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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 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - 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, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
Saturday, 18 February 23
PAKISTAN PLANS TO QUADRUPLE DOMESTIC COAL-FIRED POWER, MOVE AWAY FROM GAS - REUTERS
Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming ...
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- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- The University of Queensland
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Australian Coal Association
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- White Energy Company Limited
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
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