Two of the NYSE-listed Navios armaments companies are about to merge, and their combination will create the largest number-ship shipping company on a U.S. stock exchange.
Navios Maritime Partners and Navios Maritime Acquisition Corp. announced last week their intention to merge. Shareholders of Navios Acquisition, an oil tanker owner, will receive approximately 0.13 shares of Navios Maritime Partners for each of their outstanding shares. A series of Navios acquisition debts that were due to fall due in November will be resolved by a cash payment from Navios Partners, supported by new loan financing for the combined entity. The transaction will help resolve Navios Acquisition’s heavy debt burden.
“We are announcing a transformative transaction. The combined entity will be the largest publicly traded US shipping company in terms of number of vessels, with 15 vessel types diversified across three segments, serving more than 10 end markets, ”said Angeliki Frangou. “About a third of our fleet will be in each of the dry bulk, container ships and tankers segments. We believe this combination will result in a stronger and more resilient entity, mitigating industry specific cyclicality. “
The combined company will have 140 vessels with a combined deadweight of around 15 million tonnes and a total fleet value of around $ 4.2 billion. Currently, it has a charter backlog worth approximately $ 1.6 billion in contract revenue. Given the relatively even split between dry bulk, wet bulk and freight operations, Navios says it will be able to operate on a large scale in all major segments and smooth out fluctuations in profits. . It also provides investors with balanced exposure to the high seas shipping industry as a whole.
The merger is expected to result in cost reductions, and the new company will have a relatively low leverage ratio of around 35%. The board of directors of Navios Partners will be responsible for the management of the combined business. Frangou, who was already Chairman and CEO of both companies, will retain the role in the merged entity.
Earlier this year, Navios consolidated its stake by merging its Nasdaq-listed Navios Maritime Containers entity with NYSE-listed Navios Maritime Partners. The combination integrated the Navios container fleet into its dry bulk and general cargo entity.