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Must-know overview: Investing in Navios Maritime Acquisition Corp.

Part 3
Must-know overview: Investing in Navios Maritime Acquisition Corp. (Part 3 of 6)

Navios Acquisition’s strong management team and access to capital

Support during market lows

Navios Maritime Acquisition Corp. (NNA) subcontracts its fleet technical and commercial management to Navios Tankers Management Inc., a wholly owned subsidiary of Navios Holdings, and to other third-party managers on an interim basis. The services include crewing, maintenance, and repair. NNA thus enjoys economies of scale and lower operating expenses. Headed by the expertise of Angeliki Frangou and industry experience of more than 20 years of all board members, the company has one of the best-managed operations in the industry.

When charter markets and vessel prices are depressed and vessel financing is difficult to obtain, as is currently the case, NNA believes the relationships and experience of Navios Holdings and its management enhances its ability to acquire young, technically advanced vessels at cyclically low prices and employ them under attractive charters with leading charterers. Navios Holdings’ long involvement and reputation for reliability in the Asia Pacific region have also allowed it to develop privileged relationships with many of the largest institutions in Asia.

Vessels DeliveryEnlarge Graph

*Charter duration two years. The charterer has been granted an option for an additional year at a rate of $15,306 net per day, %.

Access to capital

Unlike its peers—Tsakos Energy Navigation Ltd (TNP), Danaos (DAC), and Frontline Ltd—NNA has raised significant capital through equity offerings and bonds.

Following its IPO of $253 million in July 2008, NNA has raised about $3.1 billion in debt and equity, commencing equity offerings and bonds issued. In every year since 2010 that NNA has raised capital through debt and equity, it has invested in purchasing vessels and expanding its operations.

Debt-EquityEnlarge Graph

With an equity offering of $57.6 million in February, a bond add-on of $60 million in March, and 8.125% mortgage notes due 2021, NNA had three VLCCs and one product tanker delivered in 2014. Meanwhile, two VLCCs and four product tankers have yet to be delivered in 2014 and two product tankers in 2015.

The Guggenheim Shipping ETF (SEA) is the composite of all shipping companies.

Let’s see how the company’s liquidity and cash flow support its growth in the next part of this series.

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