Capital Product Partners accepts 20% rate cut on five HMM boxships

Capital Product Partners, majority owned by wealthy Greek national Evangelos Marinakis, accepted the 20% rate-cut to $23,480 per day from $29,350 for a three-year period starting July 2016 and ending in December 2019.

The five boxships involved are Hyundai Prestige, Hyundai Premium, Hyundai Paramount, Hyundai Privilege and Hyundai Platinum, each under time-charter expiring in 2025.

The total charter rate reduction for the charter reduction period amounts to approximately $37m.

Under the charter restructuring agreement between Capital Product Partners and HMM, it provides that at the end of the three-year charter reduction period, the charter rate under the respective charter parties will be restored to the original daily rate of $29,350 until the expiry of each charter in 2025.

“While the impact of the HMM Vessels charter rate reduction will adversely affect our cash flows until the end of 2019, when the charter rate under the respective charter parties is expected to be restored to the original rate, we believe that the reduced charter rate and the charter reduction compensation that we expect to receive represents a more favorable outcome given the alternative employment opportunities in the current depressed container charter market,” said Jerry Kalogiratos, chief executive and chief financial officer of Capital Product Partners.

In exchange for the charter reduction, the Greek shipowner will receive shares in HMM at a share price reflecting a discount and/or an unsecured loan to HMM at 3%.

The deal with Capital Product Partners is part of various agreements that HMM have reached with its creditors and vessel owners under its voluntary debt restructuring programme.

“We are pleased to see that the out-of-court restructuring of HMM – one of the largest charterers of the partnership in terms of revenues – has been successfully agreed with the participation of HMM’s key financial creditors together with the announcement that HMM intends to join the 2M Alliance – the world’s largest container shipping alliance, which comprises Maersk Line and Mediterranean Shipping Co (MSC),” said Kalogiratos.

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