Capital Product Partners L.P. Announces the Successful Delivery of the LNG Carrier ‘Axios II’
Capital Product Partners L.P. (CPLP) successfully took delivery of the LNG Carrier 'Axios II' as part of an agreement to acquire 11 LNG/Cs. The vessel has commenced a one-year time charter at a market-linked rate, followed by a seven-year bareboat charter with Bonny Gas Transport Limited. The acquisition was financed with cash from the balance sheet, a new senior secured loan facility, and a seller's credit agreement. Axios II is the ninth latest generation LNG/C of the Partnership, with the remaining nine vessels expected to be delivered between the second quarter of 2024 and the first quarter of 2027.
The delivery and financing of the 'Axios II' LNG Carrier by Capital Product Partners L.P. (CPLP) signifies a strategic expansion in the company's fleet, which can be expected to impact its revenue stream and operational capabilities. The financing structure, comprising a blend of balance sheet cash, a secured loan and deferred payment, reflects a careful balance of capital management and investment for growth. The one-year time charter at a market-linked rate, followed by a longer seven-year bareboat charter, provides CPLP with a predictable income stream, potentially enhancing financial stability and investor confidence.
However, the significant balloon payment due in December 2030 necessitates a focus on future cash flow management. Investors should monitor the company's ability to meet this obligation, as well as the operational performance of the new vessel, which could influence the overall financial health of CPLP. Additionally, the delivery schedule of the remaining vessels under the Umbrella Agreement will be a key factor to watch, as it will affect capital expenditures and debt levels over the next few years.
The acquisition of a 'latest generation' LNG Carrier like 'Axios II' positions CPLP in a favorable spot within the maritime shipping industry, which is increasingly moving towards cleaner energy sources such as LNG due to environmental regulations. The vessel's advanced two-stroke MEGA LNG/C design, built by Hyundai Heavy Industries, is indicative of an industry shift towards more efficient and eco-friendly vessels. This could provide CPLP with competitive advantages in securing charters and maintaining operational efficiency.
Furthermore, the long-term charter agreement with Bonny Gas Transport Limited, with an option to extend, suggests a stable and potentially lucrative partnership that could lead to further business. The impact of such strategic moves on the company’s market share and industry standing should be observed closely, as they could lead to enhanced profitability and long-term growth.
The increasing global demand for LNG as an energy source, driven by the shift towards cleaner fuels, underscores the strategic importance of CPLP's investment in new LNG carriers. The 'Axios II' vessel, with its significant cargo capacity of 174,000 cbm, is well-positioned to meet the growing transport needs of the LNG market. The timing of the delivery aligns with the anticipated increase in LNG production and the need for maritime transport infrastructure.
Given the evolving landscape of the energy sector, with a focus on sustainability and energy security, CPLP's expansion into LNG transportation could be seen as a forward-thinking move. Stakeholders should consider the long-term implications of such investments, particularly as they relate to the company's alignment with global energy trends and the potential for future revenue growth in the energy transportation sector.
01/04/2024 - 09:00 AM
ATHENS, Greece, Jan. 04, 2024 (GLOBE NEWSWIRE) -- Capital Product Partners L.P. (NASDAQ: CPLP), an international owner of ocean-going vessels, today announced that it successfully took delivery of the LNG Carrier (“LNG/C”) ‘Axios II’.
Pursuant to the agreement to acquire 11 LNG/Cs provided under the Umbrella Agreement entered into on November 13, 2023 (the “Umbrella Agreement”), the Partnership took delivery on January 2, 2024 of LNG/C Axios II (174,000 cbm, latest generation, two stroke MEGA LNG/C, built at Hyundai Heavy Industries Co., Ltd). The vessel commenced a one-year time charter at a market-linked rate, which will be followed by a seven-year bareboat charter with Bonny Gas Transport Limited, who maintain an option to extend by an additional three years.
The vessel acquisition was financed with cash from the balance sheet, a new senior secured loan facility led by ING Bank N.V. for an amount of $190.0 million payable in 28 equal quarterly instalments of $2.5 million , in addition to a balloon payment of $120.0 million payable together with the final quarterly instalment in December 2030, and the deferral of $92.6 million of the purchase price, in accordance with the seller’s credit agreement included in the Umbrella Agreement, maturing on June 30, 2027.
Axios II is the ninth latest generation LNG/C of the Partnership and the second vessel delivery of the fleet acquired under the Umbrella Agreement. The remaining nine vessels are expected to be delivered between the second quarter of 2024 and the first quarter of 2027.
About Capital Product Partners L.P.
For more information about the Partnership, please visit: www.capitalpplp.com .
Forward-Looking Statements
CPLP-F
Contact Details:
Capital GP L.L.C. j.kalogiratos@capitalpplp.com
Capital GP L.L.C. n.kalapotharakos@capitalmaritime.com
Investor Relations / Media cplp@capitallink.com
What did Capital Product Partners L.P. (CPLP) announce?
CPLP announced the successful delivery of the LNG Carrier 'Axios II' as part of an agreement to acquire 11 LNG/Cs.
How was the vessel acquisition financed?
The acquisition was financed with cash from the balance sheet, a new senior secured loan facility led by ING Bank N.V., and the deferral of $92.6 million of the purchase price in accordance with the seller's credit agreement.
What is the charter plan for Axios II?
The vessel has commenced a one-year time charter at a market-linked rate, followed by a seven-year bareboat charter with Bonny Gas Transport Limited, with an option to extend by an additional three years.
How many vessels are expected to be delivered under the Umbrella Agreement?
The remaining nine vessels are expected to be delivered between the second quarter of 2024 and the first quarter of 2027.
Who provided the senior secured loan facility for the acquisition?
The senior secured loan facility was led by ING Bank N.V. for an amount of $190.0 million.
Capital Product Partners L P
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CPLP Stock Data
Industry
Deep Sea Freight Transportation
Sector
Transportation and Warehousing
Tags
Transportation, Marine Shipping, Transportation and Warehousing, Deep Sea Freight Transportation
Country
Greece
City
Peiraias
About CPLP
capital product partners l.p. (nasdaq: cplp) is an international, diversified shipping company and leader in the seaborne transportation of a wide range of cargoes, including crude oil, refined oil products, such as gasoline, diesel, fuel oil, jet fuel and edible oils, as well as dry cargo and containerized goods. as a publicly traded master limited partnership, cplp has elected to be treated as a c-corp. for tax purposes which is most beneficial for u.s. investors (as they receive the standard 1099 form). the partnership is well-positioned to benefit from the long-term growth dynamics of the global shipping industry and to capitalize on potential acquisition opportunities in the fragmented shipping market. cplp benefits from the commercial and technical management agreement with its sponsor, capital maritime & trading corp. ("capital maritime"), an established and reputable diversified shipping company.
