The gradual disposal of its oldest tankers to replace incoming newbuilding tonnage is nothing unusual for Navios Maritime Acquisition, Angeliki Frangou’s New York-listed tanker outfit.
A spate of recent sales, however, come as part of a multi-pronged strategy to cope with a $600m debt wall the company is racing towards and might crash into at the end of this year.
In its latest move to deal with the problem, the company revealed in its annual 20 F filing that it agreed in late April to sell the 298,300-dwt VLCC Nave Neutrino (built 2003) to an unaffiliated party for $25m.
This is the oldest ship by far in Navios Acquisition’s fleet of 13 VLCCs in the water or under construction. The Nave Neutrino was fixed on a time charter at $24,688 per day, which expires this month.
According to some London-based brokers, the vessel's buyers are Chinese. This would be in line with a well-established trend that has seen Asian buyers scooping up older Greek tonnage.
In another such deal reported by brokers, Middle Eastern interests are said to have purchased the 45,000-dwt tanker Marinoula (built 2000) from Thanassis Martinos company Eastern Mediterranean Maritime for about $5.5m.
The popularity of older crude carriers, particularly VLCCs, coincides with a gradual increase in floating storage numbers, analysts at Athens-based Seaborne Shipbrokers said in their latest weekly report on 26 April.
Such trends serve Navios Acquisition well as it offloads units. The sale of the Nave Neutrino brings the company's total proceeds from ship disposals to a net $146m since the beginning of the year.
These sales include a pair of VLCCs, as well as seven containerships the company was holding for sale after inheriting them from Navios Europe II — a private vehicle that Frangou dissolved last year.
Navios Acquisition sold three of these containerships to Frangou-controlled Navios Maritime Partners.
Going concern?
If it decides to divest any other tankers, however, Navios Acquisition has run out of older ships to sell. The company's remaining fleet consists of vessels built after 2008.
Ship sales are part of Navios Acquisition's efforts to scratch together funds to repay about $600m of bonds due in November. These bonds, which carry an 8.125% coupon, were issued in 2013.
The Nave Neutrino and the 298,700-dwt Nave Celeste (built 2003), the second VLCC sold by Navios Acquisition this year, were originally held as collateral for the bonds. The company released them before the sale and replaced them as collateral with the 297,200-dwt Nave Spherical (built 2009) and $5.2m in cash.
Other debt management measures taken by Navios Acquisition include a $100m loan the company obtained from a private Frangou entity. Navios Acquisition furthermore scrapped its dividend.
The company's refinancing efforts, however, may fall short.
In its latest earnings release on 15 April Navios Acquisition said there could be “no assurance” that ongoing talks with bondholders or other measures would be successful or concluded on satisfactory terms.
Its annual report, published on 28 April, includes an even starker warning: “…there is substantial doubt over the company’s ability to continue as a going concern for the 12-month period from the date its consolidated financial statements were issued."
Navios Acquisition's share price has been hovering near multi-year lows at $3.14 per share on 4 May, giving it a market value of just $52m.
