NAVIOS MARITIME HOLDINGS INC.
UNAUDITED CONDENSED NOTES TO THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
NOTE 14: INVESTMENTS IN AFFILIATE COMPANIES AND AVAILABLE-FOR-SALE SECURITIES
Navios Partners
On August 7, 2007, Navios Holdings formed Navios Partners under the laws of Marshall Islands. Navios GP L.L.C. (the General
Partner), a wholly owned subsidiary of Navios Holdings, was also formed on that date to act as the general partner of Navios Partners and received a 2.0% general partner interest. In August 2019, Navios Holdings sold the general partnership
interests in Navios Partners (except for the incentive distribution rights) to NSM.
On November 18, 2016, Navios Partners entered
into a Continuous Offering Program Sales Agreement for the issuance and sale from time to time through its agent common units having an aggregate offering price of up to $25,000. The Sales Agreement was amended on August 3, 2020 to address the
updated shelf registration statement pursuant to which sales are made. As of March 31, 2021 and December 31, 2020, since the date of the amended Sales Agreement, Navios Partners has issued 756,442 and 357,508 units, respectively. Pursuant
to the issuance of the common units, Navios Partners issued 15,440 and 7,298 general partnership units to its general partner as of March 31, 2021 and December 31, 2020, respectively, in order to maintain its 2.0% general partner interest.
As of March 31, 2021 and following the Navios Partners Merger (as defined herein), total units of 1,263,276 held in Navios
Containers converted to 492,678 units of Navios Partners. Accordingly, Navios Holdings holds a total of 2,562,893 common units representing a 12.6% interest in Navios Partners, and the investment in Navios Partners is accounted for under the equity
method. Incentive distribution rights are held by Navios GP L.L.C.
As of March 31, 2021 and December 31, 2020, the unamortized
difference between the carrying amount of the investment in Navios Partners and the amount of the Companys underlying equity in net assets of Navios Partners was $52,768 and $77,904, respectively.
As of March 31, 2021 and December 31, 2020, the carrying amount of the investment in Navios Partners was $71,635 and $39,133,
respectively.
Total equity method income/(loss) of $29,197 and $(1,227) were recognized within the caption Equity in net
earnings/(losses) of affiliate companies for the three month periods ended March 31, 2021 and 2020, respectively.
Dividends
received during each of the three month periods ended March 31, 2021 and 2020 were $104 and $621, respectively.
As of March 31,
2021, the market value of the investment in Navios Partners was $60,382. Based on Companys evaluation of the duration and magnitude of the fair value decline, Navios Partners financial condition and near-term prospects, and the
Companys intent and ability to hold its investment in Navios Partners until recovery, the Company concluded that the decline in fair value of its investment in Navios Partners below its carrying value is temporary and, therefore, no impairment
was recorded.
Navios Acquisition
In
February 2018, the Board of Directors of Navios Acquisition authorized a stock repurchase program for up to $25,000 of Navios Acquisitions common stock, for two years. Stock repurchases will be made from time to time for cash in open market
transactions at prevailing market prices or in privately negotiated transactions. As of March 31, 2021, Navios Acquisition had repurchased 735,251 shares of common stock.
As of March 31, 2021 and December 31, 2020, the unamortized difference between the carrying amount of the investment in Navios
Acquisition and the amount of the Companys underlying equity in net assets of Navios Acquisition was $81,624 and $68,793, respectively and is amortized through Equity in net earnings/(losses) of affiliate companies over the
remaining life of Navios Acquisition tangible and intangible assets. As a result of the OTTI loss recorded as at December 31, 2020, the Company had recomputed this difference which is amortized through Equity in net earnings/(losses) of
affiliate companies over the remaining life of Navios Acquisition tangible and intangible assets.
As of March 31, 2021, Navios
Holdings had a 29.5% economic interest in Navios Acquisition.
As of March 31, 2021 and December 31, 2020, the carrying amount
of the investment in Navios Acquisition was $12,981 and $15,033, respectively.
Total equity method (loss)/income of $(2,053) and $1,557,
were recognized within the caption Equity in net earnings/(losses) of affiliate companies for the three month periods ended March 31, 2021 and 2020, respectively.
Dividends received for each of the three month periods ended March 31, 2021 and 2020 were $243 and $1,460, respectively.
As of March 31, 2021, the market value of the investment in Navios Acquisition was $19,704.
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