Capital Product Partners completes $3.1 billion LNG carrier deal

New York-listed Capital Product Partners has completed the previously announced umbrella agreement to buy 11 LNG carriers from its sponsor Capital Maritime & Trading Corp for a total acquisition price of $3.13 billion.

Last month, CPLP entered into the deal with Evangelos Marinakis-led Capital Maritime and its general partner Capital GP.

Besides the deal, CPLP will change its name to Capital New Energy Carriers L.P. to reflect focus on LNG carriers and energy transition shipping, it said.

The firm announced closing of the deal in a statement issued on December 21.

Upon the closing of the agreement, CPLP entered into 11 share purchase agreements to acquire 100 percent of the equity interests in each vessel-owning company of the vessels, it said.

Earlier this year, CPLP took delivery of its seventh LNG carrier in South Korea, Asterix I, which it also purchased from Capital Maritime.

Such as the first six LNG carriers which joined CPLP in 2021, Capital Gas, also owned by Evangelos Marinakis, manages the new LNG carrier as well.

Capital Gas recently took delivery of the 174,000-cbm ME-GA LNG carrier, Amore Mio I, chartered by QatarEnergy.

This is the first vessel out of 11 of these LNG carriers CPLP will buy under the new deal.

The other LNG carriers are Axios II (chartered by Bonny Gas transport), Assos (chartered by Tokyo LNG Tanker), Apostolos (chartered by Jera), Aktoras (chartered by BGT), Archimidis, Agamemnon, Alcaios I, Antaios I, Athlos, and Archon, according to CPLP.

Rights offering

Pursuant to the umbrella agreement, CPLP conducted a rights offering to finance $500 million of the purchase price for the vessels.

The rights offering resulted in subscriptions for 445,988 common units representing limited partnership interests in CPLP offered at an exercise price of $14.25 per Common Unit.

Capital Maritime purchased 34,641,731 common Units that were not issued pursuant to the rights offering for an aggregate amount of $493.6 million pursuant to a standby purchase agreement with CPLP.

Following the rights offering, Capital Maritime owns 39,808,881 common units, representing 72.3 percent of the common units outstanding (40,962,727 common units together with the common units owned by Capital Gas, representing 74.4 percent of the common units outstanding) excluding 870,522 treasury units and 348,570 general partner units, it said.

In addition to commercial debt and the offering, Capital Maritime also issued to CPLP an unsecured seller’s credit in an amount equal to $220 million to finance a portion of the purchase price for the vessels.

“We are very pleased to see the closing of this very important first step in the transformation of the partnership into a one of the largest US listed owners of two stroke, latest generation LNG carriers,”  CEO Jerry Kalogiratos said.

“Together with the other steps that we have laid out such as the transformation of the partnership into a corporation, we hope to over time attract additional investor interest and allow our equity valuation to move closer to our peers,” he said.

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