Financial Review and Prospects The follow is a discussion of the fiscal discipline and results of operations of Navios Maritime Holdings Inc. ( “ Navios Holdings ” or the “ Company ” ) for the three calendar month periods ended March 31, 2021 and 2020. Navios Holdings ’ fiscal statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ( “ U.S. GAAP ” ). You should read this section together with the consolidated fiscal statements and the accompanying notes included in Navios Holdings ’ Annual Report on Form 20-F for the year ended December 31, 2020 filed with the Securities and Exchange Commission ( “ SEC ” ) and the condensed amalgamate fiscal statements and the accompanying notes included elsewhere in this Report. This Report contains advanced statements within the mean of the Private Securities Litigation Reform Act of 1995. All statements herein other than statements of historic fact, including statements regarding business and diligence prospects or future results of operations or fiscal side, should be considered advanced. These forward looking statements are based on Navios Holdings ’ stream expectations and observations. Factors that could cause actual results to differ materially include, but are not limited to risks relating to : our ability to overhaul and refinance our obligation including our 2022 Notes ( as defined herein ) and 2022 Senior Secured Notes ( as defined herein ) ; global and regional economic and political conditions including the affect of the COVID-19 pandemic and efforts throughout the populace to contain its outspread, including effects on global economic bodily process ; demand for seaborne department of transportation of the products we ship ; the ability and willingness of charterers to fulfill their obligations to us ; prevailing charter rates ; shipyards performing scrubber installations, drydocking and repairs ; changing vessel crews and handiness of financing ; potential break of shipping routes due to accidents, diseases, pandemics, political events, piracy or acts by terrorists, including the impingement of the COVID-19 pandemic and the ongoing efforts throughout the world to contain it ; doubt relating to ball-shaped craft, including prices of seaborne commodities and continuing issues related to seaborne volume and long ton miles ; our continue ability to enter into long-run time charters ; our ability to maximize the use of our vessels ; expected need in the dry cargo shipping sector in general and the need for our Panamax, Capesize, Ultra Handymax and Handysize vessels in particular ; the age of our fleet and attendant increases in operations costs ; the loss of any customer or rent or vessel ; the fiscal condition of our customers ; increases in costs and expenses, including but not limited to : crew wages, indemnity, provisions, port expenses, lubricant oil, bunkers, repairs, alimony, and general and administrative expenses ; the expect cost of, and our ability to comply with, governmental regulations and nautical self-regulatory organization standards, vitamin a well as criterion regulations imposed by our charterers applicable to our clientele, general domestic and international political conditions ; competitive factors in the grocery store in which Navios Holdings operates ; the value of our publicly traded subsidiaries and risks associated with operations outside the United States. other factors that could cause our actual results to differ from our current expectations and observations include, but are not limited to, those discussed under Part I, Item 3D — Risk Factors in Navios Holdings ’ Annual Report on Form 20-F for the year ended December 31, 2020. All advanced statements made in this Report speak alone as of the date of this document. The Company undertakes no obligation to publicly update or revise any advanced statements, whether as a resultant role of new information, future events or otherwise.
Recent Developments
2022 Senior Secured Notes Navios Holdings has agreed to a form of Eighth Supplemental Indenture with bondholders holding a majority in aggregate principal amount ( the “ June 2021 Consenting Noteholders ” ) of our 11.25 % Senior Secured Notes due 2022 ( the “ 2022 Senior Secured Notes ” ). The June 2021 Consenting Noteholders are delivering consents to the Eighth Supplemental Indenture via DTC, and the Company intends to execute the Eighth Supplemental Indenture immediately once DTC is able to confirm that the needed consents have been received. Upon murder, the Eighth Supplemental Indenture eliminates the Company ’ s duty to make a form maturity crack for the 2022 Senior Secured Notes upon the pro rata redemption, at par, of $ 100.0 million in aggregate star sum of the 2022 Senior Secured Notes ( the “ Redemption ” ). The Redemption will be funded through ( i ) the sale of a vessel presently pledged as collateral in deference of the 2022 Senior Secured Notes and ( two ) the borrowing of approximately $ 75.0 million from an consort of N Shipmanagement Acquisition Corp. ( the “ June 2021 Ship Management Loan ” ). The Eighth Supplemental Indenture besides ( i ) clarifies that all past dividends paid in respect of fairness pledged as collateral for the 2022 Senior Secured Notes and any future dividends paid in respect of equity pledged as collateral ( other than equity of Navios South American Logistics Inc. ( “ Navios Logistics ” ) ) can be used by the Company for general corporate purposes, absent a Default or Event of Default ; ( two ) provides that future dividends paid in obedience of equity of Navios Logistics pledged as collateral for the 2022 Senior Secured Notes may be used only to redeem or repurchase 2022 Senior Secured Notes ; ( three ) states that the Company may, subject to the occurrence of the Redemption, agree to the cancellation of amounts it owes to Navios Logistics under that certain loan agreement dated as of April 25, 2019 ( as amended ) ( the “ Grimaud Loan ” ) in stead of the reception of pro rata cash dividends from Navios Logistics ( the “ Cancellation ” ) ; ( four ) permits the lender under the June 2021 Ship Management Loan to take a second base lien on the pledged share collateral ( which pledged partake collateral secures the 2022 Senior Secured Notes on a foremost spleen basis ) ; and ( vanadium ) provides that the 2022 Senior Secured Notes will be provided with a first lien security sake in the 7.375 % Ship Mortgage Notes that impregnable the Grimaud Loan as of the date of the Eighth Supplemental Indenture no late than fifteen calendar days following the Cancellation.
Fleet Update
The Company agreed to sell to unrelated third parties : ( i ) the Navios Astra, a 2006-built Ultra-Handymax vessel of 53,468 dwt, for a sale monetary value of $ 6.6 million ( completed in February 2021 ) ; and ( two ) the Navios Serenity, a 2011-built Handysize vessel of 34,690 dwt for a sale price of $ 10.4 million ( expected to be completed in June 2021 ) .
The Company agreed to sell to a related party : ( i ) the Navios Centaurus, a 2012-built Panamax vessel of 81,472 dwt, and the Navios Avior, a 2012-built Panamax vessel of 81,355 dwt, for a sale price of $ 39.3 million, including working capital adjustments ( completed in March 2021 ) ; and ( two ) a 2011-built Capesize vessel previously chartered-in by Navios Holdings, for which the net sale proceeds were $ 8.5 million .
Overview General
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Navios Holdings is a ball-shaped seaborne ship and logistics caller focused on the transportation and transshipment of dry bulk commodities, including iron ore, coal and grain. In August 2019, the caller entered into five-year service agreements with N Shipmanagement Inc., a subsidiary company of N Shipmanagement Acquisition Corp. ( together with its subsidiaries, “ NSM ” or the “ Manager ” ) under which NSM provides technical and commercial management services at a fasten rate of $ 3,700 per day per vessel until August 2021 and administrative services, reimbursed at allocable price. See besides “ Related Party Transactions ” .
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