Good day ladies and gentlemen, and welcome to the Global Ship Lease Q4, 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a Q&A answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Ian Webber, CEO of Global Ship Lease. Sir, you may begin.

Thank you very much. Good morning everybody and thank you for joining us. I hope that you’ve been able to look at the earnings release that we issued earlier today and been able to access the slides that will accompany this call. As usual the first two slides remind you that the call may include forward-looking statements that are based on current expectations and assumptions and are by their nature inherently uncertain and outside of the Company’s control. Actual results may differ materially from these forward-looking statements due to many factors, including those described in the Safe Harbor section of the slide presentation. We also draw your attention to the Risk Factors section of our most recent Annual Report on Form 20-F, which is for 2016 and was filed with the SEC on April 12, 2017. You can obtain this via our website or via the SEC’s. All of our statements are qualified by these and other disclosures in our reports filed with the SEC. We do not undertake any duty to update forward-looking statements. For reconciliations of the non-GAAP financial measures to which we will refer during this call to the most directly comparable measures calculated and presented in accordance with GAAP, you should refer to the earnings release that we issued this morning. For today’s presentation, I’ll begin with an overview of our fourth quarter and the full year and I’ll then provide some color on our fleets, charter portfolio and strategy. After that, Tom Lister will discuss the container shipping markets and provide an overview of our financials I’ll return for a brief summary, and then we will be glad to take your questions. If you turn to Slide 3, I’ll provide an overview of our results and recent developments. We generated operating revenue of $37.9 million…

Thanks, Ian. Over the next few slides there will be some recurring themes and these are summarized at the top of Slide 8. Our thesis is that, one, after a long challenging period and almost in its infancy we believe that 2017 marks the beginning of a fundamentals-driven recovery for the industry. Two, the order book is being rightsizing over time as the industry adjusts to a combination of capital constraints and a new demand growth paradigm. Three, improving supply demand fundamentals of supporting earnings in the spot or short-term charter markets and pushing up asset values, and four, and this is a point we’ve been focusing on for some time and that goes to the very heart of the GSL value proposition. We believe industry dynamics are most attractive for midsize and smaller ships which make up the GSL fleet and represent our focus for growth going forward. As we see it, these segments are said to be supply constrained while also being core to most trade lanes. The chart from the lower half of the slide underline the points I just made. On the left, you can see a comparison of demand growth, dark blue bars and supply bars, the pale blue bars. The jagged red line cutting through the chart is the spot market charter rate index upper armature of health of the sector. You can see demand growth beginning to overhaul supply growth in 2016, a trend which continued in 2017 and is anticipated to continue in 2018. And charter rates, the red line, have responded positively as longstanding oversupply begins to swing back into balance. The lower right-hand chart shows how the global fleet has evolved since 2007. Most significantly, you can see how the order book to fleet ratio which was north of 60%…

Tom, thank you. If you kindly turn to Slide 20, I’ll briefly summarize and then we’ll open up the call for questions. We’ve made important progress over the course of 2017 and into 2018. Putting Global Ship Lease in a position not only to maintain consistency and stability, but also to take advantage of opportunities to grow and create shareholder value amid an improving market environment. We maintained full fleet employment with top-tier counterparties and maintained a high level of utilization. We agreed new charters and extensions at EBITDA-positive levels and ended the year with 3.2 years of weighted average remaining contract cover including the recent extensions. We strengthened our balance sheet through a refinancing of all of our outstanding debts on improved terms with additional flexibility. And whilst supply demand tension continues to push up both spot rates and second-hand vessel prices, we believe that we have put Global Ship Lease in an excellent position to capitalize on attractive growth opportunities, such as our recent acquisition announced last week and look to develop strategic alternatives. With that, I would now like to open the call up to your questions.

[Operator Instructions] And our first question comes from the line Richard Smith from Muzinich. Your line is now open.

Hi, there. Thanks for taking my call. Just a couple of questions. I’ve got three questions in particular, the first, can you – as a result of the impairments, so for choosing Q4, what’s your view on the kind of existing difference than they still exists between the carrying value of the vessel assets on the balance sheet and what market value is or is that collectively been now reduced to zero, the difference has been reduced to zero from these impairments? Secondly, if you could go into maybe some of the details around the insurance deductibles in Q4 that’s driven that daily OpEx up and also on the gross debt, maybe I am missing something very obvious, but I get about just shy of $400 million if I add up long-term debt and short-term debt, but you are referencing about $415 million in gross debt, maybe you could just help me kind of reconcile that.

Sure, the last point first, the gross debt is $360 million of bonds and $54.8 million of secured term loan. When it’s presented in the financial statements, we deduct from that deferred financing costs and original issue discount. So you’ve got a figure in the financial statements net of those two items, which isn’t particularly helpful, but the gross debt is indeed just shy of $415 million. Insurance deductibles in the fourth quarter, it’s a fact of life in our industry that from time-to-time and fortunately our record is really very good. We do have accidents if we have to make a claim on our insurance policies, particularly the haul policy, we have to bear a deductible of between $125,000 and $150,000. On impairments, the U.S. GAAP impairment testing is not designed to bring the carrying value of vessels to a market value. We do disclosed in our 20-F for 2017 and we will continue that disclosure in 2017 more information on impairments and the book value of our assets against the kind of market value.

Okay. That’s great. Thank you.

And our next question comes from the line of Angus Rosborough from Park Vale Capital. Your line is now open.

Hi. Just two questions really. You spoke quite a bit about the mid and small-size portion of the market being basically favorably positioned. I was wondering if you could just add a little granularity of that and talk about the differences between the small size portion of the market and the midsize portion of the market. And the second thing, if indeed there are already differences, and the second question relates to the pace of acquisitions going forward. One of the things that you’ve done on the call quite effectively is talk about how well you think that GSL is positioned for the future and you’ve also spoken about where prices are going? How optimistic you are? You’ve done one acquisition here which is yet to hit the books, but it’s pretty small as things go, can we over the course of 2018 expect to see things really pick up pace?

Sure. Hi, Angus. On the first question, what’s the distinction between a midsize and smaller tonnage categories, I would say, the broad category covering both midsize and smaller would be vessels of 10,000 TEU or below, very broadly speaking and this distinction between the smaller and midsize when we are thinking of the smaller ships, effectively we are thinking of the feeder size vessels which very crudely run from roughly 1,000 TEU up to roughly 3,500 TEU. As to the pace of acquisitions, the – under the notes, we have the capacity to put $30 million worth of “equity” or cash to work on acquisitions and we are also committed to lever that up to 70% LTV. Thus, subjects to the availability of appropriate leverage, the hypothetical investment capacity that we would have would be roughly $100 million. But nevertheless, we are a small company. We recognize that and we also recognize that not every acquisition is a good acquisition, so we will be very selective in the acquisitions that we make focusing on vessels where we think there is a high specification and where we think that the operating and commercial prospects of that particular target assets is promising. And in that sense, it’s very helpful to have CMACGM as our 45% shareholder and third largest liner operator in the world giving us vessels on the sorts of assets and the characteristics of the assets that they as an operator would see as being valuable on a go-forward basis.

Thank you very much for that. I am sorry. I probably didn’t phrase my question accurately enough, but when I was talking about the differences between the small and medium-size portion of the markets, I was wondering if you could talk about the different dynamics that you are seeing. It’s my impression that things are better in the 1,000 to 3,500 TEU area versus the more midsize portion of the market, but that’s just a guess. Could you offer little bit more color around that?

Sure. I think, one of the phrases that has been banded around by various people during the course of the last few months is small is beautiful. So, I think we see the most favorable dynamics currently in the sort of the feeder sizes which is not to say that there aren’t opportunities in the midsize segments as well, but we think the most immediate opportunities are in the feeder sizes. And that’s one of the reasons why we broke out in the chart in the presentation, the Intra-Asia trade to make the point that that which represents in aggregate the largest container volumes by demand and also absorbs the largest number of ships, roughly 1600 is serviced by vessels which are predominantly on the small side, in fact, over three quarters of those vessels are 2000 TEU or below.

Got it. Now, in terms of the midsize section of the market, is it – how would you describe? It is under threat? Is it doing well? Is it benign? How would you describe that environment?

I would say, it’s an environment which is still an interesting environment and I would point I suppose to the experience that we’ve had recently with the charter extensions on two of our midsized vessels. The GSL Tianjin and the OOCL Qingdao respectively, because they demonstrate the elasticity of pricing in that segment and how finely tuned it is from a supply-demand perspective. So, the first vessel GSL Tianjin, we announced an extension on her in January and it was a negotiation that took place in late December and early January and the rate that resulted was $11,900 a day and then a matter of just six weeks or so later, her sister vessel, OOCL Qingdao, we’ve announced an extension of $14,000 a day. So I think that’s demonstrative of the growing tension which is a good thing in the supply-demand balance for the midsize tonnage segments.

That’s very helpful. That’s where I was trying to go. And the last thing was a question I hadn’t anticipated, but here it is, Evercore, you’ve hired them. They are working on various things. When are they going to be done their work?

It’s impossible to put a timeline on this. As I said, we think with the improved market conditions with GSL having refinanced and got a stable balance sheet for the next few years, it’s right for us to take and review strategic alternates. We engaged Evercore. We announced that process to be completely transparent and it remains to be seen, it remains to be seen to what transpires and on what timetable.

Okay. So, when your second quarter – excuse me – first quarter comes out, we should not be expecting any sort of basically summary of their deep dive. It will probably remain an open question.

Unless we’ve got something to announce of course.

Okay, thank you very much.

Thank you.

[Operator Instructions] And our next question comes from the line of Julien Raffelsbauer from Cantor Fitzgerald.

Yes, good morning. I just wanted to have your view on what is holding charter rates at relatively low level. Or you are showing on the Slide 14, given the very, very low yielding rate, I was wondering why there is not a stronger fleet from the low yielding rate to the charter rate? And my second question is, could you comment on the old Panamax side – size? Do you think there was enough scrapping which has been done on that specific category?

Sure. I mean, I think, I might slightly disagree with your characterization of charter rates. I think as you can see from the slide that we’ve provided on Slide 14 there has been really a quite a significant increase, at least in percentage terms on charter rates. Clearly, we would like to see in absolute terms those rates go higher and indeed, we expect to see them go higher over time. But I think you got to remember that the industry has had a very challenging number of years and it takes a little bit of time to change sentiment and for confidence to properly return and take hold within the sector. So I think that, owners are still perhaps a little cautious and possibly even overly cautious when it comes to agreeing charter rates to ensure their vessels are fixed and I think that as the recovery continues to take hold, you’ll see people perhaps being a little bit more aggressive than they currently are and you will see charter rates reacting accordingly going forward. And then your second question was about the Panamax category. Last year, roughly 650,000 TEU from memory, was scrapped overall and I think that roughly half of that was made up of Panamax capacity. So that has seen a very material reduction in the Panamax fleet and I think what we are also seeing is that, classic Panamaxes are being deployed on more trades including Intra-Asia by the way than they have been in the past. So, I think we are seeing over time a rightsizing of the Panamax fleet, but given that our Panamaxes of still on term charters for some time to come clearly from a selfish perspective, we would be pleased to see additional scrapping in those segments.

Okay. So, yes, coming back on the first question, so you think that the main reason why charter rates which I agree you had have come up. The reason why they are not moving up more quickly is just about the attitude from the owner which are not aggressive, and – because I guess, if there is only 2% yielding rates should be able to be more aggressive.

Correct and in fact the idle capacity has come down from 2% in mid-February it was as low as 1.4%. So, yes, I think the data would suggest that the charter rates should be firming faster than they are, they are indeed firming and really the only sort of explanation we can attribute to that is, but they have been held back at least for the time-being by caution and by sentiment. And we think that is – as owners become more confident, the recovery is really taking hold. They will then take a more aggressive stance when it comes to the charter rates themselves.

That’s very clear. And then last question, so the last charter you agree were short-term. Is it your decision? Because you think the charters are going to increase or was it a common decision with you and the charter lines?

These negotiations are always bilateral, but our strong preference was to not fix long on this vessel. We think that there is material upside and 12 months seem to us like a sensible period to fix while retaining access to that upside while still being consistent with the investment thesis we’ve put in front of people which is that we will only acquire vessels if there is a charter already in place or if we can put a charter in place such that the vessel will be accretive from the moment it’s acquired.

Okay. Thank you very much. Thank you.

Okay, thank you.

And our next question comes from the line of Peter [Indiscernible] from Janus Henderson. Your line is now open.

Hi, good afternoon. Just a couple of quick questions on the new vessel. Can you share what the OpEx is on that vessel? And I think as you have the financing in place on this is it sort of 70% loan-to-value? What are you planning to say on that financing? Thanks.

On the operating front, it’s – you could use our average cost in 2017 around $6,600.

Okay. Thanks.

And on the financing, based on the alignment, but as I mentioned or both mentioned in our remarks, we are looking to place some leverage on that vessel, based on what terms might be.

Okay. Thank you.

And I am currently see no further questions and I would like to turn the call back to Ian Webber for any further remarks.

Thank you very much. Thanks for listening and we look forward to talking to you later in the year on our Q1 results. Thank you.