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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, 15 November 22
CHINA SEES RISING COAL STORAGE AMID SUPPLY PUSH - XINHUA
Coal stockpiles at China’s power plants have seen considerable increases, ensuring energy supply for the winter, the country’s energy r ...
Tuesday, 15 November 22
SEABORNE THERMAL COAL PRICES START TO EASE, BUT PROCESS IS UNEVEN - REUTERS
Prices for seaborne thermal coal have started to drop as fears of a winter energy crunch ease, but the rate of decline has varied across the differ ...
Thursday, 10 November 22
INDIA: THERMAL PLANTS HAVE ADEQUATE COAL STOCKS AT 25.6 MILLION TONNES, SAYS GOVT - IANS
The coal stock with domestic dry fuel-based power plants, as on October 31, was 25.6 million tonnes, the government said, adding that the availabil ...
Tuesday, 08 November 22
OUTLOOK ON CHINA’S WEAKENED BASIC MATERIALS SECTOR CLOUDED BY POLICY SWINGS - FITCH RATINGS
Fitch Ratings expects basic materials demand in China to improve qoq in 4Q22, driven by seasonally higher construction activity, solid infrastructu ...
Friday, 04 November 22
CHINA EXPANDS COAL TERM CONTRACTS TO ALL MINES TO STABILIZE MARKET - REUTERS
China has expanded long-term thermal coal supply contracts for 2023 to all coal mines and asked power utilities to source more of their demand thro ...
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- Deloitte Consulting - India
- MS Steel International - UAE
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
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