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Monday, February 24, 2020

Maritime Logistics Professional

December 18, 2019

Capital Product Partners Acquires Boxship Trio

Image: Capital Product Partners

Image: Capital Product Partners

Capital Product Partners (CPLP), a Greek shipping company engaged in the seaborne transportation, has agreed to acquire three 10,000 TEU sister container ships for USD 162.6 million from Capital Maritime & Trading Corp.

The ships, M/V Athos, the M/V Aristomenis and the M/V Athenian, were built in 2011 at Samsung Heavy Industries S. Korea.

The vessels are under long-term time charters with Hapag-Lloyd which will expire in April 2024, said a press note from the shipping company.

The gross charter rate for each vessel currently amounts to $27,000 per day, increasing to $28,000 per day for the M/V Aristomenis from October 2020, and from July 2021 onwards for the M/V Athos and the M/V Athenian. The time charters include two one-year options at $32,500 and $33,500 gross per day, respectively.

The Partnership intends to fund the acquisition of the three vessels with approximately $47.1 million cash at hand and two financing arrangements: the M/V Aristomenis and M/V Athos will be financed through a sale and lease back transaction, entered into with CMB Financial Leasing Co., Ltd, (CMBFL) for an amount of up to $38.5 million each, while the M/V Athenian will be financed through a term loan entered into with Hamburg Commercial Bank A.G. for an amount of up to $38.5 million.

Quarterly principal repayments under the CMBFL lease amount to $0.8 million for each vessel. The lease has a duration of five years and includes a purchase option for the Partnership to acquire each vessel on expiration of the lease at the predetermined price of $22.5 million or pay the amount of $7.5 million to CMBFL, if the option is not exercised. In addition, the Partnership has various purchase options commencing from the first year anniversary of the lease.

The HCOB facility bears interest at LIBOR plus a margin of 2.55% and is payable in twenty consecutive equal quarterly installments of $0.86 million plus a balloon payment of $21.3 million payable together with the final quarterly installment.

Both the HCOB facility and the CMBFL lease are subject to customary closing conditions.

The average fleet age of the Partnership following the transaction will be 7.7 years and the average remaining charter duration will stand at 4.6 years.

The acquisition was entered into on an arm’s length basis and was reviewed and unanimously approved by the conflicts committee of the Board of Directors and the entire Board of Directors. Raymond James & Associates, Inc. served as financial advisor and Fried, Frank, Harris, Shriver & Jacobson LLP served as legal advisors to the Committee.

Samsung Heavy Industriesseaborne transportationCapital Maritime & Trading Corp.