- Navios Maritime Partners L.P and Navios Maritime Acquisition Corp. announced a definitive transaction agreement providing for a combination of Navios Partners and Navios Acquisition.
- The transaction is carried out in a way where shareholders of Navios Acquisition will receive 0.1275 of a common unit of Navios Partners for each outstanding common share of Navios Acquisition.
Navios Maritime Partners L.P, an international owner and operator of dry cargo vessels, and Navios Maritime Acquisition Corp., an international owner and operator of tanker vessels, announced a definitive transaction agreement providing for a combination of Navios Partners and Navios Acquisition in a transaction in which shareholders of Navios Acquisition will receive 0.1275 of a common unit of Navios Partners for each outstanding common share of Navios Acquisition, reports Global News Wire.
Ship Mortgage Redemption
All of Navios Acquisition’s outstanding 8.125% First Priority Ship Mortgage Notes, due on November 15, 2021 (the “Ship Mortgage Notes”), will be redeemed in accordance with their terms with the proceeds of a cash contribution from Navios Partners and newly arranged secured term loan financings (the “Transaction”).
Company Chairwoman’s Declaration
Angeliki Frangou, Chairwoman and Chief Executive Officer, stated, “We are announcing a transformative transaction. The combined entity will be the largest U.S. publicly-listed shipping company in terms of vessel count, with 15 vessel types diversified across three segments, servicing more than 10 end markets. About one-third of our fleet will be in each of the dry bulk, containership and tanker segment. We believe that this combination will result in a stronger, more resilient entity, mitigating sector specific cyclicality. This should enable us to capitalize on opportunities throughout the industry and provide even returns to our stakeholders across cycles.
This combination of two companies with similar core values and beliefs, as it relates to our service offerings, will allow us to continue to deliver the high-quality service that our customers expect. We have a proven model to execute seamless combinations, as evidenced by our prior successful roll-up transactions, and we anticipate a smooth execution for this combination as well.”
Transaction’s Major Goals
The Transaction is expected to:
- Create the #1 largest U.S. publicly-listed shipping company, with over 140 vessels aggregating approximately 15 million deadweight tons operating in three segments through 15 different vessel types and serving more than 10 end markets.
- Scale operations with trades across all sizes with about one-third of its vessels operating in each of the three segments.
- Achieve diversification to mitigate idiosyncratic segment volatility as operational segments are driven by unique fundamentals.
- Optimize strategy allowing management to take advantage of opportunities within each sector, such as by calibrating charter term based upon segment opportunity.
- Realize annual cost reductions.
- Maintain significant financial flexibility with a combined modest leverage ratio of approximately 35%, based upon the average of publicly available broker reports as of August 20, 2021, and a large collateral value base for refinancing debt maturities.
- Enhance credit profile by increasing cash retention to support growth and continued deleveraging.
- Grow equity market capitalization and depth in share trading to offer an attractive fundamental investment opportunity to investors seeking exposure to the global economy.
- Maintain and ultimately grow returns to unitholders of the combined company.
- Provide Navios Acquisition’s shareholders the opportunity to continue to participate in the combined company and avail themselves of market upside.
Added Advantages of this Transaction
The current value of the combined company’s vessels is estimated at $4.2 billion based upon the average of publicly available broker reports; the combined company will also have an enterprise value of approximately $2.25 billion. With a $1.6 billion pipeline of contracted revenue coupled with about 47,634 available days in 2022, the combined fleet is well-positioned to take advantage of the healthy dry cargo markets as well as any future upturn in the tanker market.
Transaction Discussion Call
Navios Partners’ management will host a conference call on Tuesday, August 31, 2021 to discuss the transaction.
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Source : Global News Wire