Capital Product Partners L.P. (NASDAQ: CPLP) (“CPLP”) announced
today that its Board of Directors has established March 19, 2019 as
the record date (the “Record Date”) for the previously announced
spin-off of its crude and product tanker business into a separate
publicly listed company, Diamond S Shipping Inc. (“DSSI”).
Promptly following the spin-off, DSSI will merge with businesses
and operations of DSS Holdings L.P. (“DSS”) in a share-for-share
transaction.
The spin-off will occur by way of distribution of all the
12,725,000 then outstanding DSSI common shares to record holders of
CPLP’s common units and general partner units (the “CPLP
unitholders”).
The distribution of common shares of DSSI is expected to occur
on March 27, 2019 (the “Distribution Date”). Each CPLP
unitholder will be entitled to receive one DSSI common share for
every 10.19149 CPLP common units or 10.19149 CPLP general partner
units held as of 5:00 p.m., New York City time, on the Record
Date. CPLP unitholders will receive cash in lieu of any
fractional DSSI common shares they would otherwise be entitled to
receive in the distribution. The CPLP unitholders are not
required to make any payment or take any other action to receive
DSSI common shares in the distribution, and they will not be
required to surrender or exchange their CPLP common units or CPLP
general partner units.
Immediately following the spin-off, there will be a series of
mergers as a result of which, pursuant to the definitive agreement
that CPLP entered into with DSS (the “Transaction Agreement”), DSSI
will acquire the business and operations of DSS. In the
combination, DSSI will issue 27,165,695 additional DSSI common
shares to DSS, which amount reflects the relative net asset values
of the respective businesses and the agreed implied premium on the
net asset value of CPLP’s tanker business. Following the
spin-off and merger, DSSI will be an independent, publicly traded
company listed on the New York Stock Exchange under the symbol
“DSSI.” CPLP common units will continue to trade on NASDAQ
under the ticker symbol “CPLP.”
It is expected that for U.S. federal income tax purposes the
distribution will be treated as a non-taxable return of capital to
the extent of each CPLP common unitholder’s tax basis, and
thereafter as capital gain.
The completion of the spin-off is subject to certain conditions
set forth in the Transaction Agreement, which is filed as an
exhibit to DSSI’s registration statement on Form 10 (the “Form
10”).
Evercore and Stifel are serving as financial advisors and
Sullivan & Cromwell LLP is serving as legal advisor to
CPLP. DVB Capital Markets LLC is serving as financial advisor
and Fried, Frank, Harris, Shriver & Jacobson LLP is serving as
legal advisor to CPLP’s special committee. Moelis &
Company LLC is serving as financial advisor and Jones Day is
serving as legal advisor to DSS. Clarksons Platou is serving
as industry advisor in connection with the transaction.
Trading of CPLP Common Units and DSSI Common Shares
Before the Distribution Date
DSSI common shares will be issued in book-entry form, which
means that no physical share certificates will be issued.
In connection with the distribution, beginning on or shortly
before the Record Date and continuing up to and including through
the Distribution Date, CPLP expects that there will be three
trading markets in CPLP common units:
- In the “regular-way” market, CPLP common units will trade with
an entitlement to the DSSI common shares to be distributed on the
Distribution Date. The CPLP unitholders who sell CPLP common
units in the regular way market on or before the Distribution Date
will also sell their right to receive DSSI common shares on the
Distribution Date.
- In the “ex-distribution” market, CPLP common units will trade
without an entitlement to the DSSI common shares to be distributed
on the Distribution Date. The CPLP unitholders who own CPLP
common units at 5:00 p.m., New York City time, on the Record Date
and sell those units in the ex-distribution market on or before the
Distribution Date will retain their right to receive DSSI common
shares in the distribution on the Distribution Date.
- In the “when-issued” market, the right to receive DSSI common
shares distributed on the Distribution Date will trade under the
symbol “DSSI WI.” The CPLP unitholders who sell the right to
DSSI common shares in the when-issued market on or before the
Distribution Date will retain their CPLP common units.
CPLP anticipates that “regular-way” trading of DSSI common
shares under the symbol “DSSI” will begin on March 28, 2019, the
first trading day following the Distribution Date.
The CPLP unitholders are encouraged to consult their financial
advisors and tax advisors regarding the particular consequences of
the distribution in their situation, including, without limitation,
the specific implications of selling CPLP common units on or prior
to the Distribution Date and the applicability and effect of any
U.S. federal, state, local and foreign tax laws.
Reverse Unit
Split
CPLP also announced that, shortly after the distribution of DSSI
common shares on the Distribution Date, it will effect a
one-for-seven reverse unit split of the outstanding CPLP common
units. The reverse unit split is intended to bring CPLP’s
common unit trading price more in line with that of peer
companies.
Supplemental Materials and
Website
Supplemental information on the transaction, including DSSI’s
most recent amendment to the Form 10, is available at
www.capitalpplp.com. This press release will also be
furnished to the U.S. Securities and Exchange Commission (the
“SEC”) in a current report on Form 6-K. Shortly after the
Record Date for the distribution, CPLP expects to mail an
information statement to all CPLP unitholders entitled to receive
the distribution of DSSI common shares. The information
statement is an exhibit to the Form 10 and will describe DSSI,
including risks of owning DSSI common shares and other information
regarding the distribution and the mergers.
About Capital Product Partners L.P.
CPLP is an international owner of tanker, container and drybulk
vessels. CPLP currently owns 36 vessels, including 21 modern
medium-range product tankers, three Suezmax crude oil tankers, one
Aframax crude/product oil tanker, ten Neo Panamax container vessels
and one Capesize bulk carrier.
Forward-Looking Statements
The statements in this press release that are not historical
facts, including, among other things, the consummation of the
transaction, are forward-looking statements (as such term is
defined in Section 21E of the Securities Exchange Act of 1934, as
amended). These forward-looking statements involve risks and
uncertainties that could cause the stated or forecasted results to
be materially different from those anticipated. These risk
and uncertainties include, among others: (1) the risk that
the transaction may not be completed on terms or in the timeframe
expected by DSS or CPLP or at all; (2) the possibility that various
closing conditions to the transaction may not be satisfied or
waived; (3) the risk that committed financing may not be available
or may not be available in an amount sufficient, together with cash
to be procured by DSS, to complete the transaction; (4) risks and
uncertainties related to the expected tax treatment of the
spin-off; (5) failure to realize the anticipated benefits of the
transaction; (6) the impact of the spin-off on the business of
CPLP; and (7) the potential impact of major shareholdings on the
trading price of the DSSI common shares. For further
discussion of factors that could materially affect the outcome of
forward-looking statements and other risks and uncertainties, see
“Risk Factors” in CPLP’s annual report filed with the SEC on Form
20-F and in DSSI’s information statement attached as an exhibit to
the Form 10. Unless required by law, each of DSS and CPLP
expressly disclaims any obligation to update or revise any of these
forward-looking statements, whether because of future events, new
information, a change in its views or expectations, to conform them
to actual results or otherwise. Neither DSS nor CPLP assumes
any responsibility for the accuracy and completeness of the
forward-looking statements. You are cautioned not to place
undue reliance on forward-looking statements. All subsequent
written and oral forward-looking statements attributable to DSS or
CPLP or any person acting on their behalf are expressly qualified
in their entirety by the cautionary statements contained or
referred to in this section.
Contact Details
Capital GP L.L.C. Jerry Kalogiratos CEO Tel.
+30 (210) 4584 950 E-mail: j.kalogiratos@capitalpplp.com
Capital GP L.L.C. Nikos Kalapotharakos CFO Tel.
+30 (210) 4584 950 E-mail: n.kalapotharakos@capitalmaritime.com
Investor Relations / Media Nicolas Bornozis
Capital Link, Inc. (New York) Tel. +1-212-661-7566 E-mail:
cplp@capitallink.com
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