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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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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- White Energy Company Limited
- Romanian Commodities Exchange
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
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