Why NNA’s cash flow bridged after the NAP transaction



Cash and cash equivalents

As of September 30, 2014, cash and cash equivalents, including Navios Maritime Acquisition’s (NNA) restricted cash, totaled $72.3 million—compared to $107.8 million recorded as of December 31, 2013. After the Navios Maritime Midstream Partners (NAP) transaction, NNA’s cash flow balance got stronger.

Free cash flow bridge

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NNA’s cash flow bridged

After the NAP transaction, NNA’s cash flow will be higher by $1 million in 4Q14. This will help bridge any of the company’s funding or cash cushion gaps. Before the acquisition, NNA had four Very Large Crude Carriers (or VLCCs) generating $47.5 million in free cash flow. This is expected to increase to $48.5 million after the NAP transaction.

Common stock dividend

For 3Q14, NNA’s board of directors declared a quarterly cash dividend of $0.05 per share of common stock. It’s payable on January 6, 2015, to stockholders on record as of December 17, 2014.

Other shipping companies like Teekay Tankers Ltd. (TNK), Tsakos Energy Navigation Ltd. (TNP), Scorpio Tankers Inc. (STNG), and Capital Product Partners (CPLP) record dividend yields of 2.7%, 2.83%, 5.9%, and 11.7%—compared to 7.14% recorded by NNA. The Guggenheim Shipping ETF (SEA) recorded a dividend yield of 3.05%.

Additional dividend

Also, NNA expects an $18.1 million dividend, or $1.65 per unit, from NAP over a nine-year period. NNA expects to add $19.1 million in capital from NAP—given the debt retirement. After repaying $132.3 million in bank debt and $75.5 million for the acquisition of the new VLCCs, NNA will add ~$7 million in cash to its balance sheet. It will add the cash by selling VLCCs after the initial public offering (or IPO).


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