Navios Maritime Holdings Inc. Announces the Sale of its 36-Vessel Drybulk Fleet

Rhea-AI Summary

Navios Maritime Holdings announced the sale of its 36-vessel drybulk fleet to Navios Maritime Partners for approximately $835 million. The deal will reduce Navios Holdings' liabilities by about $784.2 million. Key figures include $441.6 million in debt and finance leases and $262.6 million in vessel loans. The transaction enhances liquidity by eliminating short-term debt and is projected to yield a net book gain of around $100 million in Q3 2022. Going forward, Navios Holdings will refocus on its logistics business in South America.

Positive

• Elimination of approximately $784.2 million in liabilities.
• Projected net book gain of around $100 million in Q3 2022.
• Strengthened liquidity position and balance sheet.

Negative

• Exit from direct fleet ownership may limit future revenue opportunities.
• Dependence on Navios Partners for assuming substantial debt.

GRAND CAYMAN, Cayman Islands, July 27, 2022 (GLOBE NEWSWIRE) -- Navios Maritime Holdings Inc. (“Navios Holdings” or the “Company”) (NYSE: NM), announced today a definitive agreement providing for the sale of its 36-vessel drybulk fleet for an aggregate consideration of approximately $835.0 million consisting of cash and the assumption of bank debt and finance leases related to the vessels and subject to working capital adjustment at closing, to Navios Maritime Partners L.P. (“Navios Partners”) (NYSE: NMM).

The aggregate transaction consideration is expected to reduce Navios Holdings’ liabilities by approximately $784.2 million, comprising of:

Amount (in US$ millions)	Description of liability
$441.6	Debt and finance leases(1)
$262.6	Vessel loans(2)
$80.0	11.25% Senior Secured Notes(3)
$784.2

(1)  Assumed by Navios Partners, includes bank debt and finance lease liabilities as well as obligations from bareboat arrangements on a finance lease basis as of June 30, 2022, to be adjusted at the closing of the transaction
(2)  Mandatory repayment of loans associated with the sale of the vessels due to N Shipmanagement Acquisition Corp. and its subsidiaries, an entity affiliated with the Chairwoman and Chief Executive Officer of Navios Holdings
(3)  To be repaid at maturity on August 15, 2022

Any remaining proceeds will be used to cover transaction costs and for general corporate purposes.

Navios Holdings through this transaction believes it:

• Took advantage of a strong sale and purchase market in dry bulk
• Strengthened its balance sheet by repaying debt
• Eliminated all short-term debt maturities
• Created a solid liquidity position
• Will record an estimated net book gain of approximately $100 million in the third quarter of 2022
  

Navios Logistics
Following the closing of the transaction, Navios Holdings will have exited direct fleet ownership. Going forward, the Company plans to focus on growing Navios South American Logistics Inc. (“Navios Logistics”) business. Navios Holdings owns a 63.8% controlling equity stake which is consolidated into its financial statements. We believe, Navios Logistics is a leading infrastructure and logistics company in the Hidrovia region of South America having:

• A unique infrastructure comprising of port terminal facilities, barge and cabotage fleet
• Favorably located assets: Nueva Palmira terminal a critical infrastructure asset
• A long-term “take-or-pay” contract with Vale
• A favorable market backdrop to support growth
• Compelling growth opportunities
  

Navios Partners
Navios Holdings also continues to hold a 10.3% interest in Navios Partners, a leading, US publicly listed shipping company, representing a compelling investment in a well-positioned diversified maritime company.

Special Committee
The transaction was negotiated by a special committee of the Board of Directors of Navios Holdings consisting of independent and disinterested directors (“Special Committee”) with the assistance of its independent financial and legal advisors. The transaction was unanimously approved by the Special Committee and Navios Holdings’ board of directors.

Transaction Closing
The closing of the transaction is subject to customary closing conditions, including receipt of certain consents required in connection with Navios Partners’ assumption of bank debt in connection with the transaction. The transaction is expected to close in two tranches. The first tranche, involving the transfer of 15 vessels, is scheduled to be completed on July 29, 2022. The second tranche, involving the remaining 21 vessels, is scheduled to be completed in the third quarter of 2022.

Advisors
Latham & Watkins LLP acted as legal advisor and Arctic Securities AS acted as sole financial advisor to the Special Committee.

Conference Call:

Navios Holdings will host a conference call tomorrow, July 28, 2022, at 7:45 am ET, at which time Navios Holdings’ senior management will provide highlights and commentary on the transaction.

Simultaneously, a supplemental slide presentation will be available on the Navios Holdings website at www.navios.com under the “Investors” section on the day of the call.

Conference Call details:

Call Date/Time: Thursday, July 28, 2022 at 7:45 am ET
Call Title: Navios Maritime Holdings Investor Call
US Dial In: +1.800.459.5346
International Dial In: +1.203.518.9544
Conference ID: NM0728

The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:

US Replay Dial In: +1. 800-934-5153
International Replay Dial In: +1. 402-220-1182

There will be a live webcast available on the Navios Holdings website, www.navios.com, under the “Investors” section. The Webcast will be archived and available at the same Web address for two weeks following the call.

About Navios Maritime Holdings Inc.

Navios Maritime Holdings Inc. (NYSE: NM) is a global seaborne shipping and logistics company. For more information about Navios Holdings, please visit our website: www.navios.com.

About Navios South American Logistics Inc.

Navios South American Logistics Inc. is one of the largest logistics companies in the Hidrovia region of South America, focusing on the Hidrovia region river system, the main navigable river system in the region, and on cabotage trades along the eastern coast of South America. Navios Logistics serves the storage and marine transportation needs of its petroleum, agricultural and mining customers through its port terminals, river barge and coastal cabotage operations. For more information about Navios Logistics, please visit its website: www.navios-logistics.com.

About Navios Maritime Partners L.P.

Navios Maritime Partners L.P. (NYSE: NMM) is an international owner and operator of dry cargo and tanker vessels. For more information, please visit its website: www.navios-mlp.com.

Forward Looking Statements – Safe Harbor

This press release contains and our call will contain forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events, including with respect to the expected completion of the sale of the fleet to Navios Partners and the expected redemption or repayment of the vessel loans and the 11.25% Senior Secured Notes prior to or at maturity using the proceeds thereof, expected cash flow generation, Navios Holdings’ expected use of proceeds from the transaction and Navios Holdings’ growth strategy and measures to implement such strategy. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenue and time charters. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Navios Holdings at the time these statements were made. Although Navios Holdings believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Holdings. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to risks relating to: the potential inability to obtain any necessary third-party consents to the transfers of one or more of the vessels to be sold to Navios Partners; global and regional economic and political conditions including the impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity; demand for seaborne transportation of the products we ship; the ability and willingness of charterers to fulfill their obligations to us; prevailing charter rates; shipyards performing scrubber installations, drydocking and repairs; changing vessel crews and availability of financing; potential disruption of shipping routes due to accidents, wars, diseases, pandemics, political events, piracy or acts by terrorists, including the impact of the COVID-19 pandemic and the ongoing efforts throughout the world to contain it; uncertainty relating to global trade, including prices of seaborne commodities and continuing issues related to seaborne volume and ton miles; our continued ability to enter into long-term time charters; our ability to maximize the use of our vessels; expected demand in the dry cargo shipping sector in general and the demand for our Panamax, Capesize, Ultra Handymax and Handysize vessels in particular; the aging of our fleet and resultant increases in operations costs; the loss of any customer or charter or vessel; the financial condition of our customers; changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors; increases in costs and expenses, including but not limited to: crew wages, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance, and general and administrative expenses; the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, general domestic and international political conditions; competitive factors in the market in which Navios Holdings operates; the value of our publicly traded subsidiaries; risks associated with operations outside the United States; and other factors listed from time to time in Navios Holdings’ filings with the Securities and Exchange Commission, including its Forms 20-F and Forms 6-K. Navios Holdings expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Holdings’ expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Holdings makes no prediction or statement about the performance of its common stock or debt securities.

Contact:

Navios Maritime Holdings Inc.
+1-345-232-3067
+1.212.906.8643
investors@navios.com 

EXHIBIT I

Fleet of Vessels sold   

Owned Vessels

Vessel Name		Vessel Type		Year Built		Deadweight (in metric tons)
Navios Ulysses		Ultra Handymax		2007		55,728
Navios Celestial		Ultra Handymax		2009		58,063
Navios Vega		Ultra Handymax		2009		58,792
Navios Taurus		Panamax		2005		76,596
Navios Asteriks		Panamax		2005		76,801
N Amalthia		Panamax		2006		75,318
Navios Galileo		Panamax		2006		76,596
N Bonanza		Panamax		2006		76,596
Rainbow N		Panamax		2011		79,642
Jupiter N		Panamax		2011		93,062
Navios Sky(1)		Panamax		2015		82,056
Navios Stellar		Capesize		2009		169,001
Navios Happiness		Capesize		2009		180,022
Navios Phoenix		Capesize		2009		180,242
Navios Lumen		Capesize		2009		180,661
Navios Antares		Capesize		2010		169,059
Navios Etoile		Capesize		2010		179,234
Navios Bonheur		Capesize		2010		179,259
Navios Altamira		Capesize		2011		179,165
Navios Canary		Capesize		2015		180,528
Navios Corali		Capesize		2015		181,249

(1)  Navios Holdings declared its option to acquire the Navios Sky

Long-term Bareboat-in Fleet

Vessel Name		Vessel Type		Year Built		Deadweight (in metric tons)
Navios Herakles I		Panamax		2019		82,036
Navios Uranus		Panamax		2019		81,516
Navios Felicity I		Panamax		2020		81,946
Navios Galaxy II		Panamax		2020		81,789
Navios Magellan II		Panamax		2020		82,037

Long-term Charter-in Fleet

Vessel Name		Vessel Type		Year Built		Deadweight (in metric tons)
Navios Lyra		Handysize		2012		34,718
Navios Venus		Ultra Handymax		2015		61,339
Navios Amber		Panamax		2015		80,994
Navios Coral		Panamax		2016		84,904
Navios Citrine		Panamax		2017		81,626
Navios Dolphin		Panamax		2017		81,630
Navios Gemini		Panamax		2018		81,704
Navios Horizon I		Panamax		2019		81,692
Navios Felix		Capesize		2016		181,221
Navios Obeliks		Capesize		2012		181,415

FAQ

What is the value of the fleet sale by Navios Maritime Holdings?

The fleet sale is valued at approximately $835 million.

How much will Navios Holdings reduce its liabilities from the sale?

The sale will reduce Navios Holdings' liabilities by about $784.2 million.

What is the expected net book gain from the fleet sale in Q3 2022?

Navios Holdings expects a net book gain of approximately $100 million.

What will Navios Holdings focus on after the fleet sale?

Navios Holdings will focus on growing its logistics business in South America.

When is the closing date for the fleet sale?

The transaction is expected to close in two tranches, starting July 29, 2022.