Table of Contents
Republic of the Marshall Islands | 4412 | N/A | ||
(State or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer | ||
incorporation or organization) | Classification Code Number) | Identification No.) |
Piraeus, Greece 185 38
(011) +30 210 459 5000
(Address and telephone number of Registrant’s principal executive offices)
Trust Company Complex, Ajeltake Island
P.O. Box 1405
Majuro, Marshall Islands MH96960
(011) +30 210 429 3223
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Todd E. Mason, Esq.
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
The Chrysler Center
666 Third Avenue
New York, New York 10017
(212) 935-3000(telephone number)
(212) 983-3115(facsimile number)
Proposed Maximum | Proposed Maximum | |||||||||||||||||
Amount to be | Aggregate Offering | Aggregate | Amount of | |||||||||||||||
Title of Each Class of Securities to be Registered | Registered(1) | Price Per Unit(1) | Offering Price(1) | Registration Fee(2) | ||||||||||||||
Common units representing limited partnership interests | ||||||||||||||||||
Debt Securities | ||||||||||||||||||
Total | $500,000,000.00 | $ | 19,650.00 | |||||||||||||||
(1) | An indeterminate principal amount or number of our common units and debt securities may be issued in primary offerings from time to time at indeterminate prices, with an aggregate offering price not to exceed $500,000,000. | |
(2) | Estimated solely for purposes of determining the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. | |
Table of Contents
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Preliminary Prospectus dated January 28, 2009
![(LOGO)](https://capedge.com/proxy/F-3/0000950123-09-001452/y00992y0099200.gif)
Table of Contents
Page | ||||
1 | ||||
4 | ||||
4 | ||||
24 | ||||
31 | ||||
33 | ||||
35 | ||||
36 | ||||
36 | ||||
36 | ||||
36 | ||||
37 | ||||
38 | ||||
38 | ||||
39 | ||||
39 | ||||
39 | ||||
41 | ||||
41 | ||||
42 | ||||
43 | ||||
43 | ||||
44 | ||||
44 | ||||
45 | ||||
45 | ||||
46 | ||||
47 | ||||
49 | ||||
49 | ||||
50 | ||||
54 | ||||
54 | ||||
55 | ||||
55 | ||||
55 | ||||
56 | ||||
56 | ||||
57 | ||||
i
Table of Contents
Page | ||||||||
57 | ||||||||
F-1 | ||||||||
EX-23.1: CONSENTS OF PRICEWATERHOUSECOOPERS S.A. |
ii
Table of Contents
• | our Annual Report on Form 20-F for the fiscal year ended December 31, 2007 (the “Annual Report”); | ||
• | our Current Report on Form 6-K/A reporting results for the fiscal quarter ended September 30, 2008 filed on January 28, 2009; |
iii
Table of Contents
• | our Current Report on Form 6-K dated July 10, 2008, filed on July 10, 2008; | ||
• | our Current Report on Form 6-K dated July 1, 2008, filed on July 2, 2008; | ||
• | all subsequent reports on Form 20-F shall be deemed to be incorporated by reference into this prospectus and deemed to be a part hereof after the date of this prospectus but before the termination of the offering by this prospectus; and | ||
• | our reports on Form 6-K furnished to the SEC after the date of this prospectus only to the extent that the forms expressly state that we incorporate by reference in this prospectus. |
Piraeus, Greece 185 38
(011) +30 210 459 5000
iv
Table of Contents
1
Table of Contents
Charter | ||||||||||||||||||||
Rate per | ||||||||||||||||||||
Vessels | Type | Built | DWT | Expiration Date (1) | day (2) | |||||||||||||||
Navios Gemini S | Panamax | 1994 | 68,636 | February 2009 | $ | 19,523 | ||||||||||||||
February 2014 | $ | 24,225 | ||||||||||||||||||
Navios Libra II | Panamax | 1995 | 70,136 | December 2010 | $ | 23,513 | ||||||||||||||
Navios Felicity | Panamax | 1997 | 73,867 | April 2013 | $ | 26,169 | ||||||||||||||
Navios Galaxy I | Panamax | 2001 | 74,195 | February 2018 | $ | 21,937 | ||||||||||||||
Navios Alegria | Panamax | 2004 | 76,466 | December 2010 | $ | 23,750 | ||||||||||||||
Navios Fantastiks | Capesize | 2005 | 180,265 | March 2011 | $ | 32,279 | ||||||||||||||
March 2014 | $ | 36,290 | ||||||||||||||||||
Navios Aurora I (3) | Panamax | 2005 | 75,397 | February 2009 | 33,863 | |||||||||||||||
April 2009 | 3,000 | |||||||||||||||||||
April 2010 | 11,000 | |||||||||||||||||||
September 2013 | 17,000 |
Charter | ||||||||||||||||||||
Vessels | Type | Expected Delivery | DWT | Delivery date | Rate | |||||||||||||||
Navios TBN I (4) | Capesize | June 2009 | 180,000 | June 2014 | $ | 47,400 |
Charter | Purchase | |||||||||||||||||||||||
Vessels | Type | Built | DWT | Expiration Date | Rate | option | ||||||||||||||||||
Navios Prosperity | Panamax | 2007 | 82,535 | July 2012 | $ | 24,000 | Yes (5) | |||||||||||||||||
Navios Aldebaran | Panamax | 2008 | 76,500 | March 2013 | $ | 28,391 | Yes (6) |
2
Table of Contents
(1) | Represents the initial expiration date of the time charter and, if applicable, the new time charter expiration date for the vessels with new time charters. | |
(2) | Net time charter-out rate per day (net of commissions). Represents the charter-out rate during the time charter period, prior to the time charter expiration date and, if applicable, the charter-out rate under the new time charter. | |
(3) | In January 2009 Navios Partners and its counterparty to the Navios Aurora I charter party mutually agreed for a lump sum amount of approximately $30.5 million to be received in the first quarter of 2009. Under a new charter agreement, the balance of the aggregate value of the original contract will be allocated to the period until its original expiration. | |
(4) | We have agreed to purchase Navios TBN I, when it is delivered in June 2009, from Navios Holdings for $130.0 million, which we expect to fund through borrowings under our existing credit facility and the issuance of additional common units at such time. | |
(5) | Navios Prosperity is chartered-in until June 2014 and we have options to extend for two one-year periods. We have the option to purchase the vessel after July 2012 at a purchase price that is initially 3.8 billion Japanese Yen ($42.1 million based upon the exchange rate at December 31, 2008), declining pro rata by 145 million Japanese Yen ($1.60 million based upon the exchange rate at December 31, 2008) per calendar year. | |
(6) | Navios Aldebaran was delivered on March 17, 2008. Navios Aldebaran is chartered-in until March 2015 and we have options to extend for two one-year periods. We have the option to purchase the vessel after March 2013 at a purchase price that is initially 3.6 billion Japanese Yen ($40.0 million based upon the exchange rate at December 31, 2008) declining pro rata by 150 million Japanese Yen ($1.65 million based upon the exchange rate at December 31, 2008) per calendar year. |
3
Table of Contents
• | the rates we obtain from our charters and the market for long-term charters when we recharter our vessels; | ||
• | the level of our operating costs, such as the cost of crews and insurance, following the expiration of the fixed term of our management agreement pursuant to which we pay a fixed daily fee until November 2009; | ||
• | the number of unscheduled off-hire days for our fleet and the timing of, and number of days required for, scheduled inspection, maintenance or repairs of submerged parts, or drydocking, of our vessels; | ||
• | demand for drybulk commodities; | ||
• | supply of drybulk vessels; | ||
• | prevailing global and regional economic and political conditions; and | ||
• | the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business. |
4
Table of Contents
• | the level of capital expenditures we make, including those associated with maintaining vessels, building new vessels, acquiring existing vessels and complying with regulations; | ||
• | our debt service requirements and restrictions on distributions contained in our debt instruments; | ||
• | interest rate fluctuations; | ||
• | the cost of acquisitions, if any; | ||
• | fluctuations in our working capital needs; | ||
• | our ability to make working capital borrowings, including the payment of distributions to unitholders; and | ||
• | the amount of any cash reserves, including reserves for future maintenance and replacement capital expenditures, working capital and other matters, established by our board of directors in its discretion. |
5
Table of Contents
• | global and regional economic conditions; | ||
• | developments in international trade; | ||
• | changes in seaborne and other transportation patterns, such as port congestion and canal closures; | ||
• | weather and crop yields; | ||
• | armed conflicts and terrorist activities; | ||
• | political developments; and | ||
• | embargoes and strikes. |
6
Table of Contents
• | number of newbuilding deliveries; | ||
• | changes in environmental and other regulations that may limit the useful life of vessels; | ||
• | changes in global drybulk commodity supply; | ||
• | types and sizes of vessels; | ||
• | development of and increase in use of other modes of transportation; | ||
• | cost of vessel acquisitions; | ||
• | governmental or other regulations; | ||
• | prevailing level of charter rates, which are at historical highs; and | ||
• | general economic and market conditions affecting the shipping industry. |
7
Table of Contents
• | the cost of our labor and materials; | ||
• | the cost of suitable replacement vessels; | ||
• | customer/market requirements; | ||
• | increases in the size of our fleet; and | ||
• | governmental regulations and maritime self-regulatory organization standards relating to safety, security or the environment. |
8
Table of Contents
9
Table of Contents
• | our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms; | ||
• | we will need a substantial portion of our cash flow to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and distributions to unitholders; | ||
• | our debt level will make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy generally; and | ||
• | our debt level may limit our flexibility in responding to changing business and economic conditions. |
• | incur or guarantee indebtedness; | ||
• | charge, pledge or encumber the vessels; | ||
• | merge or consolidate; | ||
• | change the flag, class or commercial and technical management of our vessels; | ||
• | make cash distributions; | ||
• | make new investments (including the acquisition of TBN I); and |
10
Table of Contents
• | sell or change the beneficial ownership or control of our vessels. |
• | maintain minimum free consolidated liquidity (which may be in the form of undrawn commitments under the credit facility) of at least $13.0 million per year (increasing by $9.0 million per year on each of December 31, 2009, December 31, 2010, and December 31, 2011 until it reaches $40.0 million, at which level it is required to be maintained thereafter) of which certain amounts are required to be maintained in an account pledged to the bank.; | ||
• | maintain a ratio of EBITDA (as defined in our existing credit facility) to interest expense of at least 2.00 to 1.00; and | ||
• | maintain a ratio of total liabilities to total assets of less than 0.75 to 1.00. |
• | failure to pay any principal, interest, fees, expenses or other amounts when due; | ||
• | failure to observe any other agreement, security instrument, obligation or covenant beyond specified cure periods in certain cases; |
11
Table of Contents
• | default under other indebtedness; | ||
• | an event of insolvency or bankruptcy; | ||
• | material adverse change in the financial position or prospects of us or our general partner; | ||
• | failure of any representation or warranty to be materially correct; and | ||
• | failure of Navios Holdings or its affiliates to own at least 30% of us. |
• | renew existing charters upon their expiration; | ||
• | obtain new charters; | ||
• | successfully interact with shipyards during periods of shipyard construction constraints; | ||
• | obtain financing on commercially acceptable terms; or | ||
• | maintain satisfactory relationships with suppliers and other third parties. |
12
Table of Contents
• | locating and acquiring suitable vessels; | ||
• | identifying and consummating acquisitions or joint ventures; | ||
• | integrating any acquired business successfully with our existing operations; | ||
• | enhancing our customer base; | ||
• | managing our expansion; and | ||
• | obtaining required financing. |
13
Table of Contents
• | the operator’s environmental, health and safety record; | ||
• | compliance with International Maritime Organization, or IMO, standards and the heightened industry standards that have been set by some energy companies; | ||
• | shipping industry relationships, reputation for customer service, technical and operating expertise; | ||
• | shipping experience and quality of ship operations, including cost-effectiveness; | ||
• | quality, experience and technical capability of crews; | ||
• | the ability to finance vessels at competitive rates and overall financial stability; | ||
• | relationships with shipyards and the ability to obtain suitable berths; | ||
• | construction management experience, including the ability to procure on-time delivery of new vessels according to customer specifications; | ||
• | willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events; and | ||
• | competitiveness of the bid in terms of overall price. |
14
Table of Contents
• | fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements; | ||
• | be unable to hire, train or retain qualified shore and seafaring personnel to manage and operate our growing business and fleet; | ||
• | decrease our liquidity by using a significant portion of our available cash or borrowing capacity to finance acquisitions; | ||
• | significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions; | ||
• | incur or assume unanticipated liabilities, losses or costs associated with the business or vessels acquired; or | ||
• | incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges. |
15
Table of Contents
• | quality or engineering problems; | ||
• | changes in governmental regulations or maritime self-regulatory organization standards; | ||
• | work stoppages or other labor disturbances at the shipyard; | ||
• | bankruptcy or other financial crisis of the shipbuilder; | ||
• | a backlog of orders at the shipyard; | ||
• | political or economic disturbances; | ||
• | weather interference or catastrophic event, such as a major earthquake or fire; | ||
• | requests for changes to the original vessel specifications; | ||
• | shortages of or delays in the receipt of necessary construction materials, such as steel; | ||
• | inability to finance the construction or conversion of the vessels; or | ||
• | inability to obtain requisite permits or approvals. |
• | the customer fails to make charter payments because of its financial inability, disagreements |
16
Table of Contents
with us or otherwise; | |||
• | the customer exercises certain rights to terminate the charter; | ||
• | the customer terminates the charter because we fail to deliver the vessel within a fixed period of time, the vessel is lost or damaged beyond repair, there are serious deficiencies in the vessel or prolonged periods of off-hire, or we default under the charter; or | ||
• | a prolonged force majeure event affecting the customer, including damage to or destruction of relevant production facilities, war or political unrest prevents us from performing services for that customer. |
17
Table of Contents
18
Table of Contents
19
Table of Contents
• | on-board installation of automatic information systems, or AIS, to enhance vessel-to-vessel and vessel-to-shore communications; | ||
• | on-board installation of ship security alert systems; | ||
• | the development of vessel security plans; and | ||
• | compliance with flag state security certification requirements. |
20
Table of Contents
• | damage or destruction of vessel due to marine disaster such as a collision; | ||
• | the loss of a vessel due to piracy and terrorism; | ||
• | cargo and property losses or damage as a result of the foregoing or less drastic causes such as human error, mechanical failure and bad weather; | ||
• | environmental accidents as a result of the foregoing; and | ||
• | business interruptions and delivery delays caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions. |
21
Table of Contents
22
Table of Contents
23
Table of Contents
24
Table of Contents
• | neither our partnership agreement nor any other agreement requires our general partner or Navios Holdings or its affiliates to pursue a business strategy that favors us or utilizes our assets, and Navios Holdings’ officers and directors have a fiduciary duty to make decisions in the best interests of the stockholders of Navios Holdings, which may be contrary to our interests; | ||
• | our general partner and our board of directors are allowed to take into account the interests of |
25
Table of Contents
parties other than us, such as Navios Holdings, in resolving conflicts of interest, which has the effect of limiting their fiduciary duties to our unitholders; | |||
• | our general partner and our directors have limited their liabilities and reduced their fiduciary duties under the laws of the Marshall Islands, while also restricting the remedies available to our unitholders, and, as a result of purchasing common units, unitholders are treated as having agreed to the modified standard of fiduciary duties and to certain actions that may be taken by our general partner and our directors, all as set forth in the partnership agreement; | ||
• | our general partner may have substantial influence over our board of directors’ decision to cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a distribution on the subordinated units or to make incentive distributions or to accelerate the expiration of the subordination period; | ||
• | our general partner is entitled to reimbursement of all reasonable costs incurred by it and its affiliates for our benefit; | ||
• | our partnership agreement does not restrict us from paying our general partner or its affiliates for any services rendered to us on terms that are fair and reasonable or entering into additional contractual arrangements with any of these entities on our behalf; and | ||
• | our general partner may exercise its right to call and purchase our common units if it and its affiliates own more than 80% of our common units. |
26
Table of Contents
• | permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner. Where our partnership agreement permits, our general partner may consider only the interests and factors that it desires, and in such cases it has no fiduciary duty or obligation to give any consideration to any interest of, or factors affecting us, our affiliates or our unitholders. Decisions made by our general partner in its individual capacity will be made by its sole owner, Navios Holdings. Specifically, pursuant to our partnership agreement, our general partner will be considered to be acting in its individual capacity if it exercises its call right, pre-emptive rights or registration rights, consents or withholds consent to any merger or consolidation of the partnership, appoints any directors or votes for the election of any director, votes or refrains from voting on amendments to our partnership agreement that require a vote of the outstanding units, voluntarily withdraws from the partnership, transfers (to the extent permitted under our partnership agreement) or refrains from transferring its units, general partner interest or incentive distribution rights or votes upon the dissolution of the partnership; | ||
• | provides that our general partner and our directors are entitled to make other decisions in “good faith” if they reasonably believe that the decision is in our best interests; | ||
• | generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of our board of directors and not involving a vote of unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us and that, in determining whether a transaction or resolution is “fair and reasonable,” our board of directors may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to us; and | ||
• | provides that neither our general partner nor our officers or our directors will be liable for monetary damages to us, our limited partners or assignees for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or directors or our officers or directors or those other persons engaged in actual fraud or willful misconduct. |
27
Table of Contents
• | The unitholders will be unable initially to remove our general partner without its consent because our general partner and its affiliates own sufficient units upon completion of the IPO to be able to prevent its removal. The vote of the holders of at least 66 2/3% of all outstanding common and subordinated units voting together as a single class is required to remove the general partner. Navios Holdings currently owns 49.6% of the total number of outstanding common and subordinated units. | ||
• | If our general partner is removed without “cause” during the subordination period and units held by our general partner and Navios Holdings are not voted in favor of that removal, (i) all remaining subordinated units will automatically convert into common units, (ii) any existing arrearages on the common units will be extinguished and (iii) our general partner will have the right to convert its general partner interest and its incentive distribution rights into common units or to receive cash in exchange for those interests based on the fair market value of the interests at the time. A removal of our general partner under these circumstances would adversely affect the common units by prematurely eliminating their distribution and liquidation preference over the subordinated units, which would otherwise have continued until we had met certain distribution and performance tests. Any conversion of the general partner interest and incentive distribution rights would be dilutive to existing unitholders. Furthermore, any cash payment in lieu of such conversion could be prohibitively large. “Cause” is narrowly defined to mean that a court of competent jurisdiction has entered a final, non-appealable judgment finding our general partner liable for actual fraud or willful or wanton misconduct in its capacity as our general partner. Cause does not include most cases of charges of poor business decisions such as charges of poor management of our business by the directors appointed by our general partner, so the removal of our general partner because of the unitholders’ dissatisfaction with the general partner’s decisions in this regard would most likely result in the termination of the subordination period. | ||
• | Common unitholders elect only four of the seven members of our board of directors. Our general partner in its sole discretion has the right to appoint the remaining three directors. |
28
Table of Contents
• | Election of the four directors elected by unitholders is staggered, meaning that the members of only one of three classes of our elected directors are selected each year. In addition, the directors appointed by our general partner will serve for terms determined by our general partner. | ||
• | Our partnership agreement contains provisions limiting the ability of unitholders to call meetings of unitholders, to nominate directors and to acquire information about our operations as well as other provisions limiting the unitholders’ ability to influence the manner or direction of management. | ||
• | Unitholders’ voting rights are further restricted by the partnership agreement provision providing that if any person or group owns beneficially more than 4.9% of any class of units then outstanding, any such units owned by that person or group in excess of 4.9% may not be voted on any matter and will not be considered to be outstanding when sending notices of a meeting of unitholders, calculating required votes, except for purposes of nominating a person for election to our board, determining the presence of a quorum or for other similar purposes, unless required by law. The voting rights of any such unitholders in excess of 4.9% will be redistributed pro rata among the other common unitholders holding less than 4.9% of the voting power of all classes of units entitled to vote. Our general partner, its affiliates and persons who acquired common units with the prior approval of our board of directors will not be subject to this 4.9% limitation except with respect to voting their common units in the election of the elected directors. | ||
• | We have substantial latitude in issuing equity securities without unitholder approval. |
29
Table of Contents
30
Table of Contents
31
Table of Contents
32
Table of Contents
33
Table of Contents
• | forecasts of our ability to make cash distributions on the units; | ||
• | forecasts of our future financial condition or results of operations and our future revenues and expenses; | ||
• | our anticipated growth strategies; | ||
• | future charter hire rates and vessel values; | ||
• | the repayment of debt; | ||
• | our ability to access debt and equity markets; | ||
• | planned capital expenditures and availability of capital resources to fund capital expenditures; | ||
• | future supply of, and demand for, drybulk commodities; | ||
• | increases in interest rates; | ||
• | our ability to maintain long-term relationships with major commodity traders; | ||
• | our ability to leverage to our advantage Navios Holdings’ relationships and reputation in the shipping industry; | ||
• | our continued ability to enter into long-term, fixed-rate time charters; | ||
• | our ability to maximize the use of our vessels, including the re-deployment or disposition of vessels no longer under long-term time charter; | ||
• | timely purchases and deliveries of newbuilding vessels; | ||
• | future purchase prices of newbuildings and secondhand vessels; | ||
• | our ability to compete successfully for future chartering and newbuilding opportunities; | ||
• | the expected cost of, and our ability to comply with, governmental regulations, maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business; | ||
• | our anticipated incremental general and administrative expenses as a publicly traded limited partnership and our expenses under the management agreement and the administrative services agreement with Navios ShipManagement and for reimbursements for fees and costs of our general partner; | ||
• | the anticipated taxation of our partnership and distributions to our unitholders; | ||
• | estimated future maintenance and replacement capital expenditures; | ||
• | expected demand in the drybulk shipping sector in general and the demand for our Panamax and Capesize vessels in particular; |
34
Table of Contents
• | our ability to retain key executive officers; | ||
• | customers’ increasing emphasis on environmental and safety concerns; | ||
• | future sales of our common units in the public market; and | ||
• | our business strategy and other plans and objectives for future operations. |
• | a lack of sufficient cash to pay the minimum quarterly distribution on our common units; | ||
• | the cyclical nature of the international drybulk shipping industry; | ||
• | fluctuations in charter rates for drybulk carriers; | ||
• | the historically high numbers of newbuildings currently under construction in the drybulk industry; | ||
• | changes in the market values of our vessels and the vessels for which we have purchase options; | ||
• | an inability to expand relationships with existing customers and obtain new customers; | ||
• | the loss of any customer or charter or vessel; | ||
• | the aging of our fleet and resultant increases in operations costs; | ||
• | damage to our vessels; and | ||
• | general domestic and international political conditions, including wars and terrorism. |
35
Table of Contents
• | common units; and/or | ||
• | debt securities. |
36
Table of Contents
37
Table of Contents
• | the title; | ||
• | any limit on the amount that may be issued; | ||
• | whether or not we will issue the series of notes in global form, the terms and who the depository will be; | ||
• | the maturity date; | ||
• | the annual interest rate, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates; | ||
• | whether or not the notes will be secured or unsecured, and the terms of any secured debt; | ||
• | the terms of the subordination of any series of subordinated debt; | ||
• | the place where payments will be made; |
38
Table of Contents
• | our right, if any, to defer payment of interest and the maximum length of any such deferral period; | ||
• | the date, if any, after which, and the price at which, we may, at our option, redeem the series of notes pursuant to any optional redemption provisions; | ||
• | the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund provisions or otherwise, to redeem, or at the holder’s option to purchase, the series of notes; | ||
• | whether the indenture will restrict our ability to pay dividends, or will require us to maintain any asset ratios or reserves; | ||
• | whether we will be restricted from incurring any additional indebtedness; | ||
• | a discussion of any material or special United States federal income tax considerations applicable to the notes; | ||
• | the denominations in which we will issue the series of notes, if other than denominations of $1,000 and any integral multiple thereof; and | ||
• | any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities. |
39
Table of Contents
• | if we fail to pay interest when due and our failure continues for 90 days and the time for payment has not been extended or deferred; | ||
• | if we fail to pay the principal, or premium, if any, when due and the time for payment has not been extended or delayed; | ||
• | if we fail to observe or perform any other covenant contained in the notes or the indentures, other than a covenant specifically relating to another series of notes, and our failure continues for 90 days after we receive notice from the debenture trustee or holders of at least 25% in aggregate principal amount of the outstanding notes of the applicable series; and | ||
• | if specified events of bankruptcy, insolvency or reorganization occur as to us. |
• | the direction so given by the holder is not in conflict with any law or the applicable indenture; and | ||
• | subject to its duties under the Trust Indenture Act, the debenture trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding. |
• | the holder has given written notice to the debenture trustee of a continuing event of default |
40
Table of Contents
with respect to that series; | |||
• | the holders of at least 25% in aggregate principal amount of the outstanding notes of that series have made written request, and such holders have offered reasonable indemnity, to the debenture trustee to institute the proceeding as trustee; and | ||
• | the debenture trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding notes of that series other conflicting directions within 60 days after the notice, request and offer. |
• | to fix any ambiguity, defect or inconsistency in the indenture; and | ||
• | to change anything that does not materially adversely affect the interests of any holder of notes of any series. |
• | extending the fixed maturity of the series of notes; | ||
• | reducing the principal amount, reducing the rate of or extending the time of payment of interest, or any premium payable upon the redemption of any notes; or | ||
• | reducing the percentage of notes, the holders of which are required to consent to any amendment. |
41
Table of Contents
• | register the transfer or exchange of debt securities of the series; | ||
• | replace stolen, lost or mutilated debt securities of the series; | ||
• | maintain paying agencies; | ||
• | hold monies for payment in trust; | ||
• | compensate and indemnify the trustee; and | ||
• | appoint any successor trustee. |
42
Table of Contents
• | issue, register the transfer of, or exchange any notes of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any notes that may be selected for redemption and ending at the close of business on the day of the mailing; or | ||
• | register the transfer of or exchange any notes so selected for redemption, in whole or in part, except the unredeemed portion of any notes we are redeeming in part. |
43
Table of Contents
• | through dealers or agents to the public or to investors; | ||
• | to underwriters for resale to the public or to investors; | ||
• | directly to investors; or | ||
• | through a combination of such methods. |
• | the name or names of any agents, dealers or underwriters; | ||
• | the purchase price of the securities being offered and the proceeds we will receive from the sale; | ||
• | any over-allotment options under which underwriters may purchase additional securities from us; | ||
• | any agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation; | ||
• | any initial public offering price; | ||
• | any discounts or concessions allowed or reallowed or paid to dealers; and | ||
• | any securities exchanges on which the securities may be listed. |
44
Table of Contents
• | Our unitholders have no contractual or other legal right to receive distributions other than the obligation under our partnership agreement to distribute available cash on a quarterly basis, which is subject to the broad discretion of our board of directors to establish reserves and other limitations. |
45
Table of Contents
• | While our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including provisions requiring us to make cash distributions contained therein, may be amended. Although during the subordination period, with certain exceptions, our partnership agreement may not be amended without the approval of non-affiliated common unitholders, our partnership agreement can be amended with the approval of a majority of the outstanding common units after the subordination period has ended. | ||
• | Even if our cash distribution policy is not modified or revoked, the amount of distributions we pay under our cash distribution policy and the decision to make any distribution is determined by our board of directors, taking into consideration the terms of our partnership agreement. | ||
• | Under Section 51 of the Marshall Islands Limited Partnership Act, we may not make a distribution to you if the distribution would cause our liabilities to exceed the fair value of our assets. | ||
• | We may lack sufficient cash to pay distributions to our unitholders due to decreases in net revenues or increases in operating expenses, principal and interest payments on outstanding debt, tax expenses, working capital requirements, maintenance and replacement capital expenditures or anticipated cash needs. | ||
• | Our distribution policy will be affected by restrictions on distributions under our existing credit facility which contains material financial tests and covenants that must be satisfied and we will not pay any distributions that will cause us to violate our existing credit facility or other debt instruments. Should we be unable to satisfy these restrictions included in the existing credit facility or if we are otherwise in default under our existing credit facility, our ability to make cash distributions to you, notwithstanding our cash distribution policy, would be materially adversely affected. | ||
• | If we make distributions out of capital surplus, as opposed to operating surplus, such distributions will constitute a return of capital and will result in a reduction in the minimum quarterly distribution and the target distribution levels. We do not anticipate that we will make any distributions from capital surplus. |
46
Table of Contents
Marginal Percentage Interest | ||||||||||||
Total Quarterly | in Distributions | |||||||||||
Distribution | General | |||||||||||
Target Amount | Unitholders | Partner | ||||||||||
Minimum Quarterly Distribution | $ | 0.35 | 98.0 | % | 2.0 | % | ||||||
First Target Distribution | up to $0.4025 | 98.0 | % | 2.0 | % | |||||||
Second Target Distribution | above $0.4025 up to $0.4375 | 85.0 | % | 15.0 | % | |||||||
Third Target Distribution | above $0.4375 up to $0.525 | 75.0 | % | 25.0 | % | |||||||
Thereafter | above $0.525 | 50.0 | % | 50.0 | % |
Price Range | ||||||||
High | Low | |||||||
Year Ended: | ||||||||
December 31, 2008 | $ | 18.85 | $ | 3.36 | ||||
December 31, 2007* | $ | 19.45 | $ | 17.40 | ||||
Quarter Ended: | ||||||||
March 31, 2009 (through January 27, 2009) | $ | 8.49 | $ | 6.39 | ||||
December 31, 2008 | $ | 8.7 | $ | 3.10 | ||||
September 30, 2008 | $ | 14.61 | $ | 6.97 | ||||
June 30, 2008 | $ | 15.26 | $ | 13.81 | ||||
March 31, 2008 | $ | 18.85 | $ | 13.83 | ||||
December 31, 2007* | $ | 19.45 | $ | 17.40 | ||||
Month Ended: | ||||||||
January 31, 2009 (through January 27, 2009) | $ | 8.49 | $ | 6.39 | ||||
December 31, 2008 | $ | 7.14 | $ | 4.13 | ||||
November 30, 2008 | $ | 7.74 | $ | 3.36 |
47
Table of Contents
Price Range | ||||||||
High | Low | |||||||
October 31, 2008 | $ | 7.68 | $ | 4.72 | ||||
September 30, 2008 | $ | 12.23 | $ | 6.63 | ||||
August 31, 2008 | $ | 12.00 | $ | 11.17 |
* | Period commenced on November 16, 2007. |
Distributions for Quarter | Amount of Cash | |||
Ended | Distributions | Cash Distributions per Unit | ||
September 30, 2008 | $8.3 million | $0.385 per unit | ||
June 30, 2008 | $6.5 million | $0.35 per unit | ||
March 31, 2008 | $6.5 million** | $0.35 per unit | ||
December 31, 2007* | $3.2 million | $0.175 per unit |
* | Prorated for the period from November 16, 2007 to December 31, 2007. | |
** | Rounded up. |
48
Table of Contents
49
Table of Contents
• | is an individual U.S. citizen or resident (as determined for U.S. federal income tax purposes), | ||
• | a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) organized under the laws of the United States or any of its political subdivisions, | ||
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source, or | ||
• | a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect under current Treasury Regulations to be treated as a U.S. person. |
50
Table of Contents
51
Table of Contents
• | at least 75.0% of our gross income (including the gross income of our vessel-owning subsidiaries) for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business), or | ||
• | at least 50.0% of the average value of the assets held by us (including the assets of our vessel-owning subsidiaries) during such taxable year produce, or are held for the production of, passive income. |
52
Table of Contents
• | the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common units; |
53
Table of Contents
• | the amount allocated to the current taxable year and any year prior to the year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income; and | ||
• | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
• | fails to provide an accurate taxpayer identification number; |
54
Table of Contents
• | is notified by the IRS that he has failed to report all interest or corporate distributions required to be reported on his U.S. federal income tax returns; or | ||
• | in certain circumstances, fails to comply with applicable certification requirements. |
55
Table of Contents
56
Table of Contents
U.S. Securities and Exchange Commission registration fee | $ | 19,650 | ||
Financial Industry Regulatory Authority, Inc. filing fee | * | |||
New York Stock Exchange listing fee | * | |||
Legal fees and expenses | * | |||
Accounting fees and expenses | * | |||
Printing and engraving costs | * | |||
Transfer agent fees | * | |||
Miscellaneous | * | |||
Total | $ | 19,650 | ||
* | Amounts to be provided in a prospectus supplement or in a Current Report on Form 6-K subsequently incorporated by reference into this prospectus. |
57
Table of Contents
58
Table of Contents
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 |
F-1
Table of Contents
Athens, Greece
January 27, 2009
F-2
Table of Contents
December 31, | August 8, | |||||||||||
Note | 2007 | 2007 | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash | $ | 1 | $ | 1 | ||||||||
Investment in Navios Maritime Partners L.P. | 32 | 0 | ||||||||||
Total current assets | 33 | 1 | ||||||||||
Total assets | $ | 33 | 1 | |||||||||
Liabilities and Member’s Equity | ||||||||||||
Commitments and contingencies | — | — | ||||||||||
Member’s Equity | ||||||||||||
Member’s equity | $ | 1 | 1 | |||||||||
Retained earnings | 32 | — | ||||||||||
Total member’s equity | 33 | 1 | ||||||||||
Total liabilities and member’s equity | $ | 33 | 1 | |||||||||
F-3
Table of Contents
F-4
Table of Contents
September 30, | December 31, | |||||||||||
Note | 2008 | 2007 | ||||||||||
(Unaudited) | ||||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash | $ | 1 | $ | 1 | ||||||||
Investment in Navios Maritime Partners L.P. | 1,032 | 32 | ||||||||||
Total current assets | 1,033 | 33 | ||||||||||
Total assets | $ | 1,033 | 33 | |||||||||
Liabilities and Member’s Equity | ||||||||||||
Amounts due to related parties | 573 | — | ||||||||||
Total Liabilities | 573 | — | ||||||||||
Commitments and contingencies | — | — | ||||||||||
Member’s Equity | ||||||||||||
Member’s equity | $ | 1 | 1 | |||||||||
Retained earnings | 459 | 32 | ||||||||||
Total member’s equity | 460 | 33 | ||||||||||
Total liabilities and member’s equity | $ | 1,033 | 33 | |||||||||
F-5
Table of Contents
F-6
Table of Contents
Exhibit | ||
Number | Description | |
1.1* | Form of Underwriting Agreement | |
1.2** | Certificate of Limited Partnership of Navios Maritime Partners L.P. | |
1.3** | First Amended and Restated Agreement of Limited Partnership of Navios Maritime Partners L.P. | |
1.4** | Certificate of Formation of Navios GP L.L.C. | |
1.5** | Limited Liability Company Agreement of Navios GP L.L.C. | |
1.6** | Certificate of Formation of Navios Operating GP L.L.C. | |
1.7** | Amended and Restated Limited Liability Company Agreement of Navios GP L.L.C. | |
1.8** | Limited Liability Company Agreement of Navios Operating GP L.L.C. | |
4.1** | Omnibus Agreement | |
4.2** | Management Agreement with Navios ShipManagement | |
4.3** | Administrative Services Agreement with Navios Maritime Holdings Inc. | |
4.4** | Form of First Contribution and Conveyance Agreement | |
4.5** | Form of Second Contribution and Conveyance Agreement go under 4s or 10s | |
4.6** | Form of Share Purchase Agreement for Navios TBN I | |
4.7** | Form of Share Purchase Agreement for Navios TBN II | |
4.8*** | Revolving Credit and Term Loan Facility Agreement | |
4.9** | Common Unit Purchase Agreement between Navios Maritime Partners L.P. and Amadeus Maritime S.A. | |
5.1* | Opinion of Reeder and Simpson, P.C. as to the legality of the securities being registered | |
8.1* | Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. relating to tax matters | |
8.2* | Opinion of Reeder and Simpson, P.C. relating to tax matters | |
23.1 | Consents of PricewaterhouseCoopers S.A. | |
23.2* | Consent of Reeder and Simpson, P.C. (contained in Exhibit 5.1 and 8.2) | |
23.3* | Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (contained in Exhibit 8.1) | |
24.1 | Power of Attorney (included on signature page) | |
99.1**** | Share Purchase Agreement for Navios Aurora I |
II-1
Table of Contents
Exhibit | ||
Number | Description | |
99.2**** | Registration Rights Agreement |
* | To be filed by amendment or as an exhibit to a Current Report on Form 6-K of the registrant that is incorporated by reference into this registration statement. | |
** | Previously filed as an exhibit to the registrant’s registration statement on Form F-1 (File No. 333-146972) as filed with the Securities and Exchange Commission and incorporated by reference in our Annual Report. | |
*** | Previously filed as an exhibit to a Current Report on Form 6-K filed with the Securities and Exchange Commission on November 26, 2007 and incorporated by reference in our Annual Report. | |
**** | Previously filed as an exhibit to a Current Report on Form 6-K filed with the Securities and Exchange Commission on July 2, 2008 and hereby incorporated by reference. |
II-2
Table of Contents
II-3
Table of Contents
II-4
Table of Contents
NAVIOS MARITIME PARTNERS L.P., | ||||
By: | /s/ Angeliki Frangou | |||
Name: | Angeliki Frangou | |||
Title: | Chairman of the Board of Directors and Chief Executive Officer | |||
Signature | Title | Date | ||
/s/ Angeliki Frangou | Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer) | January 28, 2009 | ||
/s/ Michael McClure | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | January 28, 2009 | ||
/s/ George Achniotis | Director | January 28, 2009 |
II-5
Table of Contents
Signature | Title | Date | ||
/s/ Shunji Sasada | Director | January 28, 2009 | ||
/s/ Leonidas Korres | Director | January 28, 2009 | ||
/s/ Efstathios Loizos | Director | January 28, 2009 | ||
/s/ Robert Pierot | Director | January 28, 2009 | ||
/s/ John Karakadas | Director | January 28, 2009 |
II-6
Table of Contents
By: | /s/ Donald J. Puglisi | |||
Name: | Donald J. Puglisi | |||
Title: | Managing Director Authorized Representative in the United States |
II-7
Table of Contents
Exhibit | ||
Number | Description | |
1.1* | Form of Underwriting Agreement | |
1.2** | Certificate of Limited Partnership of Navios Maritime Partners L.P. | |
1.3** | First Amended and Restated Agreement of Limited Partnership of Navios Maritime Partners L.P. | |
1.4** | Certificate of Formation of Navios GP L.L.C. | |
1.5** | Limited Liability Company Agreement of Navios GP L.L.C. | |
1.6** | Certificate of Formation of Navios Operating GP L.L.C. | |
1.7** | Amended and Restated Limited Liability Company Agreement of Navios GP L.L.C. | |
1.8** | Limited Liability Company Agreement of Navios Operating GP L.L.C. | |
4.1** | Omnibus Agreement | |
4.2** | Management Agreement with Navios ShipManagement | |
4.3** | Administrative Services Agreement with Navios Maritime Holdings Inc. | |
4.4** | Form of First Contribution and Conveyance Agreement | |
4.5** | Form of Second Contribution and Conveyance Agreement go under 4s or 10s | |
4.6** | Form of Share Purchase Agreement for Navios TBN I | |
4.7** | Form of Share Purchase Agreement for Navios TBN II | |
4.8*** | Revolving Credit and Term Loan Facility Agreement | |
4.9** | Common Unit Purchase Agreement between Navios Maritime Partners L.P. and Amadeus Maritime S.A. | |
5.1* | Opinion of Reeder and Simpson, P.C. as to the legality of the securities being registered | |
8.1* | Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. relating to tax matters | |
8.2* | Opinion of Reeder and Simpson, P.C. relating to tax matters | |
23.1 | Consents of PricewaterhouseCoopers S.A. | |
23.2* | Consent of Reeder and Simpson, P.C. (contained in Exhibit 5.1 and 8.2) | |
23.3* | Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (contained in Exhibit 8.1) | |
24.1 | Power of Attorney (included on signature page) | |
99.1**** | Share Purchase Agreement for Navios Aurora I | |
99.2**** | Registration Rights Agreement |
* | To be filed by amendment or as an exhibit to a Current Report on Form 6-K of the registrant that is incorporated by reference into this registration statement. | |
** | Previously filed as an exhibit to the registrant’s registration statement on Form F-1 (File No. 333-146972) as filed with the Securities and Exchange Commission and incorporated by reference in our Annual Report. | |
*** | Previously filed as an exhibit to a Current Report on Form 6-K filed with the Securities and Exchange Commission on November 26, 2007 and incorporated by reference in our Annual Report. |
Table of Contents
**** | Previously filed as an exhibit to a Current Report on Form 6-K filed with the Securities and Exchange Commission on July 2, 2008 and hereby incorporated by reference. |