Navios Maritime Holdings has reached a deal with FSL Trust Management, the trustee-manager of First Ship Lease Trust, to acquire a major share in the company.
Navios plans to buy 154.4 million shares in the Singapore-based First Ship Lease Trust, representing around 24.2% of the total number of issued units in FSL Trust, for a total of USD 20 million.
As part of the agreement, FSL Trust will secure a USD 20 million second priority mortgage convertible loan from Navios.
The interest-bearing Navios Convertible Loan is intended to be for one-year period, with the proceeds used solely to pay down the existing mortgage debt and other loan facilities of FSL Trust or as part of the refinancing of the same.
It will be convertible into such number of units in FSL Trust as when aggregated with the FSL Sale Units will total at least 50.1% of the total number of issued units in the FSL Trust on a fully diluted and as converted basis.
The number of Conversion Units to be issued may be subject to increase depending on working capital changes of FSL Trust at closing as compared to December 31, 2016, the company informed.
The proposed transaction is subject to certain conditions precedent, including restructuring of the existing mortgage debt and other loan facilities of FSL Trust.
Navios Maritime Holdings and FSL Trust said they would “negotiate exclusively” with a view to executing the definitive agreements for the proposed transaction by September 30, 2017.