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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, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Althoug ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
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- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- PTC India Limited - India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- The University of Queensland
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Planning Commission, India
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
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