2007

“SPAC” to the Well

Using its recent shelf registration, Navios Maritime, after a number of forays into the debt market, has decided to return to the equity markets with a follow-on offering of 11.5 million common shares. J.P. Morgan and Merrill Lynch will act as joint book running managers. As of today, the deal had not yet been priced. We would anticipate some minor discount to today’s closing price.

As was the case in the original SPAC, the company is rather close-mouthed about the use of proceeds stating only that the funds will be used to fund growth or for general corporate purposes. Intuitively, we would expect a portion to be used as the equity piece for the exercise of purchase options. But this leaves a whole lot more for the next Kleimar as Ms. Frangou continues her role as an industry consolidator. Although this is a company that after all likes and utilizes debt, the timing of re-entering the equity market is excellent given the continued strong performance of the dry bulk markets, the expectations that it will continue and the warm reception for these stocks on the street.

This is only an excerpt of Equity – 05/17/2007

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