Global Ship Lease, Inc. (NYSE: GSL)(NYSE: GSL.U)(NYSE: GSL.WS) a rapidly growing containership charter owner, today announced the Company's Board of Directors has declared a fourth quarter dividend of $0.23 per Class A common share and unit and Class B common share. The dividend is payable on March 5, 2009 to Class A common shareholders and unit holders and Class B common shareholders of record on February 20, 2009.
What I did not know is this company was formed by the French container carrier CMA CGM.
The French carrier (CMA CGM) transferred 17 ships, including new vessels, to Global Ship Lease when it established the company as an independent ship-owning unit in 2007. It retained a 23-percent stake in the firm following its initial public offering in New York last August.
So they declared a dividend to keep their shareholders from running away, because at the same time they realized they were in trouble with their loan covenants.
Global Ship Lease, a leading container ship charter owner, has renegotiated the terms of an $800-million credit facility to avoid defaulting on covenants linked to the value of its fleet of vessels.
The New York-listed company, whose main shareholder is French ocean carrier, CMA CGM, also has agreed to pay a higher interest rate on the existing loan.
This is the official statement from their CEO. I am always suspicious of long explanations.
Ian Webber, Chief Executive Officer of Global Ship Lease, commented, "We are pleased to have declared our fourth quarter dividend, the Company's third $0.23 distribution since going public in August of 2008. In response to the unprecedented volatility in the financial markets and in appraised ship values, we proactively approached our lenders in order to reduce our risk with respect to our loan to value maintenance covenant under the Company's credit facility. Working closely with our bank group, which has significant experience with ship lending, we have favorably amended our credit facility at attractive borrowing rates with modest upfront cost in a very challenging economic and financial environment. With the amended facility in place, Global Ship Lease has significantly reduced its exposure to pressures on ship valuations and enhanced its ability to continue providing shareholders with attractive dividends. The declaration of the fourth quarter distribution and the successful conclusion of our negotiations with our lenders further demonstrate the stability of our business model, which is focused on securing all of our vessels on long-term fixed rate contracts to generate stable and predictable cash flows."
It's going to be a rocky 2009 for container carriers. International shipping is down across the board for all types of carriers. I wouldn't be surprised if CMA CGM doesn't sell their stock in this company, and then renegotiate their charter rates. Well, they would probably sell their stock after they renegotiated. They didn't get to be the 3rd largest container carrier without being rather clever.
No comments:
Post a Comment