- Secured Long-Term Employment Generating Approximately $17.4 million of EBITDA Annually
- Issuance of $47.9 million of Mandatorily Convertible Preferred Stock
PIRAEUS, Greece, Aug. 19 /PRNewswire-FirstCall/ -- Navios Maritime Holdings Inc. ("Navios Holdings") (NYSE: NM) a global, vertically integrated seaborne shipping and logistics company, announced today that it has reached an agreement to acquire two Capesize vessels, currently under construction at the same South Korean Shipyard, to be delivered in the second half of 2010.
Angeliki Frangou, Chairman and CEO of Navios Holdings stated, "This transaction results from our efforts to capitalize on the opportunity caused by the credit crises. The acquisition price, considering the use of mandatorily convertible preferred stock, is well below the current charter-free value of the vessels. As the vessels are secured by 10 year charters with creditworthy counterparties, we anticipate recovering more than 100% of the nominal acquisition price (150% of the effective acquisition price) through EBITDA during the term of these charters.
Ms. Frangou continued, "Using mandatorily convertible preferred stock continues to be a competitive advantage as we are able to issue equity significantly above the current market price of our common stock while engaging in transactions that are accretive to our existing shareholders. To date we have employed this financing technique to acquire six new building Capesize vessels and refinance three existing Capesize vessels."
New Capesize Vessels
The aggregate nominal purchase price for the two new vessels will be approximately $141.5 million payable with a combination of cash, and mandatorily convertible preferred stock. The effective purchase price for the two vessels, assuming a $10.00 conversion price of the preferred stock, would be $115.6 million ($57.8 million per vessel).
The vessels will be employed under existing long-term charter-out contracts with an average length of 10 years and will generate approximately $17.4 million in annual EBITDA (assuming operating expense of $5,000 per day and 360 revenue days per year).
