/s/  Evangelos M. Marinakis

 

This summary highlights selected information from this proxy statement/prospectus and may not contain all the information that is important to you. To understand the merger agreement and the proposed transaction fully and for a more complete description of the legal terms of the merger, you should carefully read this entire proxy statement/prospectus and the other documents to which CPLP refers you, including in particular the copies of the merger agreement and the opinion of Jefferies & Company, Inc. that are attached to this proxy statement/prospectus and incorporated by reference into this proxy statement/prospectus. Please see also “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” on page 125. CPLP has included page references parenthetically to direct you to a more complete description of many of the topics presented in this summary.

 

Crude Carriers Corp.
3 Iassonos Street
Piraeus, 18537
Greece
+30 210 4584 900

 

Crude Carriers Corp. is a corporation organized under the laws of the Republic of the Marshall Islands focusing on the maritime transportation of crude oil cargoes. It employs its vessels in the spot tanker market or under spot related employment. Crude owns a modern, high specification fleet of crude oil tankers, comprising two VLCCs (Very Large Crude Carriers) and three Suezmax tankers, with a weighted average age of 2.1 years as of June 30, 2011, and a total carrying capacity of approximately 1,058,344 dwt. Crude’s vessels transport mainly crude oil and fuel oil along worldwide shipping routes. Capital Ship Management Corp., a subsidiary of Capital Maritime & Trading Corp. (“Capital Maritime”), an international shipping company, serves as the manager of Crude’s vessels. Currently three out of Crude’s five vessels are employed with Shell International Trading & Shipping Co. Ltd. (“Shell”) under spot index linked time charter arrangements, which are also subject to a profit sharing arrangement. Shares of Crude common stock have traded on the NYSE under the symbol “CRU” since Crude’s initial public offering in March 2010. As of March 31, 2011, Crude had approximately $414.1 million in total assets.

 

Capital Product Partners L.P.
3 Iassonos Street
Piraeus, 18537
Greece
+30 210 4584 900

 

Capital Product Partners L.P. is a limited partnership organized under the laws of the Republic of the Marshall Islands, whose vessels trade on a worldwide basis and are capable of carrying crude oil, refined oil products, such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and certain chemicals such as ethanol. As of June 30, 2011, CPLP’s fleet consisted of 21 double-hull tankers with an average age of approximately 4.7 years, including one of the largest Ice Class 1A MR product tanker fleets in the world based on number of vessels and carrying capacity, with 83% of the fleet total days in the last nine months of 2011 secured under period charter coverage. In June 2011 CPLP began operating one drybulk capesize vessel. Capital Ship Management Corp., a subsidiary of Capital Maritime, serves as the manager of CPLP’s vessels. CPLP charters 19 of its 22 vessels (including the capesize vessel) under medium- to long-term time and bareboat charters to large charterers such as BP Shipping Limited, Petroleo Brasileiro S.A., Capital Maritime and subsidiaries of Overseas Shipholding Group Inc. CPLP’s common units trade on Nasdaq under the symbol

“CPLP.” CPLP unitholders also receive reports on Form 1099, as the partnership is treated as a corporation for U.S. tax purposes. As of March 31, 2011, CPLP had approximately $752.9 million in total assets.

 

Capital GP L.L.C.
3 Iassonos Street
Piraeus, 18537
Greece
+30 210 4584 900

 

Capital GP L.L.C. is a limited liability company organized under the laws of the Republic of the Marshall Islands. It is the general partner of CPLP and a wholly-owned subsidiary of Capital Maritime.

 

Poseidon Project Corp.
3 Iassonos Street
Piraeus, 18537
Greece
+30 210 4584 900

 

Poseidon Project Corp. is a corporation incorporated under the laws of the Republic of the Marshall Islands and is a wholly-owned subsidiary of CPLP. This entity was recently formed for the sole purpose of effecting the merger.

 

The merger agreement provides for the transaction described below. The merger agreement is attached to this document as Appendix A and is incorporated by reference into this proxy statement/prospectus. We urge you to read the merger agreement carefully and in its entirety, as it is the legal document that governs the proposed transaction and your rights and obligations in connection with the proposed transaction.

 

Pursuant to the merger agreement at the time the proposed transaction is completed:

 

 

In addition, at the effective time of the proposed transaction:

 

 

Crude and CPLP expect to incur approximately $4.0 million and $4.0 million, respectively, in fees and costs associated with consummating the proposed transaction.

 

The structural organization of the companies before and after completion of the proposed transaction is illustrated on the following pages.

 

BEFORE THE PROPOSED TRANSACTION
(as of June 30, 2011)

 

 

The Crude Board (consistent with the recommendation of the Crude Independent Committee) believes the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair and reasonable to, and in the best interests of, Crude and its shareholders, including the Unaffiliated Shareholders, and recommends that you vote “FOR” the Merger Proposal. When you consider the Crude Board’s recommendation, you should be aware that Crude’s directors may have interests in the transaction that may be different from, or in addition to, your interest. These interests are described in “The Proposed Transaction — Interests of Crude’s Directors and Executive Officers in the Proposed Transaction.”

 

In evaluating the proposed transaction, the Crude Independent Committee consulted its legal and financial advisors and, in making its recommendation, considered a number of factors, including those factors described under “The Proposed Transaction — Background of the Proposed Transaction,” and “The Proposed Transaction — Recommendation of the Crude Independent Committee and the Crude Board; Crude’s Reasons for the Proposed Transaction.”

 

The Crude Independent Committee retained Jefferies & Company, Inc. (“Jefferies”) to act as its financial advisor in connection with the merger and to render to the Crude Independent Committee an opinion as to the fairness of the Crude exchange ratio to the Unaffiliated Shareholders. At the meeting of the Crude Independent Committee on May 5, 2011, Jefferies rendered its opinion to the Crude Independent Committee, to the effect that, as of that date, and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by Jefferies set forth in its opinion, the Crude exchange ratio was fair, from a financial point of view, to the Unaffiliated Shareholders.

 

Jefferies’ opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by Jefferies in rendering its opinion. Jefferies’ opinion was directed to the Crude Independent Committee and addresses only the fairness, from a financial point of view and as of the date of the opinion, of the Crude exchange ratio to the Unaffiliated Shareholders. It does not address any other aspects of the merger and does not constitute a recommendation as to how any holder of Crude common stock or Crude Class B stock should vote on the merger or any matter related thereto.

 

The full text of the written opinion of Jefferies is attached as Appendix B to this proxy statement/prospectus. Crude encourages its shareholders to read Jefferies’ opinion carefully and in its entirety.

 

The special meeting of Crude shareholders is scheduled to be held on    , 2011 at 3 Iassonos Street, Piraeus, 18537 Greece (Athens, Greece time) at    . You are entitled to vote at the Crude special meeting if you were a holder of shares of Crude common stock at the close of business on    , 2011, which is the record date for the Crude special meeting.

 

The proposed transaction will not be consummated unless the merger agreement is approved and adopted, and the transactions contemplated by the merger agreement, including the merger, are approved, by the holders of a majority of the voting power of shares of Crude common stock and Crude Class B stock outstanding and entitled to vote at the Special Meeting, voting together as a single class; by the sole holder of shares of Crude Class B stock outstanding and entitled to vote at the Special Meeting, voting as a separate class; and by a majority of the voting power of the shares of Crude common stock outstanding and entitled to vote at the Special Meeting that are held by the Unaffiliated Shareholders, voting as a separate class.

 

As of the record date for the Crude special meeting, the directors and executive officers of Crude beneficially owned     shares of Crude common stock, which represented approximately    % of the shares of Crude common stock outstanding on that date.

 

In considering the recommendations of the Crude Board (consistent with the recommendation of the Crude Independent Committee) with respect to the proposed transaction, you should be aware of the benefits available to the executive officers and directors of Crude in connection with the proposed transaction, and the potential conflicts of interest which they may have with Crude’s shareholders. These individuals have certain interests in the proposed transaction that may be different from, or in addition to, the interests of Crude’s shareholders. The Crude Independent Committee and the Crude Board were aware of these interests and considered them, among other matters, in making their recommendations. These interests and arrangements include:

 

 

 

 

 

Information relating to the interests of Crude’s directors and executive officers generally is located beginning on page 71.

 

On June 10, 2011, CPLP acquired from Capital Maritime 100% of the shares of capital stock of Patroklos Marine Corp. a corporation organized under the laws of the Republic of the Marshall Islands, that was the registered owner of the dry cargo vessel M/V Cape Agamemnon (the “Cape Agamemnon”) for a total consideration of approximately $98.5 million, paid in a combination of CPLP common units and cash. CPLP issued 6,958,000 CPLP common units to Capital Maritime based on a $10.35 price per unit, as part of the consideration for the acquisition of the Cape Agamemnon, and paid approximately $26.5 million in cash. In connection with the transaction, Capital Maritime caused Capital GP to contribute approximately $1.5 million to CPLP in exchange for 142,000 general partner units.

 

Assuming the consummation of the merger, CPLP unitholders will own approximately 65% of the combined company, with Crude shareholders owning the remaining approximately 35% of the combined

company (including 3,284,210 common units to be issued to CCIC). As a result of the merger, Capital Maritime, the owner of Capital GP, will own approximately 27.1% of the combined company, including ownership resulting from the general partnership interest in the combined company held by Capital GP and, collectively, Capital Maritime and CCIC would own approximately 31.7% of the combined company. Under the CPLP Partnership Agreement, Capital GP, which is owned by Capital Maritime, also has the right to contribute CPLP common units in return for general partner units in order to maintain a 2% general partner interest in CPLP. If the proposed transaction is consummated, shortly thereafter Capital GP expects to contribute approximately 499,346 CPLP common units in return for general partner units in order to maintain its 2% general partner interest.

 

The acquisition of the Cape Agamemnon makes CPLP subject to various risks. Please see the section captioned “Risk Factors” beginning on page 22.

 

Crude has issued shares of Crude common stock subject to certain vesting requirements pursuant to the Crude 2010 Equity Incentive Plan, adopted March 1, 2010 (the “Crude Equity Plan”). The proposed transaction will not have a substantial effect on any such outstanding shares under the Crude Equity Plan. The shares under the plan will be converted into equivalent grants with respect to CPLP common units and all the vesting requirements will remain the same. Notwithstanding the foregoing, the vesting requirements relating to the shares held by those members of the Crude Independent Committee who are not designated by Crude to serve as a member of the CPLP board of directors (the “CPLP Board”) (an aggregate of approximately 20,000 shares of Crude common stock or the right to receive approximately 31,200 CPLP common units) will lapse immediately prior to the effective time of the merger, and such shares will vest in full immediately prior to the effective time of the merger.

 

Crude shareholders will receive 1.56 CPLP common units for each share of Crude common stock or Crude Class B stock they own.

 

The obligations of CPLP and Crude to complete the merger are subject to the satisfaction of certain customary conditions, including the adoption of the merger agreement by Crude’s shareholders, the accuracy of the representations and warranties of the parties, and compliance by the parties with their respective obligations under the merger agreement. The obligations of CPLP and Crude to complete the merger are subject to the satisfaction of certain other conditions, including authorization for the listing on the Nasdaq of the CPLP common units to be issued to Crude shareholders pursuant to the merger and the effectiveness of the amendments contemplated in the merger agreement to CPLP’s second amended and restated limited partnership agreement (the “CPLP Partnership Agreement”) and CPLP’s Omnibus Agreement (the “CPLP Omnibus Agreement”).

 

The merger agreement may be terminated under the following circumstances:

 

 

 

 

Subject to certain procedural requirements, the Crude Board may withdraw or change its recommendation to the Crude shareholders with respect to the merger if the Crude Board determines that to do otherwise would be inconsistent with its fiduciary duties. In addition, subject to certain procedural requirements (including the ability of CPLP to revise its offer) and payment of the termination fee and expense reimbursement discussed below, Crude may terminate the merger agreement and enter into an agreement with a third party that makes a superior proposal. See the section captioned “The Merger Agreement — Termination of the Merger Agreement” beginning on page 96 for a discussion of these and other rights of each of Crude and CPLP to terminate the merger agreement.

 

If the merger agreement is terminated in certain circumstances described under “The Merger Agreement — Termination Fees and Reimbursement of Expenses” beginning on page 96, Crude may be obligated to pay a termination fee of $9.0 million less any expenses previously paid to CPLP.

 

If the merger agreement is terminated by Crude because of CPLP’s breach of its representations and warranties or covenants and agreements, CPLP will pay Crude the expenses of Crude incurred in connection with the merger, up to $3.0 million. If the merger agreement is terminated by CPLP because of Crude’s breach of its representations and warranties or covenants and agreements, Crude will pay CPLP the expenses of CPLP incurred in connection with the merger, up to $3.0 million.

 

The merger agreement provides that Crude is not permitted to initiate, solicit, facilitate or encourage any acquisition proposal (as described in “The Merger Agreement — Acquisition Proposals and a Company Change in Recommendation”), participate in any discussions or negotiations regarding, or furnish to any person any non-public information regarding, any acquisition proposal or waive any “standstill” agreement. Crude may furnish information to, or enter into or participate in discussions or negotiations with, any person that makes an unsolicited written acquisition proposal under certain circumstances described under “The Merger Agreement — Acquisition Proposals and a Company Change in Recommendation.”

 

The Crude Board may not (i)(A) withdraw, modify or qualify, in any manner adverse to CPLP, the company recommendation or (B) publicly approve or recommend any acquisition proposal or (ii) approve, adopt or recommend, or allow Crude or any of its subsidiaries to execute or enter into, any agreement or any tender or exchange offer in connection with, any acquisition proposal. Notwithstanding the foregoing, at any time prior to obtaining the approval of Crude’s shareholders, the Crude Board may (x) make a company change in recommendation or (y) in connection with a superior proposal, terminate the merger agreement if it has concluded in good faith, after consultation with its outside legal counsel and financial advisors, that failure to take such action would constitute or would be reasonably likely to constitute a violation of its fiduciary duties to the shareholders under applicable law. However, the Crude Board will not be entitled to make a company change in recommendation pursuant to the previous sentence (or to terminate the merger agreement in order to enter into a transaction that the Crude Board has determined is a superior proposal) unless Crude and its subsidiaries comply with those procedures described under “The Merger Agreement — Acquisition Proposals and a Company Change in Recommendation.”

 

If the proposed transaction is consummated, then based on the number of shares of Crude common stock and Crude Class B stock outstanding on July 14, 2011, CPLP would issue approximately 24,967,275 CPLP common units to Crude shareholders in the proposed transaction, including 3,284,210 common units to be issued to CCIC. As a result of the proposed transaction and CPLP’s acquisition of the Cape Agamemnon, CPLP unitholders would own approximately 65% of the combined company and Crude shareholders would own approximately 35% of the combined company. Capital Maritime, the owner of Capital GP, would own approximately 27.1% of the combined company, including ownership resulting from the general partnership interest in the combined company held by Capital GP and, collectively, Capital Maritime and CCIC would own approximately 31.7% of the combined company. Under the CPLP Partnership Agreement, Capital GP, which is owned by Capital Maritime, also has the right to contribute CPLP common units in return for general partner units in order to maintain a 2% general partner interest in CPLP. If the proposed transaction is consummated, shortly thereafter Capital GP expects to contribute approximately 499,346 CPLP common units in return for general partner units in order to maintain its 2% general partner interest.

 

Neither Crude nor CPLP anticipates drawing down on its credit facilities in connection with the consummation of the proposed transaction. The parties anticipate that, following the merger, CPLP may reach an arrangement with its lenders to draw down its existing credit facilities to refinance the debt of Crude’s vessels unless CPLP obtains better or similar terms elsewhere, but this is subject to certain conditions and entails various risks. Please see the section captioned “Risk Factors” beginning on page 22.

 

In connection with CPLP’s acquisition of the dry cargo vessel Cape Agamemnon from Capital Maritime, CPLP drew down on a new credit facility of $25 million provided by Credit Agricole Emporiki Bank in order to partially finance the acquisition of the shares of the vessel owning company of the Cape Agamemnon from Capital Maritime. This credit facility is non-amortizing until March 31, 2013 and will be repaid in twenty equal consecutive quarterly installments commencing in June 2013 plus a balloon payment in March 2018. Loan commitment fees are calculated at 0.50% per annum on any undrawn amount and are paid quarterly. This credit facility contains customary ship finance covenants and is secured and guaranteed by the vessel owning company of the Cape Agamemnon.

 

The merger has been structured to qualify as a reorganization for United States federal income tax purposes, and it is a condition to CPLP’s and Crude’s obligations to complete the merger that CPLP receive a legal opinion from a nationally recognized law firm, which is expected to be Akin Gump Strauss Hauer & Feld LLP, and Crude receive a legal opinion from Sullivan & Cromwell LLP, to the effect that the merger should qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Provided that the merger qualifies as such, holders of Crude common stock generally will not recognize any gain or loss for United States federal income tax purposes on the exchange of their Crude Carries common stock for CPLP common units pursuant to the merger, except for any gain or loss that may result from the receipt by such holders of cash instead of fractional CPLP common units.

 

It is important to note that the United States federal income tax consequences described above may not apply to some holders of Crude common stock, including certain holders specifically referred to under the section captioned “Material United States Federal Income Tax Consequences to Crude Shareholders” beginning on page 73. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the tax consequences of the merger in your particular circumstances, as well as any tax consequences that may arise from the laws of any other taxing jurisdiction.

 

No further regulatory filings or approvals will be required for the completion of the merger other than the filing of the merger agreement with the Republic of the Marshall Islands corporate registry upon approval of the Merger Proposal by Crude shareholders.

 

Under Marshall Islands law, a shareholder of a corporation has the right to vote against any plan of merger to which the corporation is a party. If such shareholders vote against the plan of merger, they may have the right to seek payment from their corporation of the appraised fair value of their shares (instead of the contractual merger consideration). However, the right of a dissenting shareholder to receive payment of the appraised fair value of his shares is not available if the shares of such class or series of stock are (i) listed on a securities exchange or (ii) held of record by more than 2,000 holders. Since shares of Crude common stock are traded on the NYSE, a dissenting holder of shares of Crude common stock has no right to receive payment from Crude for the appraised fair market value of his shares under Marshall Islands law. Furthermore, pursuant to the Support Agreement, CCIC, as the sole holder of the Crude Class B stock, has waived any appraisal rights it might have under Marshall Islands law.

 

An investment in CPLP common units involves risks, some of which are related to the merger. In considering the proposed merger, you should carefully consider the information about these risks set forth under “Risk Factors” beginning on page 22, together with the other information included or incorporated by reference in this proxy statement/prospectus.

 

CPLP common units will continue to be listed on Nasdaq after completion of the proposed transaction. The Crude common stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Registration under the Exchange Act may be terminated upon application to the SEC if the shares of Crude common stock are neither listed on a national securities exchange nor held by 300 or more holders of record. As a result of such deregistration, Crude will no longer be required to file reports with the SEC or otherwise be subject to the United States federal securities laws applicable to public companies.

 

Pursuant to the proposed transaction, Crude shareholders will receive CPLP common units. Therefore, after the consummation of the proposed transaction, current Crude shareholders will become CPLP unitholders, and their rights as CPLP unitholders will be governed by the CPLP Partnership Agreement, which will be further amended to modify certain terms, as required by the merger agreement. See the section captioned “the Merger Agreement — Governance Matters after the Merger.” While both Crude and CPLP are organized under the laws of the Republic of the Marshall Islands, and accordingly their equityholder rights are both governed by Marshall Islands law, there are certain differences between the rights of Crude shareholders and the rights of holders of CPLP common units. For example, while the business and affairs of each of Crude and CPLP are overseen by a board of directors, because CPLP is a limited partnership, its day-to-day affairs are managed by its general partner and the general partner’s officers, at the direction and subject to the authority of the CPLP Board. Crude is a corporation and has its own officers who are appointed by the Crude Board. Furthermore, the CPLP Board is composed of seven directors, three directors who are appointed by its general partner and four directors who are elected by the holders of CPLP common units that are not affiliated with the general partner or its affiliates. However, both the Crude Board and the elected directors on the CPLP Board are classified into three classes, with the terms of each of the classes expiring in successive years. For a

further description of material differences, please see the section captioned “Comparison of Rights of Shareholders of Crude and Unitholders of CPLP” beginning on page 113.

 

CPLP common units are currently listed under the trading symbol “CPLP” on Nasdaq, and the Crude common stock is listed on the NYSE under the trading symbol “CRU.” On May 4, 2011, the last full trading day prior to the public announcement of the execution of the merger agreement, the closing price of a CPLP common unit was $11.27 per unit, and the closing price of a share of Crude common stock was $12.99 per share. The averages of the closing prices of CPLP common units and shares of Crude common stock for certain periods prior to the public announcement of the execution of the merger agreement are as follows:

 

 

On July 13, 2011, the most recent practicable trading date prior to the printing of this proxy statement/prospectus, the closing price of Crude common stock was $13.53 per share, and the closing price of CPLP common units was $8.88 per unit. You are urged to obtain current market quotations prior to making any decision with respect to the proposed transaction.

 

CPLP has generally declared distributions in January, April, July and October of each year and paid those distributions in the subsequent month. In January 2010, CPLP introduced an annual distribution guidance of $0.90 per annum, or $0.225 per quarter. In July 2010, CPLP revised its annual distribution guidance to $0.93 per annum, or $0.2325 per quarter. CPLP made distributions in accordance with its guidance in November 2010, February 2011 and May 2011.

 

Crude’s dividend policy is to pay a variable quarterly dividend based on its cash available for distribution.

 

In November 2010, Crude declared a cash dividend of $0.20 per share, and paid that dividend on December 7, 2010 to shareholders of record on November 24, 2010. In February 2011, Crude declared a cash dividend of $0.30 per share, and paid that dividend on March 2, 2011 to shareholders of record on February 23, 2011. In May 2011, Crude declared a cash dividend of $0.25 per share, and paid that dividend on June 1, 2011 to shareholders of record on May 23, 2011.

 

The merger agreement provides that Crude may not declare or pay any dividends except the declaration and payment of a regular quarterly dividend for the quarter ended March 31, 2011 and the quarter ending June 30, 2011, in each case not in excess of $0.25 per share of Crude common stock and Crude Class B stock.

 

If the proposed transaction is consummated, CPLP intends to maintain its current cash distribution target of $0.93 per unit. The payment of distributions by CPLP following the merger, however, will be subject to approval and declaration by the CPLP Board and will depend on a variety of factors, including business, financial, legal and regulatory considerations, including but not limited to vessel earnings remaining at current levels or improving, refinancing of current debt obligations under similar terms as CPLP’s existing debt obligations in a timely fashion, operating and voyage expenses remaining at comparable levels, no accidents or material loss to its vessels occurring, as well as covenants under the combined company’s credit facilities. Please see the relevant subheadings under the section captioned “Risk Factors” beginning on page 22.

 

The Crude Board and the CPLP Board will continue to evaluate their respective dividend and distribution policies in light of applicable business, financial, legal and regulatory considerations. For more information regarding dividend policy and distributions of each of CPLP and Crude, and related matters, please see the section captioned “Comparative Stock Prices and Dividends” beginning on page 98.

 

The following table sets forth certain selected historical consolidated financial data of CPLP prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The selected income statement data for each of the three years ended December 31, 2010, 2009, and 2008 and the selected balance sheet data as of December 31, 2010 and 2009 has been derived from the audited consolidated financial statements and the related notes of CPLP included in its Annual Report on Form 20-F filed with the SEC on February 4, 2011. The historical financial data presented for the years ended December 31, 2007 and 2006 have been derived from audited financial statements not included in this proxy statement/prospectus and are provided for comparison purposes only. The financial statements for the years ended December 31, 2007 and 2006 are not comparable to CPLP’s financial statements for the years ended December 31, 2010, 2009 and 2008. CPLP’s initial public offering on April 3, 2007, and certain other transactions that occurred thereafter, including the delivery or acquisition of 13 additional vessels, the exchange of two vessels, the new charters for vessels, the agreement CPLP entered into with Capital Ship Management for the provision of management and administrative services to its fleet for a fixed fee and certain new financing and interest rate swap arrangements CPLP entered into, affected results of operations. Furthermore, for the year ended December 31, 2006, only eight of the vessels in CPLP’s current fleet had been delivered to Capital Maritime and only two were in operation for the full year. The selected income statement and balance sheet data as of and for the three months ended March 31, 2011 and 2010 has been derived from the unaudited condensed and consolidated financial statements and the related notes of CPLP included in its Current Report on Form 6-K furnished to the SEC on June 9, 2011. Data presented for the three months ended March 31, 2011 do not necessarily represent the results that can be expected for the year ending December 31, 2011.

 

The information presented below is only a summary and should be read in conjunction with the respective audited and unaudited financial statements of CPLP, including the notes thereto, incorporated by reference in this proxy statement/prospectus. See the section captioned “Where You Can Find More Information” beginning on page 125.

 

 

 

 

 

 

Please read “Item 6E: Share Ownership — Omnibus Incentive Compensation Plan” and Note 13 (Omnibus Incentive Compensation Plan) to CPLP’s financial statements, which are incorporated by reference to this proxy statement/prospectus, for additional information.

 

The following table sets forth certain selected historical consolidated financial data of Crude prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The selected income statement data for each of the years in the three years ended December 31, 2010, 2009, and 2008 and the selected balance sheet data as of December 31, 2010 and 2009 have been derived from the audited consolidated financial statements and the related notes of Crude included in its Annual Report on Form 20-F filed with the SEC on April 18, 2011. The historical financial data presented for the year ended December 31, 2007 and the period from April 6, 2006 (inception) to December 31, 2006 have been derived from financial statements not included in this proxy statement/prospectus and are provided for comparison purposes only. The financial statements for the years ended December 31, 2009, 2008, 2007 and for the period from April 6, 2006 (inception) to December 31, 2006 are not comparable to Crude’s financial statements for the year ended December 31, 2010. Crude’s initial public offering on March 17, 2010, and certain other transactions that occurred thereafter, including the delivery or acquisition of four additional vessels, the agreement Crude entered into with Capital Ship Management for the provision of management and administrative services to its fleet and the new revolving credit facility Crude entered into, as amended, have materially affected its results of operations. Furthermore, for the years ended December 31, 2009, 2008, 2007 and for the periods from April 6, 2006 (inception) to December 31, 2006 and January 1, 2010 to March 30, 2010, only one of the vessels in Crude’s current fleet, the Miltiadis M II, had been delivered and was operating. The selected statement of operations and balance sheet data as of and for the three months ended March 31, 2011 and 2010 has been derived from the unaudited consolidated financial statements and the related notes of Crude included in its Current Report on Form 6-K furnished to the SEC on June 9, 2011. Data presented for the three months ended March 31, 2011 do not necessarily represent the results that can be expected for the year ending December 31, 2011.

 

The information presented below is only a summary and should be read in conjunction with the respective audited and unaudited financial statements of Crude, including the notes thereto, incorporated by reference in this proxy statement/prospectus. See the section captioned “Where You Can Find More Information” beginning on page 125.

 

 

 

 

Please read “Item 6E: 2010 Equity Incentive Plan” and Note 11 (Equity Incentive Plan) to Crude’s Financial Statements, which are incorporated by reference to this proxy statement/prospectus, for additional information.

 

The following tables present, as at the dates and for the periods indicated, selected unaudited pro forma condensed financial data, which has been prepared to give effect to the proposed transaction using the acquisition method of accounting as if the proposed transaction closed on March 31, 2011 for selected balance sheet data and January 1, 2010 and carried forward through three months ended March 31, 2011 for selected income statement data.

 

You should read this information in conjunction with (i) Crude’s audited consolidated financial statements and the related notes included in Crude’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on April 18, 2011, Crude’s unaudited condensed consolidated financial statements and the related notes for the three months ended March 31, 2011 included in Crude’s Current Report on Form 6-K furnished to the SEC on June 9, 2011, CPLP’s audited financial statements and the related notes included in CPLP’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the SEC on February 4, 2011, and CPLP’s unaudited condensed consolidated financial statements and the related notes for the three months ended March 31, 2011 included in CPLP’s Current Report on Form 6-K furnished with the SEC on June 9, 2011, all of which are incorporated by reference herein and (ii) the unaudited pro forma condensed combined financial statements and accompanying notes included elsewhere in this proxy statement/prospectus. See the sections captioned “Where You Can Find More Information” beginning on page 125 and “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 100.

 

The selected unaudited pro forma condensed combined financial data is presented for illustrative purposes only and, therefore, is not necessarily indicative of the financial position or results of operations that might have been achieved had the proposed transaction occurred on (i) December 31, 2010 and (ii) January 1, 2011 and was carried forward through March 31, 2011, respectively. In addition, the selected unaudited pro forma condensed financial data is not necessarily indicative of the results of operations or financial position of the company in the future.

 

 

 

 

COMPARATIVE HISTORICAL AND PRO FORMA PER SHARE/UNIT DATA (1)

 

The December 31, 2010 selected historical comparative per share or per unit information of Crude and CPLP, set forth below, was derived from their respective audited financial statements. The March 31, 2011 selected historical comparative per share or per unit information of Crude and CPLP set forth below was derived from unaudited financial statements and, in the opinion of the management of Crude and CPLP, includes all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation for such periods.

 

You should read the information in this section along with Crude’s and CPLP’s historical consolidated financial statements and accompanying notes for the periods referred to above included in the documents described under the section captioned “Where You Can Find More Information” beginning on page 125. You should also read the section captioned “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 100.

 

CPLP Historical and Unaudited Pro Forma Common Unit Data

 

The following table presents the net income per unit, distributions per unit and book value per unit with respect to CPLP on a historical basis and pro forma combined basis giving effect to the transaction. The CPLP pro forma combined amounts are presented as if the transaction had been effective for the periods presented based on the acquisition method of accounting. The CPLP pro forma combined amounts do not reflect the benefits of expected cost savings, opportunities to earn additional revenue, and merger related costs, or other factors that may result as a consequence of the merger and, accordingly, do not attempt to predict or suggest future results.

 

 

 

 

Crude Historical and Unaudited Pro Forma Common and Class B Share Data

 

The following table presents the net income/(loss) per share for historical, and net income per unit for pro forma, dividends per share and book value per share with respect to Crude on a historical basis and dividend per unit and book value per unit on a pro forma equivalent basis. The pro forma equivalent amounts with respect to the Crude common stock are calculated by multiplying the corresponding CPLP pro forma combined amount by the exchange ratio of 1.56.