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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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Monday, 23 January 23
CHINA'S MAJOR COAL-PRODUCING PROVINCE ACCELERATES DIGITAL TRANSFORMATION - XINHUA
At Chindata Group’s big-data industrial park in Lingqiu County of Datong City, hundreds of thousands of servers are running round-the-clock t ...
Monday, 23 January 23
CHINA'S COAL-RICH PROVINCE SEES COAL PRODUCTION INCREASE IN 2022 - XINHUA
North China’s coal-rich province of Shanxi saw its coal production hit 1.31 billion tonnes in 2022, up 8.7 percent year on year, local author ...
Wednesday, 18 January 23
MARKET INSIGHT - INTERMODAL
From Feb 5, another price cap will be introduced to Russian fuels and oil products, adding to the one for crude oil, already in place from Dec. 3. ...
Tuesday, 17 January 23
FRAUD IS THE BIGGEST THREAT TO CARGO LOSSES - TT CLUB
The almost exclusive use of online facilities to process business transactions allows a myriad of fraudulent pursuits to find opportunities within ...
Tuesday, 17 January 23
CHINA'S SHANXI TARGETS 2023 COAL PRODUCTION OF NEARLY 1.37B TONS - XINHUA
China’s coal-rich province of Shanxi has set a coal production target of nearly 1.37 billion metric tons for 2023, according to a government ...
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- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- ASAPP Information Group - India
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
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