UNAUDITED CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
NOTE 1 DESCRIPTION OF BUSINESS
Navios Maritime Partners L.P. (Navios Partners or the Company), is an international owner and operator of dry cargo vessels, formed on
August 7, 2007 under the laws of the Republic of the Marshall Islands. Navios GP L.L.C. (the General Partner), a wholly owned subsidiary of Navios Maritime Holdings Inc. (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 Navios Partners.
Navios Partners is engaged in the
seaborne transportation services of a wide range of dry cargo commodities including iron ore, coal, grain, fertilizer and also containers, chartering its vessels under medium to longer-term charters. The operations of Navios Partners are managed by
Navios ShipManagement Inc., a subsidiary of Navios Holdings (the Manager), from its offices in Piraeus, Greece, Singapore and Monaco.
Pursuant to the initial public offering (IPO) on November 16, 2007, Navios Partners entered into the following agreements:
(a) a management agreement with the Manager (the Management Agreement), pursuant to which the Manager provides Navios Partners commercial and
technical management services;
(b) an administrative services agreement with the Manager (the Administrative Services Agreement),
pursuant to which the Manager provides Navios Partners administrative services; and
(c) an omnibus agreement with Navios Holdings (the
Omnibus Agreement), governing, among other things, when Navios Partners and Navios Holdings may compete against each other as well as rights of first offer on certain drybulk carriers.
As of June 30, 2018, there were outstanding: 167,589,764 common units and 3,420,203 general partnership units. As of June 30, 2018, Navios Holdings
owned a 20.2% interest in Navios Partners, which included a 2.0% general partner interest.
Navios Containers
Navios Maritime Containers Inc. (Navios Containers), an affiliate of the Company, was established in the Republic of the Marshall Islands on
April 28, 2017. The Company is a growth vehicle dedicated to the container sector of the maritime industry. On June 12, 2017, Navios Containers also registered and began trading on the Norwegian
Over-The-Counter
Market under the ticker NMCI.
On June 8, 2017, Navios Containers closed its private
placement and issued 10,057,645 shares for total gross proceeds of $50,288 at a subscription price of $5.00 per share. Navios Partners invested $30,000 and received 59.7% of the equity, and Navios Holdings invested $5,000 and received 9.9% of the
equity of Navios Containers. Each of Navios Partners and Navios Holdings also received warrants, with a five-year term, for 6.8% and 1.7% of the equity, respectively. Navios Containers used the proceeds to acquire five 4,250 TEU vessels from Navios
Partners for a total purchase price of $64,000. These vessels, first acquired by Navios Partners from Rickmers Maritime Trust Pte. (Rickmers Trust), are employed on charters with a net daily charter rate of $26,850. The charters expire
in 2018 and early 2019. In addition, Navios Containers acquired all the rights under the acquisition agreements entered into between Navios Partners and Rickmers Trust to purchase the remaining nine vessels in the original
14-vessel
container fleet.
On August 29, 2017, Navios Containers closed its private placement of 10,000,000 shares
at a subscription price of $5.00 per share, resulting in gross proceeds of $50,000. Navios Partners invested $10,000 and received 2,000,000 shares. Navios Partners also received warrants, with a five-year term, for 6.8% of the equity. As a result,
from August 29, 2017, Navios Containers is considered an affiliate entity and the investment in Navios Containers is accounted for under the equity method due to the Companys significant influence over Navios Containers.
On November 9, 2017, Navios Containers closed a private placement of 9,090,909 shares at a subscription price of $5.50 per share, resulting in gross
proceeds of approximately $50,000. Navios Partners invested $10,000 and received 1,818,182 shares. Navios Partners also received warrants, with a five-year term, for 6.8% of the newly issued equity.
On March 13, 2018, Navios Containers closed a private placement of 5,454,546 shares at a subscription price of $5.50 per share, resulting in gross
proceeds of approximately $30,000. Navios Partners invested $14,460 and received 2,629,095 shares and Navios Holdings invested $500 and received 90,909 shares. Navios Partners and Navios Holdings also received 370,909 and 9,273 warrants, with a
five-year term, respectively.
As of June 30, 2018, Navios Partners held 12,447,277 common shares and received 36.0% of the equity, and Navios
Holdings held 1,090,909 common shares and received 3.2% of the equity of Navios Containers.
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