Global Ship Lease Gets Loan Waiver Extension

Global Ship Lease said its bankers agreed to waive for a further year a requirement that the container ship-owner’s loans cannot exceed 75 percent of the value of its charter fleet.

Under the agreement, the NYSE-listed company does not have to conduct loan-to-value tests until November 30, 2012. GSL, which lost $900,000 last quarter,  said it had anticipated the loan-to-value ratio would exceed 75 percent due to the current downturn in the container ship market. The company will not be able to pay a dividend during the period of the waiver.

“Global Ship Leases’ long-term time charter contracts generate stable revenues and predictable cash flows, which are largely unaffected by the loan-to-value ratio,” said Ian Weber, Chief Executive of GSL.

“The waiver insulates the company, until November 30, 2012, from the volatility of asset values. Further, we are aggressively paying down debt, thus strengthening our balance sheet for the long-term benefit of shareholders.”

The company has reduced debt by $100.1 million since August 2009, Webber said. GSL has 17 container ships with an aggregate capacity of 66,349 20-foot equivalent units on long-term charter to French ocean carrier CMA CGM, which has a significant minority stake in the company.

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.