Author Topic: SSW - Seaspan  (Read 129681 times)

Uccmal

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Re: Seaspan Begins The Year With Promise
« Reply #50 on: May 18, 2010, 05:07:12 PM »
I think their just bigger ships Myth.  The lease prices look only marginally higher over time on the same size of boats.  Suffice to say, each working boat generates a similar amount of distributable cash per unit size.  So, the more the merrier, assuming they all get leased immediately which they seem to. 
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Myth465

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Re: Seaspan Begins The Year With Promise
« Reply #51 on: May 18, 2010, 05:55:27 PM »
I was more looking at the op ex rates vs the charter in rates. The bigger ones are more efficient and generate more revenue per op ex which is why I said they were more profitable, then again we dont get much detail on the interest expense, but I am guessing its still more revenue per costs. Some of the larger classes generate 2x the charter rate at only a bit more op ex. Which means for every ship coming online (interest expense not being considered) we should get more dropped to the bottom line.
« Last Edit: May 18, 2010, 06:07:32 PM by Myth465 »

Uccmal

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Re: Seaspan Begins The Year With Promise
« Reply #52 on: May 18, 2010, 07:41:39 PM »
I get you now...Thanks
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Grenville

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Re: Seaspan Begins The Year With Promise
« Reply #53 on: May 18, 2010, 09:38:18 PM »
I may have asked board members before, but I can't remember the answer or the logic.

How do you guys feel about the preferred offering Seaspan did in 2009? It doesn't give me a ton of confidence in management when they sold such a nice chunk of the company to insiders. The terms of the offering were $200 million of prefs that pay 12% interest payable in shares and a conversion price of $15. It's a nice vehicle to compound ownership interest.

Based on the interest of the board in SSW at current prices, it doesn't seem like the conversion price of $15 was set high. I just wouldn't be happy if a company like Fairfax did the same sort of deal with insiders getting such great terms unless they were offered to other shareholders.

I'm curious to learn how you guys think about the offering and your confidence in the future with regards to management and the large shareholders.

http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=360939

gaf63

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Re: Seaspan Begins The Year With Promise
« Reply #54 on: May 28, 2010, 01:04:52 PM »
Dennis Washington's  Deep Water purchased another 399,000 shs. in May

http://ir.seaspancorp.com/secfiling.cfm?filingID=950130-10-1210

Uccmal

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Re: Seaspan Begins The Year With Promise
« Reply #55 on: May 29, 2010, 06:43:56 AM »
I may have asked board members before, but I can't remember the answer or the logic.

How do you guys feel about the preferred offering Seaspan did in 2009? It doesn't give me a ton of confidence in management when they sold such a nice chunk of the company to insiders. The terms of the offering were $200 million of prefs that pay 12% interest payable in shares and a conversion price of $15. It's a nice vehicle to compound ownership interest.

Based on the interest of the board in SSW at current prices, it doesn't seem like the conversion price of $15 was set high. I just wouldn't be happy if a company like Fairfax did the same sort of deal with insiders getting such great terms unless they were offered to other shareholders.

I'm curious to learn how you guys think about the offering and your confidence in the future with regards to management and the large shareholders.

http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=360939


Hi Grenville, I am not trying to rationalize this or defend it but I think we need to view it in context.  The time when they needed the cash was right in the middle of the credit crisis.  If they had issued an open rights or warrant offering, or an IPO, the stock would have really been hammered and the dilution may well have been much greater.  By doing it this way they contained the damage and were still able to proceed with the new build program.  This was only a month or so after Buffett loaned GS and GE money at similarly lucrative terms.  So, if the Washington Family wanted to make a similar deal somewhere else they could have.  Rather they chose to invest in the company they know so well which is a vote of confidence, or desperation.

FFH has done similar deals right at the bottom of the market that have pissed me off such as selling a huge number of common shares to MKL and Longleaf at insanely low prices.  They never phoned and offered me the same deal.  In that case though poetic justice came into play and I was able to by a flier on the stock at prices around what their friends paid. 

Al.
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Grenville

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Re: Seaspan Begins The Year With Promise
« Reply #56 on: May 29, 2010, 11:04:33 AM »
I may have asked board members before, but I can't remember the answer or the logic.

How do you guys feel about the preferred offering Seaspan did in 2009? It doesn't give me a ton of confidence in management when they sold such a nice chunk of the company to insiders. The terms of the offering were $200 million of prefs that pay 12% interest payable in shares and a conversion price of $15. It's a nice vehicle to compound ownership interest.

Based on the interest of the board in SSW at current prices, it doesn't seem like the conversion price of $15 was set high. I just wouldn't be happy if a company like Fairfax did the same sort of deal with insiders getting such great terms unless they were offered to other shareholders.

I'm curious to learn how you guys think about the offering and your confidence in the future with regards to management and the large shareholders.

http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=360939


Hi Grenville, I am not trying to rationalize this or defend it but I think we need to view it in context.  The time when they needed the cash was right in the middle of the credit crisis.  If they had issued an open rights or warrant offering, or an IPO, the stock would have really been hammered and the dilution may well have been much greater.  By doing it this way they contained the damage and were still able to proceed with the new build program.  This was only a month or so after Buffett loaned GS and GE money at similarly lucrative terms.  So, if the Washington Family wanted to make a similar deal somewhere else they could have.  Rather they chose to invest in the company they know so well which is a vote of confidence, or desperation.

FFH has done similar deals right at the bottom of the market that have pissed me off such as selling a huge number of common shares to MKL and Longleaf at insanely low prices.  They never phoned and offered me the same deal.  In that case though poetic justice came into play and I was able to by a flier on the stock at prices around what their friends paid. 

Al.

Hey Uccmal,

I appreciate hearing your viewpoint on the transaction! Good points and I agree context is key. I'm going to look at the details of the offering a little closer and go back and look at the FFH equity raise. I just want to think about these financing deals the right way.

-G


twacowfca

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Re: Seaspan Begins The Year With Promise
« Reply #57 on: May 29, 2010, 01:35:01 PM »
I may have asked board members before, but I can't remember the answer or the logic.

How do you guys feel about the preferred offering Seaspan did in 2009? It doesn't give me a ton of confidence in management when they sold such a nice chunk of the company to insiders. The terms of the offering were $200 million of prefs that pay 12% interest payable in shares and a conversion price of $15. It's a nice vehicle to compound ownership interest.

Based on the interest of the board in SSW at current prices, it doesn't seem like the conversion price of $15 was set high. I just wouldn't be happy if a company like Fairfax did the same sort of deal with insiders getting such great terms unless they were offered to other shareholders.

I'm curious to learn how you guys think about the offering and your confidence in the future with regards to management and the large shareholders.

http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=360939


Hi Grenville, I am not trying to rationalize this or defend it but I think we need to view it in context.  The time when they needed the cash was right in the middle of the credit crisis.  If they had issued an open rights or warrant offering, or an IPO, the stock would have really been hammered and the dilution may well have been much greater.  By doing it this way they contained the damage and were still able to proceed with the new build program.  This was only a month or so after Buffett loaned GS and GE money at similarly lucrative terms.  So, if the Washington Family wanted to make a similar deal somewhere else they could have.  Rather they chose to invest in the company they know so well which is a vote of confidence, or desperation.

FFH has done similar deals right at the bottom of the market that have pissed me off such as selling a huge number of common shares to MKL and Longleaf at insanely low prices.  They never phoned and offered me the same deal.  In that case though poetic justice came into play and I was able to by a flier on the stock at prices around what their friends paid. 

Al.

Hey Uccmal,

I appreciate hearing your viewpoint on the transaction! Good points and I agree context is key. I'm going to look at the details of the offering a little closer and go back and look at the FFH equity raise. I just want to think about these financing deals the right way.

-G




Context is everything.  M. P. Did a similar transaction to try to save Delta Finance and lost his shirt.

ERICOPOLY

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Re: Seaspan Begins The Year With Promise
« Reply #58 on: July 31, 2010, 10:46:34 PM »
"I don't understand why it's so cheap.  It's not like it's hard to see the dividend power -- they say in the latest quarterly release that $40.368m cash was generated "available for distribution".  On today's price that's a 22% yield."

I believe that there are 3 issues or concerns by the market holding this one back:

1- They rely on big international banks to lend them money for the ships that remain to be delivered. These lines of credit could be cut if banks run into trouble. Similar to when the banks did not want to provide funds on some private equity deals because they were tight for cash.

2- Some ships will come for renewal over the next few years. Current spot rates are lower than these leases, so terms on renewal should be less favourable. This one is also linked to the strength of the Chinese economy.

3- They need to raise $140 million in equity between mid 2011 and mid 2012. It creates uncertainty since we don't know what will be the terms. However, it has been decreased from the $180 to $240 million range that they provided before which is excellent news.

These 3 things all have macro all over them, so despite a structure that seems to deliver free cash no matter what, it seems to explain why SSW swings so much when the market gets scared.

Another concern for me are these $200 million preferreds convertible at $15. They also pay 12%. So the "parent" did help Seaspan to get through this crisis, but it is not like it was free.

Nonetheless, it seems cheap to me as well. I figure that they could make $3 in FCF by mid 2012. That is assuming some bumps along the way, so it is attractive.

Cardboard



I keep coming back to your comments here.  Thanks for the help.

#1 is worrying me.  The CEO is aggressive-- acquiring another ship opportunistically and then hiking the dividend before letting us know that he has his ducks in a row on the ships he ordered in 2007 -- you know, the ones he had to cut the dividend for.  Then talking about wanting another 20 or 30 ships.  Maybe he's already pulled off a new financing deal and not mentioned it, but it is starting to make me question whether he is exercising enough caution.

ERICOPOLY

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Re: Seaspan Begins The Year With Promise
« Reply #59 on: October 22, 2010, 08:58:48 AM »
There is some news today -- expected, but welcome anyhow:

HONG KONG, CHINA--(Marketwire - 10/22/10) - Seaspan Corporation (NYSE:SSW - News) announced today that it has signed two financing transactions that position the Company to fully finance its built-in fleet growth and increase its financial flexibility.


http://finance.yahoo.com/news/Seaspan-Transactions-iw-4049444085.html?x=0&.v=1