Capital Product Partners LP has signed a nonbinding letter of intent to buy two vessels from Capital Maritime & Trading Corp., for total of $118m. The deal is expected to be completed by April.
The first vessel, valued at $95m, is a 2001-built, 159,982 deadweight ton double hull tanker.
The vessel is chartered to BP Shipping Ltd. under a charter at a gross rate of $36,456 per day. The charter has a term through at least January 2011, and includes a profit-sharing arrangement that calls for BP and Capital Product to equally split any additional revenue.
The second, worth $23 million, is a 12,000 deadweight ton double hull product tanker built in 2005. The tanker is chartered to Shell International Trading & Shipping Company Ltd. until at least March 2010, at a gross rate of $13,250 per day.
Capital Product Partners expects to fund the purchase with $2 million in available cash and $57.5 million through its new revolving $350 million credit facility. The remaining amount will be funded through an offering of 2.55 million common units to Capital Maritime at a price of $22.94 per unit.
Capital Product Partners expects the two vessels to boost operating earnings by 8 cents per unit annually, excluding any profit-sharing agreements.