Disgruntled Navios Maritime Partners investor Ned Sherwood is not going away easily.
The veteran Connecticut finance man is closing out 2021 no happier than he was in July, when he first publicly complained about decision-making by Navios founder and chairwoman Angeliki Frangou.
Now, despite an audience with Frangou that Sherwood said turned into more of a soliloquy, he remains convinced that a change in management is the way forward, and has new ideas about how to make that happen.
Sherwood is calling on other companies to make a takeover bid for New York-listed Navios at a minimum $40 per share, which is more than a 50% premium to its current trading price but still a significant discount to book value, he said.
The investor is casting a gaze in the direction of cash-rich container ship owners Zim and Danaos, which he reasons could pick up boxships on the cheap and decide either to keep or sell off Navios Partners' bulkers and tankers.
Sherwood is a former 5% owner in Navios Partners. He said he has not sold a single share from his original holding, but has been diluted below the 5% level by subsequent stock sales.
"With the coffers of companies like Zim and Danaos that are overflowing with cash from the strong market, it would be a great time for a more shareholder-friendly owner to make an offer and depose Angeliki as general partner," Sherwood told TradeWinds.
With the takeover of container ship owner Navios Maritime Containers and tanker player Navios Acquisition in the past year, Navios Maritime Partners has become the largest US-listed owner by vessel count.
Concerns over shareholder value
Frangou has created a 143-ship goliath worth an estimated $4.2bn with a presence in bulkers, container ships and tankers.
But her leadership has left Sherwood cold. He has complained publicly since the summer about what he sees as a management priority to bail out sister companies and stoke fees to private family managers rather than enhance shareholder value.
When TradeWinds last spoke to Sherwood in August, the 40-year finance man was demanding a discussion with Frangou to clear the air and convey some financial advice: start buying back heavily discounted Navios Partners shares rather than selling them at a huge deficit to net asset value.
Sherwood acknowledged that he got that audience. But he claimed that a 45-minute session resulted in 44 minutes of Frangou reading a canned slide-deck presentation to him.
"I told her I didn't need to see these charts, which I'd already seen on the earnings call: 'I don't need a rehash, I want to ask you a lot of questions'," Sherwood said. "She goes on for 44 minutes anyway and tells me she's late for another meeting and has to go.
"It's clear that she has no respect for any of the [limited partner] holders. In my opinion, she has abused the master limited partnership structure."
In response to Sherwood's remarks, a Navios spokesman pointed out that Navios Partners has led its peer group in total return year to date at about 125%. This is a combination of share-price appreciation and dividend. The company also topped the group at 60% over two years, he said.
He referred to Navios Partners' October acquisition of sister company Navios Maritime Acquisition.
"We understood then that this investment would turn on some easing of the pandemic, allowing global economies and travel to return to normal. Accordingly, we shared with our stakeholder that Navios Partners would conserve cash until we could foresee positive cash flows from the tanker sector," the spokesman said.
"We have made similar opportunistic investments in the past, which rewarded our shareholders handsomely."
Besides seeking a white-knight buyer for Navios Partners, Sherwood is calling on other limited partners to withhold votes from two independent directors seeking re-election at a 21 December shareholders meeting.
"They're about as independent as my three-year-old grandchild. It would send a message if 30% to 40% of the limited partners decide to withhold votes," he said.
"No limited partner trusts Angeliki's motivations. She told me she's building Navios for the long term, but why are you building for the long term when you're trading at less than half your liquidation value? You can't do good business with bad people."