Capital Product Partners (CPLP) Misses Q3 EPS by 1c; Acquires M/T 'Amor', Boosts Qtr. Distribution

October 31, 2016 8:32 AM EDT
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Capital Product Partners (NASDAQ: CPLP) reported Q3 EPS of $0.07, $0.01 worse than the analyst estimate of $0.08. Revenue for the quarter came in at $60.3 million versus the consensus estimate of $58.18 million.

Acquisition of M/T 'Amor' and Increase in our Quarterly Distribution to $0.08 per Common Unit from the Fourth Quarter of 2016

On October 24, 2016, we acquired from our sponsor, Capital Maritime & Trading Corp. ("Capital Maritime"), the eco-type MR product tanker 'Amor' (49,999 dwt IMO II/III Chemical Product Tanker built 2015, Samsung Heavy Industries (Ningbo) Co., Ltd.) for total consideration of $32.8 million. The M/T 'Amor' is employed under a time charter by Cargill at a gross daily rate of $17,500. The Cargill charter commenced in October 2015 with duration of two years +/-30 days. Aggregate consideration for this acquisition consisted of the assumption of a $15.8 million term loan under a new credit facility with ING Bank N.V., $16.0 million in cash and an issuance of new common units to Capital Maritime. The term loan is non-amortizing for a period of two years from the anniversary of the dropdown of the M/T 'Amor' vessel with an expected final maturity date in November 2022. The interest margin on the term loan is 2.50%. The term loan is subject to ship finance covenants similar to the covenants applicable under our existing facilities. As indicated above, we also issued 283,696 Partnership common units to Capital Maritime at a price of $3.54 per common unit, which was the weighted average unit price for the period from July 14, 2016 to October 14, 2016 and represents a premium of 14% to the closing price of October 28, 2016.

The purchase of the M/T 'Amor' is an arm's-length transaction that was reviewed and unanimously approved by the conflicts committee of our Board of Directors and our entire Board of Directors.

Considering the positive impact of the expansion of our asset base following the acquisition of the M/T 'Amor', the Board decided to approve an increase by 0.5 cents in our quarterly distribution for the fourth quarter 2016 onwards to $0.08 per common unit.

For earnings history and earnings-related data on Capital Product Partners (CPLP) click here.

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