The company made a deal with a German bank to acquire 14 vessels, including seven containerships, and took delivery of a 13,100-TEU ship.
The Navios Group of companies is continuing to grow its container fleet.
Navios Maritime Holdings Inc., Navios Maritime Acquisition Corporation, and Navios Maritime Partners L.P. have have executed a binding letter of intent to acquire 14 vessels from debtors of Germany’s HSH Nordbank AG through a new joint venture. The bank said the ships were “at serious risk of insolvency” and the deal includes seven containerships and seven dry bulk ships. The ships have an average age of four years. The containerships range in size from 1,740 TEUs to 3,398 TEUs while the bulkers range in size from 57,000 dwt to 93,099 dwt.
Angeliki Frangou, chairman and chief executive officer of Navios said, “This is our second transaction with HSH and demonstrates our ability to source and execute exclusive proprietary deals in a very difficult market environment. These transactions differentiate us from our peers as we are acquiring large fleets with low capital investment and no dilution to our shareholders. The transaction adds tremendous value for Navios and HSH as it provides relief to distressed assets from bankruptcy and places them into Navios’ stable ownership, leveraging our economies of scale and superior technical and commercial management.”
In 2013, Navios acquired 10 ships financed by HSH Nordbank. Frangou said yesterday’s deal “scales up on the existing mechanism with HSH to acquire distressed vessels at historically low values and economics that are more favorable when compared to the first transaction. The fleet is larger and younger and Navios enjoys an attractive preferred return per annum on its investment.”
Also on Thursday, Navios Maritime Partners announced it had taken delivery of the MSC Cristina, a 2011 South Korean-built container vessel of 13,100 TEUs that has been chartered out for 12 years at a rate of $60,275 net per day, with Navios Partners’ having an option to terminate after seven years.
HSH Nordbank said the 14 ship deal is aimed at “easing the pressure on its balance sheet with a further Nautilus
transaction, thereby continuing to resolutely wind down its risk-prone
legacy assets.”
“Nautilus” is a term that HSH Nordbank uses for a financing model whereby it remains involved in the new
structure via a part of the credit amount. This gives the bank the
opportunity of benefiting from a market improvement and – depending on
overall market trends – recover the original credit amount at a later
point of time.
Earlier this year, the bank reached a similar deal whereby Ahrenkiel Steamship acquired eight container ships
from HSH Nordbank’s credit portfolio.
Navios said the payment to HSH will consist of cash and the assumption of a subordinated HSH Participating Loan. The cash payment will be funded with senior bank financing of 60 percent of fair market value of the vessels at closing, secured by a first-priority mortgage on the vessels and $14 million form an investment by the Navios joint venture.
HSH Nordbank said “a loan in a nine-digit USD amount will be financed by a new banking syndicate.” The bank “will remain involved in the future financing construct in order to benefit from a potential recovery in the shipping markets. The transaction is expected to close in the second quarter of 2015.”
“We are reducing our risks and Navios is broadening its portfolio to include complementary ships. The ships in turn are given economic prospects as a result of becoming part of a new fleet,” said Wolfgang Topp, head of HSH Nordbank’s restructuring unit.
Navios companies continue growth in container industry
