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Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime & Trading Corp. (“Capital Maritime”) and Capital GP L.L.C. (the “General Partner”) providing for the acquisition of the following 11 newbuild LNG carriers (“LNG/C”) from Capital Maritime for a total acquisition price of $3,130.0 million:
The vessels will be purchased through the acquisition of 100% of the equity interests in the applicable vessel-owning company. The LNG/C Amore Mio I has been delivered in October 2023 and we expect to acquire its vessel-owning company on or about the closing date of the Umbrella Agreement (the “Closing Date”). The acquisition of this vessel was financed through a $196.3 million sale and leaseback transaction between the vessel-owning company and CMB Financial Leasing Co., Ltd (the “Amore Mio I Debt”). For the vessel-owning companies of the LNG/Cs Axios II, Assos, Apostolos Aktoras, Archimidis and Agamemnon (the “Initial Vessels”), we expect to pay on the Closing Date a 10% deposit on their respective purchase prices. We will acquire each Initial Vessel after the applicable vessel’s construction completion and delivery from the shipbuilder. The vessel-owning companies of the LNG/Cs Alcaios I, Antaios I, Athlos and Archon (the “Remaining Vessels”) will be acquired on the Closing Date and we will take over their obligations under the respective shipbuilding contracts with Hyundai. We expect that the total amount due on or about the Closing Date to Capital Maritime will be $454.2 million, reflecting the acquisition of Amore Mio I – net of the Amore Mio I Debt, which is expected to be carried over – the 10% deposit for the Initial Vessels and the amount due for acquiring the Remaining Vessels. On delivery of each Initial Vessel, we will pay the balance of the purchase price for such vessel to Capital Maritime, which will total $1,569.6 million for all Initial Vessels. For the Remaining Vessels, we expect to pay an additional total amount of $909.9 million to Hyundai in pre-delivery and delivery installments. The Closing Date is expected to occur by year end 2023 upon the closing of the rights offering described below.
$500.0 million Rights Offering and $220.0 million Sellers’ Credit
In addition to commercial debt, and in order to finance a portion of the purchase price for the vessels and pursuant to the Umbrella Agreement, (i) Capital Maritime has agreed to issue an unsecured seller’s credit to us in an amount of up to $220.0 million at a fixed rate of 7.5%, repayable on June 30, 2027 and (ii) we will conduct a rights offering to finance $500.0 million of the purchase price.
The rights offering is expected to commence on November 27, 2023 (the “Launch Date”). We will distribute to holders of our common units of record on November 24, 2023 (“the “Record Date”) rights to purchase newly issued common units at a price per common unit equal to the greater of (x) $14.25 and (y) 95% of the volume-weighted average price of the common units trading on the Nasdaq Global Select Market for the period from November 15, 2023 through and including the last trading day immediately prior to the Record Date. The subscription price per common unit in the offering will not be greater than $14.50. The rights will not be transferable. The rights offering will be made only by means of a prospectus supplement and accompanying prospectus. We intend to disseminate the rights certificates and a copy of the prospectus supplement and accompanying prospectus for the offering to Record Date unitholders shortly following the Record Date. In connection with the rights offering, and pursuant to the Umbrella Agreement, we will enter into a standby purchase agreement with Capital Maritime, pursuant to which Capital Maritime shall, subject to customary conditions, purchase 100% of any common units in respect of rights that remain unexercised after completion of the issue at the same offering price per common unit.
Other terms of the Transaction
Following the closing of the Umbrella Agreement, we intend to explore the disposal of our container vessels and abstain from acquiring additional container vessels. Pursuant to the Umbrella Agreement, we also agreed to change our name to “Capital New Energy Carriers L.P.” This name change is expected to become effective by December 31, 2023. Further, we, Capital Maritime and the General Partner have agreed to, in good faith negotiate and jointly work with tax and other advisors to agree terms for the conversion from a Marshall Islands limited partnership to a corporation with customary corporate governance provisions within six months of the closing of the Umbrella Agreement.
In connection with the change of our business focus to concentrate on the LNG/C market, Capital Maritime agreed to grant to us, beginning on the Closing Date rights of first refusal over (i) transfers of LNG/C vessels owned by Capital Maritime to third parties, opportunities to order newbuild LNG/C vessels of which Capital Maritime becomes aware, and employment opportunities for LNG/C vessels of which Capital Maritime becomes aware, in each case, for a period ending on the tenth anniversary of the Closing Date, (ii) transfers to third parties of two certain liquid CO2 carriers and two certain ammonia carriers recently ordered by Capital Maritime (the “New Energy Vessels”) for a period ending when Capital Maritime and its affiliates no longer beneficially own at least 25% of the issued and outstanding common units and (iii) if we acquire a New Energy Vessel from Capital Maritime, employment opportunities for such New Energy Vessel of which Capital Maritime becomes aware, for a period ending when Capital Maritime and its affiliates no longer beneficially own at least 25% of the issued and outstanding common units.
The transaction was negotiated and unanimously approved by the conflicts committee of the Board of Directors (“Committee”) and was also unanimously approved by the full Board of Directors. Evercore Group L.L.C. served as financial advisor and Fried, Frank, Harris, Shriver & Jacobson LLP served as legal advisors to the Committee. Sullivan & Cromwell LLP served as legal advisors to Capital Maritime.
Management Commentary
Mr. Jerry Kalogiratos, Chief Executive Officer of our General Partner, commented:
“We are very pleased to announce this transformative transaction for the Partnership, which we expect to usher Capital Product Partners L.P. to a new chapter in its life as a public listed entity. Upon completion of the 11 LNG/C fleet acquisition, we expect CPLP to transform, into one of the largest US listed shipping companies in terms of enterprise value and the largest owner of two stroke, latest generation LNG carriers compared to the current fleet of its US listed peers. The commitment to change the name of the Partnership to ‘Capital New Energy Carriers L.P.’ and to gradually divest our container vessels, reflects our renewed business focus on LNG and energy transition shipping. We are well positioned to take advantage of the strong fundamentals of the LNG industry with six open LNG/Cs delivering between 2026-2027 and rights of first refusal on a unique fleet of LCO2 and ammonia carriers. We believe that this transaction, together with our stated intention to convert the Partnership into a corporation and to review over time our capital allocation policy, should attract additional investor interest and allow our equity valuation to move closer to our peers.”
“Importantly, the acquisition of the 11 LNG carriers is expected to be transformative across all financial and qualitative metrics for the Partnership, as we expect our contracted revenues to increase by 87% to $3.1 billion, our revenue weighted charter duration to 7.2 years as of the Closing Date and the average age of our LNG fleet to decrease to 3.2 years by the time all LNGCs have been delivered in 2027.”
“Finally, I am pleased to see our largest unitholder and sponsor, Capital Maritime, fully backstop at no additional cost and at a 9.6% premium to the last closing price a $500.0 million rights offering and offer an attractively priced $220.0 million seller’s credit to partly finance this transaction, while giving a right of first refusal on all LNG business and its New Energy newbuilding vessels to CPLP. We believe that the rights offering with the Capital Maritime backstop will allow for all our unitholders to participate without execution risk in the transition of CPLP to an LNG and energy transition focused corporation, which we hope to become a bell weather for the industry.”
Source: Capital Product Partners L.P.
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Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Economic Council, Georgia
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Planning Commission, India
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
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