Navios Maritime Holdings has issued common shares to pay interest owed on a $70m loan provided by its subsidiary Navios South American Logistics.
The Angeliki Frangou-led parent company on Friday issued 2.41m shares, which the lender assigned to Marshall Islands-registered company Grimaud Ventures.
The new shares will be used to pay $6.38m in interest on the loan provided by the South American company to Navios Maritime on 25 April 2019, according to a regulatory filing.
Navios South American Logistics has assigned its legal and beneficial interest in the debt to Grimaud, for whom a signature on the assignment deed was provided by the South American company's chief financial officer, Ioannis Karyotis.
Initially, Navios Maritime was going to make two interest payments of $3.18m on 26 June and 1 July, but that agreement was amended such that both payments would be paid on 1 July.
The borrower may pay up to 70% of the owed interest in common shares valued at 80% of the 10-day weighted average share price as reported by Bloomberg, the filing said.
Navios Maritime's shares, which trade on the New York Stock Exchange under the ticker symbol NM, closed at $2.17 per share on Friday. They gained 0.5% to $2.18 during Monday morning trading in New York.
Paying off debt with debt
Meanwhile, Navios South American Logistics and its subsidiary Navios Logistics Finance (US) have raised $500m in a private offering of secured notes to pay off millions of dollars in debt due in 2022.
The offering was targeted at "persons reasonably believed to be qualified institutional buyers", the company said in a release.
The notes, which carry a 10.75% coupon rate and mature in 2025, will be used to pay off the $325m indenture that governs the two companies' outstanding 7.25% senior notes due in 2022, plus whatever is owed on a separate joint loan.
Any money remaining from the notes sale, which wrapped up on 8 July, will go toward "general corporate purposes", the company said.
Navios South American Logistics and its subsidiaries have provided guarantees for the notes, according to a filing made with the US Securities and Exchange Commission.
The notes are secured by first-priority ship mortgages on four small clean product tankers that are owned by subsidiary companies that have provided guarantees.
This includes assignments of the tankers' earnings and insurance, together with a first-priority lien on the capital stock of each guarantor-owner of the mortgaged vessels, which serve the company’s cabotage business along the eastern coast of South America.
Navios South American Logistics has also secured the notes by assigning the English law-governed contract that relates to the firm's iron ore port in Uruguay, which is signed with a subsidiary of Brazilian miner Vale.
Navios South American Logistics owns eight small tankers and 332 river barges.
