Nasdaq-listed Capital Product Partners (CPLP) has agreed to acquire three 5,100 teu containerships from sponsor Capital Maritime & Trading for $40.5m.
The vessels being acquired are the 2008-built Seattle Express, Long Beach Express and Fos Express. All three come attached with five-year charters to Hapag-Lloyd at $12,300 per day.
CPLP is financing the deal via a $30m sale and lease back transaction with CMB Financial Leasing. The lease is for five years, made up of 20 quarterly instalments of $800,000, with a purchase option on expiration at the predetermined price of $4.5m.
CPLP has also entered into a sellers’ credit agreement with Capital Maritime to defer $6m of the purchase price for up to five years at a fixed rate of 5%.
Jerry Kalogiratos, chief executive officer CPLP, commented: “We are pleased to announce the addition of three panamax container vessels to our fleet, as we continue to execute our business plan of growing the partnership through accretive acquisitions with long term cash flow visibility. This transaction will be completed with a minimal cash outlay from the partnership in view of the advantageous debt and sellers’ credit arrangements we have obtained. The low acquisition price, the five year charter in place to a reputable charterer, as well as the high residual value of these vessels imply very favourable returns on equity deployed.
“In view of the positive market developments in the container charter market, we are focused on increasing cash flow visibility and charter coverage for the partnership’s vessels that come off charter, while we pursue further accretive acquisitions on the back of our increasing liquidity position. Finally, the unit repurchase program we have announced today in addition to our common unit distribution policy will allow us to balance growth going forward with returning capital to our unitholders.”
The acquisition looks a good deal for CPLP considering VesselsValue places a total value of $60.45m on the trio and MSI shows a fair market value of $54.3m. However, the company has come under fire with data showing that sponsor company, Capital Maritime, had only paid $9.5m each for the ships back in September 2020. J Mintzmyer, lead researcher at Value Investor’s Edge, provided some insight into the low purchase price, describing the charters attached to the three ships as “horrible” on social media.