LNG carriers ordered privately by Evangelos Marinakis and VLCCs owned by the Greek shipowner are among the “numerous dropdown opportunities” available to Capital Product Partners from an $800m plus pipeline.
Chief executive Jerry Kalogiratos picked out the ships as examples of potential purchases available to the MLP following the pending merger of its tanker fleet with Diamond S Shipping.
He told investors and analysts the LNG carriers on order at Hyundai Heavy Industries, were on Capital’s “radar” as part of its plan to grow in a disciplined manner.
“We all consider a very exciting turn for the LNG market,” Kalogiratos said.
"Of course, these vessels are due for delivery late in 2020 and early 2021, so it is very early to discuss those assets," said Kalogiratos, referencing Capital Gas' carrier newbuilding deal. "But there is no lack if you want of dropdown opportunities."
While Kalogiratos insisted the New York-traded company would be "a little asset agnostic" when it comes to sectors - he highlighted tankers and large containerships as assets suitable for the MLP.
Rebuilding criteria
Kalogiratos said Capital’s sponsor has in excess of $800m in assets with long term charters, including VLCCs with 5% a year bareboat charters and large containers with three to five-year contracts.
“We aimed to rebuild and grow CPLP by acquiring assets with medium to long-term chapters and cash flow visibility, accretion and duration of contract are going to be the main criteria,” he said.
He added: “Larger containers tends to command longer term employment. And as a result, we will continue to look for accretive transactions with that segment.
“But it’s not the only segment that will be open to look at. As we said, tankers potentially drybulk - but I don’t see many opportunities there.”
For the last three months of 2018, Capital Product Partners rode a surge in tanker rates to a $13.2m profit, nearly doubling its results year over year.
The company has a 36 ship fleet, 25 of which are tankers and 10 are boxships. It owns a single bulker, but no gas carriers.
The $1.65bn merger with Diamond S is set to be completed in the first quarter after being delayed by a US government shutdown.
The company cited analyst forecasts in its fourth quarter earnings report that demand for boxships would outstrip supply in 2019.
