A protest letter filed by an activist investor against the management of US-listed Navios Maritime Partners has yet to make a visible impression on the company and the analysts that cover the shipowner.
In a presentation of second-quarter results on Tuesday, chief executive Angeliki Frangou and fellow company executives failed to address the 22 July letter, in which minority investor MRMP-Managers criticised them and asked for an independent investigation into potential conflicts of interest at the firm.
Analysts covering Navios Partners were equally unconcerned of any potential impact from MRMP’s complaints, asking not a single question about them in a conference call that followed.
MRMP, which emerged with a 5.8% stake in Navios Partners earlier this month, criticised a string of decisions at the company, saying it was “confused by some of her [Frangou’s] recent financial decisions — decisions which seem imprudent and illogical — that run counter to sound business principles”.
Among other things, MRMP urged Navios to “cease” all equity issuance under an ongoing “at-the-market” (ATM) programme, at prices MRMP considers undervalued.
Asked on Tuesday to comment on the status of Navios Partners’ $110m ATM programme announced in May, company executives said that it has been practically completed and that just minimal amounts of it are left.
Navios Partners, an owner of bulkers and containerships, posted record profitability of $236.6m in the first half of the year, as TradeWinds reported.
Despite the bumper profit, Navios Partners stock was down 7.3% at 1535 GMT in what was a bad day for several other shipping stocks.
In its letter, MRMP acknowledged that Navios Partners would enjoy “significant free cash flow” as a result of strong dry bulk and containership markets but urged the company to set a distribution percentage of no less than 75% of estimated annual free cash flow.
MRMP claimed in a stock exchange filing to have “more than 30 years of success investing in various companies that are operated by experienced multi-generation families”.
In one recent display of its shareholder activism, MRMP put forward board member candidates at Barnwell Industries, a Hawaii-based oil and natural gas company.
In January, MRMP and Barnwell agreed to avoid a proxy contest, in a deal that saw MRMP stockholders receive up to $300,000 to cover "reasonable" and "documented" election contest expenses. At the same time, Barnwell pledged to terminate its post-retirement medical plan.
