| | • | | Fractional interest in the Notes will not be issued for Series G ADSs or Series H ADSs. Instead, any holder who would otherwise receive a fractional interest in the Notes will have its distribution of Notes rounded down to the nearest $25.00 denomination and will receive a cash payment equal to the principal amount of the fractional interest. |
The exact details of the tender acceptance proration and the cash consideration proration are described in the prospectus dated December 21, 2018 (the “Prospectus”) which is included in the registration statement filed with the Securities Exchange Commission (“SEC”) on December 21, 2018.
Consent Solicitation
The Company is seeking consent to amend and restate the respective certificates of designation under which the Series G Preferred Shares and Series H Preferred Shares were issued to eliminate substantially all of the restrictive covenants and the Company’s obligation to pay or accrue any unpaid dividends from any past periods or future periods and to amend certain voting rights. The tender by a holder and acceptance for exchange by the Company of Series G ADSs or Series H ADSs pursuant to the Exchange Offer will constitute the granting of consent by such holder to the Proposed Amendments.
Consent of at least 66 2/3% of the outstanding preferred shares underlying each series must be received to amend each of the respective certificates of designation. In addition, the amended certificates of designation must be approved by the holders of the majority of the Common Stock in a future vote.
Purpose of Exchange Offer
Navios Holdings is not required to, and over the last 11 quarters has exercised its discretion not to, pay cash dividends to its holders of the Series G ADSs or Series H ADSs. The Exchange Offer offers holders of the Series G ADSs and Series H ADSs the opportunity to exchange the substantial majority of their Series G ADSs or Series H ADSs for (i) cash, which will provide immediate liquidity, and/or (ii) Notes, which will require the Company to pay, and which the Company will not have the discretion to avoid paying, interest (aside from in a bankruptcy).
This Exchange Offer may be appropriate for a holder seeking liquidity and/or greater certainty that it will receive current cash payments on its security and willing to forego the possibility that previously accrued dividends on the Series G ADSs and Series H ADSs may ever be paid or that the Company will elect to redeem the Preferred Shares at their full redemption amount .
Minimum Participation and Expiration
For the Series G ADSs, the Exchange Offer is conditioned on not less than 946,100 or 66 2/3%, of outstanding Series G ADSs being validly tendered and not properly withdrawn prior to the Expiration Date (“Series G Minimum Condition”).
For the Series H ADSs, the Exchange Offer is conditioned on not less than 1,907,600, or 66 2/3%, of the outstanding Series H ADSs being validly tendered and not properly withdrawn prior to Expiration Date. (“Series H Minimum Condition”).
If on the Expiration Date less than 66 2/3% of either of the outstanding Series G ADSs, the Series H ADSs or both, have been validly tendered and not properly withdrawn, the Company may waive the Series G Minimum Condition and/or the Series H Minimum Condition, as applicable, at its sole discretion, and accept for exchange all validly tendered and not properly withdrawn Series G ADSs and/or Series H ADSs. If the Series G Minimum Condition or Series H Minimum Condition is waived by the Company, the consent solicitation referred to above will not be consummated with respect to the series for which either such minimum condition was waived.
