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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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Tuesday, 17 January 23
MARKET INSIGHT - INTERMODAL
Rumor has it that the New Year has come, to set the pace in, for Russia to continue hostilities against Ukraine. Ten months on the go, into Russia& ...
Tuesday, 17 January 23
INDONESIA IS ACCOUNTING FOR 32.3% OF THE GLOBAL SEABORNE COAL MARKET IN 2022 - BENCHERO 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, Benchero ...
Tuesday, 10 January 23
INDONESIAN HBA IS SEEING A SPIKE IN JANUARY 2023 INSTEAD OF A SIGNIFICANT FALL IN DECEMBER 2022
COALspot.com: Indonesian Coal Price Reference up 8.43% in January 2023.
HBA is seeing a dramatic spike in January 2023 i ...
Sunday, 08 January 23
INDIAN COAL POWER PLANTS SHOULD BE COMPENSATED FOR 2022 FORCED GENERATION – REGULATOR : REUTERS
Indian power plants that rely on imported coal should be fully compensated when forced to supply electricity, the country’s power regulator s ...
Sunday, 08 January 23
ELEVATED COAL PRICE A DRAG ON MARGINS OF DOMESTIC BASE METAL PLAYERS: ICRA
The increased price of coal continue to be a drag on the margin of domestic base metal players with no immediate relief in sight, rating agency ICR ...
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- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Australian Coal Association
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- PTC India Limited - India
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
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