Seaspan suspends new container ships order

In a move which observers predicted could end up in the courts, Canada-based shipowner Seaspan Corp has suspended a deal it signed earlier this year to build four 7,700 teu container ships that would have with dual-fuel LNG propulsion.

Vancouver, British Columbia-based Seaspan is container ship owner and operator that specializes in long-term chartering to top-tier liner shipping companies.

Its business model relies on fixed-rate, staggered charters, which theoretically enable the company to reduce the high volatility in the shipping industry’s business cycle. The firm crews and operates its 120-plus owned vessels.

The value of the orders was reported to exceed $500m.

The agreement was announced in May and would have seen the four ships delivered in late 2024 for long-term charter to a global container liner.

The agreement included a purchase obligation at the end of the charter and would have contributed about $1bn to Seaspan’s contracted cashflow.

However Seaspan claimed last Thursday September 15th that the contracts for the vessel orders were “not being fulfilled by the counterparty”. The company further stated that the contracts had therefore “become null and void.”
Seaspan said that it had “reserved its rights to claim against the counterparty” in connection with the dispute.

Although the names of the liner and shipbuilder counterparties were not disclosed, media reports noted that the builder could have been K Shipbuilding, the rebranded Korean yard once know as STX Offshore.