Proposed Transactions to be Discussed at Investor
Day Tomorrow
HONG KONG, Nov. 21, 2019 /CNW/ - Seaspan Corporation
("Seaspan") (NYSE:SSW) today announced that its Board of Directors
has approved the implementation of a holding company reorganization
(the "Proposed Reorganization"), to create a new holding company,
Atlas Corp. ("Atlas"), which will become the new parent company of
Seaspan. The Proposed Reorganization is intended to advance
strategic capital allocation initiatives and provide operational
transparency. In conjunction with the Proposed Reorganization,
Seaspan also announced that it has entered into a definitive
agreement to acquire APR Energy Limited ("APR"), a global leader in
fast-track, mobile power solutions (the "Proposed Acquisition";
together with the "Proposed Reorganization", the "Proposed
Transactions").
Highlights of Proposed Transactions
- The Proposed Reorganization advances the commitment from the
Board of Directors and management to thoughtful capital allocation
and diversification of cash flows through professional asset
management.
- In the Proposed Acquisition, Atlas will acquire APR, the
world's largest lessor of mobile gas turbines, in an all-stock
transaction valued at $750 million
including the assumption of debt, for an expected equity value at
closing of approximately $425
million. Atlas shares will be issued to the sellers in the
Proposed Acquisition at $11.10 per
share.
- Seaspan and APR are the global leaders in scale and service
quality for their asset classes and offer unique integrated
platforms to both lease and manage assets on long-term
contracts.
- David Sokol will be Chairman of
the Board of Directors of Atlas along with Bing Chen as Chief
Executive Officer and Director of Atlas and Ryan Courson as Chief Financial Officer of
Atlas.
Comments from Seaspan Chairman & Fairfax Financial
Holdings ("Fairfax") Chairman
David Sokol, Chairman of
Seaspan's Board of Directors, commented, "The Proposed Acquisition
is a transformative transaction on our journey as professional
asset managers. We are bringing together two leading, integrated
platforms, in two industries in which we have long-term confidence
– maritime and energy. APR has built a compelling business with
contracted cash flows and a focused management team, led by their
talented CEO Charles "Chuck" Ferry.
The addition of APR to Atlas will diversify our cash flows and
expand our asset portfolio. We now have significant runway to
deploy capital into two attractive businesses where scale and
operational transparency can generate long-term shareholder value
through cycles. We will provide further detail on the Proposed
Acquisition and how it advances our corporate strategy at our
Investor Day tomorrow."
Prem Watsa, Chairman and Chief
Executive Officer of Fairfax, said, "We are thrilled to expand our
partnership with David Sokol, Bing
Chen and the Atlas management team. APR's management has
successfully repositioned the company and strengthened its
financial performance since we took the company private in 2016.
Now under the guidance of Atlas, with their deep experience in the
energy industry and capital allocation, we are excited to
participate in the next phase of APR's growth. I am confident that
the Atlas team is the best partner for APR for the long-term."
APR Is a Compelling Strategic Global Energy Platform
APR, like Seaspan, is a global leasing business that owns and
operates a fleet of capital-intensive assets (gas turbines and
other power generation equipment), providing power solutions to
customers including large corporations and/or government backed
utilities. APR focuses on maintaining high asset utilization
through medium-to-long-term contracts, to optimize cash flows
across its lease portfolio. APR is the global leader in its asset
class and offers a unique integrated platform to both lease and
operate its assets.
- Favourable market dynamics. Expanding power demand in
emerging markets, transition to non-baseload power sources, and the
increasing propensity for power grid disruption resulting from
natural disasters provide tailwinds for fast-track power
generation.
- Leading lessor of fast-track power solutions. Able to
uniquely capitalize on fast-track power generation opportunities as
the only global, at-scale operator of gas turbines.
- Substantial platform growth potential. Positioned to
leverage global platform to provide diversified medium-to-long-term
contracted power to an expanded network of global customers with a
management team committed to disciplined capital deployment to
ensure high returns on invested capital.
- Improved combined operations. Formation of Atlas will
seek to drive substantially higher and more stable cash flows by
maximizing effective synergies and unifying capital allocation
processes across the Atlas group of companies.
Chuck Ferry, Chief Executive
Officer of APR said, "APR is excited to be joining the Atlas team.
We know this will provide a significant opportunity to remain the
best-in-class for delivering fast power while expanding our efforts
into renewable, alternative fuels, and other longer-term power
projects."
John Campion, Founder
and Chairman of APR's Board of Directors commented, "The
business is well positioned for its next phase of growth. APR has a
bright future under the combined leadership of David Sokol and Chuck
Ferry."
Seaspan Remains Focused on Leading Maritime
Infrastructure
Subsequent to the Proposed Transactions, Seaspan will continue
to operate independently, on a business-as-usual basis, focused on
providing best-in-class service to its customers. Seaspan will
remain unchanged from an operational perspective, and will continue
to finance its own operations. Seaspan will have the full support
of Atlas in becoming a provider of leading global maritime
infrastructure. Bing Chen will become Chairman of Seaspan upon
closing of the Proposed Reorganization, in addition to his current
role as President and Chief Executive Officer.
Bing Chen, President and Chief Executive Officer of Seaspan,
commented, "Over the past two years, by executing on our core
competencies, our team has consistently delivered value to each of
our stakeholders through customer partnership and operational
excellence. Going forward, we remain 100% committed to our
customers, as it is paramount that our partners continue to rely on
Seaspan for dedicated and best-in-class service. We are investing
to drive further improvement in our unique integrated platform, as
we continue to lead the industry in service quality and market
consolidation. We are confident that our consistent execution will
create sustainable value for our stakeholders. Our unwavering
commitment to our global customers is further demonstrated by the
two recently announced acquisitions of seven large, high quality
containerships to best serve our global customers."
The Proposed Reorganization
The Proposed Reorganization will be implemented through the
merger of Seaspan and an indirect, wholly-owned subsidiary, with
Seaspan continuing as the surviving corporation and a direct,
wholly-owned subsidiary of Atlas. Upon completion of the Proposed
Reorganization, holders of Seaspan common shares and Seaspan
preferred shares will become holders of Atlas common shares and
Atlas preferred shares, as applicable, on a one-for-one basis with
the same number of shares and same ownership percentage of the same
corresponding class of Seaspan shares as they held immediately
prior to the Proposed Reorganization. The Proposed Reorganization
is intended to be a tax-free transaction for U.S. federal income
tax purposes for Seaspan shareholders.
Consummation of the Proposed Reorganization is subject to
approval by the holders of Seaspan common shares. The date, time
and place of the special meeting of shareholders ("Special
Meeting") at which holders of Seaspan common shares will vote on a
proposal to approve the Proposed Reorganization will be announced
by Seaspan at a later time, however it is expected to be held in
the first quarter of 2020. Fairfax, the Washington Family and
David Sokol, who together hold
approximately 65% of outstanding Seaspan common shares, have
indicated they intend to vote their shares in favour of the
Proposed Reorganization. Atlas common shares and Atlas preferred
shares are expected to be listed on the New York Stock Exchange
upon the consummation of the Proposed Reorganization. Atlas' common
shares are expected to be listed with the ticker ATCO.
Ryan Courson, Chief Financial
Officer of Seaspan commented, "The formation of Atlas as a global
asset manager enables diversification of capital to hard-asset
intensive industries and beyond, which we expect will yield strong
through cycle returns. We see ample opportunities for attractive
capital deployment in maritime in 2020 as demonstrated by our
recent acquisitions of over $400
million of containership assets, and we are excited about
the prospect of allocating capital towards the global energy
platform of APR. Maritime or energy, we remain committed to
thoughtfully allocating capital through cycles. The Proposed
Reorganization is an important step that advances this strategic
initiative."
The Proposed Acquisition
Atlas will acquire all of the outstanding common shares of APR
from sellers including Fairfax, Albright Capital Management LLC,
and certain other shareholders, in an all-stock transaction valued
at $750 million, including the
assumption of debt, for an expected equity value at closing of
approximately $425 million. The
Proposed Acquisition, which is subject to completion of the
Proposed Reorganization and other customary closing conditions
including receipt of applicable regulatory approvals, is expected
to close in the first quarter of 2020.
A special committee of Seaspan's Board of Directors, composed of
two directors, including the Chairman, each of whom are independent
of Fairfax and APR (the "Special Committee"), unanimously
determined that the Proposed Transaction is fair, advisable and in
the best interests of Atlas. The Special Committee unanimously
recommended the Proposed Transaction to the Board, which approved
the Transaction (with certain directors related to Fairfax and APR
recusing themselves).
Further Details to be Provided at Seaspan's Investor Day on
November 22, 2019
Seaspan will host its annual Investor Day at 9:00am EST on November
22nd at NYSE Freedom Hall. Seaspan will discuss
the Proposed Transactions and other developments. If you would like
to attend the presentation and lunch please submit your attendance
to IR@seaspancorp.com.
To listen-in, please dial 1-877-246-9875 (US) or
1-707-287-9353 (international) before the start of the call
(Conference ID: 3496628). To access the live webcast of the
conference call, go to www.seaspancorp.com and click on "Investor
Relations" then "Events & Presentations" for the link.
About Seaspan
Seaspan is a leading independent charter owner and operator
of containerships with industry leading ship management services.
We charter our vessels primarily pursuant to long-term, fixed-rate,
time charters to the world's largest container shipping liners.
Seaspan's fleet consists of 119 containerships, including seven
vessels the Company has agreed to purchase, which have not yet been
delivered, representing total capacity of more than 975,000 TEU.
Seaspan's current operating fleet of 112 vessels has an average age
of approximately seven years and an average remaining lease period
of approximately four years, on a TEU-weighted basis.
About APR Energy
APR Energy provides rapidly deployable, large-scale power and
fast-track mobile power to underserved markets and industries. APR
Energy's mobile, turnkey power plants help run cities, countries
and industries around the world in both developed and developing
markets. APR creates unique values through delivering large-scale
power projects anywhere in the world in less time than the typical
2-5 years required to plan, finance, construct and commission a
permanent power plant, and offering customized turnkey solutions
including flexible plant design, fast track installation, balance
of plant, and decommissioning. For more information, please visit
www.aprenergy.com.
Where to Find Additional Information
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. Atlas will file a registration statement that
includes a preliminary proxy statement/prospectus and other
relevant documents in connection with the Proposed
Reorganization. SEASPAN'S SHAREHOLDERS ARE URGED TO
CAREFULLY READ THE PRELIMINARY PROXY STATEMENT/PROSPECTUS, WHEN
FILED, AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS, WHEN FILED
AND MAILED, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED REORGANIZATION. The definitive proxy
statement/prospectus will be mailed to the holders of Seaspan
shares prior to the Special Meeting. In addition, investors may
obtain a free copy of the preliminary proxy statement/prospectus
and other filings containing information about Seaspan, Atlas and
the Proposed Reorganization, from the SEC at the SEC's website
at http://www.sec.gov after such documents have been
filed with the SEC. In addition, after such documents have been
filed with the SEC, copies of the preliminary proxy
statement/prospectus and other filings containing information about
Seaspan, Atlas and the Proposed Reorganization can be obtained
without charge by accessing them on Seaspan's web site
at http://www.seaspancorp.com or by contacting Seaspan
Investor Relations at the address below:
Investor Inquiries:
Matt Borys
Investor Relations
Seaspan Corporation
Tel. +1-778-328-5340
Email: IR@seaspancorp.com
Cautionary Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements (as
such term is defined in Section 21E of the Securities Exchange Act
of 1934, as amended) concerning future events, including
forward-looking statements regarding the Proposed Transactions and
the benefits of the Proposed Reorganization in terms of creating a
leading global asset manager and of the Proposed Acquisition in
terms of growth potential and high returns on invested capital.
Statements that are predictive in nature, that depend upon or refer
to future events or conditions, or that include words such as
"expects", "anticipates", "intends", "plans", "believes",
"estimates", "projects", "forecasts", "will", "may", "potential",
"should", and similar expressions are forward looking statements.
These forward-looking statements reflect management's current
expectations only as of the date of this release. As a result, you
are cautioned not to rely on any forward-looking statements.
Although these statements are based upon assumptions we believe to
be reasonable based upon available information, they are subject to
risks and uncertainties. These risks and uncertainties include, but
are not limited to: the potential for delays in the consummation of
the Proposed Transactions; challenges in integrating the operations
of APR; the possibility that we might not recognize the benefits of
the Acquisition; and other factors detailed from time to time in
our periodic reports and filings with the SEC, including Seaspan's
Annual Report on Form 20-F for the year ended December 31, 2018 and the Report of Foreign
Private Issuer on Form 6-K to which this release is attached is
attached as an exhibit. We expressly disclaim any obligation to
update or revise any of these forward-looking statements, whether
because of future events, new information, a change in our views or
expectations, or otherwise. We make no prediction or statement
about the performance of any of our securities.
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