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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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Friday, 25 November 22
APAC THERMAL COAL PRICES CORRECT FROM RECORD HIGH - FITCH RATINGS
Prices of Newcastle 6,000kcal/kg coal have corrected following falling European gas and coal prices, and more supply from Australia could help miti ...
Thursday, 24 November 22
VIETNAM BOOSTS COAL USE PLAN FOR 2030 AS G7 CLIMATE OFFER STALLS - REUTERS
Vietnam has increased its coal power target for 2030 under a revised draft energy plan, government documents seen by Reuters show, while renewables ...
Tuesday, 22 November 22
THE GENCON 2022 CHARTERPARTY - GARD
KNOWLEDGE TO ELEVATE
BIMCO has published a revamped version of the popular GENCON charterparty. Our author, Helena Biggs, was a member of the ...
Tuesday, 22 November 22
INDIA POWER BINGES ON COAL, OUTPACES ASIA - REUTERS
India’s coal-fired power output has increased much faster than any other country in the Asia Pacific since Russia’s invasion of Ukraine ...
Friday, 18 November 22
REALITIES OF LOI LIABILITIES - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
The cargo misdelivery claim in Trafigura Maritime Logistics Pte Ltd v. Clearlake Shipping Pte Ltd (Miracle Hope) [2022] E ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Minerals Council of Australia
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
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