Business Context and Reporting Period
This Form 6-K filing by Capital Product Partners L.P. (the "Partnership") covers the month of March 2013. The Partnership is a foreign private issuer based in Piraeus, Greece, engaged in the shipping industry. The report details a significant capital raise and asset acquisition transaction completed on March 19, 2013, with a similar transaction expected to close on March 26, 2013.
Key Financial Metrics and Transactions
- Capital Raised: Issued and sold 4,550,003 Class B Convertible Preferred Units on March 19, 2013. An additional 4,549,997 units are expected to be issued on March 26, 2013.
- Asset Acquisition: Acquired the M/V "Hyundai Premium," a 5,023 TEU high-specification container vessel, for a total consideration of $65 million.
- Funding Sources: The acquisition was funded by net proceeds from the Class B Unit issuance, approximately $27 million from existing credit facilities, and a portion of cash balances.
- Future Acquisition: A second vessel, the M/V "Hyundai Paramount" (5,023 TEU), is expected to be acquired for $65 million using similar funding sources.
- Financial Metrics: The filing text does not provide specific values for revenue, profit, cash flow, margins, or total debt levels for the period.
Material Changes
The primary material change is the expansion of the Partnership's fleet through the acquisition of two high-specification container vessels from its Sponsor, Capital Maritime & Trading Corp. ("Capital Maritime"). Additionally, the Partnership amended its Limited Partnership Agreement (Third Amendment) to adjust the rights, preferences, and privileges of the Class B Convertible Preferred Units, specifically regarding distribution rates and the potential payment of distributions in Common Units rather than cash.
Guidance, Outlook, and Risks
- Outlook: Management expects to complete the second vessel acquisition and related unit issuance on or about March 26-27, 2013.
- Related Party Transactions: Both vessel acquisitions are from the Partnership's Sponsor, Capital Maritime, which also participated as a purchaser in the Class B Unit offering.
- Regulatory Status: The Class B Units were not registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an exemption.
- Contingencies: The terms of the transactions are subject to the conditions outlined in the Subscription Agreement, Registration Rights Agreement, and Share Purchase Agreements filed as exhibits.
Investor Verification Checklist
- Verify the exact net proceeds received from the issuance of 4,550,003 Class B Units, as the specific dollar amount is not stated in the summary text.
- Confirm the total outstanding debt and liquidity position after utilizing $27 million from credit facilities for the first acquisition.
- Review the Third Amendment to the LP Agreement to understand the specific mechanics of the adjusted distribution rate and the conditions under which distributions are paid in Common Units.
- Assess the valuation of the M/V "Hyundai Premium" and M/V "Hyundai Paramount" relative to market rates for 5,023 TEU vessels.
- Examine the Registration Rights Agreement to understand the timeline and conditions for the resale of Common Units issuable upon conversion.