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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, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
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- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
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