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