Navios Maritime Holdings Inc. has sold its ship management division and certain general partnership interests to N Shipmanagement Acquisition Corp. (NSAC) and related entities affiliated with the company’s Chairman and Chief Executive Officer, Angeliki Frangou.
The company received aggregate consideration of $20 million, including assumption of liabilities, and new five-year service agreements under which NSAC will provide technical and commercial management services at fixed rates and administrative services, reimbursed at allocable cost.
The company is a holding company owning dry bulk vessels and various investments in entities owning maritime and infrastructure assets. NSAC owns all entities providing ship management services and employs all associated people.
The company will pay a fixed rate of $3,700 per day per vessel, which will cover all technical and commercial management services and operating costs, other than dry-docking and special surveys. This rate will be fixed for a two-year period and will increase thereafter by three percent annually, the company said on Friday, August 30.
NSAC will provide all administrative services to the company and will be reimbursed at allocable cost and NSAC will own the general partner interests in Navios Maritime Containers L.P. and Navios Maritime Partners L.P.
The company simultaneously entered into a secured loan agreement with NSAC whereby the Company agreed to repay NSAC $125.0 million (subject to post-closing adjustment) over a five-year period. In general, the amount owed reflects the excess of the (1) liabilities of the ship management business (including liabilities for advances previously made by affiliates to the Company for ongoing operating costs, including technical management services, supplies, dry-docking and related expenses) other than liabilities the assumption of which forms part of the consideration for the Transaction over (2) the short term assets of the ship management business.
Of the amount owed, $47 million will be repayable during the first 12 months in equal quarterly instalments, with the remaining principal amount repayable in equal quarterly instalments over the following 48 months. In certain cases, amortisation can be deferred. The loan agreement provides for interest at five percent annually, and seven percent annually for deferred principal amounts.
PHOTO: Angeliki Frangou