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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, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
Monday, 04 March 24
IS YOUR GUARANTEE A GUARANTEE? NOTE TO SHIPOWNERS - GARD
KNOWLEDGE TO ELEVATE
The law of guarantees is not always obvious or easy to understand without proper guidance. This article clarifies the dif ...
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- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- CNBM International Corporation - China
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