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Non-operating containership owner Global Ship Lease (GSL) is eyeing merger and acquisition activity after a recent round of debt financing.
In October, the New York stock exchange-listed company – French shipping line CMA CGM is its largest shareholder – completed a $320m bond issue and today appointed independent investment banking advisory firm Evercore to review “strategic alternatives focused on maximising shareholder value”.
GSL said: “These alternatives include a corporate acquisition, business combination or partnership, while continuing to develop vessel purchase opportunities.”
Chief executive Ian Webber said the bond issue due in 2022 “significantly extended the maturity of our principal debt financing, as well as arranging the associated secured term loan”, and the company was now considering broadening its corporate profile.
“Global Ship Lease is well-positioned as one of few publicly listed containership leasing companies to acquire attractive portfolios of ships, attract growth capital or find a complementary merger partner.
“In addition, with increased confidence in the container shipping industry’s cyclical recovery, we will continue to focus on near-term opportunities to grow our fleet while we explore a broad range of strategic alternatives to enhance shareholder value,” Mr Webber said.
Despite the refinancing, GSL clearly has some challenges in securing adequate returns on its fleet. It acquired three 8,000 teu ships from OOCL in 2015 which were then leased back to the Hong Kong carrier at $34,500 a day on 36-39-month time charters
However, one of these vessels has since been re-chartered to CMA CGM for between eight months and year at $11,900 a day, while the OOCL charters on the remaining two vessels expire in March and September, and new deals are unlikely to fetch anything near those daily rates.
And for the rest of its fleet CMA CGM is mostly extending – but on reduced rates, brokers said. According to vesselsvalue.com, its fleet of 18 containerships has an average age of 14 years and is valued at $195m.