Capital Product Partners L.P. (CPLP) stock gained after the international owner of ocean-going vessels reached a deal to acquire three 174,000 cubic meter latest generation X-DF LNG carriers from CGC Operating Corporation for a total sum of $599.5 million. The price includes cash, assumption of secured debt, the issuance of new common units of CPLP at a premium to the current trading unit price and unsecured, interest free seller financing, says an article published in Investorsobserver.
What does this mean for Capital Product Partners?
The three vessels are the LNG/C Aristos I built in 2020, and the LNG/C Aristarchos and the LNG/C Aristidis I built in 2021. All three were constructed at Hyundai Heavy Industries Co., Ltd. and the LNG/C Aristos I and the LNG/C Aristarchos are expected to be delivered to Capital Product Partners by Sept. 15, while the LNG/C Aristidis I is expected to be delivered by the end of November 2021.
Long time charters
The LNG/C Aristos I and the LNG/C Aristidis I are under long-term time charters with BP Gas Marketing Limited, which together with the first two optional periods, expire in October 2027 and December 2027, jg respectively.
As part of the partnership’s growth strategy, the partnership also secured an option to acquire an additional three X-DF LNG sister vessels at an average price of $207.7 million per vessel with contracted revenues of approximately $429 million and an average daily rate across all three vessels of approximately $70,650 per day.
Transformative transaction
“We are very pleased to have concluded this transformative transaction for the Partnership with the acquisition of these three, brand new, high specification LNG carriers at a time when the LNG market is exhibiting strong long-term fundamentals,” said Jerry Kalogiratos, CEO of the Partnership’s General Partner. “The acquisition is transformative across all metrics, as it is expected to be highly accretive to our distributable cash flow and earnings per unit, to renew the Partnership’s fleet and replenish its earnings capacity, to enhance our cash flow visibility and diversify our customer base with investment grade counterparties. At the same time, it is an emphatic step towards reducing the environmental footprint of the Partnership and being part of the transition to carbon neutral shipping.”
Kinds of vessels
Capital Product Partners LP is in the seaborne transportation of cargoes, crude oil, gasoline, diesel, fuel oil, jet fuel and edible oils and dry cargo and containerized goods. Its vessels include; suezmax crude oil tankers, medium-range product tankers, neo panamax container carriers and capsize bulk carrier. Its vessels are capable of carrying a wide range of cargoes, including crude oil, refined oil products (such as gasoline, diesel, fuel oil and jet fuel), edible oils and certain chemicals, such as ethanol, as well as dry cargo and containerized goods under short-term voyage charters and medium to long-term time and bareboat charters.
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Source: Investorsobserver
