Capital Product Partners announces Transformative Transaction including the Acquisition of 11 Newbuild LNG Carriers for $3.1 billion
Capital Product Partners L.P. announces Transformative Transaction including the Acquisition of 11 Newbuild LNG Carriers for $3.1 billion, Renaming of the Partnership as “Capital New Energy Carriers L.P.” and Intention to Convert into a Corporation Focused on LNG and Energy Transition Shipping.
- 11 latest generation two stroke LNG Carriers to enter CPLP’s fleet from 2023 to 2027, which would make the Partnership the largest US publicly listed owner of two stroke LNG carriers1
- Name change to Capital New Energy Carriers L.P. to reflect focus on LNG carriers and energy transition shipping
- Intention to convert into corporation with customary governance structure
- Right of First Refusal on two ammonia carriers and two liquid CO2 carriers on order by Capital Maritime, as well as on future two stroke LNG vessels and charters from Capital Maritime
- Intention to divest from non-core container vessels
- Significant funding support from Capital Maritime, including a no-fee, fully backstopped Rights Offering of $500.0 million and an unsecured non-amortizing Seller’s Credit of $220.0 million
ATHENS, Greece -- Capital Product Partners L.P. has announced that it has entered into an umbrella agreement with Capital Maritime & Trading Corp. and Capital GP L.L.C. 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:
| Two stroke MEGA Mark III Flex 174,000 Cubic Meters (“CBM”) built/under construction at Hyundai Heavy Industries Co., LTD and Hyundai Samho Heavy Industries Co. Ltd., South Korea collectively (“Hyundai”) | |||||
| No | Vessel | Contractual Delivery Date |
Charterer | Years (as of 15/12/23) |
Charter Type |
| 1. | Amore Mio I2 | October 2023 | Qatar Energy Trading LLC (“QET”) | 2.8 | Time Charter |
| 2. | Axios II4 | January 2024 | Bonny Gas Transport Limited (“BGT”) | 7.0 + 3.0 | Bareboat Charter |
| 3. | Assos5 | May 2024 | Tokyo LNG Tanker Co. Ltd. (“Tokyo Gas”) | 10.0 | Time Charter |
| 4. | Apostolos6 | June 2024 | LNG Marine Transport Limited (“Jera”) | 10.5 + 3.0 | Time Charter |
| 5. | Aktoras3 | July 2024 | BGT | 7.0 + 3.0 | Bareboat Charter |
| 6. | Archimidis | January 2026 | - | ||
| 7. | Agamemnon | March 2026 | - | ||
| 8. | Alcaios I | September 2026 | - | ||
| 9. | Antaios I | November 2026 | - | ||
| 10. | Athlos | February 2027 | - | ||
| 11. | Archon | March 2027 | - | ||
| Contracted Revenue for LNG/Cs No 1-5 (as of 15/12/23) | ||||
| Year | In Millions | Daily Rate Average 6 | ||
| 2023-2024 | $123.3 | $131,622 | ||
| 2025 | $207.3 | $115,462 | ||
| 2026 | $193.8 | $111,813 | ||
| Thereafter | $904.5 | $99,311 | ||
| Total | $1,428.9 | - | ||
(1) On a fully delivered basis, compared to the current fleet and assuming no further acquisitions by other US publicly listed companies.
(2) In October 2022, the company owning the LNG/C Amore Mio I, entered into a time charter agreement with QET for a period of up to October 1, 2026 (+30/-30 days). The time charter of the LNG/C Amore Mio I commenced on October 31, 2023.
(3) In August 2023, the company owning the LNG/C Aktoras, entered into a Bareboat charter agreement with BGT for seven years (+30/-30 days) commencing upon the delivery of the vessel from the shipyard. The charterer has the option to extend the charter for 36 months (+30/-30 days).
(4) The company owning the LNG/C Axios II has agreed with BGT to enter into a seven year (+30/-30 days) Bareboat charter commencing in the first quarter of 2025. The charterer has the option to extend the charter for 36 months (+30/-30 days).
(5) In November 2022, the company owning the LNG/C Assos, entered into a time charter agreement with Tokyo Gas for 10 years (+30/-30 days). The charter of the LNG/C Assos is expected to commence in May 2024.
(6) In May 2023, the company owning the LNG/C Apostolos, entered into a time charter agreement with Jera for a period of up to December 31, 2034 (+60/-60 days) commencing upon the delivery of the vessel from the shipyard. The charterer has the option to extend the time for a period of three years (+60/-60 days).
(7) Total available days per vessel for each calendar year multiplied by the contracted day rate. Available days per vessel for LNG/Cs Assos and Apostolos are adjusted for one special survey per vessel.
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.
