Navios Maritime Partners Inc. (NASDAQ: NMM) stock declined by 1.95% at the last close while the NMM stock price declines by 4.56% in the after-hours trading session. Navios Maritime Partners is a master limited partnership that owns and manages dry cargo boats and is publicly listed.
NMM stock’ Current Development
Navios Maritime Partners and Navios Maritime Acquisition Corp. confirmed recently that they have reached an agreement to merge Navios Partners and Navios Acquisition in a contract in which Navios Acquisition shareholders will gain 0.1275 of a Navios Partners common unit for each outstanding Navios Acquisition common share. The revenues of a cash contribution from Navios Partners and recently organized secured term loan financings will be used to repay all of Navios Acquisition’s outstanding 8.125 percent First Priority Ship Mortgage Notes, which are due on November 15, 2021.
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Advantages of Merger
The transaction is projected to:
- Build the largest publicly traded shipping firm in the United States, with over 140 vessels aggregating about 15 million deadweight tons operating in three divisions via 15 distinct vessel types and serving more than ten end markets.
- Scale operations with transactions of various sizes, with roughly a third of the company’s boats working in each of the three sectors.
- As operational segments are driven by distinct factors, achieve diversity to reduce idiosyncratic segment volatility.
- Enhance strategy to enable management to capitalize on possibilities within each sector, for as by adjusting charter terms based on segment potential.
- Obtain yearly cost reductions.
- Sustain considerable financial flexibility by combining a moderate leverage ratio of around 35 percent (based on the average of publicly accessible broker reports as of August 20, 2021) with a strong collateral value basis for refinancing debt maturities.
- To promote growth and sustained deleveraging, improve credit profile by boosting cash retention.
- To provide an appealing fundamental investment opportunity to investors seeking exposure to the global economy, increase stock market capitalization, and share trading depth.
- Preserve and eventually increase returns to the merged company’s unit holders.
The Transaction was unanimously approved by both the special committee of the Board of Directors of Navios Acquisition, consisting of independent directors, and Navios Acquisition’s full board of directors. The Transaction was also unanimously approved by the Conflicts Committee of Navios Partners as well as its full board of directors.