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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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Saturday, 25 March 23
ASIAN CRUDE PALM OIL WATCH 1Q23 - FITCH RATINGS
Malaysian benchmark crude palm oil (CPO) spot prices have averaged around USD915 per tonne (t) so far in 1Q23, sharply lower than the average of ar ...
Saturday, 25 March 23
INDONESIA’S COAL EXPORT INCREASED BY 21.0% YOY TO 388.4 MLN T IN 2022 - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels. In the f ...
Saturday, 25 March 23
GLOBAL LNG-ASIA SPOT PRICES SLIP AS WEAK NORTHERN DEMAND REMAINS - REUTERS
Asian spot prices of liquefied natural gas (LNG) declined this week, falling to a 21-month low, as weak demand in the northeast Asia region continu ...
Wednesday, 22 March 23
OIL PRICE FALL SPECULATIVE, TO HIT $140 BY YEAR-END -ANDURAND: REUTERS
The recent fall in oil prices due to banking jitters is speculative and oil will hit $140 a barrel by the end of the year, hedge fund manager Pierr ...
Wednesday, 22 March 23
MARKET INSIGHT - INTERMODAL
The crude tanker market continues to gather momentum as we head towards the end of 1Q2023, against a backdrop of strong U.S. exports paired with a ...
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- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
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