- Navios Maritime Partners has effectively bailed out their near-bankrupt sister company, Navios Maritime Acquisition through an all-equity merger.
- This leaves the almost $1b of net debt they are assuming as the true cost and in return, they receive a business in a notoriously difficult industry.
- Even more concerning is the long-term outlook for the oil tanker industry once peak oil demand is reached, which will see demand for their vessel fade away.
- Even ignoring this fading future, their leverage will surge along with the volatility of their cash flow performance.
- Since this could see Navios Maritime Partners facing solvency issues in the future when their existing cyclical businesses face a downturn, I believe that a bearish rating is appropriate.
For further details see:
Navios Maritime Partners: One Billion Dollars To Enter A Fading Industry