Will be announced on this Wednesday. Drop down VLCC to NAP and use that money to buy dry ships at big discount in next several quarters. Tanker value is at the top now and the dry ship value is at bottom or is closed to the bottom. AF will surprise you again. Interesting, another Wednesday.
I am very disappointed for dividend suspension, but it maybe a good idea in the current environment. They can buy a 3 year old Panamax at $13m and retire the 30 year old vessel at $3m. So they use $10M to extend the ship life for another 25 years. They can use these vessels to generate pretty good cash if they can lease out at $7000 for a long term or charter out to NM at a very low rate to save NM. Either one is good for Navios Group.
The iron ore inventory at Chinese major ports was 92.85m ton on Feb 4, down around 2.45m ton compared with 2 weeks ago. The price for Brazil iron ore is more than $46 per ton, up from $41 couple weeks ago. It is better than the expectation as some analysts think the inventory may break 100m ton before Chinese New Year.
No matter what you refinance, it is still your debt and it also adds extra refinance cost to the debt. So the debt become bigger and bigger. If there is no recovery in next 2 years, then the banks will force SB to fire sales all asset. They will not wait for 5 years as the vessel value goes down year by year. Bankers are not your friends. They will not take their own risk to save you.
Let's take a look at NM. NM's child companies NMM, NNA, and NSAL may generate more than $250M cash per year. NM will find a way on how to access these cash efficiently. That is part of the reason why they suspend NMM dividend. More important thing is these child companies are not banks. They provide cash with low cost and they will not force NM to fire sale its vessels if it is not getting better in 2 years.
You really hate NMM. Me too, but you exaggerated the problem. NMM may have $80m cash on hand by September. What HNN is asking now is 30% cut on the rate. If that is true, then they still have $50m cash flow which is even much better than DSX.
What is the impact to GSL? I bought common at $1.65 and preferred at $8.1. Already sold half of preferred and should i sell all of them? Thought to switch to more GSL from NMM 2 days before earning, but did not do it. Too greedy as i tried to switch after the dividend announcement to get more profit. Never thought it got completely cut.
SB and NM are totally in different situation. Besides dry shipping, SB does not have any other income. The good thing for SB is the low debt and low interest payment, so they can work with banks for the debt. For NM, due to big debt balance and higher interest payment on bonds, it is very difficult for them to work with banks for the debt. However NM has 3 child companies with huge positive cash flow.NNA, NNM, and NSAL may generate $270m cash per year. So she needs to allocate some of these cash to save NM instead of counting on banks. As a NMM share holder, I am definitely unhappy on the CUT, but it may be the best way to save NM.
That is the key point. Saving NM could be the best interest to AF. She could make $300M if NM survive and back to double digit.
NNA could be another NMM. There is no place to hide, maybe NM itself is a best place to hide. NM will survive as long as AF wants to save it at any cost.
This question was asked in the CC, but AF did not want to answer. So in your point, the note holders allow NMM to buy vessels from any ship owners but NM? That is strange.
The $60m is the saving from the dividend excluding $15m to NM. It is net saving from other unit holders. Since they have very low cash balance now, so they may not be able to buy any vessels for next couple quarters.
What you file a class action for? It is nothing wrong for NMM to charter out vessels at $3000 to NM at the current environment. GE from DRYS has done this type of thing so many times and is there anyone that won the lawsuit?
Keep all cash within the Navios group. Spending $75m to give NM $15m is too expensive in the current shipping environment. They may do better job to NM with that extra $60m a year.
Couple questions here. The cut of the dividend will not impact NM's earning, instead it may be able to give NM more help with those cash in hand. NM can only get 20% of NMM cash through the dividend, but it may get much more percentage through other ways, such as cut the charter out rate to NM deeply or buy vessels from NM. Giving $15m to NM by spending $75M definitely is not good way to save NM in the current environment. The lower charter rate may also not be bad to NM if those vessels go to NM.
Regarding less cash flow, NM can double the dividend from NNA if they want. it only costs $30M for NNA to give NM $15m, so the cost is much less. NM may not want to do that either as they want to keep all the cash within Navios group in the current environment.
Distributing cash to NM through dividend is a way to save NM, but it cost too much. For$1 distribution, NM can only get twenty cents. It is way expensive in the current environment. Instead, NMM can help NM by lowing down the chart in price. If NMM cut the rate from $12000 to $3000, then for 12 vessels the annual saving would be $38m. So it cost NMM $38m to let NM save $38m. It is much better than 20% dividend. Of course, that assume the high rate chart in vessels in NM come from NMM.