Navios Maritime Holdings has forged $550m in refinancing deals with banks, lessors and a company controlled by Angeliki Frangou in a move that helps it pay off a looming $614m bond series.
The New York-listed shipowner said the transactions include nearly $263m in payment-in-kind loans from an outfit affiliated with Frangou, who is Navios Holdings' chief executive, chairman and largest shareholder.
The loan will be paid back through a combination of cash and unsecured debt securities known as debentures, using shares in spin-off Navios Maritime Partners as collateral. Shares in subsidiary Navios South American Logistics and membership in Navios Partners' general partner entity also serve as second-lien collateral.
Navios Holdings will make $10m quarterly payments to the Frangou affiliate starting in the third quarter of 2023 and pay an upfront fee in the form of $24m in debentures.
The Piraeus-based shipowner said its board formed a special committee of independent and disinterested directors to negotiate with the Frangou affiliate and evaluate the deal.
"The loans from the lender were unanimously approved by the special committee," Navios Holdings said.
The deal also provides for $150m in advances of additional security and involves an 18-month period in which no interest or amortisation will be due, as those will be paid through debentures. And it releases other collateral held by the Frangou affiliate.
Investors reacted negatively to the deal, with Navios Holdings shares shedding 18.9% in late-morning trading on the New York Stock Exchange.
The bulker owner, which also has the leading stake in Frangou-led Navios Partners and controls Navios Logistics, also struck deals for $287m in new financial firepower through two credit facilities and four sale-and-leaseback agreements.
Those include a credit facility with a two-year term and a 5.8-year amortisation profile at an interest rate of Libor plus a margin of between 3.25% and 4.5%. A second credit facility has a three-year term and 4.9-year amortisation schedule. The interest rate on that loan is Libor plus between 2.85% and 3.75%.
Navios Maritime Holdings' $550m in new financing was provided through:
$287m
Commercial bank loans and sale-and-leaseback arrangements
$263m
Payment-in-kind loans provided by an affiliate of Angeliki Frangou
Navios Holdings' new sale-and-leaseback deals carried an average term of seven years and 9.4-year amortisation profile. The leasing transactions have an effective interest rate of 5.3%.
The credit facilities and sale-and-lease are backed by 18 bulkers, all but one of which have been serving as collateral on the notes due in January, plus seven bulk carriers already on bareboat charters or leasing arrangements.
The refinancing allows the company to pay off all of the company's $159m in notes that it had to pay off on 15 January.
Navios Holdings also plans to use the refinancing to pay $50m of the company's outstanding senior secured notes due in August. That will leave $105m outstanding in the bond series, which carries a coupon interest rate of nearly 11.3%.
Law firm Latham & Watkins acted as legal advisors to the special committee and Pareto Securities served as financial advisors.
Navios Holdings had Thompson Hine as legal advisors.
Fried, Frank, Harris, Shriver & Jacobson and the Ince Group acted as legal advisors to the Frangou-affiliated lender, and S Goldman Advisors was its financial advisor.
This story has been amended since publication to accurately reflect details of the financing
