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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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Saturday, 25 March 23
ASIAN CRUDE PALM OIL WATCH 1Q23 - FITCH RATINGS
Malaysian benchmark crude palm oil (CPO) spot prices have averaged around USD915 per tonne (t) so far in 1Q23, sharply lower than the average of ar ...
Saturday, 25 March 23
INDONESIA’S COAL EXPORT INCREASED BY 21.0% YOY TO 388.4 MLN T IN 2022 - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels. In the f ...
Saturday, 25 March 23
GLOBAL LNG-ASIA SPOT PRICES SLIP AS WEAK NORTHERN DEMAND REMAINS - REUTERS
Asian spot prices of liquefied natural gas (LNG) declined this week, falling to a 21-month low, as weak demand in the northeast Asia region continu ...
Wednesday, 22 March 23
OIL PRICE FALL SPECULATIVE, TO HIT $140 BY YEAR-END -ANDURAND: REUTERS
The recent fall in oil prices due to banking jitters is speculative and oil will hit $140 a barrel by the end of the year, hedge fund manager Pierr ...
Wednesday, 22 March 23
MARKET INSIGHT - INTERMODAL
The crude tanker market continues to gather momentum as we head towards the end of 1Q2023, against a backdrop of strong U.S. exports paired with a ...
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- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Mercator Lines Limited - India
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
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