2023-11-13 17:41:04
Capital Product Partners LP (NASDAQ:CPLP) announced today that it is entering into an Umbrella Agreement with Capital Maritime & Trading Corp. and Capital GP LLC which provides for the acquisition of 11 newbuild liquefied natural gas (“LNG/C”) carriers from Capital Maritime for a total consideration of $3.13 billion, marking the company’s entry into a new era with an emphasis on natural gas gas as a fuel and in the exclusive focus on the energy transmission market.
The ships in question, with a capacity of 174,000 cubic meters each, are built by the leading Hyundai Heavy Industries shipyards in South Korea and are expected to be delivered to prominent charterers such as Qatar Energy Trading LLC, Tokyo LNG Tanker Co. Ltd., LNG Marine Transport Limited.
The vessels will be purchased through the acquisition of 100% of the shares in the respective ship-owning companies. Capital Product Partners LP, with the support of major shareholder, Capital Maritime, has secured $500 million in financing through a Rights Offering available to all Shareholders.
The Agreement includes the conduct of a Rights Offering, Starting on November 27, 2023 and Closing on December 13, 2023, in order to strengthen the financing of the purchase price of the ships. All holders of Common Units with a record date of November 24, 2023 will receive a non-transferable subscription right to purchase one Common Unit at a subscription price of $14.25 – $14.50 per whole unit. Capital Maritime has committed to purchase all unexercised shares following the completion of the offer at the same price.
At the same time, within the framework of the Umbrella Agreement, the Company announces its renaming to “Capital New Energy Carriers LP”, reflecting its strategic commitment to the energy transition.
In this context, with the finalization of the Agreement, it will investigate the possibility of disinvestment from container ships.
In parallel, it secures Right of First Refusal (“ROFR”) for energy transition assets, including two pioneering ammonia carriers (“VLACs”) and two liquid CO2 vessels (“LCO2s”) ordered by CMTC.
This strategic move not only upgrades CPLP’s fleet with advanced LNG vessels, but also positions the company as a player in the cleaner fuel shipping market.
This is an important development for CPLP which will now have the largest and newest fleet of LNG carriers equipped with two-stroke engines of the MEGA type with a strong environmental character and high efficiencies, ensuring:
More efficient propulsion – saving up to 100 tn of fuel per day Greater storage capacity – 174k cbm vs 145k cbm or 160k cbm Lower boiling point – 0.03% vs 0.15% daily cargo evaporation ensuring greater efficiency and resource savings Lower long-term maintenance costs Compliant with international emissions regulations
At the same time, it is positioned among the elite shipping companies internationally, as it will be the largest owner of a fleet of last-generation LNG carriers on the American stock market and one of the five largest shipping companies with an enterprise value of 5.8 billion dollars.
Mr. Gerasimos Kalogiratos, CEO of Capital GP LLC, expressed his satisfaction with the agreement, characterizing it as a strategic transformational move that will usher Capital Product Partners LP into a new era with extremely significant growth prospects for the future.
While he estimated that this move will strengthen the investment attractiveness of the company as well as its economic and quality figures, with contracted revenues increasing by 87% to 3.1 billion dollars, the duration of the charter is estimated at 7.2 years from the Closing Date and the average age of the fleet to decrease to 3.2 years until all LNG vessels are delivered in 2027. He concluded by underscoring Capital Maritime’s full support for Capital Product Partners LP’s vision and commitment to evolve into a absolutely committed to LNG and the energy transition.
Understanding the alarming increase in greenhouse gas emissions and the threat of climate change, the Company is redefining its path towards sustainability and a carbon-free world. Continuing its journey towards a sustainable future, it commits to a leadership role in the global energy transition effort, setting a new benchmark for the shipping industry.
Capital Product Partners LP is moving into a new era with a strategic focus on the growing LNG market, while broadening its vision for the energy transition, reflecting its commitment to adaptation and innovation in the shipping sector.
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