Yangzijiang Shipbuilding plans to pay US$825.7 million to take a 10% stake in a key customer, charter owner Seaspan Corporation, which has been giving it shipbuilding orders for around two decades.

According to Yangzijiang, this acquisition will “further strengthen” its “strategic relationship” with Singapore-based Seaspan and “support closer long-term collaboration”.

Yangzijiang says that by owning this stake in this regular customer, it “enhances alignment” between vessel demand and its production planning and yard development strategy.

In addition, Yangzijiang will gain closer access to end-market dynamics, gather better market intelligence and be more responsive to customer demand.

The deal is also seen as a way to use Yangzijiang’s surplus funds in a “long-term strategic investment with relatively stable return characteristics.”

This acquisition is part of a bigger deal where shareholders of an entity called Poseidon Corp are selling 34% of the stake to other investors. Seaspan is an indirect subsidiary of Poseidon. It owns the world’s largest containership fleet of 227 vessels with a total carrying capacity of 2.4 million TEU.

In parallel and in conjunction to this deal, Hengyuan Asset Investment, a privately held entity controlled by Ren Letian, executive chairman of Yangzijiang, is taking a 5% stake.

In its SGX announcement, Yangzijiang notes that the book value of its 10% stake to be acquired is US$459 million as at Dec 31 2025, and that the NTA is around US$452 million.

Citing a valuation done by Kroll, the interest is valued at US$660.6 million to US$810.9 million.

According to Yangzijiang, it believes the premium it is paying over valuation is justified as it takes into account “the broader strategic and commercial benefits” of “long-term alignment with a significant customer”.

In a pro forma basis, assuming the acquisition was completed on Jan 1 2025, Yangzijiang’s profit per share would have improved to RMB2.3219, from RMB2.1923.

Yangzijiang will pay for this deal entirely using its own cash. Upon completion of the deal, it expects to remain in a net cash position.

Yangzijiang Shipbuilding shares closed at $4.05, down 1.22%.
Source: The Edge Singapore