seems to me there was a lot of speculation here a month or two back that the 10 ship Navios Europe deal with HSH Nord wouldn't actually happen. with all five container vessels now in Navios hands and this morning's announcement, that should put to rest any notion that Navios management ever releases deals/information they don't fully follow up on. a terrific deal no matter how one slices it.
It appears we are paying “purchase price consists of $127.8 million in cash and the assumption of $173.4 million Subordinated HSH Participating Loan” for “Ten vessels with FMV of approximately $218 million”.
Am I missing something or are we overpaying? Can't see than NM would overpay, but I read it that way.
The HSH deal has way more to do with bank accounting fictions related to bad loans tahn it does to anything to do with the shipping industry. The deal the Navios group cut basically says that the ships will earn whatever they can earn under the management of NM and its children. The cash generated will then be used to pay the mortgage on the ships, pay NM, and if there is anything left over pay on the subordinated debt. The sub debt is what is usually known as a "hope note" meaning the bank hopes, but does not really expect to get paid. To the extent NM and brethren put cash into this deal, they get paid on it before the hope note. NM gets some additional scale in fleet management and they have a heads I win, tails I win a bit less structure in the deal economics. No worries.
they have but $10mm of balance sheet cash in the deal with debt non-recourse to N Holdings. i'd say they did just fine on the deal. the container ships alone will allow Partners to increase its distribution, 21% of which upstreams right here. not too shabby, imho. betting against AF has not been wise.