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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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- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Planning Commission, India
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
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