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Navios Maritime Midstream Partners: Company overview, fleet

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Company overview

Navios Maritime Midstream Partners L.P. (NAP) is a Marshall Islands limited partnership recently formed by Navios Maritime Acquisition (NNA). NAP owns, operates, and acquires crude oil tankers, refined petroleum product tankers, chemical tankers, and liquefied petroleum gas tankers under long-term employment contracts.

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Initial fleet

The company’s initial fleet consists of four VLCCs, which have an average remaining employment term of approximately 7.7 years. Two of the fleets were built in 2001 and remaining two were built after 2010. These fleets are chartered to two strong counterparties: a Chinese state-owned enterprise Cosco Dalian, which is wholly owned by the COSCO Group, and Formosa Petrochemical, a Taiwan Stock exchange-listed company.

For the nine-month period ended September 30, 2014, these two customers accounted for 77.9% and 22.1%, respectively, of NAP revenue.

Option vessels

Following the share purchase agreement with Navios Maritime Acquisition, Navios Maritime Midstream will have the option to purchase seven additional VLCCs from Navios Acquisition. The company expects to finance the acquisition through its cash from operations, bank borrowings, and the issuance of debt and equity securities.

NAP is allowed to make these purchases for two years following the closing of the initial public offering (or IPO) subject to conditions that include ascertaining the vessel’s fair market value and availability of financing from external sources.

Peers

Since its listing on the exchange on November 14, 2014, until January 16, 2015, Navios Maritime Midstream Partners recorded a 4.2% increase in its share price. During the same period, peers like Teekay Tankers (TNK), Frontline Ltd. (FRO), Nordic American Tankers (NAT), and Capital Product Partners (CPLP) recorded a 41.3%, 155.7%, 38%, and 3.9% decline in the same period, respectively. The Guggenheim Shipping ETF (SEA) recorded a 5.1% dip in same period.

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