Navios Maritime Acquisition, Angeliki Frangou’s US-listed tanker arm, said on Thursday it was suspending dividend payments to its shareholders after several years of uninterrupted payouts.

“The board believes such a decision is in the best long-term interests of the company and its stockholders,” Navios Acquisition management said in a statement.

Navios Acqusition has been consistently paying dividends since 2010.

In the third quarter of 2020, however, it slashed its payout to $0.05 per share, down from the $0.30 per share it had been paying between the fourth quarter of 2018 and the second quarter of 2020.

Navios Acquisition's stock dropped 12% in New York to $3.19 per share. This gave the company, which has a fleet of 47 tankers, a market valuation of about $55m. US-listed affiliate Navios Maritime Holdings holds about 30% of Navios Acquisition and the rest is owned by public shareholders.

Navios Acquisition booked a reported net loss of $7.5m for the fourth quarter of 2020, compared with profit of $6.6m in the same period of 2019. In the full year of 2020, Navios Acquisition still notched up a $27.6m profit, from a loss of $65.4m in 2019.

“The pandemic materially impacted the tanker sector,” the company’s chief executive officer Angeliki Frangou said.

“While we believe the outlook looks brighter now, with countries well into vaccination programs and the travel industry showing signs of revival, the market remains difficult today,” she added.

Tackling the debt

The decision to suspend the dividend seems motivated by the company's efforts to cope with its debt rather than by a loss-making business quarter.

As of early December, Navios Acquisition had about $600m of senior secured ship mortgage notes outstanding, which mature on 15 November 2021. That debt carries a fixed rate of 8.125%.

“Although we are currently attempting to refinance the outstanding amount of our ship mortgage notes and have also engaged in discussions with the holders of our ship mortgage notes, there can be no assurance we will be successful in such attempts or that any such potential refinancing, sales or other action, will be consummated on terms satisfactory to us or at all,” Navios Acquisition warned in its statement on Thursday.

Rolling over that debt has been the company's top concern going forward, Frangou told analysts in a conference call last year.

Navios Acquisition has already been taking several initiatives in this direction.

On April 14 the company announced that it obtained a $100m loan from a private Frangou entity. The secured debt will be used for general corporate purposes over two years with interest fixed at 11% per year.

Other initiatives taken throughout 2020 have helped cut outstanding debt by $96.5m, or 9% of the total. Indebtedness was reduced by a further $63.4m so far in 2021, through debt amortization payments and repayment of debt maturities.

The company also confirmed having sold four containerships and one VLCC so far this year, raising $66m in total.

The 298,700-dwt Nave Celeste (renamed Anshun II, built 2003), fetched a net $23.5m, the company said.

The 3,240-teu Allegro N (renamed GH Pampero, built 2014) was sold for $13.8m; the 1,740-teu sisterships Acrux N and 1,740-teu Vita N (both built 2010) fetched $18m in total; and the 3,400-teu Solstice N (built 2007) was sold for $10.8m.

Navios Acquisition was holding these containerships for sale anyway - they were part of a legacy fleet of seven boxships the company obtained from Navios Europe II, a special purpose vehicle that Frangou liquidated last year.

At the same time, Navios Acquisition took delivery of two VLCC newbuildings from Imabari Shipbuilding. It has the ships, as it will two further VLCCs to follow, under bareboat lease with long-term employment lined up for them.