returnonmycapital Posted December 16, 2019 Share Posted December 16, 2019 With the move to a holding company and an assumed interest in "empire" building, will Seaspan reduce or even eliminate their dividend? The payout ratio does not appear conducive to building, other than through leveraged assets alone. Link to comment Share on other sites More sharing options...
ValuePadawan Posted December 16, 2019 Share Posted December 16, 2019 With the move to a holding company and an assumed interest in "empire" building, will Seaspan reduce or even eliminate their dividend? The payout ratio does not appear conducive to building, other than through leveraged assets alone. I 100% agree why do you think they haven't eliminated the dividend yet? Shipping industry shareholder expectations? Link to comment Share on other sites More sharing options...
returnonmycapital Posted December 17, 2019 Share Posted December 17, 2019 With the move to a holding company and an assumed interest in "empire" building, will Seaspan reduce or even eliminate their dividend? The payout ratio does not appear conducive to building, other than through leveraged assets alone. I 100% agree why do you think they haven't eliminated the dividend yet? Shipping industry shareholder expectations? Yes. I would think that they would want to dilute the minority shareholders (i.e. shipping shareholders wanting distributions) to as small a portion of the outstanding shares before any move to keep 100% of cashflow. With FFH, the Washingtons and Sokol, they are not far off, especially after another FFH exercise of outstanding WTS. Though I can't help thinking that an elimination will cause at least some opportunistic volatility with no-matter-what-sized shareholder rotation. Link to comment Share on other sites More sharing options...
petec Posted December 17, 2019 Share Posted December 17, 2019 My guess is the dividend stays. It doesn’t take up much of the FCF and that % will fall as they redeploy capital and grow FCF. I also suspect FFH wants the divi given their stated target to get to $1bn in dividend and interest income. Link to comment Share on other sites More sharing options...
NBL0303 Posted December 18, 2019 Share Posted December 18, 2019 My guess is the dividend stays. It doesn’t take up much of the FCF and that % will fall as they redeploy capital and grow FCF. I also suspect FFH wants the divi given their stated target to get to $1bn in dividend and interest income. I didn't know this - so Prem has said that he wants FFH to generate $1 billion annually from dividends and interest? Link to comment Share on other sites More sharing options...
petec Posted December 18, 2019 Share Posted December 18, 2019 My guess is the dividend stays. It doesn’t take up much of the FCF and that % will fall as they redeploy capital and grow FCF. I also suspect FFH wants the divi given their stated target to get to $1bn in dividend and interest income. I didn't know this - so Prem has said that he wants FFH to generate $1 billion annually from dividends and interest? Can’t remember if it was Prem or Rivett but I’ve heard it more than once and it’s an explicit target. I suspect it was part of the motivation for selling APR, which did not pay a dividend but now, in effect, does. Link to comment Share on other sites More sharing options...
Saluki Posted January 16, 2020 Share Posted January 16, 2020 Seaspan and Swiber terminate their $200 million deal. https://biv.com/article/2020/01/seaspan-corps-us200-million-swiber-plan-sidelined I'm still very long SSW. I hope SSW got a breakup fee. Link to comment Share on other sites More sharing options...
ValuePadawan Posted January 16, 2020 Share Posted January 16, 2020 A shame it didn't work out. Sokol sounded frustrated when talking about Swiber at the investor day so its not a huge surprise. Link to comment Share on other sites More sharing options...
gary17 Posted February 19, 2020 Share Posted February 19, 2020 I couldn't listen in on the CC... did they provide any update on impact of the virus on earnings? Link to comment Share on other sites More sharing options...
petec Posted February 19, 2020 Share Posted February 19, 2020 I couldn't listen in on the CC... did they provide any update on impact of the virus on earnings? They got a few questions on it. There's some disruption, more from government actions to prevent spread than the disease itself. But doesn't sound like a big impact on operations and earnings are largely insulated as they don't have much on spot at the moment. Meanwhile the cash rolls in. Link to comment Share on other sites More sharing options...
gary17 Posted March 19, 2020 Share Posted March 19, 2020 hmmm will dividend get cut ? Link to comment Share on other sites More sharing options...
NBL0303 Posted March 19, 2020 Share Posted March 19, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. Link to comment Share on other sites More sharing options...
petec Posted March 19, 2020 Share Posted March 19, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. I keep meaning to recheck the debt maturity schedule but off the top of my head between cash, unencumbered ships, the remaining space on their new flexible $2bn secured debt facility, and cash flowing in I’m pretty sure they will be fine. In fact I am hoping they get to buy some distressed assets. Link to comment Share on other sites More sharing options...
ValuePadawan Posted March 19, 2020 Share Posted March 19, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. "As of December 31, 2019, Seaspan had total liquidity of $470.0 million, consisting of $195.0 million of cash and cash equivalents and $275.0 million of undrawn commitments under the Program. Additionally, as of December 31, 2019, Seaspan’s unencumbered asset pool included 32 vessels." Link to comment Share on other sites More sharing options...
petec Posted March 19, 2020 Share Posted March 19, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. "As of December 31, 2019, Seaspan had total liquidity of $470.0 million, consisting of $195.0 million of cash and cash equivalents and $275.0 million of undrawn commitments under the Program. Additionally, as of December 31, 2019, Seaspan’s unencumbered asset pool included 32 vessels." I think that some of the $275m space in the programme has since been used. And what liquidity doesn’t tell you is what debt is coming due. Link to comment Share on other sites More sharing options...
ValuePadawan Posted March 19, 2020 Share Posted March 19, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. "As of December 31, 2019, Seaspan had total liquidity of $470.0 million, consisting of $195.0 million of cash and cash equivalents and $275.0 million of undrawn commitments under the Program. Additionally, as of December 31, 2019, Seaspan’s unencumbered asset pool included 32 vessels." I think that some of the $275m space in the programme has since been used. And what liquidity doesn’t tell you is what debt is coming due. You're right they bought 4 containerships for $367 million in late February and checking their Q4 report they have about $660 million in debt and lease liabilities this year. Link to comment Share on other sites More sharing options...
petec Posted March 19, 2020 Share Posted March 19, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. "As of December 31, 2019, Seaspan had total liquidity of $470.0 million, consisting of $195.0 million of cash and cash equivalents and $275.0 million of undrawn commitments under the Program. Additionally, as of December 31, 2019, Seaspan’s unencumbered asset pool included 32 vessels." I think that some of the $275m space in the programme has since been used. And what liquidity doesn’t tell you is what debt is coming due. You're right they bought 4 containerships for $367 million in late February and checking their Q4 report they have about $660 million in debt and lease liabilities this year. Yep Probably fairly tight on liquidity. But pre-Covid they had $600m a year of OCF coming in and a decent chunk of that is contracted, so they’ll dig themselves out of a hole. Link to comment Share on other sites More sharing options...
StubbleJumper Posted March 19, 2020 Share Posted March 19, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. "As of December 31, 2019, Seaspan had total liquidity of $470.0 million, consisting of $195.0 million of cash and cash equivalents and $275.0 million of undrawn commitments under the Program. Additionally, as of December 31, 2019, Seaspan’s unencumbered asset pool included 32 vessels." I think that some of the $275m space in the programme has since been used. And what liquidity doesn’t tell you is what debt is coming due. You're right they bought 4 containerships for $367 million in late February and checking their Q4 report they have about $660 million in debt and lease liabilities this year. Yep Probably fairly tight on liquidity. But pre-Covid they had $600m a year of OCF coming in and a decent chunk of that is contracted, so they’ll dig themselves out of a hole. This is a bit of a bad time for FFH to be short of liquidity too. SJ Link to comment Share on other sites More sharing options...
petec Posted March 19, 2020 Share Posted March 19, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. "As of December 31, 2019, Seaspan had total liquidity of $470.0 million, consisting of $195.0 million of cash and cash equivalents and $275.0 million of undrawn commitments under the Program. Additionally, as of December 31, 2019, Seaspan’s unencumbered asset pool included 32 vessels." I think that some of the $275m space in the programme has since been used. And what liquidity doesn’t tell you is what debt is coming due. You're right they bought 4 containerships for $367 million in late February and checking their Q4 report they have about $660 million in debt and lease liabilities this year. Yep Probably fairly tight on liquidity. But pre-Covid they had $600m a year of OCF coming in and a decent chunk of that is contracted, so they’ll dig themselves out of a hole. This is a bit of a bad time for FFH to be short of liquidity too. SJ Yep. But then, it’s a bit of a bad time ;) Link to comment Share on other sites More sharing options...
NBL0303 Posted March 20, 2020 Share Posted March 20, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. "As of December 31, 2019, Seaspan had total liquidity of $470.0 million, consisting of $195.0 million of cash and cash equivalents and $275.0 million of undrawn commitments under the Program. Additionally, as of December 31, 2019, Seaspan’s unencumbered asset pool included 32 vessels." I think that some of the $275m space in the programme has since been used. And what liquidity doesn’t tell you is what debt is coming due. You're right they bought 4 containerships for $367 million in late February and checking their Q4 report they have about $660 million in debt and lease liabilities this year. Yep Probably fairly tight on liquidity. But pre-Covid they had $600m a year of OCF coming in and a decent chunk of that is contracted, so they’ll dig themselves out of a hole. This is a bit of a bad time for FFH to be short of liquidity too. SJ Just curious, why? Does Fairfax have specific liabilities coming due, or especially large insurance losses coming? Link to comment Share on other sites More sharing options...
StubbleJumper Posted March 20, 2020 Share Posted March 20, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. "As of December 31, 2019, Seaspan had total liquidity of $470.0 million, consisting of $195.0 million of cash and cash equivalents and $275.0 million of undrawn commitments under the Program. Additionally, as of December 31, 2019, Seaspan’s unencumbered asset pool included 32 vessels." I think that some of the $275m space in the programme has since been used. And what liquidity doesn’t tell you is what debt is coming due. You're right they bought 4 containerships for $367 million in late February and checking their Q4 report they have about $660 million in debt and lease liabilities this year. Yep Probably fairly tight on liquidity. But pre-Covid they had $600m a year of OCF coming in and a decent chunk of that is contracted, so they’ll dig themselves out of a hole. This is a bit of a bad time for FFH to be short of liquidity too. SJ Just curious, why? Does Fairfax have specific liabilities coming due, or especially large insurance losses coming? It has $1.1B at the holdco level, about $600m coming from an asset sale, a $2b revolver of which $300m is drawn, and its insurance subs are mostly capital constrained. I estimate that FFH holdco needs another $400-500m during 2020 for its interest costs, admin costs and planned capex. Prem Watsa has always proclaimed that he never wants to drop below $1B cash at the holdco. Short of drawing heavily on that revolver, floating new debt or issuing new equity, they don't have loads of free cash to inject into SSW. Moving forward into 2021, the holdco has a ~$300m bullet maturity, perhaps $250m of interest costs, maybe $50m admin and possibly $300m of dividends to fund. If capital markets don't loosen up, they will really need the space in that revolver. Bad timing to be liquidity constrained. SJ Link to comment Share on other sites More sharing options...
petec Posted March 30, 2020 Share Posted March 30, 2020 Does anyone think this has a chance of bankruptcy/severe cash crunch issue? I believe the restructuring they had undertaken provides them breathing room - even if the pandemic's economic consequences grow worse than currently anticipated - but perhaps I'm missing something. "As of December 31, 2019, Seaspan had total liquidity of $470.0 million, consisting of $195.0 million of cash and cash equivalents and $275.0 million of undrawn commitments under the Program. Additionally, as of December 31, 2019, Seaspan’s unencumbered asset pool included 32 vessels." I think that some of the $275m space in the programme has since been used. And what liquidity doesn’t tell you is what debt is coming due. You're right they bought 4 containerships for $367 million in late February and checking their Q4 report they have about $660 million in debt and lease liabilities this year. Yep Probably fairly tight on liquidity. But pre-Covid they had $600m a year of OCF coming in and a decent chunk of that is contracted, so they’ll dig themselves out of a hole. This was wrong. They’ve just financed $340m of this deal with a 10y finance lease with flexible collateral. So it doesn’t draw down liquidity. Will be interesting to get the details (hopefully) on the next call. Link to comment Share on other sites More sharing options...
petec Posted March 30, 2020 Share Posted March 30, 2020 Pretty amazing to think they’ve bought 11 vessels since September, expanding the fleet by 10%. Link to comment Share on other sites More sharing options...
Parsad Posted March 30, 2020 Share Posted March 30, 2020 Merged Seaspan thread. Cheers! Link to comment Share on other sites More sharing options...
petec Posted May 5, 2020 Share Posted May 5, 2020 Q1 is out. Looks fine, but call commentary will be key. If annualising March is a reasonable thing to do they paid 7.5x ebitda for APR - or less if they can get utilisation up from 63%. https://ir.atlascorporation.com/earning-reports?cat=34 Edit: I had not seen the guidance. Looks like they paid 5.2-5.5x ebitda for APR. I think annualised operating cash flow after interest and pref dividends is running at around $550-600m, or a >30% yield on the market cap. Link to comment Share on other sites More sharing options...
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