Seaspan Corp., which charters a fleet of 112 containerships and counts many of the leading liner companies as customers, is diversifying into the energy business with what it described as an “opportunistic” investment.
The company said Wednesday it had “entered into a binding term sheet for a potential investment of up to $200 million” in the restructured Swiber Holdings Limited.
Singapore-based Swiber is a publicly traded Singaporean offshore engineering, procurement and construction business that owns five maritime vessels.
Singapore’s Business Times described the company as “beleaguered.”
Seaspan said the deal is expected to be funded in two steps. Seaspan will provide $20 million in exchange for an 80 percent economic interest in the restructured Swiber Group. In the second step, it would provide $180 million to be invested in a $1 billion LNG-to-power project under development in Vietnam in exchange for economic interests in the project.
Bing Chen, Seaspan’s president and chief executive officer, noted David Sokol, who became chairman in July 2017, has a long history in the energy business, adding, “We will unlock substantial value.”
During his career, Sokol founded three companies and took three companies
public. As chairman and CEO of MidAmerican Energy Holdings
Company, he sold the company to Berkshire Hathaway Inc. in 2000 and managed MidAmerican until March 2011.
Seaspan said it intends to fund the investment with cash on hand and noted the closing of the first tranche of the investment is subject to confirmatory due diligence, entering into definitive agreements, the emergence of Swiber from its judicial management process in Singapore, the approval of Swiber’s shareholders and creditors, Singapore regulatory approvals and other conditions customary for transactions of this nature. Closing of the first tranche is expected to occur in the first part of 2019. The closing of the second tranche of the investment is subject to numerous conditions.
Bing said the company will “continue to invest in and improve operations of our existing containership leasing business.”