CPLP, OSG Reach Conditional Agreement

Press Release
Friday, March 01, 2013

Capital Product Partners L.P. (the "Partnership" or CPLP) (NASDAQ: CPLP) has reached a conditional agreement with Overseas Shipholding Group Inc. (OSG) and certain of OSG's subsidiaries regarding the long term bareboat charters of three of its product tanker vessels.

On November 14, 2012, OSG made a voluntary filing for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware, and it is currently subject to bankruptcy proceedings. CPLP had three IMO II/III Chemical/Product tankers (M/T Alexandros II, M/T Aristotelis II and M/T Aris II, all built in 2008 by STX Offshore & Shipbuilding Co. Ltd.) with long term bareboat charters to subsidiaries of OSG. These bareboat charters had scheduled terminations in February, July and September of 2018, respectively, and had rates ($13,000 per day) that are substantially above current market rates.

CPLP has conditionally agreed to enter into new charters with OSG on substantially the same terms as the prior charters but at a bareboat rate of $6,250 per day. OSG has the option of extending the employment of each vessel following the completion of the bareboat charters for an additional two years on a time chartered basis at a rate of $16,500 per day. The new charters remain subject to approval by OSG's board of directors. As part of its bankruptcy proceedings, OSG has also filed a motion seeking court approval of the new charters and court approval to reject the existing bareboat charters pursuant to the Bankruptcy Code. OSG's motion is scheduled to be heard by the Bankruptcy Court on March 21, 2013. Under the terms of the agreement between CPLP and OSG, the new charters, if approved, will be effective retroactively as of March 1, 2013 (provided that in the case of the M/T Alexandros II, which was delivered back to CPLP on January 22, 2013, no payment and guarantee obligations shall arise prior to the completion of its drydock and re-delivery to OSG, which is expected to take place between March 1 and May 15, 2013). If OSG and its subsidiaries receive court approval to reject the existing charters, the existing charters will be deemed rejected as of March 1, 2013. Rejection of each charter constitutes a material breach of such charter, and CPLP is reserving its rights to make claims as a result of this breach for the difference between the reduced amount of the new charters and the amount due under each of the existing charters. No assurance can be given that OSG's board of directors will approve the new charters, that the Bankruptcy Court will approve any agreement or arrangement entered into between us and OSG or that CPLP will be successful in pursuing claims in the bankruptcy proceedings.

Maritime Today

The Maritime Industry's original and most viewed E-News Service

Maritime Reporter November 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Crowley Opens Government Services Office

Crowley Maritime Corp. has opened a new government services office in downtown Norfolk, Va. to help the company better serve government agencies such as the Military Sealift Command (MSC) and the U.

Interview: Mike Petters - President & CEO, HII

Last month Mike Petters, president and CEO of Huntington Ingalls Industries (NYSE:HII), was honored by the Coast Guard Foundation at the 35th Annual Salute to the United States Coast Guard,

McAllister Towing – 150 Years of Family Business

“Early in 1864, a young man names James McAllister stood on board a sailing vessel where he served as a mate. The boat was about to set sail from the Red Bay of

Tanker Trends

Concordia Maritime Charters MR Tanker

Concordia Maritime has signed a contract for the charter of an IMO2/3 class MR tanker, the company announced today. The vessel will be chartered jointly with Stena Weco,

Stena Bulk Orders Tankers from China

Stena Bulk has placed an order for three 50,000 dwt IMOIIMAX MR tankers with the Chinese shipyard CSSC Offshore & Marine Engineering (CSSC OME), formerly Guangzhou Shipyard International (GSI),

Fredriksen's Firms See Diverging Fortunes

Rig firm Seadrill sees tough market continuing in 2016. Firms in Norwegian-born billionaire John Fredriksen's empire saw contrasting fortunes on Tuesday, as rig firm Seadrill booked $1.


When Conducting Investigations Consider 'Privileges'

Whether voluntarily or as required by the International Safety Management Code, the American Waterways Operators’ (AWO) Responsible Carrier Program, or some other rule or regulation,

Deepwater Downturn: Bump in the Road or Long-Term Slowing of Growth?

IMA/World Energy Reports has just completed a comprehensiveassessment of the five year outlook for the deepwater sector.  The new report – the 19th annual floater

North Group Increases Projected Free Reserve

Directors of the North P&I Club and Sunderland Marine Insurance Company (North Group) have revised their projection for the group’s year-end free reserve up to $380 million,


Fincantieri Launches Nuclear Waste Vessel for Russia

New semisubmersible floating platform will be used to transport special material decommissioned by the Russian Navy    Itarus, the new semisubmersible floating

Grandweld Delivers Vessel to ADNOC

United Arab Emirates leading shipyard Grandweld has delivered a dive maintenance and support vessel TAWAM1 to Abu Dhabi National Oil Company (ADNOC).   Grandweld

Turbocharger Retrofits for Royal Caribbean

MAN PrimeServ informs it has won the contract from Royal Caribbean Cruises Ltd. (RCCL) to retrofit the turbochargers aboard four cruise liners from its fleet.   The

Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Offshore Oil Port Authority Salvage Ship Electronics Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1089 sec (9 req/sec)