ATHENS, Greece - Global Ship Lease, Inc. (NYSE:GSL), a containership owner rated "GREAT" for financial health by InvestingPro, has announced the expansion of its fleet with the acquisition of four ECO-9,115 TEU high-reefer containerships, averaging 8.5 years in age, for a total of $274 million. The vessels, purchased at more than 30% below the open-market charter-free value, are currently chartered to a leading liner operator, with an average remaining duration of 1.7 years, extendable to 5 years should the charterer exercise all options.
The company, currently trading below its Fair Value according to InvestingPro analysis, anticipates these charters to potentially yield an EBITDA of approximately $184 million, assuming full exercise of options. With impressive gross profit margins of nearly 70% and a compelling P/E ratio of 2.41, this fleet expansion will increase Global Ship Lease's fleet to 72 vessels, totaling a capacity of 413,183 TEU.
The vessels are expected to be delivered between December 2024 and January 2025 and will be financed through a combination of cash and debt. The company has secured in-principle commitments for ten-year financing at SOFR + 2.50%, leveraging the company’s existing 0.64% SOFR caps.
George Youroukos, Executive Chairman of Global Ship Lease, emphasized the strategic nature of the acquisition, stating that the purchase aligns with the company's disciplined approach to fleet renewal and growth. He highlighted the financial benefits of the deal, noting the significant discount and the long-term financing secured.
Global Ship Lease, which started operations in December 2007 and was listed on the New York Stock Exchange in August 2008, has a diversified fleet of mid-sized and smaller containerships. The company offers an attractive dividend yield of 8.25% and maintains strong cash flows that sufficiently cover interest payments. As of September 30, 2024, prior to the addition of the newly acquired vessels, the company owned 68 containerships with a total capacity of 376,723 TEU. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US equities.
The company's announcement also includes forward-looking statements regarding expectations and forecasts for future events, which are subject to various factors and risks that could cause actual results to differ from those projected. This expansion news is based on a press release statement from Global Ship Lease, Inc.
In other recent news, Global Ship Lease (GSL) reported a strong third quarter for 2024. Despite geopolitical tensions, particularly around the Red Sea, the company secured $600 million in contracted revenues in the first nine months of the year, adding $200 million in the third quarter alone. Consequently, GSL's total contracted revenues reached $1.8 billion, with over 2.3 years of contract cover. Additionally, the company completed a $300 million refinancing, reducing its average cost of debt to below 4%.
Moreover, GSL introduced a supplemental dividend, raising the annualized dividend to $1.80 per share. The company also maintains a healthy cash position of $405 million and has a disciplined capital allocation strategy. GSL's focus on fleet efficiency and shareholder value has helped it navigate a challenging market environment.
Looking ahead, GSL anticipates a potential negative net fleet growth of nearly 5% in the sub-10,000 TEU segment by 2027. However, the company plans to continue dividend payments of $1.80 per share and share buybacks, alongside selective fleet renewal. GSL is also implementing environmental initiatives, which include retrofitting vessels for efficiency and biofuel compatibility. These recent developments underscore GSL's resilience and commitment to building shareholder value amid ongoing market uncertainties.
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