Navios Maritime Holdings Inc.Announces $ 550 Million Debt Financing


GRAND CAYMAN, Cayman Islands, December 14, 2021 (GLOBE NEWSWIRE) – Navios Maritime Holdings Inc. (“Navios Holdings”) (NYSE: NM), a global shipping and logistics company, today announced that it has entered into agreements providing Navios Holdings with a total of $ 550 million in debt financing.

The proceeds of this financing together with available cash will be used to repay at maturity all outstanding Navios Holdings 7.375% First Priority Ship Mortgage Notes (“Ship Mortgage Notes”) due on January 15, 2022 and repay $ 50.0 million of outstanding Navios Holdings. 11.25% Senior Secured Notes (the “Senior Secured Notes”) due August 15, 2022 (after which $ 105.0 million will remain outstanding).

The details are as follows:

1) $ 287.0 million – Commercial banking facilities and sale and leaseback agreements
Navios Holdings has entered into two commercial banking facilities and four sale and leaseback agreements for a total principal amount of $ 287.0 million. These facilities and agreements are expected to be closed by the first half of January 2022, substantially at the same time as the repayment of the Ship Mortgage Notes. They reflect the following terms:

  • Credit Facility 1: (i) two-year term, (ii) 5.8-year amortization profile and (iii) annual LIBOR interest plus a margin between 3.25% and 4.5% under certain conditions .

  • Credit Facility 2: (i) three-year term, (ii) 4.9 year amortization profile and (iii) annual LIBOR interest plus a margin between 2.85% and 3.75% under certain conditions .

  • Sale-leaseback contracts: (i) average term of seven years, (ii) amortization profile of 9.4 years, and (iii) effective interest rate of approximately 5.3%.

The credit facilities and sale-leaseback agreements will be secured by 18 dry bulk carriers (17 of which are now collateral for ship mortgage notes) plus an additional collateral for seven dry bulk carriers who are subject to bareboat charters and sale-leaseback agreements.

2) $ 262.6 million – PIK loan facilities
Navios Holdings has entered into two PIK loan facilities with an entity affiliated with its President and CEO (“Lender”). These facilities provide loans to Navios Holdings in the aggregate principal amount of $ 262.6 million (the “Loans”).

These loans provide for-

  • advances of $ 150.0 million in additional cash

  • the release by the lender of approximately $ 300.0 million of collateral (including approximately $ 158.9 million in ship mortgage notes), allowing Navios Holdings to provide additional collateral as security for the trade credit facilities and sale-leaseback agreements

  • an initial period of 18 months during which there will be no interest or cash amortization; interest payments during this initial period will be made in the form of a junior debt instrument (“unsecured convertible debentures”) as described below.

Equipment loan features
The material conditions of the Loans are as follows:

  • Annual interest rate:

    • PIK – in the form of unsecured convertible debentures – 18% until full redemption of the senior secured notes; 16.5% thereafter

    • Or in cash – 13.5% after the initial period of 18 months;

  • Amortization: $ 10.0 million per quarter, beginning in the third quarter of 2023;

  • Duration: four years; 18 months without appeal;

  • Fees: $ 24.0 million in advance to the lender (“fees”) paid in the form of unsecured convertible debentures;

  • Collateral:

Insecure Convertible debentures:
Fees and all PIK interest on the loans will be paid in the form of unsecured convertible debentures. The unsecured convertible debentures (1) have a term of five years, (2) bear PIK interest, at an annual rate of 4% and (3) are convertible, in whole or in part, at any time at the option of the lender in common shares of the Company according to the conversion price formula set on December 13, 2021. The holder of the convertible unsecured debentures will be entitled to vote on an “as converted” basis with the holders of common shares of the Company.

Further information
Reports on Form 6-K will be filed with the Securities and Exchange Commission, providing further details of the transactions.

Special committee
The board of directors of Navios Holdings has formed a special committee of independent and disinterested directors to assess and negotiate with the lender the terms of the loans with the assistance of its independent financial and legal advisers. The Lender’s Loans were unanimously approved by the Special Committee.

Advisers
Latham & Watkins LLP acted as legal advisor and Pareto Securities AS acted as financial advisor to the special committee of Navios Holdings. Thompson Hine LLP acted as legal counsel to Navios Holdings. Fried, Frank, Harris, Shriver & Jacobson LLP and Ince Group Plc acted as legal advisers and S. Goldman Advisors LLC acted as financial advisor to the lender.

About Navios Holdings
Navios Maritime Holdings Inc. (NYSE: NM) is a global shipping and logistics company focused on the transportation and transshipment of dry bulk commodities including iron ore, coal and grains. For more information on Navios Holdings, please visit our website: www.navios.com.

Forward-looking statements – Safe Harbor
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) regarding future events, including including our ability to refinance our substantially all term debt maturities. Words such as “may”, “expects”, “intends to”, “plans”, “believes”, “foresees”, “hopes”, “estimates” and variations of such words and similar expressions are intended to identify statements. These forward-looking statements are based on the information available and the expectations and assumptions believed to be reasonable by Navios Holdings at the time these statements were made. Although Navios Holdings believes that the expectations reflected in these forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct. These statements involve known and unknown risks and are based on a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Holdings. Actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, risks related to the following: global and regional economic and political conditions, including the impact of the COVID-19 pandemic and efforts deployed worldwide to contain its spread, including effects on economic activity; the demand for sea transport of the products we ship; the ability and willingness of charterers to fulfill their obligations to us; charter rates in effect; shipyards carrying out washing installations, dry-docking and repairs; change of vessel crews and availability of funding; potential disruption of shipping routes due to accidents, disease, pandemics, political events, piracy or terrorist acts, including the impact of the COVID-19 pandemic and ongoing efforts around the world to contain it; uncertainty related to world trade, including the prices of commodities transported by sea and persistent problems relating to the volume and tonne-miles transported by sea; our continued ability to enter into long-term time charters; our ability to maximize the use of our vessels; the expected demand in the dry goods transport sector in general and the demand for our Panamax, Capesize, Ultra Handymax and Handysize vessels in particular; the aging of our fleet and the resulting increase in operating costs; the loss of any customer, charter or vessel; the financial situation of our clients; changes in the availability and costs of funding due to banking market conditions, capital markets and other factors; increases in costs and expenses, including, but not limited to: crew wages, insurance, provisions, port expenses, lubricating oil, bunkers, repairs, maintenance and general and administrative expenses; expected cost and our ability to comply with government regulations and standards of self-regulatory maritime organizations, as well as standard regulations imposed by our charterers applicable to our business, general national and international political conditions; competitive factors in the market in which Navios Holdings operates; the value of our publicly traded subsidiaries; risks associated with operations outside the United States; and other factors listed from time to time in documents filed by Navios Holdings with the Securities and Exchange Commission, including its Forms 20-F and 6-K. Navios Holdings expressly disclaims any obligation or commitment to publicly release any update or revision to any forward-looking statement contained herein to reflect any change in Navios Holdings’ expectations in this regard or any change in events, conditions or circumstances on which a statement is based on. Navios Holdings makes no predictions or representations about the performance of its common stock or debt securities.

Contact:

Navios Maritime Holdings Inc.
+1.345.232.3067
+1.212.906.8643
[email protected]


Carol M. Barragan