CHICAGO (Reuters) - The global financial crisis should provide plenty of acquisition opportunities for Seaspan Corp (SSW.N: Quote, Profile, Research, Stock Buzz), the container shipping company, as small operators run into financial difficulties, its top executive said on Wednesday.
"There will be some casualties as a result of this financial crisis we're going through, but we have set our sights on picking up some of them," Chief Executive Gerry Wang said at the Reuters Manufacturing Summit in Chicago. "My gut feeling is that this is just the start of a dramatic change, there will be opportunities for sure. Consolidation is just part of the game in the public domain."
Wang also said that if the U.S. economy enters a recession, China will likely focus investment inward and described the "decoupling" theory as a "fantasy."
Seaspan has a fleet of 29 container ships, which haul thousands of containers filled with consumer goods at a time, with another 39 on order for delivery in the next three years.
The container industry has boomed in recent years, with much of that growth fueled by China's rise as a manufacturer of consumer goods.
Wang said that the credit crunch would in particular affect smaller companies that had overextended themselves and now had no access to fresh capital.
The container shipping industry has 1,100 ships ordered for delivery over the next three years valued at around $350 billion, but the liquidity to fund those new ships has dried up, Wang said. Some of those ships may be sold off at low prices, he added.
"I think there will be some fire sales," Wang said. "That is why we are patiently waiting, we are like a tiger waiting for opportunities to come up. We have the liquidity, we have the capital."
Wang also said that despite the credit crunch, Chinese banks continue to provide liquidity to well-run container shipping companies like Seaspan in part because container shipping makes sense for the export-driven Chinese economy but also for the simple reason that they are awash with cash. Continued...
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