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Subject:  Re: Shipping: A pull-back? Date:  7/28/2021  3:18 AM
Author:  HohumYNWA Number:  25809 of 25817

In the OP, I made this comment--
I have seen a GSL Net Asset Value (NAV) suggested on SeekingAlpha that the company trades around 55% of book. I'm working on my own estimate. But this is tricky, given the fleet and age mix with a mostly 2nd hand fleet, and existing price volatility.

Ok, some progress.
I took a look at GSL's fleet and data from a few sources, and came up with a plan.
In the shipping sector, there is a concept called 'modern vessel', and this typically means a vessel less than 15-years-old. I then separated GSL's fleet into two categories
1. Modern - 2006-build and newer
2. Older vessels 2005-build and older
Then, for vessels in Group 1, I did a best estimate with data from brokers, recent transactions or newbuild price adjustments. Group 2 vessel was calculated as scrap + some declining annual balance to year 20, then vessels beyond 20-yo, it was just just individual vessel scrap ($450 * LDT tonnage)
Group 1: 18 vessels $930.00M
Group 2: 32 vessels $456.53M
Total 50 vessels* $1386.53M
* GSL completed two fleet transactions in June 2021 adding 16 vessels. The payment details - cash, new preferred share issuance & financing is not entirely clear at this time. So, I am excluding those vessels from the valuation at this time
Debt was around $730M at end of Q1 and cash was around $160M
Bim! Bang! Ka-ching! $20.71/sh

I should point out I do think my numbers are fairly conservative.
i. At least in the near term of 12-18 months, those older (Group 2) vessels can earn more in the current market environment than they normally would earn, and thus put upward pressure on their valuation.
ii. Also, ship-breakers in Bangladesh and Pakistan are currently paying a lot more than $450/LDT.

In 2021, GSL started a dividend for its common shares. Don't guarantee its long term viability. But, in the near term, a payout can offer support to the price.
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