Navios Maritime Holdings Inc. (NM)

Status NM shares as of July 31th according to the SEC filing:

22,824,328 shares issued (excluding the treasure shares).
17,557,613 shares which are issueable upon conversion of the debenture
This corresponds to convertible debentures with a nominal value of US $68,474,690 given the conversion price of 3.9

Question 1: why $68 million?
Quarterly interest of NM loan was approximately 262*0.045+25*0.01=ca. US$ 12 Mio
Upfront fee was US$25 Mio
January: 6,456,871 issueable shares ~ US$ 25 Mio
April: 9,483,147 issueable shares ~ US$ 25+12 Mio=US$ 37 Mio
July: 12,573,229 issueable shares ~ US$ 25+24 Mio=US$ 49 Mio
August: 17,557,613 issueable shares ~ US$ 68 Mio
Up to July everything adds up, but I would have expected US$49+4=53 Mio in August, where do the additional US$ 15 Mio come from? Some kind of break-up or prepayment fee?

Question 2: Did she convert or not?
The SEC filing does not seem to indicate that she actually converted the debentures, the Tradewinds heading “after converting debt to shares” seems to suggest she actually converted them. Which is it?

Frangou becomes Navios Holdings’ majority owner after converting debt to shares
Chief executive Angeliki Frangou boosts her stake in company that sold 36 bulkers to Navios Maritime Partners

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5 August 2022 16:28 GMT UPDATED 5 August 2022 16:28 GMT
By Michael Juliano in Stamford
Chief executive Angeliki Frangou has positioned herself as the majority owner of Navios Maritime Holdings after she converted more debentures she had held since a January refinancing package.

Frangou owns the shares through Raymar Investments, Amadeus Maritime and her ship management company Navios Shipmanagement (NSM).

According to the SEC filing, Frangou picked up 5.33m more shares of Navios Holdings through the convertible debenture and put them under NSM.

As a result, she has 1.27m remaining shares under a convertible debenture of $24m with a strike price of $3.90 per share that she can convert into common stock for further ownership in Navios Holdings.

Frangou last increased her stake in Navios Holdings in early July to 46% when she acquired 2.09m more Navios Holdings shares through the convertible debenture and folded them into NSM.

NSM now holds 17.6m shares, or 43.5%, of Navios Holdings. Amadeus Maritime owns 1.27m shares representing 5.6% of Navios Holdings, while Raymar Investments holds 1.37m units, or 6%, of the company.

Frangou previously increased her position in Navios Holdings in January to 10.2m shares, or 34.8%, from 4.2m shares, or 17%, through the convertible debenture. She then upped it to 40.8% by buying another 3m shares, also in early July.

Navios Holdings, which will no longer directly own vessels after selling its bulker fleet and is focused on growing Frangou’s Navios South America Logistics business, closed a $550m refinancing in January, allowing it to pay off $614m in bonds that had been set to mature in January.

As the company previously announced in December, the refinancing was possible because of nearly $263m in payment-in-kind loans from an outfit affiliated with Frangou, the company’s largest shareholder.

Navios Holdings will make $10m quarterly payments to the Frangou affiliate starting in the third quarter of 2023 and pay an upfront fee in the form of $24m in debentures.

In late July, Navios Holdings sold its 36 bulkers to spin-off Navios Maritime Partners for $835m, after the daughter company had previously taken over Navios Maritime Acquisition for $827m in January.

These moves created a Navios Partners fleet of 188 ships and 22 newbuildings and was the latest step in untangling a complex web of Navios Group companies.

The company said it will focus on growing Navios South American Logistics, a Montevideo-based tug and barge operator, shipowner and terminal player in which it has a 63.8% stake.
“Navios is one of the largest logistics and infrastructure providers in the Hidrovia region of South America,” Frangou said during a conference call, referring to the navigable river system that connects inland regions of Argentina, Bolivia, Brazil, Paraguay and Uruguay to the Atlantic.
“It is situated in a region with great opportunity.”
Frangou said the company’s anchor is a long-term take-or-pay contract with Brazilian mining giant Vale to transship iron ore at Navios Logistics’ port complex in Nueva Palmira, Uruguay.
Still, despite the importance of that contract, its share of Navios Logistics revenues had declined in recent years, from 36.4% in 2019 to 23.4% in 2021.
Once overshadowed by its core bulker business, the Nueva Palmira dry bulk terminal complex is now a key jewel in the company’s crown.
Biggest player
It is the largest independent bulk transfer and storage terminal in Uruguay. Located at the confluence of the Parana and Uruguay rivers, it is protected from the water level issues that affect other Hidrovia ports during droughts.
Navios Logistics’ liquid bulk terminal near the capital, Asuncion, is the largest independent petroleum products storage terminal in Paraguay.
The company’s shipping operation involves a fleet of 30 pushboats and 329 dry, tank and LPG barges, and it owns eight product tankers operating in South American cabotage markets.
“Prospects for Navios Logistics have always been good and are improving,” said Ted Petrone, vice chairman of Navios Holdings’ Navios Corp. “The global focus on food security because of geopolitical tensions is expected to benefit the exports of agricultural commodities from South America.”
Uruguay exports grow
The company has enjoyed a strong start to the year in the grain export business, with exports from Nueva Palmira rising 49% in the first half of the year compared with the same period of 2021, he said.
And the executive, who is also president of Navios Logistics, said the harvest for the 2022-2023 grain season is expected to be even stronger.
Vessel type Number of vessels
Pushboats 30
Dry barges 268
Tank barges 58
LPG barges 3
Product tankers 8
In iron ore, Petrone pointed to growing interest in the mining assets in Brazil’s Corumba region, whose exports will travel along the Hiddrovia.
He also said Vale’s $1.2bn sale in April of its underutilised iron ore and manganese mines in Brazil’s midwest to J&F Investimentos should lead to production increases.
“The increase in iron ore export volumes benefits barge business and our port terminal,” Petrone said.
The port has capacity to grow volumes, he added, and Navios Logistics has land for new business.
Executives said Navios Logistics was always a core asset for Navios Holdings, and its results are consolidated into those of the parent company.
After the fleet sale, Navios Holdings will have one other key asset: a 10.3% stake in Navios Partners, which will have a fleet of 188 bulkers, container ships and tankers with its parent’s three dozen ships when the deal closes.
“We are comfortable with this position, and we believe there’s significant appreciation potential for our stake, as the net asset value of the company is almost five times the one assigned by the market today,” Petrone said.
from tradewinds

To back up the $6/share valuation by @TRM 2020 here are my calculations: Based on today's NMM price, their market cap is roughly $891M (based on 30.2M shares). 10.03% of that is $91.7. Divided by number of NM shares (estimating 35.5M) gives $2.58 per NM share just for the NMM stake. The 80M proceeds from the sale add another $2.25 per share. Now we're at $4.83. Not sure what additional cash they have, but lets say TRM is right and they have another $30M on-hand. That's another $.84 for a total of $5.68 per share. Can we safely round to $6? Maybe. It depends on how to value the rest of their assets. Sounds like NSAL has debt but plenty of earnings to service it, and it has it's own assets. Anyone have some numbers for NAV of NSAL? Also, are there any other NM debts that need to be taken into account? Seems like there aren't many variables left in this valuation equation.

@EA-I would like your thoughts on my thesis as to what NM/AF will do in the next 12 months now that the ships have been sold-didn't see that coming-and all NM related debt is gone. By consensus, NM, post sale, now has a cash position of ~$51M gain from the sale, plus ~$24M from the ship earnings for July/August that are being sold, plus cash remaining after 2Q22 of ~$10M, total cash of ~$85M. Add in the 10.3% in NMM at $90M and their 63.8% interest in NSAL at $96M based on BV, and NM appears to have ~$186M in assets with NO DEBT. We both know that she has a plan for this excess liquidity. NM can't due share buybacks or issue new shares because of the default on the Prfrd. G&H shares, and it will take ~$31M to bring the default current. NM isn't going to buy ships, she just sold hers and is on the wrong side of the S&P market. That leaves doing something big with NSAL, and I think that NM can clear the Prfrd's and offer up to $12/sh for the 7.3M shares that they don't own. Then decisions can be made that the other owners can't block. Your thought are appreciated. For the record, I am and have been long in both NM & NMM for 5 years, currently my NM shares are roughly 4X my NMM shares,asI was expecting NMM to do a stock merger takeover, didn't happen. So, now I am working numbers on where NM's SP could go to IF NM has 100% ownership of NSAL, and has big plans for improvements, AND NMM increases the dividend to $8-10/sh by 12/31/2023.

Seems like the sale was of the ships to NMM was a major negative for NM. They will be able to retire 500 million in debt (maybe), which will leave them with 1.1 million in total debt. But they will be losing over 50 percent of their revenue due to the sale of the ships. Seems like a sinking ship now to me.

AF got away with robbing the company without having to buy them out, leaving them as a holding company with a large debt issue with significantly reduced revenue.

Just my initial reaction. Maybe not the case, but would be interested in other investors' analysis.

Per SEC filing tonight - AF now a 46% owner of NM:

Ms. Frangou beneficially owns and has the sole voting power and/or dispositive power over an aggregate of 16,278,565 shares of Common Stock, such shares representing approximately 46.0% of the issued and outstanding shares of Common Stock of the Issuer based on 22,824,328 shares of Common Stock issued and outstanding as of June 30, 2022 (excluding 2,414,263 shares of Common Stock held as of June 30, 2022 by Navios Corporation, a wholly owned subsidiary of the Issuer, that are considered treasury shares), based on information provided by the Issuer, plus the 12,573,229 shares of Common Stock in the aggregate underlying vested options and the Convertible Debenture described herein which shares of Common Stock are (although not yet issued) deemed outstanding and included pursuant to Rule 13d-3(d)(1)(i) under the Act

SEC

NM call regarding sale of dry bulk fleet to NMM:

1. Breakdown on where the payment will be used - $263 million toward NMCI loans
2. 18 vessels to be sold immediately, the remaining 21 in Q3 2022
3. NMM 10% stake has current market value of $75 million and average of 3 analysts base NMM net asset value at $360 million
4. Estimated $100 million net book gain for NM in Q3 2022

No questions - they deferred to upcoming NM earnings call…