Stock Photo By Oleksandr Kalinichenko / Shutterstock
Capital Product Partners L.P. (NASDAQ: CPLP) has announced its entry into an umbrella agreement with Capital Maritime & Trading Corp. and Capital GP L.L.C. for the acquisition of 11 newbuild LNG carriers for $3.13 billion.
The transaction will make Capital Product Partners the largest publicly listed owner of two-stroke LNG carriers in the United States.
Under the umbrella agreement, Capital Product Partners will also have the right of first refusal on two ammonia carriers, two liquid CO2 carriers, future two-stroke LNG vessels, and charters from Capital Maritime. Following the acquisition, Capital Product Partners says it intends to divest from non-core containerships to shift its focus to the LNG carrier market.
Capital Product Partners currently owns 22 vessels, including seven latest generation LNG carriers, 12 Neo-Panamax containerships and three Panamax containerships.
The LNG carriers are expected to join Capital Product Partners’ fleet between 2023 and 2027. As part of the agreement, the Capital Product Partners will also undergo a name change to “Capital New Energy Carriers L.P.” to reflect its focus on LNG carriers and energy transition shipping.
erry Kalogiratos, Chief Executive Officer of the General Partner, says the transaction will open a new chapter for Capital Product Partners L.P. and position the company as a key player in the LNG and energy transition shipping sector.
“The commitment to change the name of the Partnership to ‘Capital New Energy Carriers L.P.’ and to gradually divest our container vessels, reflects our renewed business focus on LNG and energy transition shipping,” said Kalogiratos. “ We are well positioned to take advantage of the strong fundamentals of the LNG industry with six open LNG/Cs delivering between 2026-2027 and rights of first refusal on a unique fleet of LCO2 and ammonia carriers.”
Capital Maritime will provide significant funding support, including a no-fee, fully backstopped Rights Offering of $500.0 million and an unsecured non-amortizing Seller’s Credit of $220.0 million. The vessels will be purchased through the acquisition of 100% of the equity interests in the respective vessel-owning companies.
The name change to “Capital New Energy Carriers L.P.” is expected to be effective by December 31, 2023.
The acquisition of the 11 LNG carriers is projected to significantly increase contracted revenues for Capital Product Partners, with an expected 87% increase to $3.1 billion. The average age of the LNG fleet is set to decrease to 3.2 years by the time all LNG carriers have been delivered in 2027.
The transaction, which has been unanimously approved by the conflicts committee of the Board of Directors and the full Board of Directors, is expected to be completed by the end of 2023.
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