Capital Product Partners Progresses with $3.1 Billion Acquisition of 11 LNG Carriers
Posted 22/12/2023 15:16
New York-listed shipowner Capital Product Partners L.P. (CPLP) has successfully closed the umbrella agreement initiated in November 2023, marking a significant step forward in the acquisition of 11 state-of-the-art LNG carrier vessels. The comprehensive deal is valued at $3.1 billion.
Under the umbrella agreement, CPLP collaborated with Capital Maritime & Trading Corp. and Capital GP to facilitate the acquisition of 11 newbuild liquefied natural gas (LNG) carriers. These vessels, each boasting a substantial capacity of 174,000 cubic meters, are either under construction or completed at renowned shipbuilders Hyundai Heavy Industries Co. and Hyundai Samho Heavy Industries Co. in South Korea.
CPLP has already completed the acquisition of the vessel-owning company for the LNG carrier named Amore Mio I and taken delivery of the vessel. This step involved a payment of $141.7 million to Capital Maritime for the vessel.
The next phase of the acquisition involves six additional vessels, including Axios II, Assos, Apostolos, Aktoras, Archimidis, and Agamemnon LNG carriers. Each vessel's acquisition will progress upon its completion and delivery from the shipbuilder. A deposit of 10% of the aggregate acquisition price, totaling $174.4 million, has already been paid, with the remaining amount exceeding $1.6 billion to be settled upon each vessel's delivery.
CPLP successfully conducted a rights offering, generating $500 million to finance a portion of the vessel purchase. The offering resulted in subscriptions for 445,988 common units. Capital Maritime significantly participated in this by acquiring 34,641,731 common units for a total of $493.6 million, increasing its ownership to 72.3% of the outstanding common units.
Jerry Kalogiratos, CEO of CPLP’s General Partner, expressed satisfaction with the closing of this significant step, positioning CPLP as one of the largest U.S.-listed owners of the latest generation LNG carriers. In addition to the acquisition, CPLP intends to explore the disposal of its container vessels and abstain from acquiring more of them.
Further strategic moves include a planned change in CPLP's name and structure, transitioning from a Marshall Islands limited partnership to a corporation with customary corporate governance provisions by June 21, 2024. As part of the business shift, CPLP will focus on the LNG market, emphasizing the transformation into a major player in the LNG carrier sector.
Capital Maritime has extended an unsecured seller’s credit to CPLP, amounting to $220 million, to partially finance the vessel purchase. The credit agreement includes a 7.5% per annum interest rate and matures on June 30, 2027.
The successful progression of this extensive agreement underscores CPLP's commitment to positioning itself strategically in the LNG carrier market and enhancing its overall business portfolio.