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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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Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
Tuesday, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
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- Minerals Council of Australia
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
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