The primary changes in the amended and restated employment arrangement are the extension of Mr. Wang's employment term until the termination of Seaspan's right of first refusal with GCI, which is scheduled to expire on March 31, 2015, the granting to Mr. Wang of stock appreciation rights with respect to Seaspan's common shares and the termination of Mr. Wang's employment agreement with Seaspan Ship Management Ltd., under which he was paid $600,000 annually. The fee under the transaction services agreement with Mr. Wang that would apply following any termination of employment prior to March 31, 2015 has decreased from 1.5% to 1.25% per transaction.
In January 2013, Seaspan entered into contracts for the construction of five 14000 TEU class newbuilding containerships with Hyundai Heavy Industries Co., Ltd. The vessels are scheduled for delivery in 2015 and will be constructed using Seaspan's fuel efficient SAVER design. Concurrently with executing the newbuilding contracts, Seaspan signed 10-year, fixed-rate time charters for the vessels with Yang Ming Marine Transport Corporation ("Yang Ming"). After the initial 10-year charter periods, Yang Ming may extend the charter for each vessel up to an additional two years.
Pursuant to its right of first refusal agreement with GCI, Seaspan will retain three of the 14000 TEU class newbuilding containerships and GCI will acquire the remaining two vessels.
In January 2013, Seaspan signed contracts for the construction of four 10000 TEU class newbuilding containerships with Jiangsu New Yangzi Shipbuilding Co., Ltd. and Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd. The vessels are scheduled for delivery in 2014 and will be constructed using Seaspan's fuel efficient SAVER design. Concurrently with entering into these newbuilding contracts, Seaspan signed long-term, fixed-rate time charters for these vessels with Mitsui O.S.K. Lines, Ltd. ("MOL"). In connection with this transaction, Seaspan also agreed to purchase from MOL four existing 2003-built 4600 TEU vessels, which are scheduled for delivery in late 2013 and early 2014, and has signed two-year short-term fixed-rate time charters for these vessels with MOL.
Pursuant to its right of first refusal agreement with GCI, Seaspan will retain two of the 10000 TEU newbuilding containerships and two of the existing vessels and GCI will acquire the remaining two 10000 TEU newbuilding containerships and two existing vessels.
Seaspan intends to fund the construction of its five newbuilding containerships and the acquisition of the two existing vessels initially with a portion of the proceeds of its previous Series C and D preferred share offerings and, subsequently over the next few quarters, with debt financing. Seaspan is considering various sources of debt financing to which it has access. Seaspan will supervise the construction of all nine newbuilding vessels and manage all 13 vessels included in these transactions.
Loan Facility Transaction
In January 2013, Seaspan entered into a LIBOR-based term loan facility with a leading Chinese bank for loan facilities in the amount of up to $340.0 million to be used towards the refinancing of existing vessels. The facilities bear interest at LIBOR plus a margin.
On January 14, 2013, Seaspan declared a cash dividend of $0.59375 per share on its Series C preferred shares (NYSE:SSW PR C) for the period from October 30, 2012 to January 29, 2013, and a pro-rated cash dividend of $0.25948 per share on its Series D preferred shares (NYSE:SSW PR D) for the period from December 13, 2012 to January 29, 2013. The dividends, representing a total distribution of $9.1 million were paid on January 30, 2013 to all Series C and Series D preferred shareholders of record as of January 29, 2013.
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