Seaspan (SSW) Stock Sinks After New Share Offering

Shares of the Seaspan Corporation (SSW) were trading down -1.82 or -11.23 percent to $14.38 per share in Tuesday’s premarket after the company announced it would offer 5 million common shares in an underwriter registered public offering. Seaspan Corporation stock closed at $16.20, down -0.56 or -3.34 percent in Monday’s regular trading session.

Hong Kong based Seaspan Corporation is a worldwide shipping and transportation company primarily focused on managing state of the art containerships.
The company operates a fleet of more than 100 vessels organized in three divisions: newbuild, operating and managed. Seaspan employs more than 3,000 people with offices in Canada, India and Hong Kong, with site teams in Korea and China.  Seaspan manufactures, owns and operates vessels in a wide range of sizes from 2,500 TEU (twenty foot equivalent unit) to 14,000 TEU. The company’s managed fleet consists of 118 containerships that represent a total capacity of 935,000 TEU and includes 15 new containerships on order scheduled for delivery to third parties and Seaspan by the end of 2017.

In a press release late yesterday, Seaspan announced that it plans to offer 5 million of its Class A common shares in an underwritten public offering subject to market and other conditions and pursuant to an effective shelf registration statement on file with the U.S. Securities Exchange Commission or SEC.

This morning, the company announced the pricing for the 5,000,000 Class A common shares in the offering at $14.70 per share. In addition and related to the proposed public offering, the company will grant the underwriters a 30 day purchase option for as many as 750,000 additional Seaspan common shares. The offering is set to close on May 27th of 2016.

The company’s Chief Executive Officer as well as affiliates of Dennis Washington and one of Seaspan’s directors have agreed to purchase an aggregate of $15 million in Seaspan common shares at the public offering price concurrent with the close of the proposed public offering.

Net proceeds of $85 million from the proposed offering along with a concurrent private sale is intended to redeem a portion of the company’s outstanding 9.5 percent Series C Cumulative Redeemable Perpetual Preferred Shares, and the remaining funds for general corporate purposes. The redemption of Series C Preferred Shares would be in addition to a previously announced redemption of 5,600,000 Series C Preferred Shares.

In a separate press release, Seaspan announced the details of the redemption of the 5,600,000 Series C Cumulative Redeemable Perpetual Preferred Shares: the shares will be redeemed on June 7th 2016 for a cash redemption price of $25.00 per share in addition to an amount equal to all accumulated and unpaid dividends pro-rated from and including April 16th 2016 to, but with the exclusion of the redemption date.

Companies acting as joint book running managers for the offering include Credit Suisse, J.P. Morgan, Morgan Stanley, Wells Fargo Securities, UBS Investment Bank and Stifel. BB&T, RBC Capital Markets, Ladenburg Thalmann and Janney Montgomery Scott will act as co-managers for the offering.

Other News About SSW

Seaspan Secures $540 Million in Capital Through Multiple Financings

Company entered into $540 million in financing through three separate offerings last week.

Seaspan Corporation Earnings Float Higher As Its Fleet Continues to Grow

Company’s earnings were positively affected by the addition of a new vessel to its fleet.

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Published on May 24, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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