Global Ship Lease, Inc. (NYSE: GSL)(NYSE: GSL.U)(NYSE: GSL.WS), a
containership charter owner, announced today that the Company has
agreed an amendment to its $800 million credit facility.
Under the terms of the amended credit facility, the
loan-to-value covenant has been waived up to and including November
30, 2010 with the next loan-to-value test scheduled for April 30,
2011. Further, Global Ship Lease will be able to borrow sufficient
funds under the credit facility to allow for the purchase of the
CMA CGM Berlioz, a 2001-built 6,627 TEU container vessel that is
scheduled to be delivered later this month. Amounts borrowed under
the amended credit facility will bear interest at LIBOR plus a
fixed interest margin of 3.50% up to November 30, 2010. Thereafter,
the margin will be between 2.50% and 3.50% depending on the
loan-to-value ratio.
In connection with the amended credit facility, undrawn
commitments of approximately $200 million will be cancelled after
the purchase of the CMA CGM Berlioz and Global Ship Lease will
suspend dividends to common shareholders, using its cash flow to
prepay borrowings under the credit facility. Global Ship Lease will
be able to resume dividend payments once loan-to-value is at or
below 75%, at which point the prepayment of borrowings becomes
fixed at $10 million per quarter. As part of the amendment, CMA CGM
has agreed to defer redemption of the $48 million preferred shares
it holds until after the final maturity of the credit facility in
August 2016 and to retain its current holding of common shares in
Global Ship Lease until at least November 30, 2010.
Ian Webber, Chief Executive Officer of Global Ship Lease,
stated, "We are pleased to have finalized an amendment to our $800
million credit facility during a time when the container shipping
industry is facing significant challenges and containership values
have experienced substantial declines. Global Ship Lease's robust
business model, focused on generating stable revenues and cash
flows, supports our amended facility. With this agreement, we have
accomplished important strategic objectives. First, by aggressively
paying down debt, we have enhanced our position to emerge from this
unprecedented market downturn as a stronger company. Second, by
waiving the loan-to-value covenant, we have insulated the Company
through April 2011 against what is likely to be a continuing period
of depressed asset prices. And third, we have enabled the accretive
purchase of the CMA CGM Berlioz, which is committed to a
non-cancellable 12 year long-term time charter, growing the
Company's contracted revenue stream to approximately $156 million a
year."
Mr. Webber concluded, "In a challenging global container
shipping market, all of our time charters continue to perform as
expected. Our present fleet of 16 vessels has an average remaining
time charter duration of 10 years, representing total contracted
revenue of $1.6 billion. Two of our vessels come up for charter
renewal at the end of 2012; the only renewals in the next seven
years. We intend to maintain our focus on preserving our financial
strength for the long term benefit of the Company and its
shareholders."
About Global Ship Lease
Global Ship Lease is a containership charter owner. Incorporated
in the Marshall Islands, Global Ship Lease commenced operations in
December 2007 with a business of owning and chartering out
containerships under long-term, fixed rate charters to world class
container liner companies.
Global Ship Lease currently owns 16 vessels and has contracted
to purchase an additional three vessels. The Company has a contract
in place to purchase CMA CGM Berlioz by September 30, 2009 for $82
million from CMA CGM, contingent on financing. The Company also has
contracts in place to purchase two newbuildings from German
interests for approximately $77 million each which are scheduled to
be delivered in the fourth quarter of 2010.
Once all of the contracted vessels have been delivered by the
end of 2010, Global Ship Lease will have a 19 vessel fleet with
total capacity of 74,797 TEU and a weighted average age at that
time of 6.1 years and an average remaining charter term of
approximately eight years. All of the vessels, including those
contracted for future delivery, are fixed on long-term
charters.
Safe Harbor Statement
This communication contains forward-looking statements.
Forward-looking statements provide Global Ship Lease's current
expectations or forecasts of future events. Forward-looking
statements include statements about Global Ship Lease's
expectations, beliefs, plans, objectives, intentions, assumptions
and other statements that are not historical facts. Words or
phrases such as "anticipate," "believe," "continue," "estimate,"
"expect," "intend," "may," "ongoing," "plan," "potential,"
"predict," "project," "will" or similar words or phrases, or the
negatives of those words or phrases, may identify forward-looking
statements, but the absence of these words does not necessarily
mean that a statement is not forward-looking. These forward-looking
statements are based on assumptions that may be incorrect, and
Global Ship Lease cannot assure you that these projections included
in these forward-looking statements will come to pass. Actual
results could differ materially from those expressed or implied by
the forward-looking statements as a result of various factors.
The risks and uncertainties include, but are not limited to:
- future operating or financial results;
- expectations regarding the strength of the future growth of
the container shipping industry, including the rate of annual
demand and supply growth;
- future payments of dividends and the availability of cash for
payment of dividends;
- Global Ship Lease's expectations relating to dividend payments
and forecasts of its ability to make such payments including the
impact of constraints under its credit facility;
- future acquisitions, business strategy and expected capital
spending;
- operating expenses, availability of crew, number of off-hire
days, drydocking and survey requirements and insurance costs;
- general market conditions and shipping industry trends,
including charter rates and factors affecting supply and
demand;
- the financial condition of CMA CGM, our charterer and sole
source of operating revenue, and its ability to pay charterhire in
accordance with the charters;
- Global Ship Lease's ability to meet financial covenants and
repay its credit facility;
- assumptions regarding interest rates and inflation;
- changes in the rate of growth of global and various regional
economies;
- risks incidental to vessel operation, including piracy,
discharge of pollutants and vessel accidents and damage including
total or constructive loss;
- Global Ship Lease's financial condition and liquidity,
including its ability to obtain additional waivers which might be
necessary under the existing credit facility or obtain additional
financing to fund capital expenditures, contracted and yet to be
contracted vessel acquisitions including the two newbuildings to be
purchased from German interests in the fourth quarter 2010 and
other general corporate activities;
- estimated future capital expenditures needed to preserve its
capital base;
- Global Ship Lease's expectations about the availability of
vessels to purchase, the time that it may take to construct new
vessels, or the useful lives of its vessels;
- Global Ship Lease's continued ability to enter into or re-new
long-term, fixed-rate charters;
- the continued performance of existing long-term, fixed-rate
charters;
- Global Ship Lease's ability to capitalize on its management
team's and board of directors' relationships and reputations in the
containership industry to its advantage;
- changes in governmental and classification societies' rules
and regulations or actions taken by regulatory authorities;
- expectations about the availability of insurance on
commercially reasonable terms;
- unanticipated changes in laws and regulations including
taxation; and
- potential liability from future litigation.
Forward-looking statements are subject to known and unknown
risks and uncertainties and are based on potentially inaccurate
assumptions that could cause actual results to differ materially
from those expected or implied by the forward-looking statements.
Global Ship Lease's actual results could differ materially from
those anticipated in forward-looking statements for many reasons
specifically as described in Global Ship Lease's filings with the
SEC. Accordingly, you should not unduly rely on these
forward-looking statements, which speak only as of the date of this
communication. Global Ship Lease undertakes no obligation to
publicly revise any forward-looking statement to reflect
circumstances or events after the date of this communication or to
reflect the occurrence of unanticipated events. You should,
however, review the factors and risks Global Ship Lease describes
in the reports it will file from time to time with the SEC after
the date of this communication.
Contacts: Investor and Media Contact: The IGB Group Michael
Cimini 212-477-8261
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