Angeliki Frangou’s Navios Group has agreed to acquire seven bulkers and seven container ships from debtors of Germany’s HSH Nordbank.
This is the second major transaction involving Navios’ acquisition of vessels previously owned by distressed borrowers that were bundled together by HSH. In 2013, a newly formed private entity called Navios Europe purchased five tankers and five container ships from HSH debtors.
The latest transaction is expected to close in 2Q15. The container ships were built in 2007-2014 and range in capacity from 1,740-3,421 teu. The bulkers were built in 2010-11 and range in size from 57,000-93,099 dwt. The buyer of the vessels will be a new Navios joint venture (JV) that is partially owned by public companies Navios Holdings, Navios Acquisition and Navios Partners. The new JV will not be consolidated into any of the public entities.
“These transactions differentiate us from our peers, as we are acquiring large fleets with low capital investment and no dilution to shareholders,” explained Frangou, who noted that the deals with HSH “provide relief to distressed assets from bankruptcy and places them into Navios’ stable ownership, leveraging our economies of scale and technical and commercial management”.
The Navios JV will pay a purchase price comprised of USD14 million plus cash from senior bank debt equal to 60% of the fair market value of the vessels at closing, secured by first-priority mortgages. In addition, the Navios JV will assume a subordinated loan from HSH.