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Why is Navios Moving from Norwalk to New York City?
The simple answer is that they were spending too much time in New York raising capital and the commutation costs were becoming excessive. In the latest iteration, Navios Maritime Partners announced on Tuesday a follow-on offering of 3.5 million common units. This is its first offering of this year and follows three such offerings done last year that raised approximately $135 million.
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Easy Decision
With the choice to lend commercially, where one is exposed to the risk of the borrower defaulting, or a “risk-free” loan, which would you do these days if you were a bank? Stephen Antczak and Jung Lee of Cantor Fitzgerald explained in their recent report titled “Capital Structure Insights: It’s All About Consistency” why banks may have little interest or incentive in lending commercially at this juncture.
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Not to Be Outdone
Navios Maritime Partners announced after the market closed Wednesday that it intended to issue 4 million common units with a green shoe of 600 thousand units. Proceeds would be used for fleet expansion and/or general partnership purposes. The deal was priced today at $14.90 per unit, a discount of 5.8% from the prior close.
Joint book running managers were Citi and JPMorgan with S. Goldman Advisors, DVB and Cantor Fitzgerald serving as co-managers.
Full House in Athens – Part 2
By Kevin Oates
…in the longer term shipping should correct but quality, transparency and financial strength are key to survival.
Despite the tough market and the general lack of ship finance, Marine Money’s Greek Ship Finance Forum again filled the seats in Athens. With 310 delegates and speakers and some 40 more for the TEN Ltd lunch, there was plenty gossip and exchange of views at the 11th Annual conference held on the 8th of October 2009.
The event had started with a speaker’s dinner the previous night co-hosted by Navios Maritime Holdings and was to end in the early hours of the following morning at the Capital Party co-hosted by Capital Product Partners LP at a well-known Athens nightclub. Even if the market is tough, we still know how to enjoy ourselves.
Back at the conference, our day began with Guy Verberne, a leading economist at Fortis Bank (Nederland) telling us that the economic recovery has come and it may well be sustainable. China, he says, has plenty foreign reserves to prolong it’s stimulus package for as long as it needs and he sees no meaningful cutbacks from the stimulus packages of western governments, at least through 2010. A risk is a double dip in 2011 if we get too bogged down in debt.
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Share Sale Completed
On Tuesday, Paragon Shipping Inc. announced that it had completed its second Controlled Equity Offering of 10 million shares achieving an average sale price of $4.11 per share. Together with the first offering completed on June 2nd, the company raised total net proceeds of $83.75 million. Proceeds will be used for future vessel acquisitions. After the completion of this offering the company has 48.2 million shares outstanding.
Denouement
The Aries Maritime Transport Limited (“Aries”) story begins anew. Last week, Aries entered into a securities purchase agreement with Grandunion Inc., a company controlled by Michail Zolotas and Nicholas Fistes, pursuant to which the company has agreed to acquire three capsize bulkcarriers, with an approximate net asset value of $36 million in exchange for 18,977,778 shares. A description of the vessels being acquired is shown herein.
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Back to the Well
Utilizing its $500 million shelf registration from February, Navios Maritime Partners (“NMP”) went back into the market last week for its second follow-on offer of this year. In May, NMP issued 3.5 million shares at a price of $10.32. Last week’s offering of 2.8 million shares was priced $12.21 per share a discount of 6.5% from the prior day’s closing price. Proceeds will be used to fund its fleet expansion and/or for general corporate purposes.
Complications Unwound. How DRYS Got There.
Last week, DryShips announced that it had agreed to acquire, from George Economou and other third party interests, the remaining 25% minority interest in Primelead Shareholders, Inc., the holding company and operating platform for DryShips ultra deepwater drilling rig assets including two owned and operational ultra deepwater semisubmersibles and 4 newbuilding drillship contracts as well as the commercial operating company, Ocean Rig ASA.
The transaction was structured to minimize the cash outlay and leverage with the price being dilution. Consideration for the transaction included $50 million in cash and the issuance of $280 million in face value of mandatorily convertible preferred stock, based upon a price per share of $5.36, the weighted average seven day trailing price. At the offering price, this equates to 52.2 million shares. The shares are manditorily convertible in four equal installments at $6.83 per share (a 27.5% premium) upon delivery of each of the four newbuilding drillships.
DRYS Cancels
Yesterday, DryShips announced that it had entered into an agreement to cancel Hull 2089, a Capesize vessel under construction in South Korea. The vessel was contracted for $114 million. Under the terms of the agreements, DryShips will pay a total cancellation penalty of $42.8 million inclusive of its previously paid 20% deposit. The company will end up paying an incremental $20 million and benefits from a reduction of $71.2 million in 2009 capex.
Even the Analysts Wonder
We arrived at work last Friday morning to the rather surprising news that DryShips, clearly seeing the opportunity, had once again gone out into the equity market. The company announced its second ATM Equity Offering through Merrill Lynch for up to $475 million of the company’s common shares. Back in January, DryShips had entered into an earlier agreement to sell up to $500 million, which it completed last month selling a total of approximately 95.7 million shares, generating net proceeds of ~$487.5 million after commissions. An ATM equity offering allows the company to issue common shares at any time and at the company’s discretion.
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