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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, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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- The University of Queensland
- The Treasury - Australian Government
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- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
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- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
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- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Planning Commission, India
- Marubeni Corporation - India
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- Malabar Cements Ltd - India
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- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
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