Business Context and Reporting Period
This Form 6-K filing by Capital Product Partners L.P. (CPLP) is dated September 17, 2007. The registrant is a Marshall Islands master limited partnership and foreign private issuer operating as an international owner of medium-range (MR) product tankers. The filing primarily serves to disseminate a press release regarding the accelerated delivery of two new vessels.
Key Financial Metrics and Operational Data
- Vessel Acquisitions: Two new MR product tankers, M/T "Apostolos" and M/T "Anemos I," are being delivered ahead of schedule.
- Acquisition Cost: The purchase price for each vessel is $56 million, totaling $112 million for the pair.
- Funding Source: The acquisitions will be fully funded through a drawdown on the company's existing revolving credit facility.
- Charter Terms: Both vessels are fixed under time charters with Morgan Stanley Capital Group Inc. for three years.
- Revenue Structure: The base charter rate is $20,000 per day. A profit-sharing arrangement exists where revenues exceeding the base rate (when spot rates are higher) are shared 50/50 between the company and the charterer.
- Vessel Specifications: M/T "Apostolos" has a capacity of 47,782 dwt; M/T "Anemos I" has a capacity of 47,823 dwt. Both are Ice Class 1A strengthened.
Material Changes and Fleet Expansion
The delivery of these two vessels marks the third and fourth additions to a planned expansion of seven MR product tankers from Capital Maritime & Trading Corp. Following these deliveries and a recently announced intended acquisition of the M/T "Attikos," the company's fleet will grow to 13 owned product tankers (12 of which are Ice Class 1A MR tankers). The company also holds an agreement to purchase three additional 51,000 dwt MR chemical/product tankers scheduled for delivery in 2008.
Outlook, Risks, and Management Commentary
Management confirmed that the new vessels are capable of carrying refined oil products, chemicals (including ethanol and biodiesel feedstock), and crude oil worldwide. The company currently has all 16 vessels (owned and under agreement) under medium to long-term charters with major entities including BP Shipping Limited, Morgan Stanley, Overseas Shipholding Group, and Trafigura Beheer B.V.
Risks and Contingencies: The filing includes standard forward-looking statements disclaiming any obligation to update future predictions. It notes that risks and uncertainties could cause actual outcomes to differ materially from expectations. No specific financial guidance or profit margins for the period were provided in this text.
Investor Verification Checklist
- Verify the exact delivery dates of September 20 and September 28, 2007, for M/T "Apostolos" and M/T "Anemos I."
- Confirm the status of the revolving credit facility drawdown to ensure sufficient liquidity for the $112 million acquisition cost.
- Monitor the performance of the profit-sharing arrangement against prevailing spot rates to assess potential upside revenue.
- Track the progress of the remaining three vessels scheduled for delivery in 2008 and the intended acquisition of M/T "Attikos."
- Review the credit terms and interest rates associated with the existing revolving credit facility.