ATCO - Atlas Corp

[DooDiligence]

Does anyone have any docs or know a rule-of-thumb for estimating lightweight displacement tonnage from DWT? All I can find on SSW's website is DWT and the only DWT-LDT matrix I can find (vesselvalues.com) is behind a paywall.

 

Those 2 measurements represent different physical objects.

 

Are you trying to figure based upon a specific load out?

 

If not then both these figures can be obtained from vessel tonnage certificates.

 

LDT is the weight of the vessel as it comes from the shipyard & doesn't include any consumables (fuel, lube, water, galley stores, etc.) & is listed as gross tons on a tonnage certificate.

 

DWT includes all cargo & consumables minus LDT & is listed as net tonnage on a cert.

 

Displacement & tonnage can be very confusing as you'll encounter domestic (US) & international (ITC) certs.

 

My vessel is registered on the International Tonnage Certificate at 2998 gross tons which means that there is 299,800 cu. ft. of enclosed space on the vessel & it displaces 2998 tons of H2O (we don't have a domestic cert because we're a SOLAS boat.)

 

The net tonnage for the vessel is 1164 & this means that out of the 299,800 cu. ft. of total enclosed space, 116,400 cu. ft. is actual cargo space (to confuse things more, I can load another 1,500 or so tons on deck & this doesn't get included in the net tonnage or DWT on the cert because it's not enclosed space but you can bet it gets included on my stability calcs.)

 

US tonnage certs indicate much lower gross tonnage because naval architects add removable "tonnage hatches" in all internal living spaces & at least one hatch leading from an internal to an external space (usually behind the main superstructure & leading to the deck) these hatches can be un-bolted & removed to create a continuous space which is open to the outdoors.

 

Basically they are saying that since all this space can conceivably be opened to the deck, it doesn't exist & should not be included in the gross tonnage (try going through the Panama or Suez canal or getting pulled out of the water at a dry dock using a Domestic Tonnage Certificate - not...)

 

They do this to allow guys with 100 ton licenses to run a vessel that is by all rights a 400 to 500 ton boat.

 

Give me some vessel specifics & I may be more helpful...

[Guest Schwab711]

Thanks for the reply. I'm trying to get an estimate of the mass of the vessel (LDT) to estimate scrap value. On seaspans fleet section they have DWT (mass of fully loaded vessel?) and gross tonnage (volume of vessel interior). I figured I'd need to estimate DWT to LDT conversion factor, since scrap prices are per LDT.

 

Am I thinking about this wrong? How much would you get if you scrapped the below at $250 per LDT?

 

http://www.seaspancorp.com/vessels/cosco-japan/

 

 

[DooDiligence]

Thanks for the reply. I'm trying to get an estimate of the mass of the vessel (LDT) to estimate scrap value. On seaspans fleet section they have DWT (mass of fully loaded vessel?) and gross tonnage (volume of vessel interior). I figured I'd need to estimate DWT to LDT conversion factor, since scrap prices are per LDT.

 

Am I thinking about this wrong? How much would you get if you scrapped the below at $250 per LDT?

 

http://www.seaspancorp.com/vessels/cosco-japan/

 

If you have the gross tonnage then that is the amount of water displaced by the vessel with no cargo or consumables.

 

There will also be a lot more valuable metals like copper & stainless steel in this measurement.

 

91,050 x $250 = $22,762,750.

 

You should be aware that it's not unusual to see different tonnages reported on Certificate of Registry & a Certificate of Inspection & a Class Certificate.

 

Where did the gross tonnage on the website come from?

 

Is it reported correctly?

 

Ask the company if it came from the International Tonnage Certificate...

[DooDiligence]

I almost forgot.

 

Is salvage value based on a long ton (2240 lbs) or a short ton (2000 lbs) ?

[Guest Schwab711]

https://en.m.wikipedia.org/wiki/Gross_tonnage

https://en.m.wikipedia.org/wiki/Tonnage

 

I think you cracked my case. The GT figure is the carrying capacity (a weight), determined by the internal volume of the vessel (including the crew's quarters). That's not exactly the same as the ship's mass. Howver, i found a PowerPoint from an industry conference that stated an average of 0.46 as the ratio of GT to LDT (for avg container) but didn't think it made sense at first if GT was volume based. I didn't realize there were multiple GT definitions. Also, I know SSW just scrapped a 4600 TEU vessel for $6.4m, which is why I think GT is too high to be the mass/displacement. The 0.46 coefficient helps me get close to the actual data point so I think I'm in good shape.

 

Hopefully I can get a hold of SSW on Tuesday and confirm. Good to know the industry lingo for when I do. Also, thanks for the heads up on other metals. I was assuming any non-steel mass would be trivial. I might be pm'ing you next week to confirm some stuff.

 

What guy decided to name all mass and volume definitions, "tonnage"?

 

I think long ton, but LDT is in mefric tons and they are close enough for an estimate

[DooDiligence]

https://en.m.wikipedia.org/wiki/Gross_tonnage

https://en.m.wikipedia.org/wiki/Tonnage

 

I think you cracked my case. The GT figure is the carrying capacity (a weight), determined by the internal volume of the vessel (including the crew's quarters). That's not exactly the same as the ship's mass. Howver, i found a PowerPoint from an industry conference that stated an average of 0.46 as the ratio of GT to LDT (for avg container) but didn't think it made sense at first if GT was volume based. I didn't realize there were multiple GT definitions. Also, I know SSW just scrapped a 4600 TEU vessel for $6.4m, which is why I think GT is too high to be the mass/displacement. The 0.46 coefficient helps me get close to the actual data point so I think I'm in good shape.

 

Hopefully I can get a hold of SSW on Tuesday and confirm. Good to know the industry lingo for when I do. Also, thanks for the heads up on other metals. I was assuming any non-steel mass would be trivial. I might be pm'ing you next week to confirm some stuff.

 

What guy decided to name all mass and volume definitions, "tonnage"?

 

I think long ton, but LDT is in mefric tons and they are close enough for an estimate

 

The tonnage & metric thing can get confusing.

 

Here in the GOM all the rigs talk standard "how many gallons/barrels of fuel/water/mud you got for me?"

 

Overseas instead of pumping 25,000 gallons of fuel, it's 95 cubes.

 

Personally I prefer metric (1000 gallons of fresh water = 1 cubic meter = 1 MT & for other liquids you multiple volume by specific gravity for weight) gotta know actual cargo weights for stability calcs.

 

I've never thought of salvage before...

[Uccmal]

Not to sidetrack your discussion guys but SSW jist bought 4 or 5 recent vintage ships of the 4500-5000 size.  They bought them at scrap prices and plan on putting them to work.  I lost the link - when I find it again I will post.  It was in one of the trade magazines.  SSW didn''t post it on their site or news release it.  It is non-material I guess.  Management is a little schizophrenic, but there may be some rationale in scrapping a ship and taking the tax loss on it, and then buying others on the cheap.

 

I have picked up a few shares on the cheap, well after my tax wash, and expect at least a 50% cut when they next announce the divdend (my smallest position in my portfolio)  I would like to see them turn EPS profitable, if it is possible. 

Saving 75 -100 mil. on the dividend would help.  I also expect alot more writedowns on their smaller, older fleet, still. 

 

 

[Guest Schwab711]

Not to sidetrack your discussion guys but SSW jist bought 4 or 5 recent vintage ships of the 4500-5000 size.  They bought them at scrap prices and plan on putting them to work.  I lost the link - when I find it again I will post.  It was in one of the trade magazines.  SSW didn''t post it on their site or news release it.  It is non-material I guess.  Management is a little schizophrenic, but there may be some rationale in scrapping a ship and taking the tax loss on it, and then buying others on the cheap.

 

I have picked up a few shares on the cheap, well after my tax wash, and expect at least a 50% cut when they next announce the divdend (my smallest position in my portfolio)  I would like to see them turn EPS profitable, if it is possible. 

Saving 75 -100 mil. on the dividend would help.  I also expect alot more writedowns on their smaller, older fleet, still.

 

Was it the MSC vessels (Carole, Veronique, Manu, and Leanne)? Looks like they bought them for $5m/vessel coming off bareboat charters. I know they had purchased 2 and were expected to purchase the other 2 in Nov or Dec. It was a pre-arranged deal but it's perfect timing. Seaspan Efficiency was just scrapped for $6.4m at slightly lower scrap rates so these vessels probably have excess value.

[DooDiligence]

I just noticed that the C Japan is only 6 years old.

 

Why would they scrap a practically new boat? Operational or maintenance issues?

[Uccmal]

Not to sidetrack your discussion guys but SSW jist bought 4 or 5 recent vintage ships of the 4500-5000 size.  They bought them at scrap prices and plan on putting them to work.  I lost the link - when I find it again I will post.  It was in one of the trade magazines.  SSW didn''t post it on their site or news release it.  It is non-material I guess.  Management is a little schizophrenic, but there may be some rationale in scrapping a ship and taking the tax loss on it, and then buying others on the cheap.

 

I have picked up a few shares on the cheap, well after my tax wash, and expect at least a 50% cut when they next announce the divdend (my smallest position in my portfolio)  I would like to see them turn EPS profitable, if it is possible. 

Saving 75 -100 mil. on the dividend would help.  I also expect alot more writedowns on their smaller, older fleet, still.

 

Was it the MSC vessels (Carole, Veronique, Manu, and Leanne)? Looks like they bought them for $5m/vessel coming off bareboat charters. I know they had purchased 2 and were expected to purchase the other 2 in Nov or Dec. It was a pre-arranged deal but it's perfect timing. Seaspan Efficiency was just scrapped for $6.4m at slightly lower scrap rates so these vessels probably have excess value.

 

Yes, that would be it.  tx..

[Uccmal]

I just noticed that the C Japan is only 6 years old.

 

Why would they scrap a practically new boat? Operational or maintenance issues?

 

They never said the reason.  I read that entire section of the Q filing, and went away thinking it was because they couldn't recharter it.  I could be confused. 

 

Your the ship driver. :-).  Would a company scrap a newish ship because it was defective?  Wouldn't it be warrantied? 

[DooDiligence]

I just noticed that the C Japan is only 6 years old.

 

Why would they scrap a practically new boat? Operational or maintenance issues?

 

They never said the reason.  I read that entire section of the Q filing, and went away thinking it was because they couldn't recharter it.  I could be confused. 

 

Your the ship driver. :-).  Would a company scrap a newish ship because it was defective?  Wouldn't it be warrantied?

 

Throughout the oil slump; as vessels came off contract, they get warm stacked (docked here in Fourchon with minimum manning) & if they don't get chartered within a few months, they get cold stacked at our shipyard facilities in either Houma, La Rose, Gulfport or Tampa.

 

HOS has cold stacked a lot of their vessels right here in Fourchon at their HOSPort facility.

 

The much larger vessels that Seaspan operates probably can't be stacked at just any old shoreside facility but could be anchord out somewhere (they'd need some minimum manning depending on the flag state requirements & those of the port state controlling authority for the anchorage.)

 

Could be they had operational performance issues (major upgrades or repairs) or they'd rather take quick cash from scrapping (sounds like a value destructive move but I'm not privy to how much cash the vessel returned above & beyond outflow...)

[Uccmal]

Dividend unchanged.  I am wrong so far.  They didn't hesitate to cut it in 2009. 

 

Holding 7500 shares.  May just make my money back. 

[watsa_is_a_randian_hero]

Dividend unchanged.  I am wrong so far.  They didn't hesitate to cut it in 2009. 

 

Holding 7500 shares.  May just make my money back.

 

Is this indicative of the next 4 quarters?  Dont they re-evaluate annually? 

[doc75]

When asked about the dividend on the last CC, I though they said that they would re-evaluate in February... so I'm not sure one should read too much into no drop as-of-yet.

[Uccmal]

When asked about the dividend on the last CC, I though they said that they would re-evaluate in February... so I'm not sure one should read too much into no drop as-of-yet.

 

No.  I figured if they cut it significantly the stock would pop.  Its popped anyways.  Mostly I think it was pushed down due to tax loss selling.  Its been coming back since the new year. 

 

For my purposes I have neen treating it as if the dividend is already cut 50%.  Anything above that is found money AFAIK. 

[Guest Schwab711]

I'd think they'd be best served cutting the dividend completely. Either way, if current conditions continued indefinitely, I think SSW is solvent (assuming newbuilds are locked in for 17 years at today's spot rate). Of the charter owners out there, they are the best positioned at the moment.

 

I think SSW's value is going to depend heavily on the charters for the newbuilds being delivered this year.

[doc75]

Anyone know what's going on with the 15% drop (and counting) today?

 

I know that they were going to revisit their dividend policy in February, but I haven't seen any news.

[Guest Schwab711]

MS initiated coverage at $4.50 so probably that

[xtreeq]

Saw this on the SSW google finance page

https://www.fool.com/investing/2017/02/01/why-seaspan-corporation-stock-is-down-nearly-13.aspx

[Uccmal]

Short attack?  Led by Morgan Stanley. 

[Guest Schwab711]

Short attack?  Led by Morgan Stanley.

 

It kind of feels that way...

 

If anyone has access to the report can you please post it or send it to me?

 

Supposedly the report mentions that SSW will have cumulative red ink over the next few years. I can't figure any way to arrive at that conclusion unless they assume newbuilds meant for Hanjin will be idle. These are the only containership sizes with positive supply/demand trends.  Everything is based on these newbuild charter rates, which I'm becoming more bullish on since reading about China/Korean state-sponsored companies getting direct and implicit backing. China/Korea seem to be self-incentivized to support the shippers, which would protect SSW from insolvency. Their state-sponsored companies have so much more to lose than SSW. I like the incentives backing SSW's bull case.

 

Without knowing the details, I think MS is being overly conservative to the point of unrealistic. SSW actually looks really cheap as a distressed debt-like position. I see nearly 10%+ CAGR as a conservative outcome.

[xtreeq]

Looks like insiders are selling

http://splash247.com/seaspans-top-names-1bn-share-exit-sparks-concern-container-shipping-prospects/

[zippy1]

David Sokol is now chairman of Seaspan.....

The Board of Directors has appointed David Sokol, a member of the Board of Directors and Executive Committee of Seaspan, as Chairman of the Board. Concurrent with this change, Kyle Washington and Gerry Wang have both been recognized as Chairman Emeritus. Seaspan has promoted Peter Curtis to Executive Vice President and Chief Operating Officer. Mr. Curtis joined Seaspan in 2001 as Vice President to establish and lead our ship management function and has served as the Chief Operating Officer of the company since 2012

http://www.newswire.ca/news-releases/seaspan-announces-leadership-transition-637536363.html

[zippy1]

I wonder what they have in the plan

First a 80m senior note deal, a new CEO

then the 250m preferred +warrant deal with FFH?

https://finance.yahoo.com/news/seaspan-announces-pricing-80-million-231100666.html

 

https://finance.yahoo.com/news/seaspan-announces-letter-intent-potential-213100040.html

"Seaspan Announces Letter of Intent for Potential $250 Million Unsecured 5.50% Debenture and Warrant Investment from Fairfax Financial Holdings Limited"