Capital Product Partners announces $3.1bn acquisition of 11 LNG carriers from Capital Maritime
In a significant move within the shipping industry, Capital Product Partners L.P. (NASDAQ: CPLP) has announced a substantial acquisition. The company has entered into an umbrella agreement with Capital Maritime & Trading Corp. and Capital GP L.L.C. for the purchase of 11 newbuild LNG carriers, totaling a remarkable $3.13 billion.
Details of the Acquisition
The deal encompasses two-stroke MEGA Mark III Flex 174,000 Cubic Meters (CBM) LNG carriers, built or under construction at Hyundai Heavy Industries Co., LTD, and Hyundai Samho Heavy Industries Co. Ltd., South Korea. This acquisition positions Capital Product Partners as a prominent player in the LNG carrier market, significantly enhancing its fleet and enterprise value.
Contracted Revenue and Financing Aspects
The contracted revenue for the initial five LNG carriers as of December 15, 2023, amounts to $1.43 billion. To finance this acquisition, Capital Product Partners will undertake a $500.0 million rights offering and receive a $220.0 million unsecured seller’s credit from Capital Maritime. The company intends to complete the acquisition by the end of 2023.
Capital Product Partners L.P. to expand LNG fleet with multi-billion dollar investment
Management Commentary and Strategic Focus
Jerry Kalogiratos, CEO of Capital Product Partners’ General Partner, expressed enthusiasm for this transformative transaction, emphasizing the expected growth in contracted revenues to $3.1 billion and the renewal of business focus on LNG and energy transition shipping. He also highlighted the support from Capital Maritime, the largest unitholder and sponsor of CPLP, in fully backing the rights offering and providing an attractively priced seller’s credit.
Future Prospects and Industry Position
With this acquisition, CPLP is set to become one of the largest US-listed shipping companies in terms of enterprise value. The company’s renewed focus on LNG and energy transition shipping, along with the expected improvement in financial and qualitative metrics, positions it favorably for future growth and investor interest.