The already extended family of Angeliki Frangou's listed companies is to grow by yet another member.
The Greek magnate announced on Thursday that Navios South American Logistics, an owner of port terminals and barges along some of that continent’s coasts and rivers, has filed a request with Brazilian bourse authorities for an initial public offering on the country’s B3 stock exchange.
Navios South American Logistics is majority-owned by Navios Maritime Holdings, one of Frangou’s New York-listed companies.
“The structure and timing of any offering is subject to market conditions and other factors, including the approval of the Brazilian Securities Commission (CVM) and the B3, and there can be no assurance as to when any such offering will occur, if at all,” Frangou and her managers said on 20 August in a conference call with investors.
Navios Logistics was set up in late 2007 and claims to be one of the largest logistics companies in Hidrovia — a navigable river system straddling the continent’s southeast.
Navios Logistics owns three port storage and transfer facilities in Paraguay and Uruguay — one for agricultural and forest related exports, one for mineral-related exports and one for refined petroleum products.
The company also owns a core fleet of 340 owned ships, mostly barges active in the river and cabotage trade.
Navios Logistics reported net income of $19m in the six months through June, on $104m of revenues. That compares with net income of $15m and revenue of $108m in the corresponding period last year.
About a third on Navios Logistic’s income depends on Brazilian mining giant Vale, with which the company has a 20-year contract for port services that yield an estimated minimum $35m of annual Ebitda.
Navios Logistics is busy widening its client basis. Earlier this month, the company signed a one-year contract with Vetorial Mineracao, another Brazilian miner, to transship 1.5m tonnes of iron ore through Navios’s terminal at Nueva Palmira, Uruguay.
Under the terms of the deal, Navios Logistics will be paid the transshipment fees directly by commodity giant Cargill. The deal is extendable by another six months.
In the run-up to its possible IPO, Navios Logistics has also been active on the financial side. In July, the company raised $500m in a private offering to refinance debt due 2022.
The notes, which carry a 10.75% coupon rate and mature in 2025, are used to pay off the $325m indenture that governs outstanding 7.25% senior notes due in 2022, plus whatever is owed on a separate joint loan.
Separately, Navios Holdings issued common shares to pay interest owed on a $70m loan provided by Navios Logistics, in which it owns almost 64%.
Navios Logistics has proved a rare source of cash for Navios Holdings shareholders. Navios Logistics directors recently declared a $6.4m dividend.
Navios Holdings itself is pays no dividends on common stock and produces considerable losses amid the Covid-19-induced downturn.
The owner and manager of 52 bulkers announced on Thursday a bottom-line net loss of $88.6m for the first half of 2020, more than twice the $41.7m in losses incurred in the same period last year.
Net revenue dropped by 15% over the same period to $188m, as freight rates declined.
“The pandemic has greatly affected businesses, countries, and people all over the world, but the Navios family perseveres,” Frangou said in a Navios Holdings press release.
Markets, however, are looking up, she added. “Rates have been recovering over the past couple of months as countries emerge from quarantine, with the current capesize 5TC rate around $20,000 per day.”
Navios Holdings confirmed the sale of two older panamaxes already reported by TradeWinds, for total proceeds of $14.1m.
The US-listed company also said it received $7.9m in cash and acquired two unencumbered panamaxes following the liquidation of Navios Europe II, a private Frangou vehicle dissolved earlier this year.
