Navios plans to buy back $131.3 million of 2% convertible preferreds

Company pays 37.5 for preferreds, will skip fourth-quarter dividend

By Devika Patel

Knoxville, Tenn., Dec. 22 - Navios Maritime Holdings Inc. said it will buy back $131.3 million of its 2% mandatorily convertible preferred stock. The convertibles were issued in connection with the acquisition of Capesize vessels.

The Piraeus, Greece-based seaborne shipping and logistics company will pay $49.2 million in cash for $131.3 million of the convertibles, or 37.5. No dividends will be paid for the fourth quarter, and the purchase is expected to settle this year.

The holder of the convertibles was entitled to receive an annual dividend of $2.6 million, payable quarterly, until conversion. Upon maturity of the convertibles, in general, the holder would have received up to 13,132,000 common shares.

"We are pleased with this transaction, as it shows our continued ability to transact with our commercial partners in a manner accretive to our stakeholders," chairman and chief executive officer Angeliki Frangou said in a news release. "We were able to provide the seller needed liquidity by purchasing our equity at an effective price of $3.75 per share, which is about 27% below the current market price.

"Through this transaction, we have reduced the number of shares outstanding as well as the $2.6 million annual dividend obligation on the preferred stock. We continue to have ample liquidity to progress our business plans."

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