Broader Acceptance

Last week, Navios Holdings announced that it had purchased the Navios Celestial, a 2009-built ultra-handymax of 58,084 DWT from a Japanese shipyard. There was nothing unusual about that except for the fact that the Japanese shipyard accepted $5 million of the total consideration of $36.2 million in the form of mandatorily convertible preferred shares. As a result, the effective purchase price was $33.5 million based upon the $10 mandatory conversion price. The shares carry a coupon of 2%.

Up until now only Korean yards have been willing to accept this arrangement. By gaining broader acceptance, Navios expands its liquidity

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