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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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Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
Tuesday, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
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- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
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