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Home News Financial Products Group in purported second Seaspan transaction

Financial Products Group in purported second Seaspan transaction

Japanese leasing house Financial Products Group (FPG) said on 1 September that it has completed a sale-and-lease transaction for 15 boxship newbuildings.

While FPG did not disclose the customer’s name, the leasing house said that it had done a transaction for the same customer in December 2021, involving 18 boxship newbuildings, and it is understood that the customer is Seaspan Corporation, which has a total of 84 container vessels on order that will be delivered between 2022 and 2025.

The 15 aforementioned vessels will be delivered in late 2023. The sum that FPG paid for the ships was not disclosed, although it said that the ships had a total value of US$1.46 billion.

FPG was founded by its President, Hisanaga Tanimura, in 2001, and started out as a lessor of real estate and aircraft, before moving into shipping. The company’s largest shareholders are still Tanimura’s relatives, who are said to have a combined stake in excess of 27%.

FPG explained that its financing of the newbuildings is “transition finance” of assets that contribute to decarbonization.

FPG said, “Each of these container ships is equipped with a dual-fuel engine that can switch between liquefied natural gas (LNG) and diesel fuel. Additionally, each of these container ships also has an alternative eco-friendly maritime power supply system that can be used, instead of the dual-fuel engine, when the ship is at a port.”

The company finances vessels through a sale and leaseback arrangement known as Japanese Operating Lease with Call Option (JOLCO).

In JOLCO transactions, the ship’s registered owner sells partial ownership of the vessel to undisclosed Japanese-registered owner/lessors, which are understood to be FPG’s wholly-owned subsidiaries and which hold the economic control of the vessel. These subsidiaries will raise funds by placing equity in silent partnerships with investors (primarily small and medium enterprises) and from bank loans. The vessel is subsequently bareboat chartered back to FPG’s customer.

Martina Li
Asia Correspondent

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