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Capital Product Partners L.p.  (CPLP)
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    Sector  Transportation    Industry Marine Transportation
 


 

Capital Product Partners L.p.

Business Description


We are an international owner of modern tanker, container and drybulk vessels. Our fleet of 30 modern high specification vessels (2.1 million dwt) with an average age of approximately 6.8 years, consists of four Suezmax crude oil tankers, eighteen modern MR tankers, all of which are classed as IMO II/III vessels, seven post-panamax container carrier vessels and one Capesize bulk carrier. Our vessels are capable of carrying a wide range of cargoes, including crude oil, refined oil products such as gasoline, diesel, fuel oil and jet fuel, edible oils and certain chemicals, such as ethanol, as well as dry cargo and containerized goods. All our vessels were chartered under medium- to long-term time and bareboat charters (with a revenue weighted average remaining term of approximately 8.3 years) to large charterers such as BP Shipping Limited, subsidiaries of OSG, Maersk Line, HMM, CSSA S.A. (Total S.A.), Subtec S.A. de C.V. (“Subtec”), Cosco, Engen Petroleum Ltd., Repsol Trading S.A. (“Repsol”) and Capital Maritime. All our time and bareboat charters provide for the receipt of a fixed base rate for the life of the charter, and in the case of 7 of our 24 time charters, also provide for profit sharing arrangements in excess of the base rate.

The Marinakis family, including Evangelos M. Marinakis, our former chairman, may be deemed to beneficially own on a fully converted basis a 17.6% and on a non-fully converted basis a 19.9% interest in us through its beneficial ownership of common units through, among others, Capital Maritime.

Our primary business objective is to pay a sustainable quarterly distribution on our common units and Class B Units and to increase our distributions on our common units over time by executing the following business strategies:

• Maintain medium- to long-term fixed charters. We believe that the medium to long-term, fixed-rate nature of our charters and our cost efficient ship management operations under our agreements with Capital Ship Management provide visibility of revenues and cash flows in the medium to long-term. All of our vessels were chartered under medium to long-term time and bareboat charters with a revenue weighted average remaining term of approximately 8.3 years. As our vessels come up for rechartering, we will seek to redeploy them under period contracts that reflect our expectations of prevailing market conditions. We will continue to evaluate growth opportunities across all shipping sectors, with a focus on chartering our vessels to third parties. We believe that the young age and diversified profile of our fleet, the high specifications of our vessels and our Manager’s ability to meet the rigorous vetting requirements of some of the world’s most selective major international oil companies and major charterers in the tanker, drybulk and container sectors will position us favorably to continue to secure medium to long-term charters for our vessels.

• Expand our relationships with both current and new charterers and capitalize on our relationship with Capital Maritime. We aim to increase the number of vessels we charter to our current third-party charterers in order to expand our relationships with them and take advantage of their diverse shipping requirements. We also believe that we can leverage our relationship with Capital Maritime and its ability to meet the rigorous vetting and selection processes of leading oil companies, as well as other charterers in the tanker, drybulk and container sectors, in order to attract new charterers for our fleet and increase the product, customer, geography and maturity diversity of our portfolio. We also believe that Capital Maritime will remain a strong chartering option.

• Expand our fleet through opportunistic acquisitions. Our fleet currently consists of 30 vessels with 2.1 million deadweight capacity, as compared to eight vessels with 0.3 million deadweight capacity at the time of our IPO in 2007. We intend to continue to evaluate potential acquisitions of both newbuilds and second-hand vessels from Capital Maritime and third parties in order to make opportunistic acquisitions for our fleet while maintaining a strong balance sheet. We also intend to take advantage of opportunities afforded to us by our relationship with our sponsor Capital Maritime. On July 24, 2014, we entered into a Master Vessel Acquisition Agreement with Capital Maritime to acquire the


• Maintain a strong balance sheet through moderate use of leverage. While we anticipate that we will finance our vessels and future vessel acquisitions through a mix of debt and equity financing, we intend to maintain a moderate level of leverage over time. By maintaining moderate levels of leverage, we expect to retain greater flexibility than our more leveraged competitors, maintain low breakeven rates and deliver steady distributions to our unitholders. In addition, charterers have increasingly favored financially solid vessel owners, and we believe that our anticipated balance sheet strength will enable us to access more favorable chartering opportunities, as well as give us a competitive advantage in pursuing vessel acquisitions.

• Maintain and build on our ability to meet rigorous industry and regulatory safety standards. We believe that in order for us to be successful in growing our business, we will need to maintain our vessel safety record and build on our high level of customer service and support. Our Manager, Capital Ship Management, has a strong record of vessel safety and compliance with rigorous health, safety and environmental protection standards, and is also committed to providing our customers with a high level of customer service and support.

   

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