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