Navios Maritime Partners L.P., an international owner and operator of container and dry bulk vessels, reported its financial results for the second quarter and six months ended June 30, 2017.
Angeliki Frangou, Chairman and Chief Executive Officer, stated, “For the second quarter of 2017, Navios Partners reported Consolidated Revenue of $50.0 million and Consolidated Net Income of $4.1 million. In addition, Adjusted EBITDA was $32.2 million.”
Angeliki Frangou continued, “Navios Partners is a unique platform in the dry industry, with about $700 million in contracted revenue, 84% of which is through charters longer than three years, and no significant near term debt maturities. As a result, Navios Partners is renewing and expanding its drybulk fleet with younger and larger vessels. To date, seven vessels were agreed to be acquired with an average age of 7.4 years and one 17-year old vessel was sold. Thus, the average age of Navios Partners’ drybulk fleet improved by 9% — from 10.4 years to 9.5 years, and the overall size increased by 33% (almost 1 million deadweight tons). In addition, we participated in the launch of Navios Maritime Containers Inc., a new vehicle dedicated to capitalizing on the opportunity within the distressed container sector by investing $30 million for about a 60% ownership interest plus warrants for an additional 6.8%.”
Acquisition of Vessels
In July 2017, Navios Partners agreed to acquire from an unrelated third party one 2010 Hyundai-built Capesize vessel of approximately 179,314 dwt, for a purchase price of $26.7 million plus the issuance of 1.0 million common units at a price of $2.1 per unit. The vessel is expected to be delivered to Navios Partners’ owned fleet in the third quarter of 2017.
In July 2017, Navios Partners agreed to acquire from a related party one 2009 Tsuneishi Zhoushan-built Handymax vessel of approximately 58,058 dwt, for a total purchase price of $13.8 million. The vessel is expected to be delivered to Navios Partners’ owned fleet in the third quarter of 2017. Both acquisitions are subject to signing of definitive documentation.
In June 2017, Navios Partners agreed to an additional tranche to its existing credit facility for an amount of $7.0 million with a commercial bank in order to finance the acquisition of the Navios Prosperity I. The facility matures in the second quarter of 2020 and bears interest at LIBOR plus 310 bps per annum.
In June 2017, Navios Partners entered into a new $32.0 million credit facility with a commercial bank in order to finance the acquisition of two Capesize vessels, the Navios Ace and the Navios Sol. The facility matures in the second quarter of 2021 and bears interest at LIBOR plus 300 bps per annum.
Long-Term Cash Flow
Navios Partners has entered into medium to long-term time charter-out agreements for its vessels with a remaining average term of 2.4 years. Navios Partners has currently contracted out 87.5% of its available days for 2017, 34.3% for 2018 and 16.3% for 2019, including index-linked charters, respectively, expecting to generate revenues of approximately $147.5 million, $83.9 million and $54.7 million, respectively. The average expected daily charter-out rate for the fleet is $15,664, $25,378 and $24,972 for 2017, 2018 and 2019, respectively.
Navios Maritime Containers
Initial Private Placement
On June 8, 2017, Navios Maritime Containers Inc. (“Navios Containers”) closed its private placement of 10,057,645 shares at a subscription price of $5.00 per share, resulting in gross proceeds of $50.3 million. Navios Partners invested $30.0 million and received 59.7% of the equity of Navios Containers. Navios Partners also received warrants, with a five-year term, for 6.8% of the equity.
Navios Containers registered its shares on the Norwegian Over-The-Counter Market (N-OTC) on June 12, 2017 under the ticker “NMCI”.
Navios Containers used the proceeds of the private placement to acquire five 4,250 TEU vessels from Navios Partners for a total purchase price of $64.0 million. The payment terms included a $24.0 million credit by Navios Partners for a period of up to 90 days from the purchase date at LIBOR plus 375 bps, of which $14.0 million remained outstanding as of June 30, 2017. These vessels were previously acquired by Navios Partners from Rickmers Maritime Trust Pte. (“Rickmers Trust”) and are employed on charters with a net daily charter rate of $26,850 which expire in 2018 and early 2019.
In addition, Navios Containers acquired all the rights under the acquisition agreements entered into between Navios Partners and Rickmers Trust to purchase the remaining nine vessels in the original 14-vessel container fleet (the “Fleet”) for a purchase price of $54.0 million plus certain delivery and other operating costs. As of July 25, 2017, five of these vessels had been delivered to Navios Containers and the remaining four are expected to be delivered during August 2017.
On June 29, 2017, Navios Containers entered into a loan facility for an amount of $40.0 million with a commercial bank in order to finance the acquisition of seven container vessels of the Fleet (including the original five vessels). The facility is repayable in six consecutive quarterly instalments of $3.8 million each, plus a balloon payment on the last repayment date. The facility matures in December 2018 and bears interest at LIBOR plus 385 bps per annum. As of June 30, 2017, the outstanding loan amount under this facility was $34.3 million and an additional amount of $3.2 million was drawn in July 2017. The Company has also agreed to a $21.0 million credit facility with the same commercial bank for financing of the remaining seven vessels of the Fleet, subject to signing of definitive documentation.
Navios Containers currently controls a fleet of 14 vessels, (of which four vessels will be delivered in early August 2017) totaling 57,100 TEU with an average age of 9.7 years. As of July 25, 2017, Navios Containers has chartered-out 46.7% of available days for the remaining six months of 2017, expecting to generate revenues of approximately $26.0 million. The average contractual daily charter-out rate for the fleet during this period is expected to be $23,780.