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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, 01 December 23
COAL MINERS GROUP EXPECTS INDONESIA’S 2023 COAL OUTPUT TO SURPASS TARGET - REUTERS
The Indonesian Coal Mining Association (ICMA) expects the country’s 2023 coal output to surpass the official target of 695 million metric ton ...
Friday, 24 November 23
COAL IMPORTS TO INDIA IN OCTOBER 2023 REACHED HIGHEST LEVELS IN NEARLY A YEAR AND A HALF - VESSELSVALUE, VESON NAUTICAL
In October, coal imports to India reached 13.8 mt in October 2023, according to Oceanbolt, a Veson Nautical solution, the highest level since May 2 ...
Friday, 24 November 23
COAL SHIPMENTS TO ADVANCED ECONOMIES DOWN 17% SO FAR IN 2023 - BIMCO
In the first ten months of 2023, coal shipments to advanced economies fell by 17% y/y, as demand for electricity declined and the share of electric ...
Friday, 24 November 23
INTELLIGENT COAL MINES CONTRIBUTE TO IMPROVING SAFETY STANDARDS - CHINA DAILY
Mechanization, automation and intelligent upgrades have contributed to improved safety in coal mines, though the level of development of intelligen ...
Friday, 24 November 23
WHY AUSTRALIA'S COAL MINES ARE GETTING BIGGER - IEEFA
Australia’s largest coal mines are getting larger. Mines in New South Wales (NSW) are ramping up production following the state’s recov ...
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- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- White Energy Company Limited
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- The University of Queensland
- PTC India Limited - India
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
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