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Prospectus summary 

This summary highlights selected information appearing elsewhere in this prospectus and may not contain all of the information that is important to you. While this summary highlights what we consider to be the most important information about us, the common shares we are offering as well as information regarding our business and detailed financial data, you should carefully read this prospectus and the registration statement of which this prospectus forms a part in their entirety before investing in our common shares, especially the risks of investing in our common shares, which we discuss under ‘‘Risk factors,’’ and the financial statements and related notes beginning on page F-1. Unless we specify otherwise, all references to and data regarding our business and our vessels in this prospectus refer to our initial fleet, first contracted fleet and second contracted fleet. 

Unless the context requires otherwise, the words ‘‘Global Ship Lease,’’ ‘‘we,’’ ‘‘company,’’ ‘‘us’’ and ‘‘our’’ refer to Global Ship Lease, Inc. and its wholly owned subsidiaries, and the words ‘‘CMA CGM’’ refer to CMA CGM S.A. and its wholly owned subsidiaries. 

For the definition of certain shipping terms used in this prospectus, see ‘‘Glossary of shipping terms’’ at the end of this prospectus. 

Unless otherwise indicated, all references to ‘‘$’’ and ‘‘dollars’’ in this prospectus are in United States dollars. We use the term ‘‘TEU,’’ meaning 20-foot equivalent unit, the international standard measure of container size, in describing the capacity of our containerships, which we also refer to as our vessels. Unless otherwise indicated, we calculate the average age of our vessels on a weighted average basis, based on TEU capacity. 

Unless we specifically state otherwise, the information in this prospectus assumes that the underwriters will not exercise their option to purchase up to an additional 2,832,184 common shares from us to cover over-allotments, if any. This option is described in ‘‘Underwriting.’’ 

BUSINESS OVERVIEW 

We are a Republic of the Marshall Islands corporation incorporated on May 3, 2007 to acquire a fleet of modern, high quality containerships of diverse sizes. We will purchase the vessels in our initial and contracted fleet from CMA CGM and will derive initially all of our revenue from CMA CGM, which will be our only charterer following this offering. Our business strategy is to expand our fleet through additional vessel acquisitions and to charter those vessels under long-term, fixed-rate charters to reputable container shipping companies, including CMA CGM. 

We will acquire 10 secondhand vessels and two newbuildings from CMA CGM and certain of its vessel-owning subsidiaries following the closing of this public offering. We refer to these 12 containerships collectively as our ‘‘initial fleet.’’ Our initial fleet will have an aggregate capacity of 36,322 TEU and a weighted average age of 5.3 years upon delivery. In addition to our initial fleet, we will also acquire from CMA CGM and its subsidiaries four secondhand vessels and one newbuilding, with an additional aggregate capacity of 29,975 TEU and a weighted average age of 3.4 years at the time of their delivery. Three of the secondhand vessels and the newbuilding are scheduled for delivery in December 2008 and we refer to these containerships as our ‘‘first contracted fleet.’’ The remaining secondhand vessel is scheduled for delivery in July 2009 and we refer to this vessel as our ‘‘second contracted fleet’’ and, together with our first contracted fleet, our ‘‘contracted fleet.’’ We refer to our combined initial fleet and contracted fleet as our ‘‘initial and contracted fleet.’’ 

Prior to this offering, we were a wholly owned subsidiary of CMA CGM. CMA CGM, a French corporation, is the third largest container shipping company in the world, operating a fleet of 378 ships with a total capacity of 881,468 TEU as of September 30, 2007. Following this offering, assuming no other issuances of our shares and after giving effect to the private placement of approximately 3.3 million common shares at the initial public offering price as partial payment for our initial fleet, CMA CGM will beneficially own 15% of our outstanding common shares (or 13.3%, if the underwriters exercise their over-allotment option in full). In connection with our acquisition of the vessels of the first contracted fleet, we will issue additional common shares to CMA CGM at the initial public offering share price and, assuming that we do not issue any additional equity interest other than in connection with this offering and our purchase of our initial fleet, CMA CGM will thereafter beneficially own approximately 30% of our common shares then outstanding. 

Upon completion of the acquisition of our initial and contracted fleet, we will own a modern, high quality fleet of containerships ranging in sizes from 2,207 TEU to 10,960 TEU, with an average capacity of approximately 3,900 TEU. Our initial and contracted fleet will have an aggregate capacity of 66,297 TEU and a weighted average age of approximately 5.5 years upon delivery of all of our vessels, which we expect to occur by the third quarter 2009. Upon completion of this offering, all of our vessels in our initial and contracted fleet will be initially time chartered to CMA CGM for terms between five and 17 years equal to a non-weighted average term of 11 years. We refer to CMA CGM, in its capacity as our initial charterer, as our Charterer. We intend to gain new container shipping companies as our customers and increase the size of our fleet beyond our initial and contracted fleet through acquisitions of newbuildings and secondhand vessels. 

Our management team has extensive background in the shipping industry. Flemming R. Jacobs, our Chairman of the board of directors, has over 40 years of experience in the shipping industry, Ian J. Webber, our Chief Executive Officer, has over 12 years of experience in the shipping industry, Susan J. Cook, our Chief Financial Officer, has 15 years of experience in the shipping industry, Thomas A. Lister, our designated Chief Commercial Officer, has 15 years of experience in liner shipping and ship finance and Captain Ib Fruergaard, a member of our board of directors, has over 40 years of technical and management experience in the shipping industry. 

Our management team will undertake all management of and strategy for our fleet, and supervise the day-to-day ship management of our vessels that will be initially provided by CMA Ship Management, a wholly owned subsidiary of CMA CGM. We refer to CMA Ship Management as our Ship Manager. Pursuant to our ship management agreements, we will pay the Ship Manager a fixed management fee per vessel and we will reimburse the Ship Manager for operating expenses incurred by it on our behalf, up to a quarterly cap. The global expense agreement establishes the quarterly cap and the Ship Manager will bear the amount of operating costs incurred on our behalf in excess of a quarterly cap. 

As of September 30, 2007, CMA CGM managed 68 container vessels, varying in capacity from 133 TEU to 9,415 TEU. We believe CMA CGM has substantial experience in providing high-quality operational services in an efficient manner. 

In addition, upon completion of this offering, we will enter into a transitional services agreement with CMA CGM for an initial term of six months pursuant to which CMA CGM will provide administrative and support services to us upon our request. We believe that this services agreement will allow us to commence our operations more efficiently. 

The aggregate purchase price for our initial fleet is $573.0 million. We intend to finance the vessels of our initial fleet with (1) the issuance of approximately 3.3 million common shares to CMA CGM at the initial public offering per share price, (2) $334.9 million of the net proceeds from this offering (based on an initial public offering price of $20.00 per common share, which is the mid-point of the price range indicated on the front cover of this prospectus) and (3) borrowings of $171.5 million under our credit facility. Under the terms of the asset purchase agreement, we will acquire the 10 secondhand vessels and one newbuilding of our initial fleet, within 10 business days of the closing of this offering. We expect to acquire the other newbuilding of our initial fleet in December 2007. 

The aggregate purchase price for the four vessels of our first contracted fleet is $355.0 million. We expect to finance the purchase price with (1) the issuance of common shares at the initial public offering price to CMA CGM totaling $95.2 million, which, at $20.00 per common share (the mid-point of the price range indicated on the front cover of this prospectus), would be approximately 4.8 million common shares and (2) borrowings of $259.8 million under our credit facility. If the underwriters exercise their over-allotment option in full, the portion of the purchase price paid in common shares will increase to $119.5 million, or 6.0 million common shares, and the borrowings under our credit facility will decrease to $235.5 million. Assuming that we do not issue any additional equity interest other than our common shares issued in connection with this offering and the purchase of our initial fleet, CMA CGM, after receiving payment for our first contracted fleet, will hold approximately 30% of our outstanding common shares. 

The purchase price of our second contracted fleet is $82.0 million and will be financed by borrowings under our credit facility. 

OUR COMPETITIVE STRENGTHS 

We believe that we possess a number of competitive strengths that will allow us to capitalize on the growth opportunities in the containership shipping industry, including the following: 

OUR BUSINESS STRATEGIES 

We will seek to increase distributable cash flow per common share by following certain business strategies. The key elements of our business strategies are: 

An investment in our common shares involves risks and we can provide no assurance that we will be able to implement our business strategies described above. We urge you to consider carefully all factors set forth in the section of this prospectus entitled ‘‘Risk factors.’’ 

INDUSTRY TRENDS 

According to Drewry Shipping Consultants Limited, or Drewry, the container shipping industry has exhibited high demand growth with a compound annual growth rate in volume terms (as measured in TEU capacity) of approximately 10% over the period from 2001 to 2006. This growth represents a multiple of approximately three times the growth in global GDP over the same period. The high growth rate was mainly due to the following factors: 

In September 2007, Drewry estimated that world container traffic (measured in TEU capacity) may grow by 10.8% from 2007 to 2008, and may continue to grow at a similar high rate thereafter. 

As the industry has grown, charter owners with a business like ours have increased their share of global container ship fleet ownership and have become responsible for a substantial portion of containership capacity as the container shipping companies have sought to reduce their direct capital requirements and achieve greater fleet flexibility by chartering in tonnage rather than buying vessels. According to Drewry, chartered-in vessels accounted for approximately 49% of the top 10 container shipping companies’ capacity in March 2007, compared to approximately 30% in 1997. We believe that we are able to capitalize on this growth by offering container shipping companies competitively priced charters of newbuildings and secondhand vessels to either grow their fleet or to replace owned or other chartered vessels with long-term chartered vessels. 

Although the container shipping industry has exhibited high growth, the financial performance of charter owners and container shipping companies has been cyclical due to periodic imbalances in the supply of containerships and the demand for container shipping services. According to Drewry, in August 2007, the containership newbuilding orderbook in terms of TEU size was 60.4% of the existing cellular containership fleet. Most of the orderbook will be delivered into the world’s fleet over the next four years; therefore, the annual containership newbuilding orderbook equates to approximately 15% of the existing cellular containership fleet, which is a rate closer to the rate of global containerized trade. If demand growth is not at a level sufficient to absorb this additional capacity, an oversupply may result which could cause freight rates to fall and thereby reduce the financial performance of container shipping companies and place a downward pressure on ship charter rates, particularly in the short term charter market. These declines could then affect the overall financial results of charter owners. On the other hand, if demand growth subsequently catches up with, and  

then exceeds, supply growth, there may be a shortage of capacity which may drive up freight and charter rates. We believe that our focus on securing long-term charters with staggered expiration dates will help insulate us from this short term market volatility. 

We cannot offer assurances that the industry trends described above will continue following the completion of this offering. For a discussion of the risks related to our industry, see ‘‘Risk factors.’’ 

The offering 

Summary carve-out financial and other data 

You should read the information set forth below in conjunction with ‘‘Management’s discussion and analysis of financial condition and results of operations’’ and our predecessor’s carve-out financial statements and notes thereto, which we refer to as our carve-out financial statements, included elsewhere in this prospectus. We use the term ‘‘predecessor’’ to mean the container shipping services provided by the 10 secondhand vessels in our initial fleet that are currently owned by CMA CGM, rather than any particular entity or entities. 

The summary carve-out financial data set forth below for the years ended December 31, 2006, 2005 and 2004 and for the six-month period ended June 30, 2007 and 2006 have been derived from our predecessor’s audited and unaudited carve-out financial statements included in this prospectus. The Summary pro forma financial information and other data set forth below as of December 31, 2006 and for the six-month period ended June 30, 2007 have been derived from our predecessor’s unaudited pro forma financial information included elsewhere in this prospectus. Certain financial information has been rounded, and, as a result, certain totals shown in this prospectus may not equal the arithmetic sum of the figures that should otherwise aggregate to those totals. In addition, as discussed elsewhere in this prospectus, significant changes will occur to our operating structure upon completion of this offering and the acquisition of our initial fleet. Accordingly, the summary historical carve-out financial data, which include the trading activities of the vessels earning freight rates or revenue from carrying cargo for third party customers, are not indicative of the results we would have achieved had we historically operated as an independent shipowner company earning charterhire, as we intend to do, or of our future results. This information should be read together with, and is qualified in its entirety by, our predecessor’s historical, annual and interim carve-out financial statements and the notes thereto included elsewhere in this prospectus. The unaudited pro forma statement of operations for the period presented has been prepared as if we had completed this offering, acquired our initial fleet of 12 vessels and entered into our charter arrangements with our Charterer, our ship management agreements with our Ship Manager and our financing arrangements with Fortis Bank (Nederland) N.V., Citibank International Plc and HSH Nordbank AG, as of the beginning of the period presented. The unaudited pro forma balance sheet information has been prepared as if these events had occurred on June 30, 2007. Such information is provided for illustrative purposes only and does not represent what our results of operations or financial position would actually have been if the transactions had in fact occurred as of these dates and it is not representative of our results of operations or financial positions for any future periods. 

See ‘‘Unaudited pro forma financial information,’’ and the notes thereto, for a detailed explanation of the adjustments to our annual and interim carve-out financial statements that were made to produce the pro forma information presented below. 

Enforceability of civil liabilities 

Global Ship Lease, Inc. is a Marshall Islands company and our principal executive offices are located outside the United States in the United Kingdom. A majority of our directors and officers and certain of the experts named in this prospectus reside outside the United States. In addition, a substantial portion of our assets and the assets of our directors, officers and certain of our experts are located outside the United States. As a result, you may have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside the United States, judgments you may obtain in United States courts against us or these persons in any action, including actions based upon the civil liability provisions of United States federal or state securities laws. Furthermore, it is uncertain whether the courts of the Marshall Islands or the United Kingdom would enter judgments in original actions brought in those courts predicated on United States federal or state securities laws. 

Industry and market data 

Drewry Shipping Consultants Limited, or Drewry, an independent consulting company, has provided us with statistical data regarding the containership industry that we use in the discussion of the containership industry contained in ‘‘Business overview,’’ ‘‘Industry trends,’’ ‘‘Management’s discussion and analysis of financial condition and results of operations,’’ ‘‘The international containership industry’’ and ‘‘Business.’’ Drewry has advised us that the statistical information contained herein is drawn from its database and a number of industry sources and that this information is a general, accurate description of the international container shipping industry. Drewry’s methodologies for collecting data, however, and therefore the data collected, may differ from those of other sources, and its data cannot reflect all of the actual transactions occurring in the market. We believe that the information and the data provided by Drewry is accurate in all material respects and we have relied upon such information for purposes of this prospectus. 

Risk factors 

Investing in our common shares involves a high degree of risk. You should carefully consider the risks described below together with all of the other information included in this prospectus before deciding to invest in our common shares. If any of the following risks actually occurs, it may materially harm our business, results of operations or financial condition. As a result, the market price of our common shares may decline, our ability to pay dividends could be impaired and you might lose part or all of your investment.  

RISKS RELATED TO OUR BUSINESS 

Our growth depends on our ability to expand our relationship with our existing Charterer and obtain new charterers, for which we will face substantial competition.  

One of our principal objectives is to acquire additional vessels to be chartered out to our Charterer or to other charterers. The process of obtaining new charterers is highly competitive and often takes several months. Charters are awarded based upon a variety of factors relating to the vessel owner, including: 

We expect substantial competition in expanding our business, including with respect to obtaining new containership charters, from a number of experienced and substantial companies. Many of these competitors currently have significantly greater financial resources than we do, can therefore operate larger fleets and may be able to offer better charter rates. There may be an increasing number of owners with vessels available for charter, including many with strong reputations and extensive resources and experience. This increased competition may cause greater price competition for charters. As a result of these factors, we may be unable to maintain or expand our relationships with our Charterer or to obtain new charterers on a profitable basis, if at all, which would have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends to our shareholders. 

We cannot assure you that we will pay any dividends and our dividend policy is subject to change at the discretion of our board of directors.  

We intend to pay regular quarterly dividends. The declaration and payment of dividends is subject at all times to the discretion of our board of directors. We expect our dividends will be substantially equal to the available cash from our operations during the previous quarter (which equals revenue less costs and expenses under ship management agreements and other cash expenses), less interest payments on our outstanding debt, capital expenditures and any amounts we put in reserve (as determined by our board of directors) for drydocking, vessel acquisitions, other capital expenditures and debt repayments. We expect that our expenses will initially consist primarily of ship operating costs and management fees payable under our ship management agreements, salaries and benefits of our executive officers, directors’ fees, salaries and benefits for non-executive officers and employees and general and administrative expenses, including payments of insurance premiums. There can be no assurance that our actual results will be as anticipated, that our board will not increase the level of reserves or otherwise change our dividend policy or that we will not have additional cash expenses or liabilities, including extraordinary expenses. 

Risk factors 

The amounts of future dividends set forth in ‘‘Prospectus summary’’ and ‘‘Dividend policy’’ represent only estimates of future dividends based on our charters, estimated ship management costs, estimates of the delivery dates for our initial and contracted fleet, other expenses and the other matters and assumptions set forth therein and assume that none of our expenses will increase during the periods presented in those sections. 

The timing and amount of future dividends, if any, could also be affected by various factors, including: 

We may be unable to make or realize expected benefits from vessel acquisitions, and implementing our growth strategy through acquisitions may harm our business, financial condition and operating results.  

Our growth strategy includes, among other things, selectively acquiring newbuildings and secondhand vessels. Growing any business through acquisition presents numerous risks, such as undisclosed liabilities and obligations, the possibility that indemnification agreements will be unenforceable or insufficient to cover potential losses and obtaining the necessary resources to manage an enlarged business. We cannot give any assurance that we will be successful in executing our growth plans, that we will be able to employ acquired vessels under long-term charters or have ship management agreements with similar or better terms than those we have obtained from our Ship Manager or that we will not incur significant expenses and losses in connection with our future growth. 

Factors that may limit our ability to acquire additional vessels include the limited shipyard capacity for newbuildings, the relatively small number of independent fleet owners and the limited number of modern vessels with appropriate characteristics not subject to existing long-term or other charters. Competition from other purchasers could reduce our acquisition opportunities or cause us to pay higher prices. 

Any acquisition of a vessel may not be profitable to us and may not generate cash flow sufficient to justify our investment. In addition, our acquisition growth strategy exposes us to risks that may harm our business, financial condition and operating results, including risks that we may: 

Risk factors 

Unlike newbuildings, secondhand vessels typically do not carry warranties as to their condition at the time of acquisition. While we would inspect existing containerships prior to purchase, such an inspection would normally not provide us with as much knowledge of a containership’s condition as if it had been built for us and operated by us during its life. Future repairs and maintenance costs for existing vessels may be difficult to predict and may be substantially higher than for equivalent vessels we have operated since they were built. These additional costs could decrease our cash flow and reduce our liquidity and our ability to pay dividends. 

We cannot assure you that we will be able to borrow amounts under our credit facility, and restrictive covenants in our credit facility may impose financial and other restrictions on us, such as limiting our ability to pay dividends.  

In connection with this offering, we will establish an $800.0 million credit facility with Fortis Bank (Nederland) N.V., Citibank International Plc and HSH Nordbank AG, which we intend to use to acquire our initial and contracted fleet, acquire additional vessels and fund working capital, among other things. Our ability to borrow amounts under the credit facility will be subject to the execution of customary documentation, including security documents, satisfaction of certain customary conditions precedent and compliance with terms and conditions included in the loan documents. Our ability to borrow funds from the credit facility to acquire additional vessels and include them in the security package under the credit facility will be partially dependent on whether the purchase of the acquired vessels meets certain financial criteria, and whether the vessels meet certain age and minimum capacity requirements and are to be employed by an acceptable charterer. In addition, as a condition for obtaining financing from our lenders, every one of our vessels needs to be certified ‘‘in class’’ by a member of the International Association of Classification Societies Ltd. Four of the vessels in our initial fleet currently have recommendations. Our ability to borrow amounts under the credit facility will also be subject to, among other things, all of our borrowings under the credit facility not exceeding 70% of the aggregate charter-free market value of the vessels that are chartered to the Charterer or otherwise employed by an acceptable charterer and that secure our obligations under the credit facility. 

Additionally, our credit facility will provide that we may not pay dividends if there is a continuing default under the facility. We will also be prohibited from paying dividends if the payment of the dividend would result in a default and any payments to be made into the retention account are not fully up to date. Our ability to declare and pay dividends will therefore depend on whether we are in compliance with our credit facility. Our credit facility is a revolving credit facility and we may be required to make repayments under the facility although these repayments may be redrawn. It is probable that the market value of our vessels will decrease over time, as vessels generally decrease in value as they age. In addition, the market value of our vessels can fluctuate substantially depending on market supply and demand for vessels. Consequently, the ratio of our outstanding borrowings under our credit facility relative to the asset value of our vessels will likely increase, which will negatively affect our ability to comply with our financial ratio covenants. This, in turn, will impact our ability to pay dividend payments. In addition, following five years from the date of the closing of the credit facility, the amounts available for borrowing will be permanently reduced. Therefore, unless we are able to use other sources or refinance borrowings under our credit facility with new indebtedness that has a later maturity date, following five years after the date of the closing of the credit facility, the amount of cash that we will have available to pay as dividends in any period will be decreased by the amount of any principal repayments that we are required to make. 

The credit facility will impose additional operating and financial restrictions on us. These restrictions may limit our ability to, among other things: 

Risk factors 

Therefore, we may need to seek consent from our lenders in order to engage in certain corporate actions. Our lenders’ interests may be different from ours and we cannot guarantee that we will be able to obtain our lenders’ consent when needed. This may limit our ability to pay dividends to you, finance our future operations, make acquisitions or pursue business opportunities. See ‘‘Our credit facility.’’ 

Our ability to pay dividends is limited by our payments to CMA CGM and by Marshall Islands law.  

In addition to limiting payments of dividends if we are, or could become, insolvent, Marshall Islands law generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares). For accounting purposes, we will be deemed to be under common control of CMA CGM at the time of this offering. We will therefore treat the difference between our initial fleet’s purchase price over our initial fleet’s book value as a distribution to CMA CGM. This deemed distribution will reduce the size of our surplus amount available for distribution by a corresponding amount. This accounting treatment may adversely affect our ability to pay dividends to you immediately following the offering. 

We cannot assure you that we will be able to refinance any indebtedness incurred under our credit facility.  

We cannot assure you that, when required, we will be able to refinance our indebtedness on terms that are acceptable to us or at all. The actual or perceived credit quality of our charterers, any defaults by them, and the market value of our fleet, among other things, may materially affect our ability to obtain new or replacement debt financing. If we are not able to refinance our indebtedness, we will have to dedicate a portion of our cash flow from operations to pay the principal and interest of our indebtedness. We cannot assure you that we will be able to generate cash flow in amounts that are sufficient for these purposes. If we are not able to satisfy our debt service obligations with our cash flow from operations, we may have to sell some or all of our assets, which may not be possible and which would have an adverse effect on our cash flows and results of operations. If we are unable to meet our debt obligations for any reason, our lenders could declare their debt, together with accrued interest and fees, to be immediately due and payable and foreclose on vessels in our fleet, which could result in the acceleration of other indebtedness that we may have at such time and the commencement of similar foreclosure proceedings by other lenders. 

We are highly dependent on CMA CGM.  

All of our vessels in our initial and contracted fleet are chartered to CMA CGM, or its wholly owned subsidiaries, which we collectively refer to as the Charterer. See ‘‘Related party transactions’’ for more information on the agreements that we have entered into with the Charterer. The Charterer’s payments to us under the charters are initially our sole source of revenue. We are highly dependent on the performance by the Charterer of its obligation under the charters. CMA CGM has guaranteed the payment of charterhire in cases of default where the Charterer is one of its wholly owned subsidiaries. If the Charterer ceases doing business or fails to perform its obligations under our charters or pursuant to any guarantees, our business, financial position and cash available for the payment of dividends could be adversely affected. Under our ship management agreement with CMA Ship Management, the Ship Manager is obligated to provide us with requisite financial information so that we can meet our own reporting obligations under U.S. securities laws. CMA CGM has guaranteed the performance of CMA Ship Management and any payments due to us under the ship management agreements. CMA CGM and CMA Ship Management are privately held French corporations with financial reporting schedules different from ours. If CMA CGM or any of its subsidiairies is delayed in providing us with key financial information, we could miss our financial reporting deadlines. Although our Ship Manager has agreed to indemnify us for all losses and damages incurred as a result of its failure to provide financial information on a timely basis, up to a capped amount, our shareholders do not have any direct recourse against our Ship Manager or CMA CGM. 

Risk factors 

CMA CGM and our Ship Manager have conflicts of interest and limited contractual duties, which may make them favor their own interests to our detriment.  

Conflicts of interest may arise between us, on the one hand, and CMA CGM, our initial Charterer, and our Ship Manager, on the other hand. As a result of these conflicts, our Ship Manager may favor its own or its parent company’s interests over our interests. These conflicts may have unfavorable results for us. For example, our Ship Manager could be encouraged to incur unnecessary costs, for which it would seek reimbursement from us. Although our ship management agreements expressly prohibit our Ship Manager from giving preferential treatment when performing any of its ship management services to any other vessel that is affiliated with it, or otherwise controlled by CMA CGM, conflicts of interest may arise between us, and our Ship Manager and our initial Charterer. 

Our Ship Manager and CMA CGM, our initial Charterer, are privately held companies and there is little or no publicly available information about them.  

CMA CGM is our initial Charterer and CMA Ship Management is our initial Ship Manager. CMA CGM’s ability to continue to pay charterhire and CMA Ship Mangement’s ability to render ship management services will depend in part on their own financial strength. Circumstances beyond our control could impair CMA CGM’s and CMA Ship Management’s financial strength, and because they are privately held companies, information about the financial strength of their companies is not available. As a result, we and an investor in our common shares might have little advance warning of financial or other problems affecting CMA CGM or its wholly owned subsidiaries even though their financial or other problems could have a material adverse effect on us and our shareholders. As part of our reporting obligations as a public company, we will disclose information regarding CMA CGM, in its capacity as our initial Charterer, and CMA Ship Management, our Ship Manager, that has a material impact on us or our shareholders to the extent that we become aware of such information. 

CMA CGM could compete with us.  

Along with many other vessel-owning transportation companies, CMA CGM, currently our sole charterer and projected holder of up to 30% of our common shares upon the acquisition of our initial and contracted fleet, could compete with us in our search to purchase newbuildings and secondhand vessels. Further, CMA CGM is not precluded from acting as an owner in the direct chartering market. While we understand that CMA CGM currently has no intention of doing so, competition from CMA CGM may potentially harm our ability to grow the business beyond our initial and contracted fleet and may decrease our results of operations. 

Certain terms in our agreements with CMA CGM and its affiliates may be the result of negotiations that were not conducted at arms-length and may not reflect market standard terms. In addition, they may include terms that may not be obtained from future negotiations with unaffiliated third parties.  

The asset purchase agreement, the charters, the ship management agreements, the transitional services agreement and the other contractual agreements we have entered into with CMA CGM and its wholly owned subsidiaries were made in the context of an affiliated relationship and were negotiated in the overall context of the public offering of our common shares, the purchase of the vessels in our initial and contracted fleet and other related transactions. Because we were a wholly owned subsidiary of CMA CGM prior to the completion of this offering, the negotiation of the asset purchase agreement, the charters, the ship management agreements, the transitional services agreement and our other contractual arrangements may have resulted in certain terms that may not reflect market standard terms. For example, in connection with the purchase of our fleet from CMA CGM, we are granting CMA CGM the right to participate in certain future offerings until one month following the delivery of the vessel in our second contracted fleet. In addition, our agreements with CMA CGM may include terms that could not have been obtained from arms-length negotiations with unaffiliated third parties for similar services and assets. As a result, our future operating results may be negatively affected if we do not receive terms as favorable in future negotiations with unaffiliated third parties or have to enter into lengthy and costly negotiations with third parties in connection with entering into such agreements. 

Risk factors 

Our business depends upon certain individuals who may not necessarily continue to be affiliated with us.  

Our future success depends to a significant extent upon our Chief Executive Officer, Ian J. Webber, our Chief Financial Officer, Susan J. Cook, Thomas A. Lister, our designated Chief Commercial Officer and our Chairman of the board of directors, Flemming R. Jacobs. Mr. Webber, Ms. Cook, Mr. Lister and Mr. Jacobs have substantial experience in the shipping industry and have worked with several of the world’s largest shipping companies for many years. They and other members of the board of directors are crucial to the execution of our business strategies and to the growth and development of our business. If these individuals were no longer to be affiliated with us, or if we were to otherwise cease to receive advisory services from them, we may be unable to recruit other employees with equivalent talent and experience, and our business and financial condition may suffer as a result. 

We are a newly formed company with no separate operating history and our historical financial and operating data may not be representative of our future results.  

We are a recently incorporated company with no operating history. The historical predecessor carve-out financial statements included in this prospectus have been prepared on a carve-out basis and reflect our predecessor’s historical business activities as a container shipping company earning freight from transporting shipper’s cargo and incurring both vessel and voyage expenses, including all costs related to handling of shippers’ cargoes for our vessels while they were owned and operated by CMA CGM. These predecessor financial statements do not reflect the results we would have obtained under our fixed-rate long-term charters, ship management agreements and our financing arrangements and are not a meaningful representation of our future results of operations. Our unaudited pro forma financial information has been prepared as if we had purchased our initial fleet from CMA CGM, and entered into our charter arrangements and ship management agreements as of January 1, 2006. Such information is provided for illustrative purposes only and does not represent what our results of operations or financial position would actually have been if the transactions had in fact occurred on those dates and is not representative of our results of operations or financial position for any future periods. There will likely be variations between our future operating results and our pro forma financial information and such variations may be material. 

We do not intend to perform underwater inspections of our vessels.  

Although we have performed physical inspections of the vessels, we do not intend to perform any underwater inspections either prior to or after their delivery. As a result, we will not be aware of any damage to the vessel that may exist at the time of delivery and which could only be discovered through an underwater inspection. We have agreed to purchase the vessels and newbuildings on an ‘‘as is’’ basis, subject to CMA CGM being responsible for any class condition or recommendation that is found to have existed prior to delivery of the vessels. However, if any damage is subsequently found, we could incur substantial costs to repair the damage. 

Delays in the deliveries of the vessels in our initial and contracted fleet could harm our operating results.  

We have agreed to acquire (a) 10 secondhand vessels and one newbuilding of our initial fleet expected to be delivered within 10 business days following the closing of this offering, (b) one newbuilding of our initial fleet, expected to be delivered in December 2007, (c) three secondhand vessels and one newbuilding, expected to be delivered in December 2008 and (d) one secondhand vessel, expected to be delivered in July 2009. The delivery of any of these vessels could be delayed and any delay could negatively affect our operating results. 

The delivery of the secondhand vessels could be delayed because of, among other things: 

Risk factors 

The delivery of the newbuildings could be delayed for a number of reasons, including: 

The ship building contracts for the newbuildings in our initial and first contracted fleets contain a ‘‘ force majeure ’’ provision whereby the occurrence of certain events could delay delivery or possibly terminate the contract. Furthermore, Cosco is responsible for all construction and delivery costs of the two newbuildings in our initial fleet and CMA CGM is responsible for all construction and delivery costs of the newbuilding in our first contracted fleet. If either Cosco or CMA CGM fails to make construction payments for their respective newbuildings, we could lose our opportunity to acquire them. 

Any termination of the ship building contracts, or any delay in the delivery of the vessels in our initial and contracted fleet, will eliminate or postpone our receipt of revenues under the time charters for those vessels and may permanently reduce our actual and projected revenues, and would therefore adversely affect our results of operations and financial condition, including our ability to pay dividends to our shareholders, and may negatively affect our stock price. 

We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial and other obligations.  

We are a holding company and have no significant assets other than the equity interests in our subsidiaries. Our subsidiaries will own all of our vessels and payments under our charters will be made to our subsidiaries. As a result, our ability to pay dividends depends on the performance of our subsidiaries and their ability to distribute funds to us. The ability of our subsidiaries to make these distributions could be affected by a claim or other  

Risk factors 

action by a third party, including a creditor, or by Marshall Islands law or the laws of any jurisdiction which regulates the payment of dividends by companies. If we are unable to obtain funds from our subsidiaries, we may not be able to pay dividends. 

As our fleet ages, we may incur increased operating costs, which could adversely affect our earnings.  

In general, the cost of maintaining a vessel in good operating condition increases with age. In addition, older vessels are typically less fuel efficient. Governmental regulations and safety or other equipment standards may also require expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in which our vessels may engage. Although our initial and contracted fleet has a weighted average age of 5.5 years upon delivery, we cannot assure you that, as our vessels age, market conditions will justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives. 

Our insurance may be insufficient to cover losses that may occur to our property or result from our operations.  

The shipping industry has inherent operational risks. Although we will carry hull and machinery insurance, war risks insurance and protection and indemnity insurance (which includes environmental damage and pollution insurance), we may not be adequately insured against all risks and our insurers may not pay every claim. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the event of a loss. Under the terms of our credit facility, we may be subject to restrictions on the use of any proceeds we may receive from claims under our insurance policies. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet. We may also be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we receive indemnity insurance coverage for tort liability. Insurers typically have the right to increase immediately the premiums in certain ‘‘excluded areas’’ following acts of war or terrorism and we cannot be certain that our insurers will continue to provide cover, or that we will be able to pass these increased costs to any new charterers. Our insurance policies will also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs. 

In addition, we do not presently carry loss-of-hire insurance, which covers the loss of revenue during extended vessel off-hire periods, such as those that might occur during an unscheduled drydocking due to damage to the vessel from accidents. Accordingly, any vessel that is off-hire for an extended period of time, due to an accident or otherwise, could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends to our shareholders. 

Certain adverse United States federal income tax consequences could arise for United States holders.  

Shareholders of a ‘‘passive foreign investment company,’’ or PFIC, that are United States persons within the meaning of the Internal Revenue Code of 1986, as amended, or Code, which we refer to as ‘‘United States shareholders,’’ are subject to a disadvantageous United States federal income tax regime with respect to the distributions they receive from a PFIC and the gain, if any, they derive from the sale or other disposition of their shares in a PFIC (detailed below). In addition, dividends paid by a PFIC do not constitute qualified dividend income and, hence, are ineligible for the preferential rate of tax that applies to qualified dividend income. 

A foreign corporation is treated as a PFIC if either (1) 75% or more of its gross income for any taxable year consists of certain types of ‘‘passive income’’ or (2) 50% or more of the average value of the corporation’s assets produce or are held for the production of those types of ‘‘passive income.’’ For purposes of these tests, ‘‘passive income’’ includes dividends, interest and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business; income derived from the performance of services does not, however, constitute ‘‘passive income.’’ 

While there are legal uncertainties involved in this determination, based on representations made by us, our United States tax counsel believes that (1) our charters with CMA CGM and its subsidiaries should constitute  

Risk factors 

service contracts rather than leases for United States federal income tax purposes and (b) as a result, our income from these charters should not constitute ‘‘passive income,’’ and the assets we own for the production of this income should not constitute passive assets. Based on this opinion, we do not expect that we will constitute a PFIC with respect to the current or any future taxable year. 

There is, however, no direct legal authority under the PFIC rules addressing our current and projected future operations. In addition, our United States tax counsel’s opinion is based on certain representations made by us that have not been reviewed by the United States Internal Revenue Service, or IRS. Accordingly, no assurance can be given that the IRS will not assert that we are a PFIC with respect to any taxable year, nor that a court would not uphold any such assertion. Moreover, no assurance can be given that we will be able to avoid PFIC classification for any future taxable year if we decide to change the nature and/or extent of our operations. 

If the IRS were to determine that we are or have been a PFIC for any taxable year, our United States shareholders will face adverse United States tax consequences. Distributions paid by us will not constitute qualified dividend income if we are a PFIC in the year we pay a dividend or in the prior taxable year and, hence, will not be eligible for the preferential rate of tax that applies to qualified dividend income. In addition, our United States shareholders (other than those who have made a ‘‘qualified electing fund’’ or ‘‘mark-to-market’’ election) will be subject to special rules relating to the taxation of ‘‘excess distributions’’ — with excess distributions being defined to include certain distributions we may make on our shares as well as gain recognized by a United States shareholder on a disposition of our common shares. In general, the amount of any ‘‘excess distribution’’ will be allocated ratably to each day of the United States shareholder’s holding period for our common stock. The amount allocated to the current year and any taxable year prior to the first taxable year for which we were a PFIC will be included in the United States shareholder’s gross income for the current year as ordinary income. With respect to amounts allocated to prior years for which we were a PFIC, the tax imposed for the current year will be increased by the ‘‘deferred tax amount,’’ which is an amount calculated with respect to each prior year by multiplying the amount allocated to such year by the highest rate of tax in effect for such year, together with an interest charge as though the amounts of tax were overdue. See ‘‘Tax considerations — United States Federal Income Taxation of United States Holders — Consequences of Possible PFIC Classification’’ for a more comprehensive discussion of the United States federal income tax consequences to United States shareholders if we are treated as a PFIC (including those applicable to United States shareholders who make a qualified electing fund or mark-to-market election). 

Our operating income could fail to qualify for an exemption from United States federal income taxation, which will reduce our cash flow.  

We do not expect to be engaged in a United States trade or business. In the case of a foreign corporation that is not so engaged, the Code imposes a 4% United States federal income tax (without allowance of any deductions) on 50% of the corporation’s gross transportation income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States, unless the corporation qualifies for the exemption provided in Section 883 of the Code. 

Both before and after this offering, we expect that we will qualify for the tax exemption provided by Section 883. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this exemption and thereby become subject to the 4% tax described above. For example, if shareholders with a 5% or greater interest in our common shares (including CMA CGM) were collectively to own 50% or more of our outstanding common shares on more than half the days during a taxable year, we would probably not be able to qualify for the exemption provided under Section 883 of the Code. Due to the factual nature of the issues involved, we can give no assurances that we will qualify for the Section 883 exemption. 

If we are not entitled to the exemption provided under Section 883 for any taxable year (and assuming we are not engaged in a United States trade or business with respect to any such year), we would be subject to a 4% United States federal income tax on 50% of our gross transportation income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States (as described above). The imposition of this tax could have a negative effect on our business and would result in decreased earnings available for distribution to our shareholders. 

Risk factors 

The enactment of proposed legislation could affect whether dividends paid by us constitute qualified dividend income eligible for the preferential rate.  

Legislation has been proposed in the past and may again be proposed in the future that would have the effect of classifying dividends paid by us as other than qualified dividends, with the result that United States shareholders who are individuals would not be eligible for a 15% tax rate that might otherwise apply for a portion of the distributions they receive from us. The most recent of such bills were introduced into the House of Representatives and the Senate in March of this year. We cannot predict whether these bills or any similar bill will, in fact, be enacted. 

We may be subject to taxation of all or part of our income in the United Kingdom, which could have a material adverse affect on our results of operations.  

If we were considered to be a resident of the United Kingdom or to have a permanent establishment in the United Kingdom, all or a part of our profits could be subject to UK corporate tax, which currently has a maximum rate of 30%. We intend to be managed and controlled from outside the UK and to restrict our activities within the UK so that our UK taxes will be minimized. Certain intra-group services may be provided from within the UK, in which case UK corporate tax will be payable on the arms-length price for those services. The appropriate arms-length price in these circumstances is likely to be a matter of negotiation with the UK taxing authorities. 

Because some administrative and executive services will be provided to us by a subsidiary company located in the UK and certain of our directors reside in the UK, and because UK statutory and case law fail to definitively identify the activities that constitute a trade being carried on in the United Kingdom through a permanent establishment, the UK taxing authorities may contend that we are subject to UK corporate tax on all of our income, or a greater portion of our income than we currently expect to be taxed. If the UK taxing authorities made such a contention, we could incur substantial legal costs defending our position, and, if we were unsuccessful in our defense, our results of operations would be materially adversely affected. 

RISKS RELATING TO OUR INDUSTRY 

Our growth and long term profitability depend mainly upon continued growth in demand for containerships and the condition of the charter market. The container shipping industry is cyclical and volatile and the industry’s upward trend may have passed its peak. Should demand for containerships diminish, charterhire rates may fall, thus reducing our profitability.  

The container shipping industry is both cyclical and volatile in terms of charterhire rates and profitability. Charterhire rates are below their historical highs and rates may decrease in the future. Fluctuations in charter rates result from changes in the supply and demand for ship capacity, which is driven mainly by changes in the supply and demand for world trade container shipping services. If demand growth, for example, is not at a level sufficient to absorb the additional containership capacity to be delivered in the future, there may be an over supply of ship capacity which would typically cause freight rates, and in turn charter rates, to fall. The factors affecting the supply and demand for containerships and supply and container shipping services are outside our control, and the nature, timing and degree of changes in industry conditions are unpredictable. 

The factors that influence demand for containership capacity include: 

Risk factors 

The factors that influence the supply of containership capacity include: 

Our ability to re-charter our initial and contracted fleet upon the expiration or termination of our charters, and the charter rates payable under and the duration of any renewal or replacement charters will depend upon, among other things, the then current state of the containership market and how the then current age and quality of our initial and contracted fleet are perceived by the market. If the containership market is in a period of depression when our vessels’ charters expire for whatever reason, including an over supply of containership capacity, we may be forced to re-charter our vessels at reduced or unprofitable rates, which may reduce or eliminate our earnings or make our earnings increasingly volatile, or we may not be able to re-charter our vessels at all. The same issues will exist if we acquire additional vessels without long-term charter arrangements in place, or at the expiration of such arrangements, obliging us to try to fix employment of the additional vessels in the spot market while attempting to subject them to a long-term time charter arrangement. 

If the market value of vessels substantially declines when we are attempting to sell one of our vessels, we may incur a financial loss.  

Although the market value of containerships has increased since 2000, containership values can fluctuate substantially over time. A number of factors may contribute to a future decrease in the market value of containerships, including: 

If a charter terminates when the market value of our containerships has been depressed, we may be unable to re-charter the vessel at attractive rates and, rather than continue to incur costs to maintain and finance the vessel, we may seek to dispose of it. Inability to dispose of the containership at a reasonable price could result in a loss on its sale and adversely affect our results of operations and financial condition and our ability to pay dividends to our shareholders. 

Future fluctuations in charter rates and vessel values may trigger a possible impairment of our vessels as described in ‘‘Management’s discussion and analysis of financial condition and results of operations — Critical accounting policies and estimates.’’ This risk may also impact our ability to satisfy our financial covenants under our credit facility. 

Risk factors 

We may have more difficulty entering into long-term charters if a more active and cheaper short-term or spot container shipping market develops.  

At the expiration of our charters, if a charter terminates early for any reason or if we acquire vessels charter-free in addition to our initial and contracted fleet, we will need to charter or re-charter our vessels. Should more vessels be available on the spot or short-term market at the time we are seeking to fix new long-term charters, we may have difficulty entering into such charters at profitable rates and for any term other than short term and, as a result, our cash flow may be subject to instability in the long-term. In addition, it would be more difficult to fix relatively older vessels should there be an oversupply of younger vessels on the market. A more active short-term or spot market may require us to enter into charters based on fluctuating market rates, as opposed to long-term contracts based on a fixed rate, which could result in a decrease in our cash flow in periods when the charter rates for container shipping is depressed. 

Terrorist attacks and international hostilities could affect our results of operations and financial condition.  

Terrorist attacks, such as the attacks on the United States on September 11, 2001, and the continuing response of the United States and other countries to these attacks, as well as the threat of future terrorist attacks, continue to cause uncertainty in the world financial markets and may affect our business, results of operations and financial condition from increased security costs and more rigorous inspection procedures at borders and ports. The conflict in Iraq may lead to additional acts of terrorism, regional conflict and other armed conflict around the world, which may contribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. 

Terrorist attacks targeted at oceangoing vessels, such as the October 6, 2002 attack in Yemen on the VLCC Limburg, a ship not related to us, may also negatively affect our future operations and financial condition and directly impact our containerships or our customers. Future terrorist attacks could result in increased market volatility or even a recession in the United States or global financial markets, and could further increase inspection and security requirements and regulation that could slow our operations and negatively affect our profitability. Any of these occurrences could have a material adverse impact on our operating results, revenue and costs. 

Our vessels may call on ports located in countries that are subject to restrictions imposed by the United States government, which could negatively affect the trading price of our common shares.  

From time to time and in relation to our Charterer’s business, our vessels may call on ports located in countries subject to sanctions and embargoes imposed by the United States government and countries identified by the United States government as state sponsors of terrorism, such as Syria and Iran. Although these sanctions and embargoes do not prevent our vessels from making calls to ports in these countries, potential investors could view our presence at those ports negatively, which could in turn adversely affect our reputation and the receptiveness of the market for our common shares. 

Risks inherent in the operation of containerships could impair the ability of the Charterer to make payments to us, increase our costs or reduce the value of our assets.  

Our containerships and their cargoes are at risk of being damaged or lost because of events such as marine accidents, bad weather, mechanical failures, human error, war, terrorism, piracy, environmental accidents and other circumstances or events. Any of these events connected to our vessels or other vessels under our Charterer’s control, or any other factor which negatively affects the Charterer’s business, could impair the ability of the Charterer to make payments to us pursuant to our charters. Although the Charterer is obligated to pay us regardless of the safety of the cargoes, it is possible that such events may render the Charterer financially unable to pay us our hire. Furthermore, there is a risk that the vessel may become damaged, lost or destroyed and any such occurrence may cause us additional expenses to repair or substitute the vessel or may render us unable to provide the vessel for chartering, which will cause us to lose charterhire revenue. 

Risk factors 

These occurrences could also result in death or injury to persons, loss of property or environmental damage, loss of revenues from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business, higher insurance rates, and damage to our reputation and customer relationships generally. Any of these circumstances or events could increase our costs or lower our revenues, which could result in reduction in the market price of our common shares. 

Maritime claimants could arrest our vessels, which could interrupt the Charterer’s or our cash flow.  

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against that vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels, for valid or invalid reasons, could interrupt the Charterer’s or our cash flow and require them or us or our insurance to pay a significant amount to have the arrest lifted. In addition, in some jurisdictions, such as South Africa, under the ‘‘sister ship’’ theory of liability, a claimant may arrest both the vessel that is subject to the claimant’s maritime lien and any ‘‘associated’’ vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert ‘‘sister ship’’ liability against one vessel in our fleet for claims relating to another vessel in our fleet. In any event, any lien imposed may adversely affect our results of operations by delaying the revenue gained from ships. 

Governments could requisition our vessels during a period of war or emergency without adequate compensation.  

A government could requisition one or more of our vessels for title or for hire. Requisition for title occurs when a government takes control of a vessel and becomes its owner, while requisition for hire occurs when a government takes control of a vessel and effectively becomes its charterer at dictated charter rates. Generally, requisitions occur during periods of war or emergency, although governments may elect to requisition vessels in other circumstances. Although we would be entitled to compensation in the event of a requisition of one or more of our vessels, the amount and timing of payment would be uncertain. Government requisition of one or more of our vessels may negatively impact our revenues and reduce the amount of cash we have available for distribution as dividends to our shareholders. 

Technological innovation could reduce our charterhire income and the value of our vessels.  

The charterhire rates and the value and operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge containers quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities, such as cranes, and pass through canals and straits. Physical life is related to the original design and construction, maintenance and the impact of the stress of operations. If new containerships are built that are more efficient or more flexible or have longer physical lives than our vessels, competition from these more technologically advanced containerships could adversely affect the amount of charterhire payments we receive for our vessels once their initial charters expire and the resale value of our vessels could significantly decrease. As a result, our cash available for the payment of dividends could then be adversely affected. 

Compliance with safety and other vessel requirements imposed by classification societies may be costly and may adversely affect our business and our operating results.  

The hull and machinery of every commercial vessel must conform to the rules and standards of a classification society approved by its country of registry. Such societies set the rules and standards for the design, construction, classification, and surveys of vessels and conduct surveys to determine whether vessels are in compliance with such rules and standards. A certification by the society is an attestation that the vessel is in compliance with the society’s rules and standards. A vessel involved in international trade must also conform to national and international regulations on safety, environment and security, including (but not limited to) the Safety of Life at Sea Convention, or SOLAS, and the International Convention for the Prevention of Pollution from Ships. A vessel conforms to such regulations by obtaining certificates from its country of registry and/or a classification society authorized by the country of registry. 

Risk factors 

A vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special or class renewal survey, a vessel’s machinery may be reviewed on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. See ‘‘Business — Inspection by Classification Societies’’ for more information regarding annual surveys, intermediate surveys and special surveys. Bureau Veritas, the classification society for all of the vessels in our initial fleet and our second contracted fleet, may approve and carry out in-water inspections of the underwater parts of our vessels once every three to five years, in lieu of drydocking inspections. In-water inspections are typically less expensive than drydocking inspections and we intend to conduct in-water inspections when that option is available to us. 

If a vessel does not maintain its ‘‘in class’’ certification or fails any annual survey, intermediate survey or special survey, port authorities may detain the vessel, refuse to change her entry or refuse to allow her to trade resulting in the vessel being unable to trade and therefore rendering her unemployable. In the event that a vessel becomes unemployable, we could also be in violation of provisions in our charters, insurance coverage, covenants in our loan agreements and ship registration requirements and our revenues and future profitability would be negatively affected. 

We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income.  

The shipping industry, and the operations of containerships, are materially affected by environmental regulation in the form of international conventions, national, state and local laws and regulations in force in the jurisdictions in which our containerships operate, as well as in the country or countries of their registration, including those governing the management and disposal of hazardous substances and wastes, the cleanup of oil spills and other contamination, air emissions, water discharges and ballast water management. Because such conventions, laws and regulations are often revised, we cannot predict the cost of complying with such requirements or the impact thereof on the value or useful life of our containerships. Additional conventions, laws and regulations may be adopted that could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations. We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates and financial assurances with respect to our operations. Many environmental requirements are designed to reduce the risk of pollution, such as oil spills, and our compliance with these requirements can be costly. 

Environmental requirements can also affect the value or useful lives of our vessels, require a reduction in cargo capacity, ship modifications or operational changes or restrictions, lead to decreased availability of insurance coverage for environmental matters or result in the denial of access to certain jurisdictional waters or ports, or detention in certain ports. Under local, national and foreign laws, as well as international treaties and conventions, we could incur material liabilities, including cleanup obligations and natural resource damages, in the event that there is a release of oil-based products or other hazardous materials from our vessels or otherwise in connection with our operations. We could also become subject to personal injury or property damage claims relating to the release of hazardous materials associated with our existing or historic operations. Violations of, or liabilities under, environmental requirements can result in substantial penalties, fines and other sanctions, including in certain instances, seizure or detention of our vessels. 

In addition, significant compliance costs could be incurred due to existing environmental laws and regulations and those that may be adopted, which could require new maintenance and inspection procedures and new restrictions on air emissions from our containerships, the development of contingency arrangements for potential spills and/or obtaining insurance coverage. Government regulation of vessels, particularly in the areas of safety and environmental requirements, can be expected to become increasingly strict in the future and require us to incur significant capital expenditures on our vessels to keep them in compliance, or even to scrap or sell certain vessels altogether. We believe that regulation of the shipping industry will continue to become more stringent and more expensive for us and our competitors. Substantial violations of applicable requirements or a catastrophic release of bunker fuel from one of our containerships, among other events, could have a material adverse impact on our financial condition, results of operations and our ability to pay dividends to our shareholders. For additional information on these and other environmental requirements, you should carefully review the information contained in ‘‘Business — Environmental and Other Regulations.’’ 

Risk factors 

RISKS RELATED TO OUR COMMON STOCK 

There is no guarantee that an active and liquid public market will develop for you to resell our common shares.  

Prior to this offering, there was no public market for our common shares. A liquid trading market for our common shares may not develop. If an active liquid trading market does not develop, you may have difficulty selling any of our common shares you buy. The initial public offering price will be determined in negotiations between the representatives of the underwriters and us and may not be indicative of prices that will prevail in the trading market. 

The price of our common shares after this offering may be volatile, and may fluctuate due to factors such as: 

The container shipping industry has been unpredictable, cyclical and volatile. The market price for our common shares may also be volatile. Consequently, you may not be able to sell our common shares at prices equal to or greater than that paid by you in this offering. 

We may issue additional common shares without your approval, which would dilute your ownership interests and may depress common share prices.  

Assuming no exercise of the underwriters’ over-allotment option, upon closing of this offering and the private placement of approximately 3.3 million common shares to CMA CGM at the initial public offering price to finance in part the acquisition of our initial fleet, approximately 22.3 million common shares will be outstanding. Subject to the rules of the New York Stock Exchange, we may also issue additional common shares of equal rank, without shareholder approval, in a number of circumstances. We plan on issuing additional common shares to partially finance our purchase of our first contracted fleet, and we are not precluded from issuing or selling additional common shares to purchase vessels in addition to our initial and contracted fleet. 

The issuance by us of additional common shares or other equity securities of equal or senior rank may have the following effects: 

CMA CGM, our principal shareholder, may act in a way that adversely impacts you and the value of your shares.  

Upon the completion of this public offering and the issuance in a private placement of approximately 3.3 million common shares to CMA CGM at the initial public offering price, CMA CGM will own approximately 15% of our common shares (or 13.3% if the underwriters exercise their over-allotment option in full). Following the acquisition of our first contracted fleet, in which we will issue additional common shares to CMA CGM in connection with the purchase of our vessels, and assuming we do not issue any additional equity interest other  

Risk factors 

than the common shares issued in connection with this offering and the purchase of our initial fleet, CMA CGM is expected to own approximately 30% of our common shares. We have also granted CMA CGM preemptive rights to participate in any offerings of our capital stock (subject to limited exceptions), until one month following the delivery of the vessel in our second contracted fleet, in order to maintain its then current percentage ownership. In addition to being our principal shareholder as of the closing of this offering, CMA CGM is also the parent company of our Ship Manager, and our Charterer. As a result, CMA CGM will be in a position to exert significant influence over the decisions of our management and any transaction that requires the approval of shareholders. CMA CGM may vote in favor of a particular transaction regardless of whether we or any shareholders other than CMA CGM believe that such transaction is in your best interest. 

You will incur immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.  

We expect the initial public offering price per common share to be substantially higher than the pro forma net tangible book value per outstanding common share, after adjustments for our acquisition of our initial fleet upon completion of this offering. As a result, you may incur immediate and substantial dilution for each common share you hold equal to the difference between the assumed initial public offering price of $20.00 per common share and our pro forma as adjusted net tangible book value per common share as of June 30, 2007. See ‘‘Dilution’’ for a more detailed description of how dilution may affect you and the value of your common shares. 

In addition to the dilution you will experience immediately following the offering, we have also entered into a preemptive rights agreement with CMA CGM. This preemptive rights agreement gives CMA CGM, for the period of time between the closing of this offering and one month following the delivery of the vessel in our second contracted fleet, the option to participate in any offerings of our capital stock (subject to limited exceptions) in order to maintain its then current percentage ownership in the event we sell additional common shares, or equity or debt convertible, exchangeable or exercisable into our common shares. In the event that CMA CGM exercises its right to participate in any of our future offerings, you may experience additional dilution of your shareholdings. See ‘‘Related party transactions — Preemptive Rights Agreement’’ for more information on this agreement. 

We are incorporated in the Marshall Islands, which does not have a well developed body of corporate law.  

Our corporate affairs are governed by our articles of incorporation and bylaws and by the Business Corporations Act of the Marshall Islands, or BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain United States jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, our public shareholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction. For more information with respect to how shareholder rights under Marshall Islands law compare with shareholder rights under Delaware law, see ‘‘Marshall Islands company considerations.’’ 

Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us, our directors or our management.  

We are organized under the laws of the Marshall Islands, and all of our assets are located outside of the United States. Our principal executive offices are located in the United Kingdom and some of our directors and officers reside outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against our directors or our management in the United States if you believe that your rights have been infringed under securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Marshall Islands and of other jurisdictions may prevent or restrict you from enforcing a judgment against our assets or our directors and officers. For more information regarding the relevant laws of the Marshall Islands, see ‘‘Enforceability of civil liabilities.’’ 

Risk factors 

We have anti-takeover provisions in our organizational documents that may discourage a change of control.  

Our amended and restated articles and bylaws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors or, in certain circumstances, our shareholders. Certain of these provisions provide for: 

In addition, we have entered into a shareholder rights agreement that makes it more difficult for a third party to acquire us without the support of our board of director and, in certain circumstances, our shareholders. 

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many shareholders. As a result, shareholders may be limited in their ability to obtain a premium for their shares. 

Special note regarding forward-looking statements 

This prospectus contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘continue,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘intend,’’ ‘‘may,’’ ‘‘ongoing,’’ ‘‘plan,’’ ‘‘potential,’’ ‘‘predict,’’ ‘‘project,’’ ‘‘will’’ or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this prospectus include, but are not limited to, statements regarding our disclosure concerning our operations, cash flows, financial position, dividend policy and likelihood of success to acquire all vessels in our initial and contracted fleet to expand our business, including acquiring additional vessels. 

Forward-looking statements appear in a number of places in this prospectus including, without limitation, in the sections entitled ‘‘Dividend policy,’’ ‘‘Management’s discussion and analysis of financial conditions and operations,’’ ‘‘The international containership industry’’ and ‘‘Business.’’ The risks and uncertainties include, but are not limited to: 

Special note regarding forward-looking statements 

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Our actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in ‘‘Risk factors’’ in this prospectus. Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this prospectus. We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this prospectus or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the reports we will file from time to time with the Securities and Exchange Commission, or SEC, after the date of this prospectus. 

You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with additional or different information. We are offering to sell, and seeking offers to buy, our common shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our common shares. 

Use of proceeds 

We expect that the net proceeds of this offering will be $349.9 million after deducting underwriting discounts, commissions and other offering expenses amounting to approximately $27.8 million (based on an initial public offering price of $20.00 per common share, the mid-point of the price range indicated on the front cover of this prospectus). We intend to use $334.9 million of the net proceeds from this offering to finance our initial fleet together with the issuance of approximately 3.3 million common shares to CMA CGM at the initial public offering price and borrowings of $171.5 million under our credit facility. We intend to use the remaining $15 million of the net proceeds from this offering to finance a restricted cash balance reserve as required by the terms of our credit facility. 

The aggregate purchase price for the vessels of our first contracted fleet is $355.0 million. We expect to finance the purchase price of the four vessels in our first contracted fleet with (1) the issuance of our common shares at the initial public offering price to CMA CGM totaling $95.2 million, which, at $20.00 per common share (the mid-point of the price range indicated on the front cover of this prospectus), would be approximately 4.8 million common shares and (2) borrowings of $259.8 million under our credit facility. If the underwriters exercise their over-allotment option in full, the portion of the purchase price paid in common shares will increase to $119.5 million, or 6.0 million common shares, and the borrowings under our credit facility will decrease to $235.5 million. Assuming we do not issue any additional equity interest other than the common shares issued in connection with this offering and our purchase of our initial fleet, CMA CGM, after receiving payment for our initial and contracted fleet, will hold approximately 30% of our outstanding common shares. 

The purchase price for the one secondhand vessel that comprises our second contracted fleet will be financed with borrowings of $82.0 million under our credit facility. 

For a description of the vessels in our initial and contracted fleet, see ‘‘Business — Our Fleet.’’ 

We are acquiring our initial and contracted fleet from CMA CGM. The purchase prices for the vessels of our initial and contracted fleet were determined between us and CMA CGM before this offering. See ‘‘Related party transactions’’ and ‘‘Acquisition of our initial and contracted fleet’’ for more information on CMA CGM and our agreements with them. 

Dividend policy 

The prospective financial information relating to our dividend policy included in this prospectus has been prepared by, and is the responsibility of, the company’s management. PricewaterhouseCoopers Audit has neither examined nor compiled the accompanying prospective financial information and, accordingly, PricewaterhouseCoopers Audit does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers Audit reports included in this prospectus relates to the company’s historical financial information. It does not extend to the prospective financial information and should not be read to do so. 

Based on the assumptions and the other matters set forth below and subject to the matters set forth under ‘‘Risk factors,’’ we estimate that the total amount of cash available for distribution (1) as an initial dividend (payable in February 2008) will be $0.11 per share and (2) as our second dividend (payable in May 2008) will be $0.37 per share. The initial dividend will reflect the period between the commencement of our operations, which is assumed to be November 21, 2007 and December 31, 2007 and our second dividend will reflect our first full quarter of operations. We expect our dividends will be substantially equal to the available cash from operations during the previous quarter (which equals revenue less costs and expenses and other cash expenses, including insurance and costs relating to accidents and incidents) less interest payments on our outstanding debt, capital expenditures and any amounts (as determined by our board of directors) we hold in reserves for drydocking, vessel acquisitions and other capital expenditures and debt repayment. Our dividend policy reflects our judgment that by retaining a portion of our cash flow in our business, we will be able to provide better value to our shareholders by enhancing our longer term dividend paying capacity. Although we do not currently have plans to purchase any specific vessels other than our initial and contracted fleet of 17 vessels, it is our objective to grow our dividend through accretive acquisitions of additional vessels beyond our initial and contracted fleet. For the period during which our credit facility is available, we expect to fund all or a portion of our future vessel acquisitions with borrowings under it. 

The declaration and payment of any dividend is subject at all times to the discretion of our board of directors and will depend on, among other things, our earnings, financial condition and anticipated cash requirements and availability, additional acquisitions of vessels, restrictions in our credit facility, the provisions of Marshall Islands law affecting the payment of distributions to shareholders, required capital and drydocking expenditures, reserves established by our board of directors, increased or unanticipated expenses, a change in our dividend policy, additional borrowings or future issuances of securities and other factors, many of which will be beyond our control. 

We currently do not expect to have any cash expenses or other cash requirements other than: 

Other than (1) interest that will be payable on the $518.8 million of floating rate indebtedness outstanding under our credit facility, upon completion of the acquisition of all vessels in our initial and contracted fleet, of which at least 50% of the amount outstanding will be swapped for a fixed rate, (2) commitment fees under our credit facility for so long as we do not make any further borrowings under the facility and (3) fees under our ship management agreements, most of our costs and expenses are not fixed. 

Dividend policy 

The foregoing estimate of available cash for distribution and estimated dividend is based on the following assumptions: 

We cannot assure you that our future dividends will be distributed in the frequency set forth in this prospectus, or that our estimate of cash available for distribution or our estimated future dividends for our initial and second distribution periods will in fact be equal to the amount set forth above or elsewhere in this prospectus. Our ability to pay dividends may be limited by the amount of cash we can generate from operations following the payment of fees and expenses and the establishment of any reserves as well as additional factors unrelated to our profitability and assumes that we do not make any vessel acquisitions beyond those set forth in this prospectus. We are a holding company, and we will depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to pay dividend payments. Further, our board of directors may elect to distribute no dividends or may significantly reduce the dividends we project in this prospectus. As a result, the amount of dividends actually paid, if any, may vary from the amount currently estimated and such variations may be material. See ‘‘Risk factors’’ for a discussion of the risks associated with our ability to pay dividends. 

Dividend policy 

Marshall Islands law generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by the payment of such a dividend. 

We believe that, under current United States federal income tax law, some portion of the distributions you receive from us will constitute dividends and, if you are an individual that is a citizen or resident of the United States and that meets certain holding period and other requirements, such dividends will be taxable as ‘‘qualified dividend income’’ (subject to a maximum 15% United States federal income tax rate through 2010). See ‘‘Tax considerations — United States Federal Income Taxation of United States Holders — Distributions’’ for information regarding the eligibility requirements for ‘‘qualified dividend income’’ and for a discussion of proposed legislation that, if enacted, would prevent dividends paid by us from constituting qualified dividend income.