$500 Million
Equity Capital Investment Through Exercise of 77 Million
Warrants
Amplifies Ability to Drive Consolidation in
Containership Sector
Strengthens Balance Sheet, Enriches Access to
Capital and
Positions Seaspan for Long-Term Success
HONG KONG, May 31, 2018 /PRNewswire/ - Seaspan Corporation
("Seaspan") (NYSE:SSW), the world's largest independent
containership owner operator, today announced that Fairfax
Financial Holdings Limited, through certain subsidiaries
(collectively, "Fairfax"), has entered into a definitive agreement
to invest an additional $500 million
of equity in Seaspan through the exercise of two tranches of
warrants, increasing Fairfax's total investment in Seaspan to
$1 billion.
David Sokol, Chairman of Seaspan
Corporation, commented, "Our Board of Directors and management team
are excited by this transformative investment, which will further
bolster Seaspan's strategy to lead consolidation in the fragmented
containership sector and capitalize on the most compelling
opportunities in the shipping sector and beyond it. Building on our
acquisition of Greater China Intermodal Investments and existing
partnership with Prem Watsa and
Fairfax, the cumulative investment of $1
billion from Fairfax will also significantly strengthen
Seaspan's balance sheet, significantly improve access to capital
and accelerate our progress toward achieving an investment grade
credit rating. With foundational, long-term oriented partners like
Fairfax and the Washington family, we have the opportunity to build
on our industry-leading position to drive growth and sustainable
shareholder value creation for many years to come."
"Seaspan has a strong leadership team with a compelling vision
and laser focus on execution," said Prem
Watsa, Chairman and Chief Executive Officer of Fairfax. "As
the global containership industry continues to consolidate, we
believe owner-operators like Seaspan, with financially sound
balance sheets, will have excellent growth prospects. We are
excited about Seaspan's outstanding progress over the past six
months, and with David Sokol's
proven capital allocation and shareholder value creation
credentials, we are thrilled to expand our relationship. This
transaction represents one of Fairfax's largest investments in a
public company, which is a clear indication of our respect for
David Sokol and Dennis Washington."
Bing Chen, President and Chief Executive Officer of Seaspan,
stated, "We are honored by Fairfax's transformative series of
investments in Seaspan, totalling $1
billion, over the past five months. We remain focused on
deploying capital in a disciplined and value-enhancing manner, and
pursuing opportunities that best serve our customers and create
meaningful returns. The support of Fairfax, the Washington family
and our other long-term shareholders is instrumental for us to
execute on our strategy and create lasting value for all
shareholders."
Transaction Details:
The definitive agreement provides
that on July 16, 2018, Fairfax will
exercise all of the warrants issued to Fairfax on February 14, 2018, to acquire approximately 38.46
million Class A common shares at an exercise price of $6.50 per share. In January, 2019, Fairfax will
immediately exercise all of the warrants that are issued to Fairfax
in connection with the closing of Fairfax's second debenture
investment of $250 million pursuant
to the subscription agreement dated March
13, 2018. Upon exercise of the warrants in January 2019, Fairfax will acquire approximately
38.46 million Class A common shares at an exercise price of
$6.50 per share, for a total equity
investment of $500 million.
In consideration for Fairfax exercising these warrants in
advance of their seven year terms, 2025 and 2026 expirations,
Seaspan will issue Fairfax seven year warrants to acquire 25
million Class A common shares at an exercise price of $8.05 per share and amend the terms of the
debentures that were issued on February 14,
2018 and will be issued on or about January 15, 2019 to allow Fairfax to call for
early redemption of some or all of those debentures on each
respective anniversary date of issuance to the respective seven
year maturity date.
Upon the full exercise of both tranches of warrants, Fairfax's
total investment in Seaspan will increase to $1 billion, consisting of $500 million of Class A common shares and
$500 million in debentures.
The definitive agreement provides for customary closing
conditions. For additional information, please refer to Seaspan's
report issued on Form 6-K to be filed on May
31, 2018.
Investor Conference Call:
Seaspan will host a
conference call for investors and analysts to discuss today's news,
with details as follows:
Date of Conference
Call:
|
Thursday, May 31,
2018
|
Scheduled
Time:
|
8:30 a.m. ET / 7:30
a.m. CT / 6:30 a.m. MT / 5:30 a.m. PT
|
Participant Toll Free
Dial In #:
|
1-877-246-9875
|
International Dial In
#:
|
1-707-287-9353
|
Audience
Passcode:
|
3370917
|
To access the live webcast of the conference call, go to
www.seaspancorp.com and click on "News & Events" then "Events
& Presentations" for the link.
A replay of the conference call will be available from
11:30 a.m. ET on May 31, 2018 to 11:59 p.m.
ET on June 14, 2018. The
replay telephone numbers are: 1-855-859-2056 or 1-404-537-3406 and
the replay passcode is: 3370917.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. This press release is
not an offer of securities for sale in the United States, and the securities may not
be offered or sold in the United
States absent registration or an exemption from the
registration requirements. The securities have not been registered
under the United States Securities Act of 1933, as amended.
About Seaspan
Seaspan provides many of the
world's major container shipping liners with alternatives to vessel
ownership by offering long-term leases on large, modern
containerships combined with industry-leading ship management
services. Seaspan's operating fleet consists of 112 containerships
with a total capacity of over 900,000 TEU, an average age of
approximately 5 years and an average remaining lease period of
approximately 5 years, on a TEU weighted basis.
Seaspan has the following securities listed on The New York
Stock Exchange:
Symbol:
|
Description:
|
SSW
|
Class A common
shares
|
SSW PR
D
|
Series D preferred
shares
|
SSW PR
E
|
Series E preferred
shares
|
SSW PR
G
|
Series G preferred
shares
|
SSW PR
H
|
Series H preferred
shares
|
SSWN
|
6.375% senior
unsecured notes due 2019
|
SSWA
|
7.125% senior
unsecured notes due 2027
|
About Fairfax Financial Holdings Limited
Fairfax is a
holding company which, through its subsidiaries, is engaged in
property and casualty insurance and reinsurance and investment
management.
Cautionary Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements (as such
term is defined in Section 21E of the Securities Exchange Act of
1934, as amended) concerning future events and our operations,
performance and financial condition, including, in particular, the
likelihood of our success in developing and expanding our business.
Statements that are predictive in nature, that depend upon or refer
to future events or conditions, or that include words such as
"expects", "anticipates", "intends", "plans", "believes",
"estimates", "projects", "forecasts", "will", "may", "potential",
"should", and similar expressions are forward looking statements.
These forward-looking statements reflect management's current views
only as of the date of this release and are not intended to give
any assurance as to future results. As a result, you are cautioned
not to rely on any forward-looking statements. Forward-looking
statements appear in a number of places in this release. Although
these statements are based upon assumptions we believe to be
reasonable based upon available information, including operating
margins, earnings, cash flow, expected 2019 annual EBITDA from
Greater China Intermodal Investments LLC, working capital and
capital expenditures, they are subject to risks and uncertainties.
These risks and uncertainties include, but are not limited to:
future operating or financial results; our expectations relating to
dividend payments and forecasts of our ability to make such
payments; pending acquisitions, business strategy and expected
capital spending; operating expenses, availability of crew, number
of off-hire days, drydocking requirements and insurance costs;
general market conditions and shipping market trends, including
charter rates and factors affecting supply and demand; our
financial condition and liquidity, including our ability to obtain
additional financing in the future to fund capital expenditures,
acquisitions and other general corporate activities; estimated
future capital expenditures needed to preserve our capital base;
our expectations about the availability of ships to purchase, the
time that it may take to construct new ships, or the useful lives
of our ships; our continued ability to enter into long-term,
fixed-rate time charters with our customers; our ability to
leverage to our advantage Seaspan's relationships and reputation in
the containership industry; changes in governmental rules and
regulations or actions taken by regulatory authorities; changes in
worldwide container demand; changes in trading patterns;
competitive factors in the markets in which we operate; potential
inability to implement our growth strategy; potential for early
termination of long-term contracts and our potential inability to
renew or replace long-term contracts; ability of our customers to
make charter payments; potential liability from future litigation;
conditions in the public equity markets; and other factors detailed
from time to time in our periodic reports and filings with the
Securities and Exchange Commission, including Seaspan's Annual
Report on Form 20-F for the year ended December 31, 2017. We expressly disclaim any
obligation to update or revise any of these forward-looking
statements, whether because of future events, new information, a
change in our views or expectations, or otherwise. We make no
prediction or statement about the performance of any of our
securities.
For Investor Relations Inquiries:
Mr. Michael
Sieffert
Director, Corporate Finance
Seaspan Corporation
Tel. 778-328-6490
For Media Inquiries:
Jared Levy /
Danya Al-Qattan /Nikki Ritchie
Sard Verbinnen & Co
Tel. 212-687-8080
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SOURCE Seaspan Corporation