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