Capital Product Partners Acquires 11 New LNG Carriers

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  • Capital Product Partners L.P. closed an Umbrella Agreement to acquire 11 new LNG carriers for $3.13 billion from Capital Maritime, funded through a rights offering, seller’s credit, and share purchase agreements.
  • This strategic move marks a shift toward LNG carriers, intending to sell container vessels, change its name, and convert to a corporation by 2024, aiming to boost investor appeal and align with LNG market growth.
  • The move aims to enhance CPLP’s position as a significant owner of modern LNG carriers in the US market.

Vessel Acquisitions

Capital Product Partners L.P. closed a landmark Umbrella Agreement with Capital Maritime & Trading Corp. for the acquisition of 11 liquefied natural gas carriers from Hyundai, collectively priced at $3.13 billion. The vessels, each with a 174,000 Cubic Meters capacity, are part of the strategic acquisition deal.

While the acquisition for some vessels has concluded, others are expected to be acquired upon completion of construction, with initial deposits paid and further payments upon delivery. The acquisitions mark a significant step in expanding their fleet and maritime capabilities.

Funding Details

The funding included a $500.0 million Rights Offering and a $220.0 million Sellers’ Credit. The Rights Offering concluded with subscriptions for 445,988 Common Units at $14.25 per unit.

Capital Maritime acquired 34,641,731 Common Units under a Standby Purchase Agreement, resulting in them owning 72.3% of the Common Units.

Additionally, an unsecured seller’s credit of $220.0 million was provided by Capital Maritime to finance part of the Vessels’ purchase price, bearing an interest rate of 7.5% per annum and maturing on June 30, 2027.

Strategic Transformation

Following the Umbrella Agreement, focus shifts to LNG/C market. Business shifts from container vessels to exploring LNG/C sector, aiming for a partnership-to-corporation conversion by June 2024.

Capital Maritime grants us rights of first refusal on LNG/C vessel transfers, employment opportunities, and newbuild orders until December 2033. CEO Jerry Kalogiratos sees the acquisition as a pivotal step, aiming to transform the partnership into a leading owner of modern LNG carriers and boost investor interest in equity valuation.

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Source: Capital

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