Navios Maritime Partners, part of Greek owner Angeliki Frangou’s Navios Group, has offered to take a boxship-owning affiliate private via a share-for-share swap.
The New York-listed master limited partnership said on Monday it proposes to issue 0.37 shares for each outstanding common unit of Navios Maritime Containers, a Nasdaq-listed partnership that owns 29 vessels toalling 143,000 teu.
The offer represents a 15% premium to Navios Containers’ share value based on the closing prices on 13 November.
Share price of Navios Partners rose 5.92% to $6.98 during mid-day trading on Monday. Navios Containers increased by 2.76% to $2.23.
Navios Partners, which already owned 35.7% of Navios Containers as of early November, did not explain the reason behind the acquisition in its announcement. TradeWinds has approached the partnership for further comment.
Following a failed attempt at a $121m initial public offering, Navios Containers opted for a direct listing on Nasdaq in December 2018.
For the first nine months of this year, the partnership posted a net profit of $1.82m on revenue of $95.4m.
But two of Navios Cotainers’ largest shareholders in July accused the boxship owner of fraud in its the direct listing and enriching Frangou, who was listed as one of the defendants in the lawsuit.
Mangrove Partners and 683 Capital Partners, which together owned 16.1% of the partnership then, said Navios Containers never mentioned a "plan of conversion" into a partnership upon going public until it was about to do so.
The conversion removed the partnership’s fiduciary duty to shareholders and paved the way for Frangou to stack its board and enter into transactions with related parties, like a management agreement where Navios Containers paid an allegedly above-market sum of $118m to a Frangou-linked company over two years, the duo alleged.
The merger proposal has been submitted to the Navios Containers board and further announcements are expected later. Frangou holds the positions of chairman and chief executive at both firms.
Operating a fleet of 43 bulkers and 10 boxships, Navios Partnership has been hit by weaker dry bulk shipping demand this year during the coronavirus pandemic.
When one-off items were excluded, Navios Partners booked an adjusted net loss of $2.9m between January and September, compared to an adjusted profit of $14.7m in the same period of 2019.
“Dry bulk demand in the first half of 2020 suffered from the global shutdown,” Frangou said in a quarterly report.
