Giant container ship owner Seaspan Corp has scrapped a meeting at which it was hoping to avoid buying back a $300m issue.
The company, part of US-listed Atlas Corp, wanted to amend the terms of the 6.5% series due in 2026.
Seaspan had even upped its fee for the change from 8% to 8.5% to bring investors onside.
But the owner said in a filing on Friday that it was withdrawing the proposal.
“As agreement could not be reached with certain bondholders, amounting to more than one-third of the outstanding bonds, the company is providing notice that the bondholder vote scheduled for December 16 is cancelled,” it added.
A two-thirds majority would have been needed to carry the day at any vote.
The amendment was considered necessary due to Seaspan’s imminent $10.9bn takeover by leading shareholders including Fairfax Financial Holdings and the Washington family.
This will trigger a bond delisting clause that gives holders a put option at 1% above par.
Seaspan now says it plans to have liquidity available for any bondholder redemptions following the conclusion of the takeover.
Strong and stable
“Seaspan continues to believe that its offer … was attractive given the company’s strong and stable credit profile backed by substantial locked-in contracted cash flows with high-quality counterparties (approximately $18.3bn as at September 30),” the tonnage provider added.
Chief financial officer Graham Talbot thanked bondholders for their feedback and partnership through the process.
“We will continue making progress toward our objective of achieving an investment-grade credit rating at Seaspan, for which a strong component of unsecured credit within the company’s capital structure is an important target,” he said.
“To that end, while we remain ready to repay this particular bond issue, we will endeavour to continue building long-term relationships with supportive bondholders.”
Seaspan has $1.1bn available in undrawn revolving credit facilities and $6bn in untapped newbuilding finance.
Offer accepted
Parent Atlas has agreed to accept an all-cash takeover offer at $15.50 per share in a move expected to see the stock delisted from the New York Stock Exchange next year.
The deal places the company in the hands of Poseidon Acquisition Corp, an entity formed by certain affiliates of Fairfax Financial Holdings, the Washington family and Atlas chairman David Sokol.
The majority shareholders, who already hold 68% of the Atlas stock, will now acquire outstanding shares they do not already own.
Ocean Network Express — the Singapore-based container ship operation of Japan’s Mitsui OSK Lines, NYK Line and K Line — is also participating in the bid.
