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