Capital Product Partners eyes more ships as it snaps up three LNG carriers in $600m deal

Capital Product Partners (CPLP) has purchased three 174,000 cu m X-DF LNG carriers from CGC Operating Corp. for $599.5m and secured additional growth opportunities through three optional LNG carriers and right of the first offer on six more vessels.

The New York-listed Greek owner is adding the 2020-built Aristos I and 2021-built Aristarchos, expected to deliver by September 15, as well as the 2021-built Aristidis I, which should deliver by the end of November this year.

The Hyundai Heavy-built Aristos I and Aristidis I are under long-term time charters with BP, which, together with the first two optional periods, expire in October 2027 and December 2027, respectively. BP holds additional options which could extend the charter of the vessels to Q4 2032. The Aristarchos is under a long-term time charter with Cheniere, which expires in February 2025. Cheniere holds two one-year options.

Meanwhile, CPLP secured an option to acquire three more 2021-built X-DF LNG sister vessels at an average price of $207.7m per vessel with contracted revenues of around $429m and chartered to BP, Cheniere and Engie Energy. The company can exercise the purchase option at any time on or prior to November 1, 2021.

Further, CPLP obtained the right of the first offer from Capital Maritime & Trading Corp. (CMTC) on six vessels comprising three 13,278 TEU eco boxships with a 10-year charter to Hapag Lloyd and expected delivery between October 2022 and May 2023, and three LNG carriers with expected delivery in January, October and December 2023.

Jerry Kalogiratos, CEO of CPLP, commented: “The acquisition is transformative across all metrics, as it is expected to be highly accretive to our distributable cash flow and earnings per unit, to renew the Partnership’s fleet and replenish its earnings capacity, to enhance our cash flow visibility and diversify our customer base with investment grade counterparties. At the same time, it is an emphatic step towards reducing the environmental footprint of the Partnership and being part of the transition to carbon neutral shipping.”

The acquisition will reduce Capital Product Partners’ average fleet age from 10.4 years to 8.8 years.