Navios Holdings Repaying Loan a Year Early

Navios Holdings will fully prepay the loan facility entered into on September 19, 2016, with Navios Maritime Acquisition Corporation with a payment of USD 55.1 million in the fourth quarter of 2017, a year earlier than planned.

The prepayment amount will consist of the USD 50.0 million drawn under the loan facility entered into with Navios Holdings and USD 5.1 million of accrued interest, Navios Acquisition said announcing its quarterly results.

Navios Acquisition agreed to provide a USD 70 million secured loan facility maturing in November 2018 to Navios Holdings after it terminated a similar loan agreement with its subsidiary from March 2016 for up to USD 50 million.

The move came after a lawsuit was filled in April 2016 against Navios Holdings by Metropolitan Capital Advisors International, a shareholder in Navios Acquisition.

Namely, Metropolitan, which holds some 234,500 shares in Navios Acquisition along with its founder Jeffrey E. Schwarz, had urged the court to block the drawdown of the agreed loan or to seek a return of any amount paid.

The boards of Navios Holdings and Navios Acquisition said at the time that the litigation was without merit.

“However, the Board of Directors of Navios Holdings determined that Navios Holdings does not currently need access to the revolver, and the board of each company determined it was in such company’s best interests to avoid expensive and unnecessary litigation,” a statement from the company read.

Navios Acquisition reported a USD 8.1 million net loss in the third quarter of 2017, down by USD 16 million compared to USD 8.8 million net income for the same period of 2016.

For the nine-month period, the loss reached USD 66 million against last year’s USD 44 million net income.

However, on June 30, 2017, the company recognized a USD 59.1 million non-cash impairment loss on its equity investment in Navios Midstream. Therefore, net loss for the nine-month period was adjusted to exclude the impairment loss, and USD 0.7 million write-off of deferred finance cost, resulting in an adjusted net loss of USD 7.1 million.

“We are pleased with our results for the third quarter of 2017, where we reported revenue of USD 54.0 million and EBITDA of USD 23.3 million. We also declared a dividend of USD 0.05 per share for the quarter, resulting in a dividend yield of about 16.0%, ”Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition said.

“The recent volatility in the price of oil and continued uncertainty in the outlook has adversely affected transportation. However, our long-term chartering strategy insulates us somewhat from this volatility.”

Navios Acquisition currently owns 36 vessels, of which eight are VLCCs, 26 are product tankers and two are chemical tankers.

As of November 2, 2017, Navios Acquisition had contracted 98.8% of its available days on a charter-out basis for 2017, which is expected to generate revenues of approximately USD 208.2 million. The average contractual net daily charter-out rate for the fleet is expected to be USD 17,312.

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