Former Buffett Heir Apparent David Sokol Gets Into LNG With COSCO and Singapore's Swiber (SSW)

David Sokol, Chairman of Seaspan, was CEO and chair of MidAmerican Energy when Berkshire Hathaway bought the utility. At the time MidAm was running the largest utility-owned wind generation fleet in the U.S., in addition to the hydrocarbon fueled generation. He appeared to have the inside track to replacing Buffet, with Ajit Jain being elevated to God-King of all insurance ops.

Then Sokol decided to trade ahead of a Berkshire acquisition and Buffet did the investigation and fired Sokol. He next showed up on our pages in January 2018's "Former Buffett Heir Apparent David Sokol Resurfaces In the Shipping Business" with the intro being:

We have a lot of stuff on Mr. Sokol what with the wind and the gas and the BRK Mid-American Energy and all. Some links below....

He has appeared a few times since:
June 2018 
Shipping: Canadian Fund Fairfax Commits to New $500 Million Investment in David Sokol's Seaspan
Jan 2019 
Warren Buffet's Former Heir Apparent Cuts A Deal With "The Warren Buffet of Canada"

Seaspan runs a container fleet with 900,000 TEU capacity.

And the latest. First up an April 3 press release via MarketWatch:

Seaspan Announces Framework Agreement with COSCO SHIPPING Energy Transportation Relating to LNG Opportunities

HONG KONG, April 3, 2019 /PRNewswire/ - Seaspan Corporation ("Seaspan") SSW, -0.99% today announced a framework agreement (the "Agreement") for strategic cooperation with COSCO SHIPPING Energy Transportation Co., Ltd. ("COSCO SHIPPING Energy"). COSCO SHIPPING Energy specializes in LNG, oil products, and other energy transportation under China COSCO Shipping Corporation Ltd., ("COSCO Shipping"), and has the largest LNG fleet in China.

Pursuant to the Agreement, both parties are committed to strengthening their exchange of and collaboration on opportunities relating to LNG investments, LNG projects, LNG transportation, ethane transportation, or other related and mutually beneficial projects. The strategic partnership will leverage the strengths and networks of both companies, taking advantage of COSCO SHIPPING Energy's experience in the building, operation, and management of LNG vessels, and Seaspan's global experience in the operation and management of containerships, as well as the networks and experience of its board members in the energy sector....MUCH MORE

And from the Straits Times, April 2:

NY-listed Seaspan investing up to $270m in Swiber
$13.5m in initial tranche; rest to come after key milestones are hit

A New York-listed firm will invest up to US$200 million (S$270 million) in Swiber Holdings, a move the marine engineering group says is a significant step forward in its restructuring.
The shot in the arm for Swiber from Seaspan, which owns and manages containerships, comes after more than two years in judicial management.

Swiber and Seaspan said last Saturday that they have modified certain aspects of the investment deal announced last October when the parties signed a term sheet.

An initial investment tranche of US$10 million - this was previously US$20 million - will be unlocked in exchange for an 80 per cent interest in a new holding company that will contain certain Swiber Group assets.

Once the firm has secured the development stage LNG-to-power project in Vietnam and achieved major milestones, a tranche of US$190 million, previously US$180 million, will be used to subscribe to preference shares in Swiber's wholly owned subsidiary, Equatoriale Energy. This entity will also form part of the New Swiber group....MORE

Two things to be aware of regarding Seaspan. Firstly the stock looks a bit extended:

FinViz

Secondly the company has 38 million shares registered to sell, here's the prospectus, and what had been on the shelf was just declared effective on April 2.

Shipping: Former Buffett Heir Apparent Increases Seaspan's Fleet To Almost One Million TEUs (SSW)

I thought the whole reason Sokol made a move on Seaspan was that they were growing too fast.
Huh
And in one of those "You can't make it up" twists:
January 17, 2019
Warren Buffet's Former Heir Apparent Cuts A Deal With "The Warren Buffet of Canada"
Mr. Sokol broke Warren's heart when he traded on material non-public information. It was one of the dumbest things anyone in business management has ever done....

And here's the latest from gCaptain:
Containership Deal Brings Seaspan’s Fleet Close to One Million TEU

Hong Kong-based Seaspan has announced plans to purchase a fleet of six containerships that will bring its fleet close to one million TEU.
The six ships will be purchased on long-term charter for a total purchase price of approximately $380 million.

The addition of the ships will bring Seaspan’s total pro forma global fleet to 119 vessels and approximately 975,000 TEU, giving it a market share of 7.7 percent by total TEU capacity.
Seaspan says the acquired vessels are comprised of three 10,700 TEU ships built in 2012, two 9,200 TEU ships built in 2013, and one 9,200 TEU ship built in 2014. The vessels all currently operate under long-term charter with a leading global liner, according to Seaspan....MORE

We have quite a few posts on Seaspan and even more on David Sokol from the time he was running Berkshire's MidAmerican Energy sub. and building what was the largest fleet of wind turbines in the country, though I think they've since been passed by one of the Florida utilities.
Use the 'Search blog' box if interested.

And here is the chart with a warning dated April 3 (as can be seen the stock dropped for around 48 hours and then proceeded 27% higher over the next five months):

Two things to be aware of regarding Seaspan. Firstly the stock looks a bit extended:

FinViz

Secondly the company has 38 million shares registered to sell, here's the prospectus, and what had been on the shelf was just declared effective on April 2.

Warren Buffet's Former Heir Apparent Cuts A Deal With "The Warren Buffet of Canada"

Mr. Sokol broke Warren's heart when he traded on material non-public information. It was one of the dumbest things anyone in business management has ever done.

From World Maritime News:

Seaspan Completes 2nd Tranche of Investment with Fairfax

Hong Kong-based containership owner and operator Seaspan Corporation revealed that Fairfax Financial Holdings Limited closed the second tranche of its USD 1 billion investment commitment in the company.

As with Fairfax’s initial USD 500 million investment in Seaspan, the second tranche of funding is structured as a USD 250 million issuance of 5.50% senior notes due 2026 and approximately 38.46 million warrants.

Pursuant to a deal entered into at the end of May 2018, Fairfax has agreed to immediately exercise the 2019 warrants at a price of USD 6.50 per warrant, for additional equity proceeds to Seaspan of USD 250 million. As a result, Seaspan’s aggregate proceeds from the Second Fairfax Investment will be USD 500 million, the company explained.

This brings Fairfax’s total investment in Seaspan to USD 1 billion, the proceeds of which will be used to fund future growth initiatives, repay debt and for general corporate purposes.
With the closing of the second investment, Fairfax’s aggregate shareholdings in Seaspan are 76.9 million Class A common shares or 36% of shares outstanding.

Fairfax continues to hold the 25 million seven year warrants, with an exercise price of USD 8.05, which were issued to it on July 16, 2018.

“This additional investment will enhance Seaspan’s ability to execute on our long-term goals of deleveraging, strengthening our balance sheet, and creating value through disciplined and thoughtful capital allocation,” David Sokol, Chairman of Seaspan Corporation, said.

World Maritime News front page.

As to Fairfax's Prem Watsa, I don't think riding Blackberry into the ground buffed-up his "Oracle of Toronto" cred.

Regarding Sokol, as noted a year ago:
Former Buffett Heir Apparent David Sokol Resurfaces In the Shipping Business
We have a lot of stuff on Mr. Sokol what with the wind and the gas and the BRK Mid-American Energy and all. Some links below....

For press releases SeaSpan uses PR Newswire/Cision rather than "BusinessWire-A Berkshire Hathaway Company".

Wow: "Seaspan Completes Full Financing for 70-Vessel Newbuild Program" (ATCO)

If you can handle the risk of a company 100% devoted to financial engineering these guys are pretty good at what they do.

Our boilerplate introduction to the Chairman of the parent company:

David Sokol, Chairman of Seaspan, was CEO and chair of MidAmerican Energy when Berkshire Hathaway bought the utility. At the time MidAm was running the largest utility-owned wind generation fleet in the U.S., in addition to the hydrocarbon fueled generation. He appeared to have the inside track to replacing Buffet, with Ajit Jain being elevated to God-King of all insurance ops.

Then Sokol decided to trade ahead of a Berkshire acquisition and Buffet did the investigation and fired Sokol....

And on the CEO of the larger of the two operating companies:
Hong Kong Shipping: Do Not Short Seaspan's Bing Chen (ATCO)

From gCaptain:

Containership owner and operator Seaspan Corporation says it has completed full financing for its 70-vessel newbuild program.

The final $1.4 billion in financing closed on December 23, 2021, bringing its total financing proceeds to $6.9 billion.

The $1.4 billion will be used to finance ten 15,000 TEU LNG dual-fuel newbuild vessels and marks the last arrangement needed to fully finance its $7.6 billion newbuild program.

“We have now concluded binding financing arrangements for our full Newbuild Program, solidifying our long-term liquidity,” said Graham Talbot, CFO of Atlas and Seaspan. Seaspan is a wholly owned subsidiary of Atlas Corp. (NYSE: ATCO). “We have demonstrated consistent success in executing on attractive growth opportunities at the right time, while diligently managing associated risk. We do this by ensuring we enter into newbuild contracts only once a long-term lease is in place with one of our high-quality counterparties, and that we have a clear line of sight to financing the project.”

Seaspan charters its vessels primarily on long-term, fixed-rate time charters to the world’s largest container shipping lines. Its fleet consists of 134 vessels with a total capacity of 1,156,800 TEU, plus another 67 vessels under construction, increasing total capacity to 1,959,200 TEU. The 70-ship newbuild program includes three recently delivered ships....

....MUCH MORE

Our last visit to Seaspan was July's "Shipping: French Engineers To Design Ammonia-Ready LNG Fuel Tanks for Hong Kong's Seaspan Containerships"  

We ended that post on Mr. Chen by saying:

Because there is so much financial engineering involved in what Seaspan does, buying ships with debt and chartering them out to operators it is a little spooky to look at their financials but if they keep all the plates spinning there is a lot of money to be made. And that's the dilemma for betting on either side of this one.

Former Buffett Heir Apparent David Sokol Resurfaces In the Shipping Business

We have a lot of stuff on Mr. Sokol what with the wind and the gas and the BRK Mid-American Energy and all. Some links below.
From Cision-PR Newswire:

Seaspan Enters Into Definitive Agreements for $250 Million Unsecured 5.50% Debenture and Warrant Investment with Fairfax Financial Holdings Limited

HONG KONG, Jan. 17, 2018 /PRNewswire/ - Seaspan Corporation (NYSE: SSW) ("Seaspan" or the "Company") announced today that Fairfax Financial Holdings Limited, through certain subsidiaries (collectively, "Fairfax"), has entered into definitive agreements for the previously announced US$250 million investment in Seaspan 5.5% interest bearing unsecured debentures (the "Debentures") and Class A Common Share purchase warrants (the "Warrants"). The transaction is expected to close before March 1^st, and Seaspan intends to use the proceeds from the investment to fund future growth initiatives, debt repayment and for general corporate purposes.

David Sokol, Chairman of Seaspan Corporation, commented, "I am very pleased to announce the finalization of our agreements with Fairfax, and look forward to beginning our partnership at such an exciting time for the company. Under Bing's leadership, Seaspan will continue to grow and optimize the franchise in order to benefit our investors, customers, employees, and other key stakeholders."

"We are excited about our investment and partnership with Seaspan." said Prem Watsa, Chairman and Chief Executive Officer of Fairfax. "I have known both David Sokol and Dennis Washington for many years through the Horatio Alger Association. David has one of the most outstanding records I have come across, as he built Mid American Energy from revenue of $116 million in 1991 to revenue of $11 billion in 2010, while net income increased from $27 million to $1.2 billion over the same period, representing a compound growth rate of 22.4% per year. David is a man of the highest integrity and we are proud to partner with him. Dennis, of course, is one of North America's most successful entrepreneurs and a wonderful human being."...MORE

Oddly enough Seaspan doesn't employ the services of BusinessWire (a Berkshire Hathaway company) for their press releases.
Another oddity, Mr. Watsa is known as the Warren Buffett of Canada although he isn't really.

Previous posts on Mr. Sokol:
August 2015
Oil: "End Of The Line For Buffett's Burlington Northern" (BRK)

Burlington Northern is the largest hauler of crude out of the Bakken.
Should this scenario play out, and knowing Warren's almost chameleon-like promotional abilities, I would expect him to begin buffing his already-verdant green credentials and in particular those of the former Mid-American Energy division, now renamed Berkshire Hathaway Energy, which, under disgraced former heir-apparent David Sokol, became the owner of the largest wind turbine fleet in the U.S. and which, under current head Greg Abel, will become the largest single owner of utility-scale solar operations.
Just don't mention the coal....

August 2011 
Former Berkshire Hathaway Bigwig David Sokol Continues Buying Middleburg Financial (MBRG)  
The speculation is that this is going to be a "mini-Berkshire".
I don't know about that, Dave isn't Warren, but he is a good operator....
... We had a flurry of posts on Middleburg last March, here are a couple:

March 31
Middleburg Financial Approaching Escape Velocity on Word Sokol Was Buying Within the Last Two Weeks (MBRG; BRK.A)
March 31 
UPDATED: "Sokol: Off to Middleburg Financial? (Its Shares Are Soaring)" MBRG; BRK.B

March 2011 
Climateer line of the Day: Billionaire Insider Trading Edition

From a friend:

" I don't know if what Sokol did was illegal but I've got to tell you,

I felt safer after Martha Stewart was locked up.

First Runner-up:

A real oracle would have seen this coming.

-Anonymous Zerohedge commenter on 

Warren Buffett's reaction
.

David Sokol resigns from Berkshire Hathaway …Middleburg Financial Corp.’s sugar daddy David Sokol has resigned from Berkshire Hathaway. Sokol  of the handy “Berkshire benefactor” alliteration, it might mean that Sokol will be freed up to join Middleburg…
BizBeat 3/30/2011

March 2011 
Deal Journal is Running a Reader Poll on David Sokol's Lubrizol Trades! (BRK.A; BRK.B)
LIVE BLOG - David Sokol's Live Interview on CNBC's Squawk Box (BRK.A; BRK.B)
David Sokol Resigns From Berkshire Hathaway (BRK.A; BRK.B)
December 2010 
Berkshire Hathaway Subsidiary Gives Siemens Largest Onshore Wind Turbine Order (BRK.B; SI)
August 2010 
2016: "U.S. Facing a `Painful Period' as Debt Is Unwound, Berkshire's Sokol Says" and Fortune's Everything You Ever Wanted to Know about David Sokol article (BRK.B; BRK.A)

And many, many more. Use the search blog box if interested.

Warren really trusted him.

Shipping: French Engineers To Design Ammonia-Ready LNG Fuel Tanks for Hong Kong's Seaspan Containerships

Very smart. As we said in February when the ZIM deal was announced::
Shipping: Hong Kong's Seaspan Cuts A Billion Dollar Charter Deal (ATCO)
We last visited Seaspan and parent holding company in December 8's "Hong Kong Shipping: Do Not Short Seaspan's Bing Chen (ATCO)":

Or former Buffet heir apparent David Sokol for that matter but it is Chen running the larger company of the wannabe conglomerate, Atlas, and Chen who has built Seaspan into the largest non-operating ship lessor.....

From gCaptain:

South Korean shipbuilder Samsung Heavy Industries has awarded French engineering firm GTT with a contract to design Ammonia-ready LNG fuel tanks for five 15,000 TEU containerships.

The containerships on order for Hong Kong-based Seaspan Corporation for charter by ZIM.

GTT says each tank will have capacity of 12,000 cubic meters of LNG fuel and will be fitted with the company’s Mark III membrane containment system. Interestingly, the tanks will also be designed for future compatibility with ammonia fuel, giving Seaspan and Zim “greater operational flexibility” for adapting to changes in environmental regulations.

“This first collaboration on LNG fuel business with our long-time partner Samsung Heavy Industries, for the ship-owner Seaspan and the charterer ZIM, is a major milestone for GTT,” said Philippe Berterottière, Chairman and CEO of GTT.

“The ammonia compatibility of the ordered vessels offers flexibility and demonstrates GTT’s continued commitment to protect ship-owners investments in a context where they have to constantly adapt to evolving environmental regulations,” he added....

....MORE

Shipping: David Sokol's Atlas Filed Their Annual Report (ATCO)

Following up on yesterday's "Shipping, Energy: Former Buffett Heir-Apparent Is Turning SeaSpan Into A Mini-Berkshire (ATCO)"

It's a big old hog of a PDF, 190 pages, 33MB.
Here's the press release.
Here's the 20-F filed April 13:

Corporate Profile

In November 2019, we announced the reorganization of Seaspan Corporation (“Seaspan”) to create Atlas Corp. (“Atlas”), a leading global asset management company differentiated by its position as a best-in-class owner and operator with a focus on deploying capital to create sustainable shareholder value. Atlas’ management team, Board of Directors and major shareholders, the Washington Companies and Fairfax Financial Holdings, are aligned on our long-term growth strategy. Atlas’ wholly-owned subsidiaries, Seaspan and APR Energy Ltd. (“APR”), are unique, industry-leading operating platforms in the global maritime and energy space.

Seaspan is the largest independent owner and operator of container ships in the world,
with an industry-leading, fully-integrated operating platform that delivers unique and
differentiated value to our customers through a full life-cycle asset management approach. Seaspan’s fleet consists of 123 containerships, including one vessel we have agreed to purchase which has not yet been delivered, representing total capacity of approximately1,023,000 TEU1 (twenty-foot equivalent units are a measure of container capacity). Seaspan’s operating fleet of 123 vessels has an average age of approximately seven years, average remaining lease period of approximately four years, $4.6 billion of long term contracted revenue and a pro forma market share of 7.9% of the global chartered fleet2. Seaspan is well-positioned for sustainable long-term growth thanks to our resilient business model,attractive fleet, high quality customer base and financial strength, and our emphasis on operational excellence.

APR is the largest mobile gas turbine fleet owner and operator in the world, providing power solutions to customers including large corporations and government sponsored utilities. APR is the global leader in its asset class and offers a fully-integrated platform to both lease and operate its fleet, which consists of 850MW of mobile gas turbines and ~700MW of diesel/gas generators. Our global footprint includes over 600 staff operating 14 power plants in 10 countries on a 1.3GW installed base. APR focuses on maintaining high asset utilization through medium to long-term contracts to optimize cash flows across our global fleet.....

....MUCH MORE

Tomorrow,  big ATCO backer Fairfax Financial and Prem Watsa—he's not the Warren buffet of Canada, no matter what anybody says—but for now, here's one reason Sokol is going to be challenged going forward. As if  being in shipping and power generation weren't challenging enough:

Fairfax Financial warns of US$1.4-billion net loss in the first quarter

Shipping: Hong Kong's Seaspan Cuts A Billion Dollar Charter Deal (ATCO)

We last visited Seaspan and parent holding company in December 8's "Hong Kong Shipping: Do Not Short Seaspan's Bing Chen (ATCO)":

Or former Buffet heir apparent David Sokol for that matter but it is Chen running the larger company of the wannabe conglomerate, Atlas, and Chen who has built Seaspan into the largest non-operating ship lessor.

And the latest from Splash 24/7, February 15: 

ZIM seals deal for 10 Seaspan newbuilds

Israeli carrier ZIM has a struck a deal worth more than a $1bn with Seaspan, one of the world’s largest containership charterers, for a series of LNG-fuelled ships.

The ten 15,000 teu vessels, to be built at South Korea’s Samsung Heavy Industries, will be deployed on ZIM’s Asia – US East Coast trade when they deliver.

Eli Glickman, ZIM president and CEO, stated: “This is a milestone agreement for ZIM, valued in excess of $1bn.”....MORE

And the outro from that December post:

Because there is so much financial engineering involved in what Seaspan does, buying ships with debt and chartering them out to operators it is a little spooky to look at their financials but if they keep all the plates spinning there is a lot of money to be made. And that's the dilemma for betting on either side of this one.

Previously

 ATCO $13.14 at the close Friday, up from $11.22 that day in December.

Shipping: Hong Kong's Seaspan Secures Industry-First Sustainability Linked Loan (ATCO)

We haven't looked at Seaspan since late February when they went with the holding company structure so it will be interesting to see how all the financial engineering put together by Prem Watsa, Bing Chen and David Sokol works out.

From gCaptain, October 21:

Seaspan Corporation, a leading containership owner and operator, says it has secured a $1.8 billion sustainability-linked loan, marking a first of its kind in the containership leasing industry.

The loan consists of a $200 million term loan with a tenor of six years. The expanded Program is comprised of a $300 million revolving credit facility, and approximately $1.5 billion of term loan commitments, with staggered maturities between 2024 and 2026. Proceeds from the loan are intended to pay down the revolving credit facility, bolstering liquidity and capacity for growth opportunities, Seaspan said.

The SLL is the first sustainability-linked loan in the containership leasing industry, according to Seaspan. The framework of the loan inspired by the Poseidon Principles, the global framework by which financial institutions can assess the climate alignment of their ship finance portfolios.

The pricing of the loan will adjusted based on Seaspan’s performance against two key performance indicators. The first is the alignment of the carbon intensity of the collateral vessels with the International Maritime Organization (IMO) 2050 decarbonization goals. The second aims at fostering cooperation with charterers in order to advance the decarbonization agenda by seeking to include sustainability-linked provisions in future charter contracts....

....MORE

 FinViz

Tough timing for the combination of APR Energy and the shipping business but they actually received their first investment-grade senior secured rating from Kroll in early August.

We have more on Sokol than the other two financial whiz kids, as noted in the intro to this 2019 post:

Former Buffett Heir Apparent David Sokol Gets Into LNG With COSCO and Singapore's Swiber (SSW)

David Sokol, Chairman of Seaspan, was CEO and chair of MidAmerican Energy when Berkshire Hathaway bought the utility. At the time MidAm was running the largest utility-owned wind generation fleet in the U.S., in addition to the hydrocarbon fueled generation. He appeared to have the inside track to replacing Buffet, with Ajit Jain being elevated to God-King of all insurance ops.

Then Sokol decided to trade ahead of a Berkshire acquisition and Buffet did the investigation and fired Sokol. He next showed up on our pages in January 2018's "Former Buffett Heir Apparent David Sokol Resurfaces In the Shipping Business"....

Shipping: Hong Kong's "Seaspan continues ordering spree with 8 more boxships" (ATCO)

From OffshoreEnergy.biz:

Seaspan Corporation, a Hong Kong-based owner and operator of container vessels and part of Atlas Corp., has entered into an agreement with an undisclosed shipyard for the construction of eight scrubber-fitted containerships.

As informed, the transaction includes firm orders for four 12,000 TEU and four 15,000 TEU vessels plus an option for four additional 15,000 TEU boxships of similar build.

According to Seaspan, the ships will feature advanced efficiency and emissions reduction technologies and, upon completion, will enter long-term charters with a major liner company.

Deliveries of the containerships are anticipated to begin in the second half of 2022 and extend through the third quarter of 2023.

The vessels are anticipated to be financed from additional borrowings as well as existing liquidity.

As of September 30, 2020, Seaspan’s global fleet consisted of 127 vessels and approximately 1,073,000 TEU, with total contracted revenue of approximately $4.1 billion, and a weighted average remaining lease period of approximately four years....

....MORE

Although not mentioned above, Seaspan announced last month that it had ordered a couple biggun's. Two 24,000 TEU monsters which, were they operating today would be the largest container ships in the world, surpassing the 23,964 TEU Algeciras-class ships that Korea's HMM is running.

We have many posts on what CEO Bing Chen and former Buffet heir apparent David Sokol are up to, some of which are linked in February's "Shipping: Hong Kong's Seaspan Cuts A Billion Dollar Charter Deal (ATCO)".

Hong Kong Shipping: Do Not Short Seaspan's Bing Chen (ATCO)

Or former Buffet heir apparent David Sokol for that matter but it is Chen running the larger company of the wannabe conglomerate, Atlas, and Chen who has built Seasspan into the largest non-operating ship lessor.

From The LoadStar: 

MSC buys more second-hand ships and may be eyeing Seaspan newbuilds

The world’s largest non-operating containership owner, Seaspan Corporation, has ordered five newbuild 12,200 teu vessels, backed by 18-year charters with a major ocean carrier.

“All five vessels will commence long-term charters with a leading global liner company and are subject to vessel purchase obligations at the conclusion of the charters,” said Seaspan.

But it gave no details of the charterer, other than that it is a “long-standing customer”, or the construction yard.

“Executing a discreet newbuild opportunity to fulfil customer needs and achieve targeted returns is a win-win result,” said Seaspan chairman, president and CEO Bing Chen.

However, one broker source told The Loadstar today he suspected the charterer would be either Cosco, Maersk or MSC, but thought the tone of the announcement suggested the latter....

....MUCH MORE

Because there is so much financial engineering involved in what Seaspan does, buying ships with debt and chartering them out to operators it is a little spooky to look at their financials but if they keep all the plates spinning there is a lot of money to be made. And that's the dilemma for betting on either side of this one.

Previously

Shipping: Canadian Fund Fairfax Commits to New $500 Million Investment in David Sokol's Seaspan

From gCaptain May 31:

Fairfax Financial Holdings Ltd., the investment firm run by Prem Watsa, is preparing to increase its investment in Seaspan Corp. by $500 million to help fund the containership owner’s takeover ambitions.

Fairfax plans to exercise warrants to buy 77 million shares in the Hong Kong-based company at $6.50 per share in two phases starting this summer, according to a statement Thursday. It will exercise half in July and the rest in January.

Watsa said he is making the additional investment in Seaspan primarily based on the track record of the company’s Chairman David Sokol. Sokol, the former chairman of Berkshire Hathaway Inc.’s utility operations, took the same role at Seaspan in July as part of a shakeup that saw its co-founder, co-chairman and chief executive officer, Gerry Wang, resign.

In the 20 years that Sokol was at the helm of MidAmerican Energy Holdings Co., he grew the company’s assets from $500 million to $50 billion and its revenue from $100 million a year to $11 billion, Watsa said. MidAmerican had a return on equity of 23 percent per year on average over that period, he said.

Watsa noted the company started with just one geothermal plant in 1991. It was acquired by Warren Buffett’s Berkshire Hathaway in 1999, and by the time Sokol left 12 years later the company had pipelines, power plants and natural gas infrastructure under its umbrella.
“He went all the way up the value chain but was smart enough to go where others weren’t going and getting a good return all the time,” he said.

New Warrants
Toronto-based Fairfax acquired the warrants earlier this year through deals to buy $500 million of Seaspan’s debt. Fairfax will receive a new batch of warrants worth about $200 million for exercising the other ones early, according to the statement. The new warrants will give it the right to buy 25 million shares at $8.05 apiece within seven years....MORE

Previously on Seaspan:
Former Buffett Heir Apparent David Sokol Resurfaces In the Shipping Business

And on Mr. Sokol:
August 2015
Oil: "End Of The Line For Buffett's Burlington Northern" (BRK)

Burlington Northern is the largest hauler of crude out of the Bakken.
Should this scenario play out, and knowing Warren's almost chameleon-like promotional abilities, I would expect him to begin buffing his already-verdant green credentials and in particular those of the former Mid-American Energy division, now renamed Berkshire Hathaway Energy, which, under disgraced former heir-apparent David Sokol, became the owner of the largest wind turbine fleet in the U.S. and which, under current head Greg Abel, will become the largest single owner of utility-scale solar operations.
Just don't mention the coal....

August 2011 
Former Berkshire Hathaway Bigwig David Sokol Continues Buying Middleburg Financial (MBRG)  
The speculation is that this is going to be a "mini-Berkshire".
I don't know about that, Dave isn't Warren, but he is a good operator....
... We had a flurry of posts on Middleburg last March, here are a couple:

March 31
Middleburg Financial Approaching Escape Velocity on Word Sokol Was Buying Within the Last Two Weeks (MBRG; BRK.A)
March 31 
UPDATED: "Sokol: Off to Middleburg Financial? (Its Shares Are Soaring)" MBRG; BRK.B

March 2011 
Climateer line of the Day: Billionaire Insider Trading Edition

From a friend:

" I don't know if what Sokol did was illegal but I've got to tell you,

I felt safer after Martha Stewart was locked up.

First Runner-up:

A real oracle would have seen this coming.

-Anonymous Zerohedge commenter on 

Warren Buffett's reaction
.

David Sokol resigns from Berkshire Hathaway …Middleburg Financial Corp.’s sugar daddy David Sokol has resigned from Berkshire Hathaway. Sokol  of the handy “Berkshire benefactor” alliteration, it might mean that Sokol will be freed up to join Middleburg…
BizBeat 3/30/2011

March 2011 
Deal Journal is Running a Reader Poll on David Sokol's Lubrizol Trades! (BRK.A; BRK.B)
LIVE BLOG - David Sokol's Live Interview on CNBC's Squawk Box (BRK.A; BRK.B)
David Sokol Resigns From Berkshire Hathaway (BRK.A; BRK.B)
December 2010 
Berkshire Hathaway Subsidiary Gives Siemens Largest Onshore Wind Turbine Order (BRK.B; SI)
August 2010 
2016: "U.S. Facing a `Painful Period' as Debt Is Unwound, Berkshire's Sokol Says" and Fortune's Everything You Ever Wanted to Know about David Sokol article (BRK.B; BRK.A)

And many, many more. Use the search blog box if interested.

Warren really trusted him.

Shipping, Energy: Former Buffett Heir-Apparent Is Turning SeaSpan Into A Mini-Berkshire (ATCO)

With some financial help from the "Warren Buffet of Canada" (a misnomer, Mr. Watsa held Blackberry and held it waaay too long).
First up, some of the backgound. It was almost a decade ago that David Sokol broke Warren's heart by front-running the Lubrizol acquisition.  He purchased something like $10 million of the stock and then recommended Berkshire buy the company.

It made no sense, even if he doubled his money it was peanuts compared to what he stood to gain from operating MidAmerican Energy—an Iowa utility with what was at the time the largest fleet of wind turbines in the U.S.—for Berkshire ($24-25 mil/year).
As the facts came out it made even less sense. His stake was purchased for $104 and BRK bought Lubrizol for $135.

One of the dumbest trades in history.

Buffett was all set to basically recreate Enron, pipelines and gas and wind but within Berkshire and on the up-and-up, and eventually hand the reins of the entire Berkshire operation over to Sokol and Ajit Jain running the insurance and reinsurance ops.

Anyhoo, Sokol left in disgrace, took an interest in Middleburg Financial which looked as though it might be his vehicle to regain some cred, made some money off that and moved on to Hong Kong based shipping company,  Seaspan.

Some of our posts along the way:
March 2011
Middleburg Financial Approaching Escape Velocity on Word Sokol Was Buying Within the Last Two Weeks (MBRG; BRK.A)
January 2018
Former Buffett Heir Apparent David Sokol Resurfaces In the Shipping Business
June 2018
Shipping: Canadian Fund Fairfax Commits to New $500 Million Investment in David Sokol's Seaspan
April 2019
Former Buffett Heir Apparent David Sokol Gets Into LNG With COSCO and Singapore's Swiber (SSW)
November 2019
Shipping: Former Buffett Heir Apparent Increases Seaspan's Fleet To Almost One Million TEUs (SSW)

There are quite a few more, use the search blog box if interested
And where, patient reader asks, where is this ramble going?
Well staying in November 2019 Sokol made a mini-Berkshire move:

Seaspan Announces Proposed Holding Company Reorganization Forming Atlas Corp., a Leading Global Asset Manager and Enters into Agreement to Acquire APR Energy in $750 Million Transaction 

This post is getting too long as it is so we'll stop there and come back to Sokol and two very tough industries tomorrow.

And Middleburg?

April 1, 2017 
Middleburg Financial Corp. has merged with Access National Corp.
DPP acted as financial advisor to Mr. David Sokol, Middleburg’s largest shareholder (approximately 30%) and assisted in the negotiations on his behalf....

Shipping: "Cargo flow in 2030"

From Splash 24/7:

Revolution or evolution? What will the business of shipping and ports look like 10 years from now? The next chapter in our week-long look at the future of the industry, published in association with MacGregor.

How will the business of cargo flow and handling change over the next 10 years? It’s a question Maritime CEO has posed to hundreds of shipping executives in recent months. Some have BladeRunner-esque visions of the ship/port interface; others are more cautious about the speed of change.

The twin focus on market share and economies of scale has gone

For Graham Porter, the famous co-founder of Seaspan and now head of Tiger Group Investments, the biggest change coming is in automatic trucking, likely in combination with battery propulsion.

“This will redefine the logistics of the world,” Porter argues in conversation with Maritime CEO. “Efficiencies will improve dramatically, essentially highway trains will come about, with cargo moving 24 hours a day as there will be no limiting human driver and mandatory rest breaks. It will all be optimised to avoid rush hours. This could potentially redefine which ports are winners, displacing some of the old names.”

Phil Curran, vice president at G2 Ocean, says changes in cargo handling methods over the next 10 years will be driven by technology improvements.

“As technology improves and becomes less expensive and more accessible, we are expecting many opportunities in the breakbulk sector for improved, efficient automation, especially in operations onshore,” Curran says.

As an example, Curran expects shipping companies to use Radio-Frequency Identification (RFID) technology increasingly to monitor cargo from the first to the last mile.
“Tagging with RFIDs will be commonplace and will not only improve the visibility of cargo transport along a shipment journey but also help to improve our supply chain management,” Curran says.

Coordinated improvements
Kris Kosmala, a cargo handling expert and regular Maritime CEO columnist, says it is vital for the industry as a whole to work together to drive efficiencies over the coming decade.
“Value is created out of coordinated improvements across all port-vessel and port-cargo touch points,” Kosmala reminds readers.

Value is created out of coordinated improvements across all port-vessel and port-cargo touch points

Looking at specific touch points reveals where the improvements and changes will be happening over the next 10 years. In the physical port-vessel interface area Kosmala reckons we will see progressive deployment of vessel mooring solutions such as smart bollards and smart quay walls based on sensors and movement suppression technology between the bollard and the vessel.

But the physical aspect of mooring systems does not create sufficient value nor competitive differentiation. There is a need, Kosmala reckons, for predictive and optimisation software to be deployed above the physical interface that would aid terminal mooring crew in both tactical planning (where and how to position vessel at the quay in advance of the arrival/departure), as well as operational decisions on securing/releasing the vessel on the day of its actual arrival/departure in port.

Predictive maintenance
“The next 10 years will bring increasing sophistication of sensors and also sophistication of software capable of reading data from the sensors and predicting equipment servicing needs and optimising repairs and maintenance on the shore and ship equipment,” Kosmala suggests....

....MUCH MORE

Hmmm...
I'm going to have to seriously step up my game.

"How Technology is Changing the Spice Trade"
Change is hard.
I'm still mentally into the old-timey combination shipping news/stock market report:
Dutch East India Company (VOC)

$64.98 (+$13.84) (+27.1%) Shares in the spice purveyor soared on word that the three sturdy galleons dispatched two years afore had been sighted off the coast of Cape Verde, returning from their dangerous voyage to the exotic Orient with their casks brimful of redolent cinnamon, cardamom, and mysteriously intoxicating curried powder.

Okay, that's actually America's Finest News Source.
note: link to The Onion rotted, apparently un-Googleable as well. I was dreaming when I wrote this, forgive me if it goes astray.

Robert Yildirim: The Man With 24% Of CMA CGM

As far as CMA CGM is concerned it is probably a good thing Mr. Yildirim's Long Beach bid was not accepted, he would have had to sell his stake in the French flagship carrier to get liquid, and from all appearances is pretty much who you want as a minority owner.

Yildrum the Interview from Lloyd's List

Little known in shipping circles until he came to CMA CGM's rescue in 2011, Robert Yildirim has become a force to be reckoned with in the container terminals industry. A plain speaker who is not afraid to vent his anger in public, Mr Yildirim has made it clear he is very upset about the way the Long Beach Container Terminal sale was handled, and how unfairly he thinks he was treated

ROBERT Yildirim is one of a rare breed in the world of shipping, someone who is not only prepared to speak his mind, but also let his feelings be known.
In an increasingly corporatised industry where chief executives choose their words with care and try not to stray far from the party line, Mr Yildirim is refreshingly frank and open about his business dealings.

It helps, of course, to be the boss of a private family-owned group, but even so, many others in a similar position to Mr Yildirim prefer to stay away from the limelight, and would certainly never dream of discussing a transaction that had gone wrong.

But the head of the Yildirim Group of Companies was so incensed about what happened during the final stages of the Long Beach Container Terminal sale last month that he decided to vent his anger in public.
“I was screwed,” he told Lloyd’s List as he detailed how he had been led to believe he had won the bid for the LBCT concession.

Having thought he was on the verge of clinching an acquisition that had the potential to transform Yildirim’s Yilport subsidiary, he ended up with zero, and at a considerable cost.

Mr Yildirim is not planning to seek compensation through legal action, but he certainly expects recompense in some other form from business partners who, he believes, let him down. He mentions as an example more volumes through Yilport terminals.

So what happened exactly?
Yilport submitted a bid for Long Beach Container Terminal fairly late in the process, offering $1.76bn for the automated facility and setting out ways in which the Turkish company thought it could make the terminal even more productive and efficient.

The sellers and others with a role in the disposal process were impressed by the offer, Lloyd’s List was told by those closely associated in the transaction, and the Yilport tender was shortlisted, along with four others. Seaspan subsequently dropped out, and eventually there were just two names left in the ring, Yilport and Australia’s Macquarie Infrastructure.

Keen to buy LBCT and consolidate Yilport’s position as one of the world’s leading container terminal operators, Mr Yildirim lobbied hard.

He met members of the powerful Committee for Foreign Investment in the US to convince them he was a committed long-term investor and that his Turkish nationality posed no risk, especially given his group’s existing US interests and strong family ties to the US. His children are American citizens.

He also addressed Long Beach executive director Mario Cordero and port commissioners, who had asked for additional time to vet the two bids; was in direct contact with OOIL co-chief executive Andy Tung; and spoke to the JP Morgan team which was handling the sale. Finally, he talked to Macquarie since, at the time, Mr Yildirim was interested in buying three North Amercian port facilities that the Australian fund manager wanted to sell.

Piecing all the feedback together, Mr Yildirim was so certain he had won the LBCT concession that he pulled out of talks to buy the Macquarie terminals, as he could not afford both deals, which would have added up to $3bn.

“Everyone assured me, even JP Morgan, that my offer was similar to Macquarie’s, but that I was ahead,” says Mr Yildirim.

“Robert, you can get this,” he was told by those closely involved with the sales process.
It was Mr Tung who broke the news that OOIL’s new owner, Cosco Shipping, had decided at the last minute to accept the Macquarie offer.....

....MUCH MORE