Hard times for containership lessors

The seven publicly listed pure containership leasing companies lost 48% of their market value in 2015, as earnings were battered by the sharp fall in charter rates and resale values. The weak market conditions also forced Greek shipowner Technomar and its private equity partners to withdraw the planned initial public offering of their containership leasing vehicle, Poseidon Containers Holdings, in July.

The worst hit of the listed companies was Michael Bodouroglou’s Box Ships Inc., whose share price has dropped by over 81% in the last 12 months. The company, which was first listed on the New York Stock Exchange in 2011, was delisted from the NYSE on 17 November 2015 after it failed to maintain a market capitalization of at least $15million. It is now traded in the over-the-counter (OTC) market, with a market cap of only $4.9million, based on a current share price of $0.158, compared to an IPO price of $12.00 per share in April 2011.

Box Ships’ fleet of nine container vessels in the size range of 3,400 to 6,500 TEU is entirely exposed to the weak spot charter market, with remaining charter periods of between one and seven months, and one 3,426 TEU unit idle since the end of December. Current charter rates for Box Ships’ vessels now range from only $5,500 to $7,500 per day. Such rates barely cover vessel operating costs and they are insufficient to pay any capital costs. Of note, the vessels earned charter rates from $20,000 to $38,000 per day in 2011 and 2012, when they were initially acquired by Box Ships.

 

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