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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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Monday, 23 October 23
CHINA SEPT COAL OUTPUT HITS SIX-MONTH HIGH ON RISING POWER DEMAND - REUTERS
China’s September coal output rose 0.4% from August to the highest level since March, official data showed on Wednesday, on rising power dema ...
Monday, 23 October 23
INDIA COAL INVENTORIES DROP AT FASTEST PACE IN TWO YEARS, BOOSTING IMPORTS - REUTERS
Coal inventories at Indian power plants in the first half of October fell at their fastest rate in two years, an analysis of government data showed ...
Tuesday, 19 September 23
LNG SHIPPING STOCKS: THE ASIAN GROWTH UP-INDICES
Last week, the UP World LNG Shipping Index (UPI) gained 3.81 points or 2.51%, closing at 155.85 points. This index tracks the performance of LNG sh ...
Sunday, 10 September 23
GOLDMAN SACHS PREDICTS OIL PRICE TO HIT $100 ON OPEC CUTS - YAHOO FINANCE
Oil supply cuts by Saudi Arabia and Russia could lead to Brent crude jumping as high as $107 a barrel in 2024, Goldman Sachs Commodities Research h ...
Sunday, 10 September 23
CHINA AUGUST COAL IMPORTS OF 44.3 MLN T HIT RECORD - REUTERS
China, the world’s top coal consumer, imported 44.3 million metric tons of the fuel last month, customs data showed, the highest amount in an ...
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- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
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