6-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

OF THE SECURITIES EXCHANGE ACT OF 1934

DATED: June 1, 2023

Commission File No. 001-33811

 

 

NAVIOS MARITIME PARTNERS L.P.

 

 

7 Avenue de Grande Bretagne, Office 11B2

Monte Carlo, MC 98000 Monaco

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

 

 

 


Table of Contents

NAVIOS MARITIME PARTNERS L.P.

FORM 6-K

TABLE OF CONTENTS

 

     Page  

Operating and Financial Review and Prospects

     2  

Exhibit List

     25  

INDEX

     F-1  

This Report on Form 6-K is hereby incorporated by reference into the Navios Maritime Partners L.P. Registration Statement on Form F-3, File No. 333-271842.

Operating and Financial Review and Prospects

The following is a discussion of the financial condition and results of operations for the three month periods ended March 31, 2023 and 2022 of Navios Maritime Partners L.P. (referred to herein as “we”, “us”, “Company” or “Navios Partners”). All of the financial statements have been stated 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 financial statements and the accompanying notes included in Navios Partners’ 2022 Annual Report filed on Form 20-F with the U.S. Securities and Exchange Commission (the “SEC”) on March 24, 2023.

This Report contains and will contain forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events, TCE rates (as defined herein), and Navios Partners’ expected cash flow generation, future contracted revenues, future distributions and its ability to make distributions going forward, opportunities to reinvest cash accretively in a fleet renewal program or otherwise, potential capital gains, its ability to take advantage of dislocation in the market and Navios Partners’ growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters and Navios Partners’ ability to refinance its debt on attractive terms, or at all. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Navios Partners at the time these statements were made. Although Navios Partners believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Partners. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, risks relating to: global and regional economic and political conditions including global economic activity, demand for seaborne transportation of the products we ship, the ability and willingness of charterers to fulfill their obligations to us and prevailing charter rates, the economic condition of the markets in which we operate, shipyards performing scrubber installations, construction of newbuilding vessels, drydocking and repairs, changing vessel crews and availability of financing, potential disruption of shipping routes due to accidents, wars, sanctions, diseases, pandemics, political events, piracy or acts by terrorists; uncertainty relating to global trade, including prices of seaborne commodities and continuing issues related to seaborne volume and ton miles, our continued ability to enter into long- term time charters, our ability to maximize the use of our vessels, expected demand in the dry and liquid cargo shipping sectors in general and the demand for our drybulk, containerships and tanker vessels in particular, fluctuations in charter rates for drybulk, containerships and tanker vessels, the aging of our fleet and resultant increases in operations costs, the loss of any customer or charter or vessel, the financial condition of our customers, changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors, fluctuation in interest rates and foreign exchange rates, and the impact of the discontinuance of the London Interbank Offered Rate for US Dollars, or LIBOR, after June 30, 2023, increases in costs and expenses, including but not limited to: crew, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance and general and administrative expenses, the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, general domestic and international political conditions, competitive factors in the market in which Navios Partners operates; risks associated with operations outside the United States; and other factors listed from time to time in Navios Partners’ filings with the Securities and Exchange Commission, including its Form 20-F and Form 6-K. Navios Partners expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Partners’ expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Partners makes no prediction or statement about the performance of its common units.

 

2


Table of Contents

Recent Developments

Financing arrangements

In May 2023, Navios Partners completed a $178.0 million sale and leaseback transaction with an unrelated third party, in order to finance the acquisition of two newbuilding 5,300 TEU containerships and two newbuilding Aframax/LR2 tanker vessels. The sale and leaseback transaction: (i) matures ten years after the drawdown date; and (ii) bears interest at Term Secured Overnight Financing Rate (“SOFR”) plus 210 bps per annum.

In May 2023, Navios Partners entered into a new credit facility with a commercial bank for up to $30.0 million in order to refinance existing indebtedness of three product tanker vessels. The credit facility: (i) matures five years after the drawdown date; and (ii) bears interest at Term SOFR plus 100 bps per annum for any part of the loan (up to 70%) secured by cash collateral and 225 bps per annum for the remaining loan amount.

In April 2023, Navios Partners entered into an export credit agency-backed facility for a total amount of up to $165.6 million in order to finance the acquisition of two newbuilding 7,700 TEU containerships. The facility: (i) matures 12 years after the drawdown date; and (ii) bears interest at SOFR plus 150 bps per annum.

In April 2023, Navios Partners entered into a new credit facility with a commercial bank for up to $65.0 million in order to refinance existing indebtedness of five product tanker vessels. The credit facility: (i) matures five years after the drawdown date; and (ii) bears interest at SOFR plus 200 bps per annum.

Acquisition of vessels

On April 27, 2023, Navios Partners took delivery of the Navios Sakura, a 2023-built Capesize vessel of 182,169 dwt (see Note 11 – Commitments and Contingencies to the unaudited condensed consolidated financial statements, included elsewhere in this Report).

Sale of vessels

On May 10, 2023, Navios Partners agreed to sell the Lumen N, a 2008-built LR1 Product Tanker vessel of 63,599 dwt, to an unrelated third party, for a sales price of $22.3 million. The sale is expected to be completed during the second quarter of 2023.

On April 12, 2023, Navios Partners agreed to sell the Navios Anthos, a 2004-built Panamax vessel of 75,798 dwt, to an unrelated third party, for a sales price of $11.0 million. The sale was completed on May 3, 2023.

Overview

We are an international owner and operator of dry cargo and tanker vessels, formed on August 7, 2007 under the laws of the Republic of the Marshall Islands. Olympos Maritime Ltd. is our general partner (the “General Partner”).

As of May 29, 2023, there were 30,184,388 outstanding common units and 622,296 general partnership units. Navios Maritime Holdings Inc. (“Navios Holdings”) currently owns an approximately 10.3% ownership interest in Navios Partners and the General Partner currently owns an approximately 2.0% ownership interest in Navios Partners based on all outstanding common units and general partnership units.

 

3


Table of Contents

Fleet

Navios Partners’ fleet consists of 81 drybulk vessels, 47 containerships and 45 tanker vessels, including one newbuilding Capesize chartered-in vessel under bareboat contract expected to be delivered in the second quarter of 2023, six newbuilding Aframax/LR2 vessels expected to be delivered in 2024 and the first half of 2025, two newbuilding MR2 Product Tanker chartered-in vessels under bareboat contracts expected to be delivered in the second half of 2025 and the first half of 2026 and 12 newbuilding Containerships expected to be delivered by the second half of 2023, in 2024 and by the first half of 2025. The fleet excludes one LR1 Product Tanker vessel agreed to be sold.

We generate revenues by charging our customers for the use of our vessels to transport their dry cargo commodities, containers, crude oil and/or refined petroleum products. In general, the vessels in our fleet are chartered-out under time charters, which range in length from one to twelve years at inception. From time to time, we operate vessels in the spot market until the vessels have been chartered out under short-term, medium and long-term charters.

The following table provides summary information about our fleet as of May 24, 2023:

 

Owned Drybulk Vessels

  

Type

   Built    Capacity
(DWT)
     Charter-Out
Rate(1)
    

Index(2)

   Expiration
Date(3)

Navios Christine B

   Ultra-Handymax    2009      58,058        —        100.0% average BSI 58 10TC    Jul-23

Navios Celestial

   Ultra-Handymax    2009      58,063      $ 11,400      No    Sep-23

Navios Vega

   Ultra-Handymax    2009      58,792      $ 14,250      No    Jun-23

Navios La Paix

   Ultra-Handymax    2014      61,485        —        111.0% average BSI 58 10TC    Jul-24

Navios Hyperion

   Panamax    2004      75,707      $ 19,000      No    Nov-23

Navios Orbiter

   Panamax    2004      76,602        —        100.0% average BPI 4TC    Sep-23

Navios Hope

   Panamax    2005      75,397        —        100.0% average BPI 4TC    Jun-24

Navios Taurus

   Panamax    2005      76,596        —        100.0% average BPI 4TC    Feb-24

Navios Sun

   Panamax    2005      76,619        —        100.0% average BPI 4TC    Jun-23
   $ 16,844      No    Sep-23
     —        100.0% average BPI 4TC    Dec-23

Navios Asteriks(24)

   Panamax    2005      76,801        —        100.0% average BPI 4TC    Sep-23

Navios Helios

   Panamax    2005      77,075        —        100.0% average BPI 4TC    Jan-24

 

4


Table of Contents

Navios Apollon I

   Panamax    2005      87,052        —        105.0% average BPI 4TC    Sep-23

N Amalthia

   Panamax    2006      75,318        —        90.0% average BPI 82    Apr-24

Navios Sagittarius(5)

   Panamax    2006      75,756        —        100.0% average BPI 4TC    Sep-23

Navios Galileo

   Panamax    2006      76,596        —        89.0% average BPI 82    Jan-24

N Bonanza

   Panamax    2006      76,596       

$

—  

16,405

—  

 

 

 

  

100.0% average BPI 4TC

No

100.0% average BPI 4TC

  

Jun-23

Sep-23

Apr-24

Navios Harmony

   Panamax    2006      82,790      $ 8,550      No    Jun-23

Copernicus N

   Panamax    2010      93,062      $ 16,721      No    Jun-23
     —        107.0% average BPI 4TC    Sep-23

Unity N

   Panamax    2011      79,642        —        100.0% average BPI 4TC    Oct-23

Odysseus N

   Panamax    2011      79,642        —        100.0% average BPI 4TC    Nov-23

Rainbow N

   Panamax    2011      79,642        —        100.0% average BPI 4TC    Aug-23

Navios Avior

   Panamax    2012      81,355      $ 16,469      No    Jun-23
     —        100.0% average BPI 82    Feb-24

Navios Centaurus

   Panamax    2012      81,472      $ 17,977      No    Jun-23
     —        101.0% average BPI 82    Aug-23

Navios Victory

   Panamax    2014      77,095        —        106.75% average BPI 4TC    Oct-23

Navios Alegria(24)

   Panamax    2016      84,852      $ 14,197      No    Jul-24

Navios Sphera

   Panamax    2016      84,872      $ 19,268      No    Jun-23
     —        108.0% average BPI 82    Apr-24

Navios Sky(5)

   Panamax    2015      82,056      $ 19,541      No    Jun-23
     —        105.0 % average BPI 82    Sep-24

Navios Uranus(6)

   Panamax    2019      81,821      $ 15,593      No    Dec-23

Navios Herakles I(6)

   Panamax    2019      82,036      $

 

18,503

—  

 

 

  

No

115.0% average BPI 82

  

Jun-23

Aug-23

 

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Table of Contents

Navios Galaxy II(6)

     Panamax        2020        81,789      $ 18,635      No    Jun-23
              —        112.5% average BPI 82    Dec-24

Navios Felicity I(6)

     Panamax        2020        81,962      $ 14,919      No    Dec-23

Navios Magellan II(6)

     Panamax        2020        82,037      $ 19,335      No    Jun-23
              —        112.0% average BPI 82    Feb-24

Navios Primavera(5)

     Panamax        2022        82,003      $ 18,473      No    Jun-23
              —        112.0% average BPI 82    Jul-23

Navios Meridian(5)

     Panamax        2023        82,010      $ 19,132      No    Jun-23
              —        115.5% average BPI 82    Jan-24

Navios Beaufiks(5)

     Capesize        2004        180,310      $ 22,563      No    Sep-23

Navios Fantastiks(5)

     Capesize        2005        180,265      $ 18,911      No    Dec-23

Navios Stellar(5)

     Capesize        2009        169,001        —        99.0% average BCI 5TC    Apr-24

Navios Aurora II

     Capesize        2009        169,031        —        99.0% average BCI 5TC    May-24

Navios Happiness

     Capesize        2009        180,022      $ 20,710      No    Dec-23

Navios Bonavis(5)

     Capesize        2009        180,022      $ 20,791      No    Jun-23
              —        107.0% average BCI 5TC    Apr-24

Navios Phoenix(5)

     Capesize        2009        180,242      $ 19,288      No    Jun-23
              —        100.0% average BCI 5TC + $1,905 per day    Jan-24

Navios Sol(5)

     Capesize        2009        180,274      $ 20,378      No    Dec-23
              —        110.0% average BCI 5TC    Apr-24

Navios Lumen(5)

     Capesize        2009        180,661        —        107.0% average BCI 5TC    Apr-24

Navios Pollux(5)

     Capesize        2009        180,727        —        100.0% of pool earnings    Jul-23

Navios Antares(5)

     Capesize        2010        169,059        —        100.0% average BCI 5TC    Jan-24

Navios Symphony

     Capesize        2010        178,132        —        104.5% average BCI 5TC    Jan-24

Navios Melodia

     Capesize        2010        179,132      $ 18,702      No    Jun-23
              —        105.0% average BCI 5TC    Apr-24

Navios Luz

     Capesize        2010        179,144        —        102.0% average BCI 5TC    Jul-23
              —        106.0% average BCI 5TC    May-24

 

6


Table of Contents

Navios Etoile

   Capesize    2010      179,234      $ 20,948      No    Jun-23
              —        105.0% average BCI 5TC    Feb-24

Navios Buena Ventura

   Capesize    2010      179,259      $ 20,349      No    Jun-23
              —        105.0% average BCI 5TC    Feb-24

Navios Bonheur

   Capesize    2010      179,259        —        103.0% average BCI 5TC    Sep-23

Navios Fulvia

   Capesize    2010      179,263      $ 18,703      No    Jun-23
              —        105.0% average BCI 5TC    Feb-24

Navios Aster

   Capesize    2010      179,314      $

$

19,932

22,721

 

 

  

No

No

   Jun-23

Sep-23

              —        108.0% average BCI 5TC    Dec-23

Navios Ace(5)

   Capesize    2011      179,016        —        107.25% average BCI 5TC    Mar-24

Navios Altamira

   Capesize    2011      179,165        —        107.0% average BCI 5TC    Mar-24

Navios Azimuth

   Capesize    2011      179,169      $ 19,701      No    Jun-23
              —        105.0% average BCI 5TC    Feb-24

Navios Koyo

   Capesize    2011      181,415      $ 22,308      No    Jun-23
              —        118.0% average BCI 5TC    Apr-24

Navios Ray(5)

   Capesize    2012      179,515      $ 19,950      No    Dec-23
              —        105.0% average BCI 5TC    Feb-24

Navios Joy

   Capesize    2013      181,389       
Freight
Voyage
 
 
   No    Sep-23

Navios Gem

   Capesize    2014      181,336        —        128.0% average BCI 5TC    Jan-24

Navios Canary(24)

   Capesize    2015      180,528      $ 24,819      No    Dec-23

Navios Corali(24)

   Capesize    2015      181,249      $ 25,201      No    Oct-23

Navios Felix(24)

   Capesize    2016      181,221      $ 21,850      No    Jun-23
              —        100.0% average BCI 5TC + $4,085 per day    Jan-24

Navios Mars

   Capesize    2016      181,259        —        126.0% average BCI 5TC    Oct-23

Navios Armonia(6)

   Capesize    2022      182,079      $ 20,750      No    Sep-27

Navios Azalea(6)

   Capesize    2022      182,064      $ 19,950      No    Nov-27

Navios Astra(25)

   Capesize    2022      182,392      $ 21,000      No    Sep-27

Navios Altair(6)

   Capesize    2023      182,115      $ 19,600      No    Nov-27

Navios Sakura(6)

   Capesize    2023      182,169      $ 19,550      No    Mar-28

 

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Table of Contents

Owned Containerships

  

Type

   Built    Capacity
(TEU)
     Charter-Out
Rate(1)
     Index(2)    Expiration
Date(3)

Navios Summer(5)

   Containership    2006      3,450      $

$

$

$

39,795

30,320

20,845

34,110

 

 

 

 

   No

No

No

No

   May-24

May-25

May-26

Jul-26

Navios Verano (5)

   Containership    2006      3,450      $ 18,818      No    Apr-26

Hyundai Hongkong(7)

   Containership    2006      6,800      $

$

30,119

21,083

 

 

   No

No

   Dec-23

Dec-28

Hyundai Singapore(7)

   Containership    2006      6,800      $

$

30,119

21,083

 

 

   No

No

   Dec-23

Dec-28

Hyundai Busan(7)

   Containership    2006      6,800      $

$

30,119

21,083

 

 

   No

No

   Aug-24

Aug-29

Hyundai Shanghai(7)

   Containership    2006      6,800      $

$

30,119

21,083

 

 

   No

No

   Aug-24

Aug-29

Hyundai Tokyo(7)

   Containership    2006      6,800      $

$

30,119

21,083

 

 

   No

No

   Dec-23

Dec-28

Protostar N

   Containership    2007      2,741      $ 46,556      No    Nov-25

Navios Spring(5)

   Containership    2007      3,450      $ 58,500      No    May-25

Matson Lanai(5)

   Containership    2007      4,250      $ 55,794      No    Jul-25

Navios Indigo(5)

   Containership    2007      4,250      $

$

$

$

43,875

34,125

24,375

41,438

 

 

 

 

   No

No

No

No

   Apr-24

Apr-25

Apr-26

Aug-26

Navios Vermilion(5)

   Containership    2007      4,250      $

$

$

45,425

23,972

41,722

 

 

 

   No

No

No

   Dec-23

Nov-24

Dec-24

Navios Verde(5)

   Containership    2007      4,250      $ 21,725      No    Apr-25

Navios Amarillo(5)

   Containership    2007      4,250      $

$

$

$

92,381

63,956

28,425

9,475

 

 

 

 

   No

No

No

No

   Jan-24

Jan-25

Jan-26

Jan-28

Navios Azure(5)

   Containership    2007      4,250      $ 20,748      No    Apr-26

Navios Domino(5)

   Containership    2008      4,250      $

$

24,934

23,453

 

 

   No

No

   Aug-23

Sep-25

Navios Delight(5)

   Containership    2008      4,250      $ 45,425      No    Jan-24

Navios Magnolia

   Containership    2008      4,730      $

$

$

45,425

23,972

41,722

 

 

 

   No

No

No

   Nov-23

Oct-24

Nov-24

Navios Jasmine

   Containership    2008      4,730      $ 60,000      No    Apr-25

Navios Chrysalis

   Containership    2008      4,730      $ 23,453      No    Jun-25

Navios Nerine

   Containership    2008      4,730      $

$

$

45,425

23,972

41,722

 

 

 

   No

No

No

   Oct-23

Sep-24

Oct-24

Spectrum N

   Containership    2009      2,546      $ 36,538      No    Mar-25

 

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Table of Contents

Navios Devotion(5)

   Containership    2009      4,250      $

$

$

$

43,875

34,125

24,375

41,438

 

 

 

 

   No

No

No

No

   Mar-24

Mar-25

Mar-26

Jul-26

Navios Destiny(5)

   Containership    2009      4,250      $

$

$

45,425

23,972

41,722

 

 

 

   No

No

No

   Nov-23

Oct-24

Nov-24

Navios Lapis

   Containership    2009      4,250      $ 20,244      No    Apr-24

Navios Tempo

   Containership    2009      4,250      $ 44,438      No    Sep-25

Navios Miami

   Containership    2009      4,563      $

$

$

45,425

23,972

41,722

 

 

 

   No

No

No

   Nov-23

Oct-24

Nov-24

Navios Dorado

   Containership    2010      4,250      $ 21,676      No    Jun-24

Zim Baltimore

   Containership    2010      4,360      $

$

$

$

43,875

34,125

24,375

41,438

 

 

 

 

   No

No

No

No

   Jan-24

Jan-25

Jan-26

May-26

Navios Bahamas

   Containership    2010      4,360      $ 60,000      No    May-25

Zim Carmel

   Containership    2010      4,360      $

$

$

$

42,164

32,689

23,214

39,795

 

 

 

 

   No

No

No

No

   Apr-24

Apr-25

Apr-26

Jun-26

Navios Unison(5)

   Containership    2010      10,000      $ 26,276      No    Jun-26

Navios Constellation(5)

   Containership    2011      10,000      $ 26,276      No    Jun-26

Fleur N

   Containership    2012      2,782      $ 19,750      No    Mar-24

Ete N

   Containership    2012      2,782      $ 19,750      No    Feb-24

 

Owned Tanker Vessels

  

Type

   Built    Capacity
(DWT)
     Charter-Out
Rate(1)
    Profit Sharing
Arrangements
   Expiration
Date(3)

Hector N

   MR1 Product Tanker    2008      38,402      $

$

14,319

15,306

 

 

  No

No

   Jun-23

Aug-23

Nave Equinox

   MR2 Product Tanker    2007      50,922      $ 20,392 (8)    No    Sep-24

Nave Pulsar (24)

   MR2 Product Tanker    2007      50,922      $ 27,650     No    Aug-23

Nave Orbit

   MR2 Product Tanker    2009      50,470      $ 15,306     No    Sep-24

Nave Equator (24)

   MR2 Product Tanker    2009      50,542      $ 23,651     No    Aug-23

Nave Aquila (5)

   MR2 Product Tanker    2012      49,991      $ 27,181     No    Sep-23

Nave Atria (5)

   MR2 Product Tanker    2012      49,992      $ 14,887     No    Nov-24

Nave Capella

   MR2 Product Tanker    2013      49,995      $ 22,138     No    Jan-25

Nave Alderamin

   MR2 Product Tanker    2013      49,998      $ 22,138     No    Nov-24

Nave Bellatrix (5)

   MR2 Product Tanker    2013      49,999      $ 23,083     No    Aug-23

Nave Orion (5)

   MR2 Product Tanker    2013      49,999      $ 22,138     No    Dec-24

Nave Titan

   MR2 Product Tanker    2013      49,999      $ 25,891     No    Feb-25

Bougainville (24)

   MR2 Product Tanker    2013      50,626        Floating Rate (9)    No    Dec-23

Nave Pyxis (24)

   MR2 Product Tanker    2014      49,998      $ 25,891     No    Jan-25

Nave Luminosity

   MR2 Product Tanker    2014      49,999      $ 23,004 (10)    No    Dec-25

Nave Jupiter

   MR2 Product Tanker    2014      49,999      $ 16,491     No    Aug-23

Nave Velocity

   MR2 Product Tanker    2015      49,999      $ 15,553 (11)    No    Oct-24

 

9


Table of Contents

Nave Sextans

   MR2 Product Tanker    2015      49,999      $ 16,844     No   May-23
            $ 23,196 (10)    No   May-26

Nave Ariadne

   LR1 Product Tanker    2007      74,671        Floating Rate (12)    No   Dec-23

Nave Cielo

   LR1 Product Tanker    2007      74,671      $

$

16,335

26,564

 

 

  No

No

  Sep-23

Nov-23

Lumen N(4)

   LR1 Product Tanker    2008      63,599        Floating Rate (12)    No   Jun-23

Nave Andromeda

   LR1 Product Tanker    2011      75,000      $ 28,394     No   Mar-25

Nave Cetus

   LR1 Product Tanker    2012      74,581      $ 32,094     No   Jul-25

Nave Cassiopeia

   LR1 Product Tanker    2012      74,711      $ 33,150 (13)    No   Jan-25

Nave Estella

   LR1 Product Tanker    2012      75,000      $ 28,394     No   Dec-24

Nave Rigel

   LR1 Product Tanker    2013      74,673        Floating Rate (14)    No   Dec-23

Nave Atropos(24)

   LR1 Product Tanker    2013      74,695      $ 21,971     No   Oct-24

Nave Galactic

   VLCC    2009      297,168      $ 45,425     No   Sep-23

Nave Spherical

   VLCC    2009      297,188        Floating Rate     Yes(15)   Jan-24

Nave Constellation

   VLCC    2010      296,988        Freight Voyage     No   Jun-23

Nave Quasar

   VLCC    2010      297,376        Freight Voyage     No   May-23

Nave Synergy

   VLCC    2010      299,973        Freight Voyage     No   Jun-23

Nave Universe

   VLCC    2011      297,066        Freight Voyage     No   Jun-23

Nave Buena Suerte

   VLCC    2011      297,491      $ 47,906     Yes(16)   Jun-25

 

Bareboat-in vessels

  

Type

   Built    Capacity
(DWT)
     Charter-Out
Rate(1)
   

Index(2)

   Expiration
Date(3)

Navios Libra

   Panamax    2019      82,011      $

 

18,541

—  

 

 

  No 109.75% average BPI 82    Jun-23

Jun-24

Navios Star

   Panamax    2021      81,994      $

 

19,413

—  

 

 

 

No

110.0% average BPI 82

   Jun-23

Apr-24

Navios Amitie

   Panamax    2021      82,002      $

 

19,731

—  

 

 

 

No

110.0% average BPI 82

   Jun-23

Apr-24

Baghdad

   VLCC    2020      313,433      $ 27,816 (17)    No    Sep-30

Nave Electron

   VLCC    2021      313,239      $ 47,906     Yes(16)    Jan-26

Erbil

   VLCC    2021      313,486      $ 27,816 (17)    No    Feb-31

Nave Celeste

   VLCC    2022      313,418        Floating rate     Yes(18)    Jul-24

 

10


Table of Contents

Chartered-in vessels

   Type    Built      Capacity
(DWT)
     Charter-Out
Rate(1)
    Index(2)    Expiration
Date(3)
 

Navios Lyra

   Handysize      2012        34,718      $ 9,975     No      Oct-23  

Navios Venus

   Ultra-
Handymax
     2015        61,339        —       111.0% average BSI 58
10TC
     Feb-24  

Navios Amber(19)

   Panamax      2015        80,994      $ 19,000     No      Apr-24  

Navios Coral(19)

   Panamax      2016        84,904      $
 
19,736
—  
 
 
  No

108.0% average BPI 82

    
Jun-23
Feb-24
 
 

Navios Citrine(19)

   Panamax      2017        81,626        —       122.0% average BPI 4TC      Jun-23  

Navios Dolphin(19)

   Panamax      2017        81,630      $ 14,013 (20)    No      Dec-24  

Navios Gemini(21)

   Panamax      2018        81,704      $ 14,919     No      Oct-23  

Navios Horizon I(21)

   Panamax      2019        81,692      $

 

18,530

—  

 

 

  No 108.5% average BPI 82     

Jun-23

Oct-23

 

 

 

Bareboat Chartered-in Drybulk Vessels to be Delivered

   Type      Expected
Delivery
     Capacity
(DWT)
     Charter-Out
Rate(1)
     Index(2)      Expiration
Date(3)
 

TBN I(6)

     Capesize        Q2 2023      180,000    $ 19,550      No        Feb-28  

 

Owned Containerships to be Delivered

   Type      Expected
Delivery
     Capacity
(TEU)
     Charter-
Out
Rate(1)
     Index(2)      Expiration
Date(3)
 

TBN II

     Containership        H2 2023        5,300      $

$

$

$

$

$

42,900

39,000

37,050

35,100

31,200

37,050

 

 

 

 

 

 

    

No

No

No

No

No

No

 

 

 

 

 

 

    

Sep-24

Sep-25

Sep-26

Sep-27

Sep-28

Nov-28

 

 

 

 

 

 

TBN III

     Containership        H2 2023        5,300      $

$

$

$

$

$

42,900

39,000

37,050

35,100

31,200

37,050

 

 

 

 

 

 

    

No

No

No

No

No

No

 

 

 

 

 

 

    

Oct-24

Oct-25

Oct-26

Oct-27

Oct-28

Dec-28

 

 

 

 

 

 

TBN VIII

     Containership        H2 2023        5,300      $

$

$

$

$

$

42,900

39,000

37,050

35,100

31,200

37,050

 

 

 

 

 

 

    

No

No

No

No

No

No

 

 

 

 

 

 

    

Nov-24

Nov-25

Nov-26

Nov-27

Nov-28

Jan-29

 

 

 

 

 

 

 

11


Table of Contents

TBN IV

     Containership        H1 2024        5,300      $

$

$

$

$

$

42,900

39,000

37,050

35,100

31,200

37,050

 

 

 

 

 

 

   

No

No

No

No

No

No

 

 

 

 

 

 

    

May-25

May-26

May-27

May-28

May-29

Jul-29

 

 

 

 

 

 

TBN V

     Containership        H1 2024        5,300      $

$

$

$

$

$

42,900

39,000

37,050

35,100

31,200

37,050

 

 

 

 

 

 

   

No

No

No

No

No

No

 

 

 

 

 

 

    

Jun-25

Jun-26

Jun-27

Jun-28

Jun-29

Aug-29

 

 

 

 

 

 

TBN IX

     Containership        H1 2024        5,300      $

$

$

$

$

$

42,900

39,000

37,050

35,100

31,200

37,050

 

 

 

 

 

 

   

No

No

No

No

No

No

 

 

 

 

 

 

    

Mar-25

Mar-26

Mar-27

Mar-28

Mar-29

May-29

 

 

 

 

 

 

TBN VI

     Containership        H2 2024        5,300      $

$

$

$

$

$

42,900

39,000

37,050

35,100

31,200

37,050

 

 

 

 

 

 

   

No

No

No

No

No

No

 

 

 

 

 

 

    

Aug-25

Aug-26

Aug-27

Aug-28

Aug-29

Oct-29

 

 

 

 

 

 

TBN VII

     Containership        H2 2024        5,300      $

$

$

$

$

$

42,900

39,000

37,050

35,100

31,200

37,050

 

 

 

 

 

 

   

No

No

No

No

No

No

 

 

 

 

 

 

    

Nov-25

Nov-26

Nov-27

Nov-28

Nov-29

Jan-30

 

 

 

 

 

 

TBN X

     Containership        H2 2024        5,300      $ 37,500       No        Feb-30  

TBN XI

     Containership        H2 2024        5,300      $ 37,500       No        Apr-30  

TBN XIX

     Containership        H1 2025        7,700      $

$

$

$

$

57,213

52,238

37,313

27,363

24,875

 

 

 

 

(23) 

   

No

No

No

No

No

 

 

 

 

 

    

Jan-28

Jan-31

Jan-33

Jan-35

Jan-37

 

 

 

 

 

TBN XVIII

     Containership        H2 2024        7,700      $

$

$

$

$

57,213

52,238

37,313

27,363

24,875

 

 

 

 

(23) 

   

No

No

No

No

No

 

 

 

 

 

    

Dec-27

Dec-30

Dec-32

Dec-34

Dec-36

 

 

 

 

 

 

12


Table of Contents

Tanker Vessels

to be delivered

   Type    Expected
Delivery
     Capacity
(DWT)
     Charter-Out
Rate(1)
    Index(2)      Expiration
Date(3)
 

TBN XII

   Aframax / LR2      H1 2024        115,000      $ 26,366 (22)      No        Apr-29  

TBN XIII

   Aframax / LR2      H2 2024        115,000      $ 26,366 (22)      No        Jul-29  

TBN XIV

   Aframax / LR2      H2 2024        115,000      $ 25,576 (22)      No        Oct-29  

TBN XV

   Aframax / LR2      H2 2024        115,000      $ 25,576 (22)      No        Dec-29  

TBN XVI

   Aframax / LR2      H1 2025        115,000      $ 27,798 (22)      No        Mar-30  

TBN XVII

   Aframax / LR2      H1 2025        115,000      $ 27,798 (22)      No        May-30  

TBN XX(6)

   MR2 Product
Tanker
     H2 2025        52,000                      

TBN XXI(6)

   MR2 Product
Tanker
     H1 2026        52,000                      

 

(1)

Daily charter-out rate per day, net of commissions.

(2)

Index rates exclude commissions.

(3)

Estimated dates assuming the midpoint or Company’s estimate of the redelivery period by charterers.

(4)

Vessel agreed to be sold.

(5)

The vessel is subject to a sale and leaseback transaction with a purchase obligation at the end of the lease term.

(6)

The vessel is subject to a bareboat contract with a purchase option at the end of the contract.

(7)

Includes optional years (Navios Partners’ option) after 2023.

(8)

The premium for when the vessel is trading on ice or follow ice breaker is $1,481 per day.

(9)

Rate based on Scorpio MR pool earnings.

(10)

Charterer’s option to extend the charter for one year at $27,913 net per day.

(11)

Charterer’s option to extend the charter for one year at $16,540 net per day plus one year at $17,528 net per day.

(12)

Rate based on Penfield pool earnings.

(13)

Charterer’s option to extend the charter for one year at $40,950 net per day.

(14)

Rate based on LR8 pool earnings.

(15)

Contract provides for TD3C-TCE index plus $1,463 premium.

(16)

Profit sharing arrangement of 35% above $54,388, 40% above $59,388 and 50% above $69,388.

(17)

Charterer’s option to extend the bareboat charter for five years at $29,751 net per day.

(18)

Bareboat charter based on adjusted TD3C-WS with floor $22,572 and collar at $29,700.

(19)

The vessel is subject to a charter-in agreement with a purchase option at the end of the agreement, classified as a finance lease.

(20)

Charterer’s option to extend charter for one year at $15,200.

(21)

Purchase option in the form of the right of first refusal and profit share on sale of vessel.

(22)

Charterer has the option to extend for five further one-year options at rates increasing by $1,234 net per day each year.

(23)

Charterer’s option to extend charter for two years at $24,875 net per day.

(24)

The vessel is subject to a sale and leaseback transaction with a purchase option at the end of the lease term.

(25)

The vessel is subject to a bareboat contract with a purchase obligation at the end of the contract.

Our Charters

We provide seaborne shipping services under short, medium, and long-term time charters, bareboat charters and voyage charters with customers that we believe are creditworthy. For the three month period ended March 31, 2023, no customer accounted for 10% or more of our total revenues. For the three month period ended March 31, 2022, Cosco represented approximately 10.6% of total revenues. No other customers accounted for 10% or more of total revenues for any of the periods presented.

 

13


Table of Contents

Our revenues are driven by the number of vessels in the fleet, the number of days during which the vessels operate and our charter hire rates, which, in turn, are affected by a number of factors, including:

 

the duration of the charters;

 

the level of spot and long-term market rates at the time of charters;

 

decisions relating to vessel acquisitions and disposals;

 

the amount of time spent positioning vessels;

 

the amount of time that vessels spend in dry dock undergoing repairs and upgrades;

 

the age, condition and specifications of the vessels;

 

the aggregate level of supply and demand in the liquid, dry and containerized cargo shipping industry;

 

economic conditions, such as the impact of inflationary cost pressures, decreased consumer discretionary spending, fluctuations in foreign currency exchange rates, increasing interest rates, and the possibility of recession or financial market instability;

 

armed conflicts, such as the Russian/Ukrainian conflicts; and

 

the outbreak of global epidemics or pandemics such as coronavirus (COVID-19).

Time charters are available for varying periods, ranging from a single trip (spot charter) to long-term which may be many years. In general, a long-term time charter assures the vessel owner of a consistent stream of global revenue. Operating the vessel in the spot market affords the owner greater spot market opportunity, which may result in high rates when vessels are in high demand or low rates when vessel availability exceeds demand. We intend to operate our vessels in the medium to long-term charter market. Vessel charter rates are affected by world economics, international events, weather conditions, strikes, governmental policies, supply and demand and many other factors that might be beyond our control. Please read “Risk Factors” in our 2022 Annual Report on Form 20-F for a discussion of certain risks inherent in our business.

We could lose a customer or the benefits of a charter if:

 

the customer fails to make charter payments because of its financial inability, disagreements with us or otherwise;

 

the customer exercises certain rights to terminate the charter of the vessel;

 

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.

Under some of our time charters, either party may terminate the charter contract in the event of war in specified countries or in locations that would significantly disrupt the free trade of the vessel. Some of the time charters covering our vessels require us to return to the charterer, upon the loss of the vessel, all advances paid by the charterer but not earned by us.

 

14


Table of Contents

Trends and Factors Affecting Our Future Results of Operations

We believe the principal factors that will affect our future results of operations are the economic, regulatory, political and governmental conditions that affect the shipping industry generally and that affect conditions in countries and markets in which our vessels engage in business. Please read “Risk Factors” in our 2022 Annual Report on Form 20-F for a discussion of certain risks inherent in our business.

Results of Operations

Overview

The following table reflects certain key indicators of Navios Partners’ fleet performance for the three month periods ended March 31, 2023 and 2022.

 

     Three Month
Period Ended
March 31, 2023
(unaudited)
    Three Month
Period Ended
March 31, 2022
(unaudited)
 

Available Days(1)

     13,908       11,228  

Operating Days(2)

     13,749       11,072  

Fleet Utilization(3)

     98.9     98.6

Time Charter Equivalent rate (per day)(4)

   $ 20,811     $ 20,386  

Vessels operating at end of periods

     156       128  

 

(1)

Available days for the fleet represent total calendar days the vessels were in Navios Partners’ possession for the relevant period after subtracting off-hire days associated with scheduled repairs, dry dockings or special surveys and ballast days relating to voyages. The shipping industry uses available days to measure the number of days in a relevant period during which a vessel is capable of generating revenues.

(2)

Operating days are the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues.

(3)

Fleet utilization is the percentage of time that Navios Partners’ vessels were available for generating revenue, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure efficiency in finding employment for vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, dry dockings or special surveys.

(4)

Time Charter Equivalent rate (“TCE rate”) is defined as voyage, time charter revenues and charter-out revenues under bareboat contracts (grossed up by currently applicable fixed vessel operating expenses) less voyage expenses during a period divided by the number of available days during the period. The TCE rate per day is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels on various types of charter contracts for the number of available days of the fleet.

 

15


Table of Contents

FINANCIAL HIGHLIGHTS

The following table presents consolidated revenue and expense information for the three month periods ended March 31, 2023 and 2022.

 

     Three Month Period
Ended March 31, 2023
     Three Month Period
Ended March 31, 2022
 
     (unaudited)      (unaudited)  

Time charter and voyage revenues

   $ 309,522      $ 236,617  

Time charter and voyage expenses

     (39,763      (17,143

Direct vessel expenses

     (14,440      (11,193

Vessel operating expenses (entirely through related parties transactions)

     (83,216      (73,172

General and administrative expenses

     (19,499      (13,916

Depreciation and amortization of intangible assets

     (54,218      (42,866

Amortization of unfavorable lease terms

     7,588        21,839  

Gain on sale of vessels, net

     33,450        —    

Interest expense and finance cost, net

     (35,524      (13,227

Interest income

     1,617        2  

Other expense, net

     (6,352      (1,276
  

 

 

    

 

 

 

Net income

   $ 99,165      $ 85,665  
  

 

 

    

 

 

 

EBITDA(1)

   $ 188,836      $ 126,118  
  

 

 

    

 

 

 

Adjusted EBITDA(1)

   $ 155,386      $ 126,118  
  

 

 

    

 

 

 

Operating Surplus (1)

   $ 65,748      $ 55,825  
  

 

 

    

 

 

 

 

(1)

EBITDA, Adjusted EBITDA and Operating Surplus are non-GAAP financial measures. See “Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA and Operating Surplus” for a description of EBITDA, Adjusted EBITDA and Operating Surplus and a reconciliation of EBITDA, Adjusted EBITDA and Operating Surplus to the most comparable measure under U.S. GAAP.

Period over Period Comparisons

For the Three Month Period ended March 31, 2023 compared to the Three Month Period ended March 31, 2022

Time charter and voyage revenues: Time charter and voyage revenues of Navios Partners for the three month period ended March 31, 2023 increased by $72.9 million, or 30.8%, to $309.5 million, as compared to $236.6 million for the same period in 2022. The increase in revenue was mainly attributable to the increase in the size of our fleet and to the increase in the TCE rate. For the three month periods ended March 31, 2023 and 2022, the time charter and voyage revenues were negatively affected by $13.0 million and $4.8 million, respectively, relating to the straight-line effect of the containerships and tankers charters with de-escalating rates. For the three month period ended March 31, 2023, the TCE rate increased by 2.1% to $20,811 per day, as compared to $20,386 per day for the same period in 2022. The available days of the fleet increased by 23.9% to 13,908 days for the three month period ended March 31, 2023, as compared to 11,228 days for the same period in 2022 mainly due to the acquisition of the 36-vessel drybulk fleet from Navios Holdings and the deliveries of newbuilding and secondhand vessels, partially mitigated by the sale of vessels.

 

16


Table of Contents

Time charter and voyage expenses: Time charter and voyage expenses for the three month period ended March 31, 2023 increased by $22.7 million to $39.8 million, as compared to $17.1 million for the three month period ended March 31, 2022. The increase was mainly attributable to a: (i) $9.9 million increase in bunkers expenses arising from the increased number of freight voyages in the first quarter of 2023 (ii) $9.7 million increase in bareboat and charter-in hire expense of the tanker and drybulk fleet primarily due to the expansion of our fleet; (iii) $1.1 million increase in brokers’ commissions; (iv) $1.1 million increase in port expenses; and (v) $0.9 million increase in other voyage expenses.

Direct vessel expenses: Direct vessel expenses for the three month period ended March 31, 2023, increased by $3.2 million to $14.4 million, as compared to $11.2 million for the three month period ended March 31, 2022. The increase of $3.2 million was mainly attributable to the amortization of the deferred drydock and special survey costs due to the increase in the size of our fleet.

Vessel operating expenses: Vessel operating expenses for the three month period ended March 31, 2023, increased by approximately $10.0 million to $83.2 million, as compared to $73.2 million for the same period in 2022. The increase was mainly due to the expansion of our fleet and the adjustment of the fixed daily fee in accordance with the management agreements (the “Management Agreements”), partially mitigated by the sale of vessels.

General and administrative expenses: General and administrative expenses increased by $5.6 million to $19.5 million for the three month period ended March 31, 2023, as compared to $13.9 million for the three month period ended March 31, 2022. The increase was mainly due to a: (i) $3.9 million increase in administrative fees paid to the Manager (as defined herein) as per the administrative services agreement (the “Administrative Services Agreement”), mainly due to the expansion of our fleet, partially mitigated by the sale of vessels; and (ii) $1.7 million increase in professional and legal fees, as well as audit fees and other administrative expenses.

Depreciation and amortization of intangible assets: Depreciation and amortization of intangible assets amounted to $54.2 million for the three month period ended March 31, 2023, as compared to $42.9 million for the three month period ended March 31, 2022. The increase of $11.3 million was mainly attributable to a: (i) $13.6 million increase due to the delivery of the 36-vessel drybulk fleet in Navios Partners’ owned fleet; (ii) $2.1 million increase in depreciation expense due to the delivery of eight vessels during the second half of 2022 and the first quarter of 2023; and (iii) $0.4 million increase in depreciation expense due to vessel improvements. The above increase was partially mitigated by a: (i) $2.5 million decrease due to the sale of 15 vessels during the second half of 2022 and the first quarter of 2023; and (ii) $2.3 million decrease in amortization of favorable lease terms. Depreciation of vessels is calculated using an estimated useful life of 25 years for drybulk and tanker vessels and 30 years for containerships, respectively, from the date the vessel was originally delivered from the shipyard.

Amortization of unfavorable lease terms: Amortization of unfavorable lease terms amounted to $7.6 million and $21.8 million for the three month periods ended March 31, 2023 and March 31, 2022, respectively, related to the fair value of the time charters with unfavorable lease terms as determined at the acquisition date of Navios Maritime Containers L.P. (“Navios Containers”) and at the date of obtaining control of Navios Maritime Acquisition Corporation (“Navios Acquisition”).

Gain on sale of vessels, net: Gain on sale of vessels amounted to $33.5 million for the three month period ended March 31, 2023, relating to a gain on sale of eight of our vessels amounted to $34.1 million, partially mitigated by an impairment loss of one of our vessels that amounted to $0.6 million (see Note 4 – Vessels, net to the unaudited condensed consolidated financial statements, included elsewhere in this Report). There was no gain on sale of vessels for the three month period ended March 31, 2022.

 

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Interest expense and finance cost, net: Interest expense and finance cost, net for the three month period ended March 31, 2023 increased by $22.3 million to $35.5 million, as compared to $13.2 million for the three month period ended March 31, 2022. The increase was mainly due to: (i) the increase in Navios Partner’s weighted average loan balance to $1,904.6 million for the three month period ended March 31, 2023, as compared to the $1,352.1 million for the three month period ended March 31, 2022; and (ii) the increase of the weighted average interest rate for the three month period ended March 31, 2023 to 6.96% from 3.70% for the three month period ended March 31, 2022.

Interest income: Interest income amounted to $1.6 million for the three month period ended March 31, 2023, as compared to no interest income for the three month period ended March 31, 2022.

Other expense, net: Other expense, net for the three month period ended March 31, 2023 increased by $5.1 million to $6.4 million, as compared to $1.3 million for the three month period ended March 31, 2022, mainly due to the increase in expenses related to claims and foreign exchange differences.

Net income: Net income for the three month period ended March 31, 2023 amounted to $99.2 million as compared to $85.7 million net income for the three month period ended March 31, 2022. The increase of $13.5 million was due to the factors discussed above.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Liquidity and Capital Resources

We anticipate that our primary sources of funds for our short-term liquidity needs will be cash flows from our equity offerings, operations, proceeds from assets’ sales, long-term bank borrowings and other debt raisings. In addition to distributions on our units, our primary short-term liquidity needs are to fund general working capital requirements, cash reserve requirements including those under our credit facilities and debt service, while our long-term liquidity needs primarily relate to expansion and investment capital expenditures and other maintenance capital expenditures and debt repayment. As of March 31, 2023, Navios Partners’ current assets totaled $318.2 million, while current liabilities totaled $492.5 million, resulting in a negative working capital position of $174.3 million. Navios Partners’ cash forecast indicates that it will generate sufficient cash through its contracted revenue of $3.4 billion as of May 24, 2023 and cash proceeds from the sale of vessels (see Note 4 - Vessels, net and Note 15 - Subsequent Events to the unaudited condensed consolidated financial statements included elsewhere in this Report) to make the required principal and interest payments on its indebtedness, provide for the normal working capital requirements of the business for a period of at least 12 months from the date of issuance of our unaudited condensed consolidated financial statements.

Generally, our long-term sources of funds derive from cash from operations, long-term bank borrowings and other debt or equity financings to fund acquisitions and expansion and investment capital expenditures. We cannot assure you that we will be able to secure adequate financing or to obtain additional funds on favorable terms to meet our liquidity needs.

Cash deposits and cash equivalents in excess of amounts covered by government provided insurance are exposed to loss in the event of non-performance by financial institutions. Navios Partners does maintain cash deposits and cash equivalents in excess of government provided insurance limits. Navios Partners also minimizes exposure to credit risk by dealing with a diversified group of major financial institutions.

 

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The following table presents cash flow information derived from the unaudited condensed Consolidated Statements of Cash Flows of Navios Partners for the three month periods ended March 31, 2023 and 2022.

 

     Three Month
Period Ended
March 31, 2023
     Three Month
Period Ended
March 31, 2022
 
     (unaudited)      (unaudited)  

Net cash provided by operating activities

   $ 94,516      $ 5,153  

Net cash provided by/ (used in) investing activities

     44,232        (21,669

Net cash used in financing activities

     (100,635      (44,734
  

 

 

    

 

 

 

Increase/ (decrease) in cash, cash equivalents and restricted cash

   $ 38,113      $ (61,250
  

 

 

    

 

 

 

Cash provided by operating activities for the three month period ended March 31, 2023 as compared to the cash provided by operating activities for the three month period ended March 31, 2022

Net cash provided by operating activities increased by $89.3 million to $94.5 million of cash provided by operating activities for the three month period ended March 31, 2023, as compared to $5.2 million of cash provided by operating activities for the same period in 2022. In determining net cash provided by operating activities, net income is adjusted for the effects of certain non-cash items as discussed below.

The aggregate adjustments to reconcile net income to net cash provided by operating activities was $35.9 million of non-cash positive net adjustments for the three month period ended March 31, 2023, which consisted mainly of the following adjustments: (i) $54.2 million depreciation and amortization of intangible assets; (ii) $9.1 million non-cash amortization of deferred revenue and straight-line effect of the containerships and tankers charters with de-escalating rates; (iii) $9.1 million amortization of deferred dry dock and special survey costs; (iv) $2.6 million amortization of operating lease assets/ liabilities; and (v) $2.0 million amortization and write-off of deferred finance costs and discount. These adjustments were partially mitigated by: (i) $33.5 million gain from sale of vessels; and (ii) $7.6 million amortization of unfavorable lease terms.

The net cash outflow resulting from the change in operating assets and liabilities of $40.6 million for the three month period ended March 31, 2023 resulted from a: (i) $73.3 million decrease in amounts due to related parties; (ii) $12.5 million in payments for dry dock and special survey costs; and (iii) $4.8 million decrease in accounts payable. This was partially mitigated by: (i) a $31.5 million decrease in accounts receivable (ii) an $8.9 million increase in deferred revenue; (iii) a $7.3 million increase in accrued expenses; (iv) a $1.9 million decrease in prepaid expenses and other current assets; and (v) a $0.4 million decrease in amounts due from related parties.

The aggregate adjustments to reconcile net income to net cash provided by operating activities was a $33.5 million non-cash positive net adjustments for the three month period ended March 31, 2022, which consisted mainly of the following adjustments: (i) $42.9 million depreciation and amortization of intangible assets; (ii) $6.2 million amortization of deferred dry dock and special survey costs; (iii) $5.1 million non-cash amortization of deferred revenue and straight line effect of the containerships charters with de-escalating rates; and (iv) $1.3 million amortization and write-off of deferred finance costs and discount. These adjustments were partially mitigated by: (i) $21.8 million amortization of unfavorable lease terms; and (ii) $0.2 million amortization of operating lease assets/ liabilities.

 

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The net cash outflow resulting from the change in operating assets and liabilities of $114.0 million for the three month period ended March 31, 2022 resulted from: (i) a $64.2 million decrease in amounts due to related parties; (ii) an $18.5 million increase in amounts due from related parties; (iii) a $15.4 million increase in accounts receivable; (iv) a $10.5 million increase in prepaid expenses and other current assets; (v) $9.4 million in payments for dry dock and special survey costs; and (vi) a $4.8 million decrease in deferred revenue. This was partially mitigated by a: (i) $4.9 million increase in accrued expenses; and (ii) $3.9 million increase in accounts payable.

Cash provided by investing activities for the three month period ended March 31, 2023 as compared to the cash used in investing activities for the three month period ended March 31, 2022

Net cash provided by investing activities for the three month period ended March 31, 2023 amounted to $44.2 million as compared to $21.7 million cash used in investing activities for the three month period ended March 31, 2022.

Cash provided by investing activities of $44.2 million for the three month period ended March 31, 2023 was mainly due to $157.6 million proceeds related to the sale of eight vessels. This was partially mitigated by: (i) $62.1 million related to deposits for the acquisition/ option to acquire vessels and capitalized expenses; and (ii) $51.3 million related to vessels’ acquisitions and additions.

Cash used in investing activities of approximately $21.7 million for the three month period ended March 31, 2022 was mainly due to: (i) $19.0 million related to deposits for the acquisition/ option to acquire vessels and capitalized expenses; and (ii) $2.7 million related to vessels’ additions.

Cash used in financing activities for the three month period ended March 31, 2023 as compared to cash used in financing activities for the three month period ended March 31, 2022

Net cash used in financing activities increased by approximately $55.9 million to $100.6 million outflow for the three month period ended March 31, 2023, as compared to $44.7 million outflow for the same period in 2022.

Cash used in financing activities of $100.6 million for the three month period ended March 31, 2023 was mainly due to: (i) $172.5 million repayments of loans and financial liabilities; (ii) $2.8 million payments of deferred finance costs related to the new credit facilities and financial liability; and (iii) $1.5 million payment in total for cash distributions. This was partially mitigated by $76.2 million proceeds from the new credit facility and sale and leaseback agreement.

Cash used in financing activities of $44.7 million for the three month period ended March 31, 2022 was mainly due to: (i) $97.2 million repayments of loans and financial liabilities; (ii) $1.5 million payment in total for cash distributions; and (iii) $1.0 million payments of deferred finance costs related to the new credit facilities. This was partially mitigated by $55.0 million of proceeds from the new credit facility.

 

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Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA and, Operating Surplus

 

     Three Month Period
Ended March 31, 2023
     Three Month Period
Ended March 31, 2022
 
     (unaudited)      (unaudited)  

Net cash provided by operating activities

   $ 94,516      $ 5,153  

Net (decrease)/ increase in operating assets

     (21,359      53,956  

Net decrease in operating liabilities

     62,023        60,013  

Net interest cost

     33,907        13,225  

Amortization and write-off of deferred finance cost

     (2,031      (1,324

Amortization of operating lease assets/liabilities

     (2,558      211  

Non-cash amortization of deferred revenue and straight-line

     (9,111      (5,074

Stock-based compensation

     (1      (42

Gain on sale of vessels, net

     33,450        —    
  

 

 

    

 

 

 

EBITDA(1)

   $ 188,836      $ 126,118  

Gain on sale of vessels, net

     (33,450      —    
  

 

 

    

 

 

 

Adjusted EBITDA(1)

   $ 155,386      $ 126,118  

Cash interest income

     1,255        2  

Cash interest paid

     (34,642      (11,252

Maintenance and replacement capital expenditures

     (56,251      (59,043
  

 

 

    

 

 

 

Operating Surplus(2)

   $ 65,748      $ 55,825  
  

 

 

    

 

 

 

 

     Three Month Period
Ended March 31, 2023
     Three Month Period
Ended March 31, 2022
 
     (unaudited)      (unaudited)  

Net cash provided by operating activities

   $ 94,516      $ 5,153  

Net cash provided by/(used in) investing activities

     44,232        (21,669

Net cash used in financing activities

     (100,635      (44,734

(1) EBITDA and Adjusted EBITDA

EBITDA represents net income before interest and finance costs, depreciation and amortization (including intangible accelerated amortization) and income taxes. Adjusted EBITDA represents EBITDA excluding certain items, as described in the table above. Navios Partners uses Adjusted EBITDA as a liquidity measure and reconciles EBITDA and Adjusted EBITDA to net cash provided by operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA in this document is calculated as follows: net cash provided by operating activities adding back, when applicable and as the case may be, the effect of: (i) net increase/ (decrease) in operating assets; (ii) net decrease in operating liabilities; (iii) net interest cost; (iv) amortization and write-off of deferred finance costs and discount; (v) gain on sale of assets; (vi) non-cash amortization of deferred revenue and straight-line effect of the containerships and tankers charters with de-escalating rates; (vii) stock-based compensation expense; and (viii) amortization of operating lease assets/ liabilities. Navios Partners believes that EBITDA and Adjusted EBITDA are each the basis upon which liquidity can be assessed and presents useful information to investors regarding Navios Partners’ ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and make cash distributions. Navios Partners also believes that EBITDA and Adjusted EBITDA are used: (i) by potential lenders to evaluate potential transactions; (ii) to evaluate and price potential acquisition candidates; and (iii) by securities analysts, investors and other interested parties in the evaluation of companies in our industry.

 

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Each of EBITDA and Adjusted EBITDA have limitations as an analytical tool, and should not be considered in isolation or as a substitute for the analysis of Navios Partners’ results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA and Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as a principal indicator of Navios Partners’ performance. Furthermore, our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.

EBITDA for the three month period ended March 31, 2023 and 2022 was affected by the items described in the table above. Excluding these items, Adjusted EBITDA increased by approximately $29.3 million to $155.4 million for the three month period ended March 31, 2023, as compared to $126.1 million for the same period in 2022. The increase in Adjusted EBITDA was primarily due to a $72.9 million increase in time charter and voyage revenues. The above increase was partially mitigated by a: (i) $22.7 million increase in time charter and voyage expenses, mainly due to the increase in (a) bunker expenses arising from the increased number of freight voyages in the first quarter of 2023 and (b) bareboat and charter-in hire expense of the tanker and drybulk fleet primarily due to the expansion of our fleet; (ii) $10.0 million increase in vessel operating expenses in accordance with our Management Agreements, mainly due to the expansion of our fleet; (iii) $5.6 million increase in general and administrative expenses in accordance with our Administrative Services Agreement, mainly due to the expansion of our fleet; (iv) $5.1 million increase in other expenses, net; and (v) $0.2 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items).

(2) Operating Surplus

Navios Partners generated Operating Surplus for the three month period ended March 31, 2023 of $65.7 million, as compared to $55.8 million for the three month period ended March 31, 2022. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (See “Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA and Operating Surplus” contained herein).

Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense, non-cash interest income, estimated maintenance and replacement capital expenditures and one-off items. Maintenance and replacement capital expenditures are those capital expenditures required to maintain over the long term the operating capacity of, or the revenue generated by, Navios Partners’ capital assets.

Operating Surplus is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership’s ability to make quarterly cash distributions. Operating Surplus is not required by accounting principles generally accepted in the United States and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.

Capital Expenditures

Navios Partners finances its capital expenditures with cash flow from operations, equity raisings, long-term bank borrowings and other debt raisings. Capital expenditures for each of the three month periods ended March 31, 2023 and 2022 amounted to $113.4 million and $21.7 million, respectively. The reserves for estimated maintenance and replacement capital expenditures for the three month periods ended March 31, 2023 and 2022 were $56.3 million and $59.0 million, respectively.

Maintenance for our vessels and expenses related to drydocking expenses are reimbursed at cost by Navios Partners to Navios Shipmanagement Inc., (the “Manager”) and Navios Tankers Management Inc. (“Tankers Manager” and together with the Manager, the “Managers”) under the Management Agreements.

 

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Maintenance and Replacement Capital Expenditures Reserve

We estimate that our annual replacement reserve for the year ending December 31, 2023 will be approximately $225.9 million, for replacing our vessels at the end of their useful lives.

The amount for estimated replacement capital expenditures attributable to future vessel replacement was based on the following assumptions: (i) current market price to purchase a five year old vessel of similar size and specifications; (ii) a 25-year useful life for drybulk and tanker vessels and a 30-year useful life for containerships; and (iii) a relative net investment rate.

The amount for estimated maintenance capital expenditures attributable to future vessel drydocking and special survey was based on certain assumptions including the remaining useful life of the owned vessels of our fleet, market costs of drydocking and special survey and a relative net investment rate.

Our Board of Directors, with the approval of the Conflicts Committee, may determine that one or more of our assumptions should be revised, which could cause our Board of Directors to increase or decrease the amount of estimated maintenance and replacement capital expenditures. The actual cost of replacing the vessels in our fleet will depend on a number of factors, including prevailing market conditions, charter hire rates and the availability and cost of financing at the time of replacement. We may elect to finance some or all of our maintenance and replacement capital expenditures through the issuance of additional common units, which could be dilutive to existing unitholders.

Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy

There is no guarantee that unitholders will receive quarterly distributions from us on the common units on any quarter.

Our ability to make distributions to our unitholders depends on the performance of our subsidiaries and their ability to distribute funds to us. The ability of our subsidiaries to make distributions to us may be restricted by, among other things, the provisions of existing and future indebtedness, applicable partnership and limited liability company laws and other laws and regulations.

See Note 13 – Cash distributions and earnings per unit to the unaudited condensed consolidated financial statements included elsewhere in this Report.

Quantitative and Qualitative Disclosures about Market Risks

Foreign Exchange Risk

Our functional and reporting currency is the U.S. dollar. We engage in worldwide commerce with a variety of entities. Although our operations may expose us to certain levels of foreign currency risk, our transactions are predominantly U.S. dollar denominated. Transactions in currencies other than U.S. dollars are translated at the exchange rate in effect at the date of each transaction. Differences in exchange rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is either settled or translated, are recognized.

Interest Rate Risk

Interest rates have increased significantly as central banks in Europe, United States and other developed countries raise interest rates in an effort to reduce the inflation effect. The eventual implications of tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital for our Company.

 

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Borrowings under our credit facilities and financial liabilities bear interest at a rate based on a premium over U.S. LIBOR or SOFR. Therefore, we are exposed to the risk that our interest expense may increase if interest rates rise. For the three month periods ended March 31, 2023 and 2022, we paid interest on our outstanding debt at a weighted average interest rate of 6.96% and 3.70%, respectively. An 1% increase in LIBOR or SOFR would have increased our interest expense for the three month periods ended March 31, 2023 and 2022 by $3.7 million and $3.0 million, respectively.

Concentration of Credit Risk

Financial instruments, which potentially subject us to significant concentrations of credit risk, consist principally of trade accounts receivable. We closely monitor our exposure to customers for credit risk. We have policies in place to ensure that we trade with customers with an appropriate credit history.

For the three month period ended March 31, 2023, no customer accounted for 10% or more of our total revenues. For the three month period ended March 31, 2022, Cosco, represented approximately 10.6% of total revenues. No other customers accounted for 10% or more of total revenues for any of the periods presented.

If we lose a charter, we may be unable to re-deploy the related vessel on terms as favorable to us due to the long-term nature of most charters and the cyclical nature of the industry or we may be forced to charter the vessel on the spot market at then market rates which may be less favorable than the charter that has been terminated. If we are unable to re-deploy a vessel for which the charter has been terminated, we will not receive any revenues from that vessel, but we may be required to pay expenses necessary to maintain the vessel in proper operating condition. If we lose a vessel, any replacement or newbuilding would not generate revenues during its construction acquisition period, and we may be unable to charter any replacement vessel on terms as favorable to us as those of the terminated charter.

Even if we successfully charter our vessels in the future, our charterers may go bankrupt or fail to perform their obligations under the charter agreements, they may delay payments or suspend payments altogether, they may terminate the charter agreements prior to the agreed-upon expiration date or they may attempt to renegotiate the terms of the charters. The permanent loss of a customer, time charter or vessel, or a decline in payments under our charters, could have a material adverse effect on our business, results of operations and financial condition and our ability to make cash distributions in the event we are unable to replace such customer, time charter or vessel. For further details, please read “Risk Factors” in our 2022 Annual Report filed on Form 20-F with the SEC on March 24, 2023.

Recent Accounting Pronouncements

The Company’s recent accounting pronouncements are included in the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this Report.

Critical Accounting Policies

Our financial statements have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates in the application of our accounting policies based on the best assumptions, judgments and opinions of management. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. All significant accounting policies are as described in Note 2-Summary of Significant Accounting Policies to the notes to the consolidated financial statements included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2022 filed with the SEC on March 24, 2023 and in Note 2-Summary of Significant Accounting Policies included in the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this Report.

 

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Exhibit List

 

Exhibit No.

99.1    Bareboat Charter and Memorandum of Agreement, dated February 14, 2023, between Glory Ocean Shipping S.A. and Temm Maritime Co., Ltd., as buyers and bareboat owners, and Koufonisi Shipping Corporation, as seller and bareboat charterer, providing for the sale and leaseback of the Navios Felix.*
99.2    Term Loan Facility Agreement dated February 16, 2023, by and among Terpsichore Shipping Corporation, Erato Shipmanagement Corporation, Calliope Shipping Corporation, and Euterpe Shipping Corporation, as borrowers, DNB Bank ASA, as agent, and the Banks and Financial Institutions listed therein.*
99.3    Term Loan Facility Agreement dated April 19, 2023, by and among Folegandros Shipping Corporation, Serifos Shipping Corporation, Sifnos Shipping Corporation, Syros Shipping Corporation and Skiathos Shipping Corporation, as borrowers, Skandinaviska Enskilda Banken AB, as agent, bank, and arranger, and the Banks and Financial Institutions listed therein.*
99.4    Loan Agreement dated April 25, 2023, between Karpathos Shipping Corporation, and Patmos Shipping Corporation, as borrowers, KFW IPEX-Bank GMBH, as facilitly and security agent, mandated lead arranger, and K-Sure agent, and the Banks and Financial Institutions listed therein.*
99.5    Loan Agreement dated May 2, 2023, between Antipsara Shipping Corporation, Kithira Shipping Corporation, and Thasos Shipping Corporation, as borrowers, Eurobank S.A., as agent, arranger, and security agent, Eurobank Cyprus Ltd., as account bank, and the Banks and Financial Institutions listed therein.*
99.6    Bareboat Charter and Memorandum of Agreement (Form of) dated May 19, 2023, by and between Xiang H145 International Ship Lease Co., Limited, Xiang H142 International Ship Lease Co., Limited, Xiang H143 International Ship Lease Co., Limited, Xiang H144 International Ship Lease Co., Limited, wholly owned subsidiaries of Bank of Communications Financial Leasing Company as buyers and bareboat owners and Polymnia Shipping Corporation, Kleio Shipping Corporation, Astrovalos Shipping Corporation and Gavdos Shipping Corporation as seller and bareboat charterers, providing for the sale and leaseback of Nave Cosmos, Nave Photon, Zim Seagull and Zim Albatross.*

 

*

Filed herewith

 

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INDEX

 

NAVIOS MARITIME PARTNERS L.P.

   Page  

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS AT MARCH  31, 2023 AND DECEMBER 31, 2022

     F-2  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2023 AND 2022

     F-3  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2023 AND 2022

     F-4  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2023 AND 2022

     F-6  

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

     F-7  

 

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Table of Contents

NAVIOS MARITIME PARTNERS L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of U.S. Dollars except unit data)

 

     Notes      March 31, 2023
(unaudited)
     December 31, 2022  

ASSETS

        

Current assets

        

Cash and cash equivalents

     3      $ 197,467      $ 157,814  

Restricted cash

     3        15,744        17,284  

Accounts receivable, net

        43,547        75,030  

Prepaid expenses and other current assets

        61,463        60,296  
     

 

 

    

 

 

 

Total current assets

        318,221        310,424  
     

 

 

    

 

 

 

Vessels, net

     4        3,695,272        3,777,329  

Deposits for vessels acquisitions

     11        265,255        218,663  

Other long-term assets

     6, 11        33,922        46,122  

Deferred dry dock and special survey costs, net

        98,739        99,999  

Amounts due from related parties

     12        39,844        41,403  

Intangible assets

     5        74,048        78,716  

Operating lease assets

     14        310,492        323,048  
     

 

 

    

 

 

 

Total non-current assets

        4,517,572        4,585,280  
     

 

 

    

 

 

 

Total assets

      $ 4,835,793      $ 4,895,704  
     

 

 

    

 

 

 

LIABILITIES AND PARTNERS’ CAPITAL

        

Current liabilities

        

Accounts payable

      $ 22,192      $ 27,117  

Accrued expenses

        23,373        16,049  

Deferred revenue

        47,472        38,875  

Operating lease liabilities, current portion

     14        37,884        39,853  

Amounts due to related parties

     12        31,454        104,751  

Current portion of financial liabilities, net

     6        170,056        216,955  

Current portion of long-term debt, net

     6        160,037        174,140  
     

 

 

    

 

 

 

Total current liabilities

        492,468        617,740  
     

 

 

    

 

 

 

Operating lease liabilities, net

     14        263,234        271,262  

Unfavorable lease terms

     5        40,318        47,906  

Long-term financial liabilities, net

     6        889,705        864,661  

Long-term debt, net

     6        650,712        689,691  

Deferred revenue

        51,031        50,138  

Other long-term liabilities

        7,736        11,343  
     

 

 

    

 

 

 

Total non-current liabilities

        1,902,736        1,935,001  
     

 

 

    

 

 

 

Total liabilities

      $ 2,395,204      $ 2,552,741  
     

 

 

    

 

 

 

Commitments and contingencies

     11        —          —    

Partners’ capital:

        

Common Unitholders (30,184,388 units issued and outstanding at each of March 31, 2023 and December 31, 2022)

     1, 8        2,401,169        2,305,494  

General Partner (622,296 units issued and outstanding at each of March 31, 2023 and December 31, 2022)

     1, 8        39,420        37,469  
     

 

 

    

 

 

 

Total partners’ capital

        2,440,589        2,342,963  
     

 

 

    

 

 

 

Total liabilities and partners’ capital

      $ 4,835,793      $ 4,895,704  
     

 

 

    

 

 

 

See unaudited notes to the condensed consolidated financial statements

 

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NAVIOS MARITIME PARTNERS L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

            Three Month
Period Ended
March 31, 2023
    Three Month
Period Ended
March 31, 2022
 
     Notes      (unaudited)     (unaudited)  

Time charter and voyage revenues

     2, 9, 14      $ 309,522     $ 236,617  

Time charter and voyage expenses

     14        (39,763     (17,143

Direct vessel expenses

     12        (14,440     (11,193

Vessel operating expenses (entirely through related parties transactions)

     12        (83,216     (73,172

General and administrative expenses

     12        (19,499     (13,916

Depreciation and amortization of intangible assets

     4, 5        (54,218     (42,866

Amortization of unfavorable lease terms

     5        7,588       21,839  

Gain on sale of vessels, net

     4        33,450       —    

Interest expense and finance cost, net

     6        (35,524     (13,227

Interest income

        1,617       2  

Other expense, net

        (6,352     (1,276
     

 

 

   

 

 

 

Net income

      $ 99,165     $ 85,665  
     

 

 

   

 

 

 

 

     Three Month Period
Ended March 31, 2023
     Three Month Period
Ended March 31, 2022
 
Net income    (unaudited)      (unaudited)  

Common Unitholders

   $ 97,183      $ 83,952  

General Partner

     1,982        1,713  
  

 

 

    

 

 

 

Net income

   $ 99,165      $ 85,665  
  

 

 

    

 

 

 

 

     Three Month Period
Ended March 31, 2023
     Three Month Period
Ended March 31, 2022
 
Earnings per unit (see Note 13):    (unaudited)      (unaudited)  

Earnings per common unit, basic

   $ 3.22      $ 2.78  

Earnings per common unit, diluted

   $ 3.22      $ 2.78  

See unaudited notes to the condensed consolidated financial statements

 

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NAVIOS MARITIME PARTNERS L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of U.S. Dollars)

 

            Three Month Period
Ended March 31, 2023
    Three Month
Period Ended
March 31, 2022
 
     Notes      (unaudited)     (unaudited)  

OPERATING ACTIVITIES:

       

Net income

      $ 99,165     $ 85,665  

Adjustments to reconcile net income to net cash provided by operating activities:

       

Depreciation and amortization of intangible assets

     4, 5        54,218       42,866  

Amortization of unfavorable lease terms

     5        (7,588     (21,839

Non-cash amortization of deferred revenue and straight line

        9,111       5,074  

Amortization of operating lease assets/ liabilities

     14        2,558       (211

Amortization and write-off of deferred finance costs and discount

        2,031       1,324  

Amortization of deferred dry dock and special survey costs

        9,134       6,201  

Gain on sale of vessel, net

     4        (33,450     —    

Stock-based compensation

     8        1       42  

Changes in operating assets and liabilities:

       

Decrease/ (increase) in accounts receivable

        31,483       (15,431

Decrease/ (increase) in prepaid expenses and other current assets

     15        1,949       (10,545

Decrease/ (increase) in amounts due from related parties

     12        421       (18,541

Payments for dry dock and special survey costs

        (12,494     (9,439

(Decrease)/ increase in accounts payable

        (4,924     4,049  

Increase in accrued expenses

        7,324       4,946  

Increase/ (decrease) in deferred revenue

        8,875       (4,804

Decrease in amounts due to related parties

     12        (73,298     (64,204
     

 

 

   

 

 

 

Net cash provided by operating activities

        94,516       5,153  

INVESTING ACTIVITIES:

       

Net cash proceeds from sale of vessels

     4        157,655       —    

Deposits for acquisition/ option to acquire vessel

     11        (62,140     (19,023

Acquisition of/ additions to vessels

     4,12        (51,283     (2,646
     

 

 

   

 

 

 

Net cash provided by/ (used in) investing activities

        44,232       (21,669

FINANCING ACTIVITIES:

       

Cash distributions paid

     13        (1,540     (1,541

Repayment of long-term debt and financial liabilities

     6        (172,542     (97,167

Payments of deferred finance costs

     6        (2,753     (1,026

Proceeds from long-term debt and financial liabilities

     6        76,200       55,000  
     

 

 

   

 

 

 

Net cash used in financing activities

        (100,635     (44,734
     

 

 

   

 

 

 

Increase/ (decrease) in cash, cash equivalents and restricted cash

        38,113       (61,250

Cash, cash equivalents and restricted cash, beginning of period

        175,098       169,446  
     

 

 

   

 

 

 

Cash, cash equivalents and restricted cash, end of period

      $ 213,211     $ 108,196  
     

 

 

   

 

 

 

See unaudited notes to the condensed consolidated financial statements

 

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NAVIOS MARITIME PARTNERS L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of U.S. Dollars)

 

     Three Month Period
Ended March 31, 2023
    Three Month Period
Ended March 31, 2022
 
     (unaudited)     (unaudited)  

Supplemental disclosures of cash flow information

    

Cash interest paid

   $ 34,642     $ 11,252  

Non cash financing activities

    

Stock-based compensation

   $ 1     $ 42  

Financial and finance lease liabilities

   $ 68,410     $ —    

Non cash investing activities

    

Acquisition of vessels

   $ (90,677   $ —    

See unaudited notes to the condensed consolidated financial statements

 

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NAVIOS MARITIME PARTNERS L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(Expressed in thousands of U.S. Dollars except unit data)

 

     Limited Partners        
     General Partner     Common Unitholders        
     Units      Amount     Units      Amount     Total
Partners’
Capital
 

Balance, December 31, 2022

     622,296      $ 37,469       30,184,388      $ 2,305,494     $ 2,342,963  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Cash distribution paid ($0.05 per unit—see Note 13)

     —          (31     —          (1,509     (1,540

Stock based compensation (see Note 8)

     —          —         —          1       1  

Net income

     —          1,982       —          97,183       99,165  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, March 31, 2023

     622,296      $ 39,420       30,184,388      $ 2,401,169     $ 2,440,589  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

     Limited Partners        
     General Partner     Common Unitholders        
     Units      Amount     Units      Amount     Total
Partners’
Capital
 

Balance, December 31, 2021

     622,555      $ 26,008       30,197,087      $ 1,743,717     $ 1,769,725  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Cash distribution paid ($0.05 per unit—see Note 13)

     —          (31     —          (1,510     (1,541

Stock based compensation (see Note 8)

     —          —         —          42       42  

Net income

     —          1,713       —          83,952       85,665  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance, March 31, 2022

     622,555      $ 27,690       30,197,087      $ 1,826,201     $ 1,853,891  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

See unaudited notes to the condensed consolidated financial statements

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED 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 and tanker vessels, formed on August 7, 2007 under the laws of the Republic of the Marshall Islands. The Company’s general partner is Olympos Maritime Ltd. (the “General Partner”) (see Note 12 – Transactions with related parties and affiliates).

Navios Partners is engaged in the seaborne transportation services of a wide range of liquid and dry cargo commodities including crude oil, refined petroleum, chemicals, iron ore, coal, grain, fertilizer and also containers, chartering its vessels under short, medium and longer-term charters. The operations of Navios Partners are managed by Navios Shipmanagement Inc., (the “Manager”) and Navios Tankers Management Inc. (“Tankers Manager” and together with the Manager, the “Managers”) which are entities affiliated with the Company’s Chairwoman and Chief Executive Officer (see Note 12 – Transactions with related parties and affiliates).

As of March 31, 2023, there were 30,184,388 outstanding common units and 622,296 general partnership units. As of March 31, 2023, Navios Maritime Holdings Inc. (“Navios Holdings”) owned an approximately 10.3% ownership interest in Navios Partners and the General Partner held an approximately 2.0% ownership interest in Navios Partners based on all outstanding common units and general partnership units.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation: The accompanying interim condensed consolidated financial statements are unaudited, but, in the opinion of management, reflect all adjustments for a fair statement of Navios Partners’ consolidated balance sheets, statement of partners’ capital, statements of operations and cash flows for the periods presented. The results of operations for the interim periods are not necessarily indicative of results for the full year. The footnotes are condensed as permitted by the requirements for interim financial statements and accordingly, do not include information and disclosures required under United States generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. All such adjustments are deemed to be of a normal recurring nature. These interim financial statements should be read in conjunction with the Company’s consolidated financial statements and notes included in Navios Partners’ Annual Report for the year ended December 31, 2022 filed on Form 20-F on March 24, 2023 with the U.S. Securities and Exchange Commission (“SEC”).

Based on internal forecasts and projections that take into account reasonably possible changes in Company’s trading performance, management believes that the Company has adequate financial resources, including cash from sale of vessels (see Note 4 – Vessels, net and Note 15 – Subsequent Events) to continue in operation and meet its financial commitments, including but not limited to capital expenditures and debt service obligations, for a period of at least twelve months from the date of issuance of these condensed consolidated financial statements. Accordingly, the Company continues to adopt the going concern basis in preparing its financial statements.

Following Russia’s invasion of Ukraine in February 2022 the United States, the European Union, the United Kingdom and other countries have announced sanctions against Russia, and may impose wider sanctions and take other actions in the future. To date, no apparent consequences have been identified on the Company’s business. It should be noted that since the Company employs Ukrainian and Russian seafarers, it may face problems in relation to their employment, repatriation, salary payments and be subject to claims in this regard. Notwithstanding the foregoing, it is possible that these tensions might eventually have an adverse impact on our business, financial condition, results of operations and cash flows.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

Interest rates have increased significantly as central banks in Europe, United States and other developed countries raise interest rates in an effort to reduce the inflation effect. The eventual implications of tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital for our Company.

(b) Principles of consolidation: The accompanying interim condensed consolidated financial statements include Navios Partners’ wholly owned subsidiaries incorporated under the laws of the Republic of Marshall Islands, Liberia, Malta, Delaware, Cayman Islands, Hong Kong, British Virgin Islands, Luxemburg and Belgium from their dates of incorporation or from the date of acquiring control or, for chartered-in vessels, from the dates charter-in agreements were in effect. All significant inter-company balances and transactions have been eliminated in Navios Partners’ consolidated financial statements.

Navios Partners also consolidates entities that are determined to be variable interest entities (“VIE”) as defined in the accounting guidance, if it determines that it is the primary beneficiary. A VIE is defined as a legal entity where either (i) equity interest holders as a group lack the characteristics of a controlling financial interest, including decision making ability and an interest in the entity’s residual risks and rewards, (ii) the equity holders have not provided sufficient equity investment to permit the entity to finance its activities without additional subordinated financial support, or (iii) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights.

Subsidiaries: Subsidiaries are those entities in which Navios Partners has an interest of more than one half of the voting rights or otherwise has power to govern the financial and operating policies of the entity.

A discussion of the Company’s significant accounting policies can be found in Note 2 to the Company’s consolidated financial statements included in the Annual Report filed on Form 20-F on March 24, 2023 with the SEC for the year ended December 31, 2022. There have been no material changes to these policies in the three months ended March 31, 2023.

(c) Revenue and Expense Recognition:

Revenue from time chartering

Revenues from time chartering and bareboat chartering of vessels are accounted for as operating leases and are thus recognized on a straight line basis as the average lease revenue over the rental periods of such charter agreements, as service is performed. A time charter involves placing a vessel at the charterers’ disposal for a period of time during which the charterer uses the vessel in return for the payment of a specified daily hire rate. Short period charters for less than three months are referred to as spot-charters. Charters extending three months to a year are generally referred to as medium-term charters. All other charters are considered long-term. The Company has determined to recognize lease revenue as a combined single lease component for all time charters (operating leases) as the related lease component and non-lease components will have the same timing and pattern of the revenue recognition of the combined single lease component. The performance obligations in a time charter contract are satisfied over term of the contract beginning when the vessel is delivered to the charterer until it is redelivered back to the Company. Under time charters, operating costs such as for crews, maintenance and insurance are typically paid by the owner of the vessel. Revenue from time chartering and bareboat chartering of vessels amounted to $267,672 and $221,318 for the three month periods ended March 31, 2023 and 2022, respectively.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

Revenue from voyage contracts

Under a voyage charter, a vessel is provided for the transportation of specific goods between specific ports in return for payment of an agreed upon freight per ton of cargo. Upon adoption of ASC 606, the Company recognizes revenue ratably from port of loading to when the charterer’s cargo is discharged as well as defer costs that meet the definition of “costs to fulfill a contract” and relate directly to the contract. Revenue from voyage contracts amounted to $23,750 and $6,571 for the three month periods ended March 31, 2023 and 2022, respectively.

Pooling arrangements

For vessels operating in pooling arrangements, the Company earns a portion of total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to each pool participant vessel, including the Company’s vessels, is determined in accordance with an agreed-upon formula, which is determined by points awarded to each vessel in the pool based on the vessel’s age, design and other performance characteristics. Revenue under pooling arrangements is accounted for as variable rate operating leases on the accrual basis and is recognized when an agreement with the pool exists, price is fixed, service is provided and the collectability is reasonably assured. The allocation of such net revenue may be subject to future adjustments by the pool however, such changes are not expected to be material. The Company recognizes net pool revenue on a monthly and quarterly basis, when the vessel has participated in a pool during the period and the amount of pool revenue can be estimated reliably based on the pool report. Revenue from vessels operating in pooling arrangements amounted to $18,050 and $8,666 for the three month periods ended March 31, 2023 and 2022, respectively.

Revenue from profit-sharing

Profit-sharing revenues are calculated at an agreed percentage of the excess of the charterer’s average daily income (calculated on a quarterly or semi annual basis) over an agreed amount and accounted for on an accrual basis based on provisional amounts and for those contracts that provisional accruals cannot be made due to the nature of the profit sharing elements, these are accounted for on the actual cash settlement or when such revenue becomes determinable. Profit-sharing revenue amounted to $50 and $62 for the three month periods ended March 31, 2023 and 2022, respectively.

Revenues are recorded net of address commissions. Address commissions represent a discount provided directly to the charterers based on a fixed percentage of the agreed upon charter or freight rate. Since address commissions represent a discount (sales incentive) on services rendered by the Company and no identifiable benefit is received in exchange for the consideration provided to the charterer, these commissions are presented as a reduction of revenue.

Recent Accounting Pronouncements:

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in Navios Partners’ Annual Report on Form 20-F for the year ended December 31, 2022.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

NOTE 3 – CASH AND CASH EQUIVALENTS

 

     March 31, 2023      December 31, 2022  

Cash and cash equivalents

   $ 197,467      $ 157,814  

Restricted cash

     15,744        17,284  
  

 

 

    

 

 

 

Total cash and cash equivalents and restricted cash

   $ 213,211      $ 175,098  
  

 

 

    

 

 

 

As of March 31, 2023 and December 31, 2022, restricted cash amounted to $15,744 and $17,284, respectively, and relates to amounts held in retention accounts in order to service debt and interest payments, as required by certain of the Company’s credit facilities and financial liabilities.

Cash deposits and cash equivalents in excess of amounts covered by government-provided insurance are exposed to loss in the event of non-performance by financial institutions. Navios Partners does maintain cash deposits and equivalents in excess of government-provided insurance limits. Navios Partners also minimizes exposure to credit risk by dealing with a diversified group of major financial institutions.

NOTE 4 – VESSELS, NET

 

Total Vessels    Cost      Accumulated
Depreciation
     Net Book
Value
 

Balance December 31, 2022

   $ 4,292,150      $ (514,821    $ 3,777,329  

Additions/ (Depreciation)

     141,960        (49,449      92,511  

Disposals/ Impairment

     (186,336      11,768        (174,568
  

 

 

    

 

 

    

 

 

 

Balance March 31, 2023

   $ 4,247,774      $ (552,502    $ 3,695,272  
  

 

 

    

 

 

    

 

 

 

The above balances as of March 31, 2023 are analyzed in the following tables:

 

Owned Vessels    Cost      Accumulated
Depreciation
     Net Book
Value
 

Balance December 31, 2022

   $ 3,757,903      $ (505,943    $ 3,251,960  

Additions/ (Depreciation)

     96,026        (43,840      52,186  

Disposals/ Impairment

     (130,262      10,677        (119,585
  

 

 

    

 

 

    

 

 

 

Balance March 31, 2023

   $ 3,723,667      $ (539,106    $ 3,184,561  
  

 

 

    

 

 

    

 

 

 

 

Right-of-use assets under finance Lease    Cost      Accumulated
Depreciation
     Net Book
Value
 

Balance December 31, 2022

   $ 534,247      $ (8,878    $ 525,369  

Additions/ (Depreciation)

     45,934        (5,609      40,325  

Transfers to owned vessels

     (56,074      1,091        (54,983
  

 

 

    

 

 

    

 

 

 

Balance March 31, 2023

   $ 524,107      $ (13,396    $ 510,711  
  

 

 

    

 

 

    

 

 

 

 

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Table of Contents

NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

Right-of-use asset under finance leases are calculated at an amount equal to the finance liability, increased with the allocated excess value, the initial direct costs and adjusted for the carrying amount of the straight-line effect of liability as well as the favorable and unfavorable lease terms derived from charter-in agreements.

During the three month periods ended March 31, 2023 and 2022, the Company capitalized certain extraordinary fees and costs related to vessels’ regulatory requirements, including ballast water treatment system installation, exhaust gas cleaning system installation and scrubber system installation, that amounted to $7,189 and $2,646, respectively, and are presented under the caption “Acquisition of/ additions to vessels” in the condensed Consolidated Statements of Cash Flows (see Note 12 – Transactions with related parties and affiliates).

Acquisition of Vessels

2023

On March 29, 2023, Navios Partners took delivery of the Navios Altair, a 2023-built Capesize vessel of 182,115 dwt, from an unrelated third party, by entering into a 15-year bareboat charter-in agreement which provides for purchase options with de-escalating purchase prices. Navios Partners accounted for the bareboat charter-in agreement as finance lease, and recognized a right-of-use asset at $45,934 being an amount equal to the initial measurement of the finance lease liability (see Note 6 – Borrowings) increased by the amount of $2,815, which was prepaid before the lease commencement.

On March 6, 2023, Navios Partners paid an amount of $42,879 (including $1,600 related to the scrubber system installation) and acquired from an unrelated third party, the Navios Felix, a 2016-built scrubber-fitted Capesize vessel of 181,221 dwt, which was previously accounted for as a right-of-use asset under finance lease. At the same date, the Company derecognized the right-of-use asset under finance lease and recognized the vessel at an aggregate cost of $53,232.

On February 5, 2023, Navios Partners took delivery of the Navios Meridian, a 2023-built Panamax vessel of 82,010 dwt, from an unrelated third party, for an acquisition cost of $35,605.

Sale of Vessels

2023

On March 3, 2023, Navios Partners sold the Nave Photon, a 2008-built VLCC vessel of 297,395 dwt, to an unrelated third party, for a net sales price of $52,000.

On February 7, 2023, Navios Partners sold the Navios Prosperity I, a 2007-built Panamax vessel of 75,527 dwt, to an unrelated third party, for a net sales price of $13,337.

On February 3, 2023, Navios Partners sold the Jupiter N, a 2011-built Post-Panamax vessel of 93,062 dwt, to an unrelated third party, for a net sales price of $16,096.

On January 26, 2023, Navios Partners sold the Star N, a 2009-built MR1 Product Tanker vessel of 37,836 dwt, to an unrelated third party, for a net sales price of $17,738.

On January 26, 2023, Navios Partners sold the Navios Amaryllis, a 2008-built Ultra-Handymax vessel of 58,735 dwt, to an unrelated third party, for a net sales price of $14,798.

 

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Table of Contents

NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

On January 24, 2023, Navios Partners sold the Nave Polaris, a 2011-built Chemical Tanker vessel of 25,145 dwt, to an unrelated third party, for a net sales price of $14,909.

On January 17, 2023, Navios Partners sold the Nave Dorado, a 2005-built MR2 Product Tanker vessel of 47,999 dwt, to an unrelated third party, for a net sales price of $15,313.

On January 9, 2023, Navios Partners sold the Nave Cosmos, a 2010-built Chemical Tanker vessel of 25,130 dwt, to an unrelated third party, for a net sales price of $13,464.

Following the sale of the above vessels and the committed sale of the Navios Libertas during the three month period ended March 31, 2023 analyzed below, the aggregate amount of $33,450 (including the aggregate remaining carrying balance of dry-dock and special survey cost of $4,620), including an impairment loss of $601 in connection with the committed sale of the Navios Libertas, was presented under the caption “Gain on sale of vessels, net” in the condensed Consolidated Statements of Operations and condensed Consolidated Statements of Cash Flows.

Vessels agreed to be sold

On March 17, 2023, Navios Partners agreed to sell the Navios Libertas, a 2007-built Panamax vessel of 75,511 dwt, to an unrelated third party, for a sales price of $13,800. The sale was completed on May 4, 2023.

On February 6, 2023, Navios Partners agreed to sell the Serenitas N, a 2011-built Ultra-Handymax vessel of 56,644 dwt, to an unrelated third party, for a sales price of $12,250. The sale was completed on May 16, 2023 (see Note 15 – Subsequent Events).

On January 3, 2023, Navios Partners agreed to sell the Aurora N, a 2008-built LR1 Product Tanker vessel of 63,495 dwt, to an unrelated third party, for a sales price of $22,500. The sale was completed on April 5, 2023 (see Note 15 – Subsequent Events).

Vessels impairment loss

2023

During the first quarter of 2023, an impairment loss of $601 was recognized in connection with the committed sale of the Navios Libertas in May 2023, as the carrying amount of the asset group was not recoverable and exceeded its fair value less costs to sell, as described above. The vessel was subject to an existing time charter with an unrelated charterer and was not immediately available for sale and therefore, did not qualify as an asset held for sale as of March 31, 2023.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

NOTE 5 – INTANGIBLE ASSETS AND LIABILITIES

Intangible assets as of March 31, 2023 and December 31, 2022 consisted of the following:

 

     Cost      Accumulated
Amortization
     Net Book
Value
 

Favorable lease terms December 31, 2022

   $ 211,644      $ (132,928    $ 78,716  

Amortization

     —          (4,668      (4,668
  

 

 

    

 

 

    

 

 

 

Favorable lease terms March 31, 2023

   $ 211,644      $ (137,596    $ 74,048  
  

 

 

    

 

 

    

 

 

 

Amortization expense of favorable lease terms for each of the periods ended March 31, 2023 and 2022 is presented in the following table:

 

     Three month
Period ended
March 31, 2023
     Three month
Period ended
March 31, 2022
 

Favorable lease terms

   $ (4,668    $ (6,865
  

 

 

    

 

 

 

Total

   $ (4,668    $ (6,865
  

 

 

    

 

 

 

The aggregate amortization of the intangible assets for the 12-month periods ending March 31 is estimated to be as follows:

 

Period

   Amount  

2024

   $ 18,156  

2025

     18,020  

2026

     12,607  

2027

     6,665  

2028

     4,982  

2029 and thereafter

     13,618  
  

 

 

 

Total

   $ 74,048  
  

 

 

 

Intangible assets subject to amortization are amortized using straight-line method over their estimated useful lives to their estimated residual value of zero. As of March 31, 2023, the weighted average useful life of the remaining favorable lease terms was 5.4 years.

Intangible liabilities as of March 31, 2023 and December 31, 2022 consisted of the following:

 

     Cost      Accumulated
Amortization
     Net Book
Value
 

Unfavorable lease terms December 31, 2022

   $ 231,407      $ (183,501    $ 47,906  

Amortization

     —          (7,588      (7,588
  

 

 

    

 

 

    

 

 

 

Unfavorable lease terms March 31, 2023

   $ 231,407      $ (191,089    $ 40,318  
  

 

 

    

 

 

    

 

 

 

Amortization income of unfavorable lease terms for each of the periods ended March 31, 2023 and 2022 is presented in the following table:

 

     Three month
Period ended
March 31, 2023
     Three month
Period ended
March 31, 2022
 

Unfavorable lease terms

   $ 7,588      $ 21,839  
  

 

 

    

 

 

 

Total

   $ 7,588      $ 21,839  
  

 

 

    

 

 

 

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

The aggregate amortization of the intangible liabilities for the 12-month periods ending March 31 is estimated to be as follows:

 

Period

   Amount  

2024

   $ 15,470  

2025

     12,462  

2026

     11,445  

2027

     941  

2028

     —    

2029 and thereafter

     —    
  

 

 

 

Total

   $ 40,318  
  

 

 

 

Intangible liabilities subject to amortization are amortized using straight-line method over their estimated useful lives to their estimated residual value of zero. As of March 31, 2023, the weighted average useful life of the remaining unfavorable lease terms was 3.0 years.

NOTE 6 – BORROWINGS

Borrowings as of March 31, 2023 and December 31, 2022 consisted of the following:

 

     March 31, 2023      December 31, 2022  

Credit facilities

   $ 821,836      $ 874,038  

Financial liabilities

     684,922        695,934  

Finance lease liabilities

     381,259        389,007  
  

 

 

    

 

 

 

Total borrowings

   $ 1,888,017      $ 1,958,979  

Less: Current portion of long-term borrowings, net

     (330,093      (391,095

Less: Deferred finance costs, net

     (17,507      (13,532
  

 

 

    

 

 

 

Long-term borrowings, net

   $ 1,540,417      $ 1,554,352  
  

 

 

    

 

 

 

As of March 31, 2023, the total borrowings, net of deferred finance costs were $1,870,510.

Credit Facilities

FIRST-CITIZENS BANK & TRUST COMPANY: On December 21, 2022, Navios Partners entered into a credit facility with First-Citizens Bank & Trust Company of up to $44,200 in order to refinance the existing indebtedness of three of its tanker vessels and for general corporate purposes. On January 5, 2023, the full amount was drawn. As of March 31, 2023, the total outstanding balance was $44,200 and is repayable in 20 consecutive quarterly installments of $1,500 each, with a final balloon installment of $14,200 to be paid on the last repayment date. The facility matures in the first quarter of 2028 and bears interest at Term Secured Overnight Financing Rate (“SOFR”) plus 195 bps per annum.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

Financial Liabilities

In February 2023, the Company entered into a sale and leaseback agreement of $32,000 with an unrelated third party, in order to finance the Navios Felix, a 2016-built Capesize vessel of 181,221 dwt. The bareboat charter-in provides for purchase options with de-escalating purchase prices starting on the end of the fourth year. Navios Partners has a purchase option of $750 to acquire the vessel at the end of the lease term and given the fact that such exercise price is not equal to the fair value of the asset at the end of the lease term, the transaction was determined to be a failed sale. In accordance with ASC 842-40, the Company did not derecognize the respective vessel from its balance sheet and accounted for the amount received under the sale and leaseback agreement as a financial liability. On March 10, 2023, the amount of $32,000 was drawn. Navios Partners is obliged to make 120 consecutive monthly payments of $260 each that commenced in March 2023. The sale and leaseback transaction matures in the first quarter of 2033 and bears interest at Libor plus 200 bps per annum. As of March 31, 2023, the outstanding balance under the sale and leaseback agreement was $31,740.

In January 2022, the Company entered into a sale and leaseback agreement of $27,440 with an unrelated third party for the Navios Meridian, a newbuilding Panamax vessel of 82,010 dwt. The bareboat charter-in provides for purchase options with de-escalating purchase prices starting on the end of the fourth year. In January 2022, Navios Partners declared its option to purchase the vessel at the end of the tenth year of the bareboat charter-in agreement, preserving the right to exercise the purchase option earlier during the option period. Under ASC 842-40, the transfer of the vessel was determined to be a failed sale. In February 2023, Navios Partners took delivery of the Navios Meridian and recognized an amount of $27,440 as financial liability in accordance with ASC 842-40. Navios Partners is obliged to make 120 consecutive monthly payments of $152 each that commenced in February 2023. The sale and leaseback transaction matures in the first quarter of 2033, with a purchase obligation of $9,147 on the last repayment date and bears interest at Libor plus 180 bps per annum. As of March 31, 2023, the outstanding balance under the sale and leaseback agreement was $27,135.

Finance Lease Liabilities

On March 29, 2023, Navios Partners took delivery of the Navios Altair, a 2023-built Capesize vessel of 182,115 dwt under a 15-year bareboat charter-in agreement. The bareboat charter-in provides for purchase options with de-escalating purchase prices starting on the end of the fourth year. The Company has performed an assessment considering the lease classification criteria under ASC 842 and concluded that the agreement is a finance lease. Consequently, the Company has recognized a finance lease liability based on the net present value of the charter-in payments including the purchase option to acquire the vessel at the end of the lease period, discounted by the Company’s incremental borrowing rate of approximately 6.5%. As of March 31, 2023, the outstanding balance was $41,094 and is repayable in 15 years in consecutive monthly installments up to $275 each, with a purchase option of $9,500, assuming that the option will be exercised at the end of the agreement.

The Company recognizes the total interest expense incurred on finance lease liabilities under the caption “Interest expense and finance cost, net” in the condensed Consolidated Statements of Operations. For the three month period ended March 31, 2023, the total interest expense incurred amounted to $5,165. No interest expense on finance lease liabilities was incurred for the three month period ended March 31, 2022. As of March 31, 2023, payments related to the finance lease liabilities amounted to $5,688 and are presented under the caption “Repayment of long-term debt and financial liabilities” in the condensed Consolidated Statements of Cash Flows.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

Credit Facilities and Financial Liabilities

The credit facilities and certain financial liabilities contain a number of restrictive covenants that prohibit or limit Navios Partners from, among other things: incurring or guaranteeing indebtedness; entering into affiliate transactions; charging, pledging or encumbering the vessels; changing the flag, class, management or ownership of Navios Partners’ vessels; changing the commercial and technical management of Navios Partners’ vessels; selling or changing the beneficial ownership or control of Navios Partners’ vessels; not maintaining Navios Holdings’, Angeliki Frangou’s or their affiliates’ ownership in Navios Partners of at least 5.0%; and subordinating the obligations under the credit facilities to any general and administrative costs related to the vessels, including the fixed daily fee payable under the Management Agreements (defined herein).

As of March 31, 2023 and December 31, 2022, the security deposits under certain sale and leaseback agreements were $5,535 and $8,650, respectively, and are presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.

The Company’s credit facilities and certain financial liabilities also require compliance with a number of financial covenants, including: (i) maintain a required security ranging over 105% to 140%; (ii) minimum free consolidated liquidity in an amount equal to $500 per owned vessel and a number of vessels as defined in the Company’s credit facilities and financial liabilities; (iii) maintain a ratio of EBITDA to interest expense of at least 2.00:1.00; (iv) maintain a ratio of total liabilities or total debt to total assets (as defined in the Company’s credit facilities and financial liabilities) ranging from less than 0.75 to 0.80; and (v) maintain a minimum net worth ranging from $30,000 to $135,000.

It is an event of default under the credit facilities and certain financial liabilities if such covenants are not complied with in accordance with the terms and subject to the prepayments or cure provisions of the facilities.

As of March 31, 2023, Navios Partners was in compliance with the financial covenants and/or the prepayments and/or the cure provisions, as applicable, in each of its credit facilities and certain financial liabilities.

The annualized weighted average interest rates of the Company’s total borrowings for the three month periods ended March 31, 2023 and 2022 were 6.96% and 3.70%, respectively.

The maturity table below reflects the principal payments for the next five 12-month periods ending March 31 and thereafter of all borrowings of Navios Partners outstanding as of March 31, 2023, based on the repayment schedules of the respective credit facilities, financial liabilities and finance lease liabilities.

 

Period

   Amount  

2024

   $ 336,494  

2025

     425,638  

2026

     431,665  

2027

     231,304  

2028

     138,902  

2029 and thereafter

     324,014  
  

 

 

 

Total

   $ 1,888,017  
  

 

 

 

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value amounts of many of Navios Partners’ financial instruments, including accounts receivable and accounts payable approximate their fair value due primarily to the short-term maturity of the related instruments.

Fair value of financial instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents: The carrying amounts reported in the condensed Consolidated Balance Sheets for interest bearing deposits approximate their fair value because of the short maturity of these deposits.

Restricted Cash: The carrying amounts reported in the condensed Consolidated Balance Sheets for interest bearing deposits approximate their fair value because of the short maturity of these deposits.

Amounts due from related parties, long-term: The carrying amount of due from related parties long-term reported in the condensed Consolidated Balance Sheets approximates its fair value.

Amounts due to related parties, short-term: The carrying amount of due to related parties, short-term reported in the condensed Consolidated Balance Sheets approximates its fair value due to the short-term nature of these payables.

Credit facilities and financial liabilities, including current portion, net: The book value has been adjusted to reflect the net presentation of deferred finance costs. The outstanding balance of the floating rate credit facilities and financial liabilities continues to approximate its fair value, excluding the effect of any deferred finance costs.

The estimated fair values of the Navios Partners’ financial instruments are as follows:

 

     March 31, 2023      December 31, 2022  
     Book
Value
     Fair Value      Book
Value
     Fair Value  

Cash and cash equivalents

   $ 197,467      $ 197,467      $ 157,814      $ 157,814  

Restricted cash

   $ 15,744      $ 15,744      $ 17,284      $ 17,284  

Amounts due from related parties, long-term

   $ 39,844      $ 39,844      $ 41,403      $ 41,403  

Amounts due to related parties, short-term

   $ (31,454    $ (31,454    $ (104,751    $ (104,751

Credit facilities and financial liabilities, including current portion, net

   $ (1,489,251    $ (1,506,758    $ (1,556,440    $ (1,569,972

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

Fair Value Measurements

The estimated fair value of the Company’s financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows:

Level I: Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Valuation of these items does not entail a significant amount of judgment.

Level II: Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.

Level III: Inputs that are unobservable. The Company did not use any Level III inputs as of March 31, 2023 and December 31, 2022.

 

     Fair Value Measurements as at March 31, 2023  
     Total      Level I      Level II      Level III  

Cash and cash equivalents

   $ 197,467      $ 197,467      $ —        $ —    

Restricted cash

   $ 15,744      $ 15,744      $ —        $ —    

Amounts due from related parties, long-term

   $ 39,844      $ —        $ 39,844      $ —    

Amounts due to related parties, short-term

   $ (31,454    $ —        $ (31,454    $ —    

Credit facilities and financial liabilities, net (1)

   $ (1,506,758    $ —        $ (1,506,758    $ —    

 

     Fair Value Measurements as at December 31, 2022  
     Total      Level I      Level II      Level III  

Cash and cash equivalents

   $ 157,814      $ 157,814      $ —        $ —    

Restricted cash

   $ 17,284      $ 17,284      $ —        $ —    

Amounts due from related parties, long-term

   $ 41,403      $ —        $ 41,403      $ —    

Amounts due to related parties, short-term

   $ (104,751    $ —        $ (104,751    $ —    

Credit facilities and financial liabilities, net (1)

   $ (1,569,972    $ —        $ (1,569,972    $ —    

 

(1)

The fair value of the Company’s credit facilities and financial liabilities is estimated based on currently available credit facilities and financial liabilities with similar contract terms, interest rate and remaining maturities as well as taking into account the Company’s creditworthiness.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

The estimated fair value of the Company’s assets measured at fair value on a non-recurring basis, is based on the concluded sales price and is categorized based upon the fair value hierarchy as follows:

 

     Fair Value Measurements as at March 31, 2023  
     Total      Level I      Level II      Level III  

Vessels, net

   $ 13,524      $ —        $ 13,524      $ —    

 

    Fair Value Measurements as at December 31, 2022  
    Total     Level I     Level II     Level III  

Vessels, net

  $ 57,402     $ —       $ 57,402     $ —    

NOTE 8 – REPURCHASES AND ISSUANCE OF UNITS

In July 2022, the Board of Directors of Navios Partners authorized a common unit repurchase program for up to $100,000 of the Company’s common units. Common unit repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of repurchases under the program will be determined by Navios Partners’ management based upon market conditions and financial and other considerations, including working capital and planned or anticipated growth opportunities. As of March 31, 2023, no repurchases of common units has been made. The program does not require any minimum repurchase or any specific number of common units and may be suspended or reinstated at any time in the Company’s discretion and without notice. The Board of Directors will review the program periodically.

The effect of compensation expense arising from the restricted common units granted in December 2019 and 2018 and February 2019, amounted to $1 and $42 for the three month periods ended March 31, 2023 and 2022, respectively, and was presented under the caption “General and administrative expenses” in the condensed Consolidated Statements of Operations.

As of March 31, 2023, the estimated compensation cost related to service conditions of non-vested restricted common units granted in 2019 not yet recognized was $3.

As of each of March 31, 2023 and December 31, 2022, there were 1,001 restricted common units outstanding that remained unvested.

NOTE 9 – SEGMENT INFORMATION

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments.

 

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Table of Contents

NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

Navios Partners reports financial information and evaluates its operations by charter revenues. Navios Partners does not use discrete financial information to evaluate operating results for each type of charter or by sector. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet as a whole, determining where to allocate resources and drive business forward by examining consolidated results. Thus Navios Partners has determined that it operates under one reportable segment.

The following table sets out operating revenue by geographic region for Navios Partners’ reportable segment. Revenue is allocated on the basis of the geographic region in which the customer is located. Drybulk, Containerships and Tankers operate worldwide. Revenues from specific geographic region, which contribute over 10.0% of total revenue, are disclosed separately.

Revenue by Geographic Region

Vessels operate on a worldwide basis and are not restricted to specific locations. Accordingly, it is not possible to allocate the assets of these operations to specific countries.

 

     Three Month
Period ended
March 31,
2023
     Three Month
Period ended
March 31,
2022
 

Asia

   $ 200,753      $ 141,196  

Europe

     59,451        73,916  

America

     49,318        21,505  
  

 

 

    

 

 

 

Total

   $ 309,522      $ 236,617  
  

 

 

    

 

 

 

NOTE 10 – INCOME TAXES

The Republic of the Marshall Islands does not impose a tax on international shipping income. Under the laws of the Marshall Islands, Liberia, Cayman Islands, Hong Kong, British Virgin Islands Panama and Belgium, the countries of the vessel-owning subsidiaries’ incorporation and/or vessels’ registration, the vessel-owning subsidiaries are subject to registration and tonnage taxes, which have been included in vessel expenses in the accompanying condensed Consolidated Statements of Operations.

In accordance with the currently applicable Greek law, foreign flagged vessels that are managed by Greek or foreign ship management companies having established an office in Greece on the basis of the applicable licensing regime are subject to tax liability towards the Greek state, which is calculated on the basis of the relevant vessel’s tonnage. A tax credit is recognized for tonnage tax (or similar tax) paid abroad, up to the amount of the tax due in Greece.

The owner, the manager and the bareboat charterer or the financial lessee (where applicable) are liable to pay the tax due to the Greek state. The payment of said tax exhausts the tax liability of the foreign ship owning company, the bareboat charterer, the financial lessee (as applicable) and the relevant manager against any tax, duty, charge or contribution payable on income from the exploitation of the foreign flagged vessel outside Greece.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

We have elected to be treated and we are currently treated as a corporation for U.S. federal income tax purposes. As such, we are not subject to section 1446 as that section only applies to entities that for U.S. federal income tax purposes are characterized as partnerships.

Pursuant to Section 883 of the Internal Revenue Code of the United States, U.S. source income from the international operation of ships is generally exempt from U.S. income tax if the company operating the ships meets certain incorporation and ownership requirements. Among other things, in order to qualify for this exemption, the company operating the ships must be incorporated in a country, which grants an equivalent exemption from income taxes to U.S. corporations. All the vessel-owning subsidiaries satisfy these initial criteria.

In addition, these companies must meet an ownership test. The management of Navios Partners believes that this ownership test was satisfied prior to the IPO by virtue of a special rule applicable to situations where the ship operating companies are beneficially owned by a publicly traded company. Although not free from doubt, management also believes that the ownership test will be satisfied based on the trading volume and ownership of Navios Partners’ units, but no assurance can be given that this will remain so in the future.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

Navios Partners is involved in various disputes and arbitration proceedings arising in the ordinary course of business. Provisions have been recognized in the financial statements for all such proceedings where Navios Partners believes that a liability may be probable, and for which the amounts are reasonably estimable, based upon facts known at the date the financial statements were prepared. Management believes the ultimate disposition of these matters will be immaterial individually and in the aggregate to Navios Partners’ financial position, results of operations or liquidity.

In November 2017, Navios Partners agreed to bareboat charter-in, under a ten-year bareboat contract, from an unrelated third party, the Navios Libra, a newbuilding Panamax vessel of 82,011 dwt, delivered on July 24, 2019. Navios Partners agreed to pay in total $5,540, representing a deposit for the option to acquire the vessel after the end of the fourth year, of which the first half of $2,770 was paid during the year ended December 31, 2017 and the second half of $2,770 was paid during the year ended December 31, 2018. As of March 31, 2023, the total amount of $6,243, including expenses, is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.

On October 18, 2019, Navios Partners agreed to bareboat charter-in, under a ten-year bareboat contract each, from an unrelated third party, the Navios Amitie and the Navios Star, two newbuilding Panamax vessels of 82,002 dwt and 81,994 dwt, respectively. The vessels were delivered in Navios Partner’s fleet on May 28, 2021 and June 10, 2021, respectively. Navios Partners has the option to acquire the vessels after the end of the fourth year for the remaining period of the bareboat charters. Navios Partners had agreed to pay in total $12,328, representing a deposit for the option to acquire the vessels after the end of the fourth year, of which $1,434 was paid during the year ended December 31, 2019, $10,034 was paid during the year ended December 31, 2020, and the remaining amount of $860 was paid upon the delivery of the vessels. As of March 31, 2023, the total amount of $13,243, including expenses, is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

On March 25, 2021, Navios Partners agreed to bareboat charter-in, under a 15-year bareboat contract, from an unrelated third party, one newbuilding Capesize vessel. The vessel, Navios Sakura, has 182,169 dwt and was delivered in Navios Partners’ fleet on April 27, 2023. Navios Partners has the option to acquire the vessel after the end of year four for the remaining period of the bareboat charter. Navios Partners agreed to pay in total $3,500, representing a deposit for the option to acquire the vessel after the end of the fourth year of which $1,750 was paid during the year ended December 31, 2021 and the remaining amount of $1,750 was paid upon the delivery of the vessel. As of March 31, 2023, the total amount of $2,361 including expenses, is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.

On July 2, 2021, Navios Partners agreed to purchase four 5,300 TEU newbuilding containerships, from an unrelated third party, for a purchase price of $61,600 each. The vessels are expected to be delivered into Navios Partners’ fleet during the second half of 2023 and first half of 2024. Navios Partners agreed to pay in total $18,480 in three installments for each vessel and the remaining amount of $43,120 for each vessel plus extras will be paid upon delivery of the vessel. During the year ended December 31, 2021, the first installment of each vessel of $6,160, or $24,640 accumulated for the four vessels, was paid. During the year ended December 31, 2022, the aggregate amount of $36,960 in relation to the second instalment for the four vessels and the third instalment for the two vessels, was paid. As of March 31, 2023, the total amount of $61,600 is presented under the caption “Deposits for vessels acquisitions” in the condensed Consolidated Balance Sheets.

On October 1, 2021, Navios Partners exercised its option to acquire two 5,300 TEU newbuilding containerships, from an unrelated third party, for a purchase price of $61,600 each. The vessels are expected to be delivered into Navios Partners’ fleet during the second half of 2024. Navios Partners agreed to pay in total $18,480 in three installments for each vessel and the remaining amount of $43,120 for each vessel plus extras will be paid upon delivery of the vessel. During the year ended December 31, 2021, the first installment of each vessel of $6,160, or $12,320 accumulated for the two vessels, was paid. During the first quarter of 2023, the second installment of $6,160 for the one vessel, was paid. As of March 31, 2023, the total amount of $18,480 is presented under the caption “Deposits for vessels acquisitions” in the condensed Consolidated Balance Sheets.

In November 2021, Navios Partners agreed to purchase four 5,300 TEU newbuilding containerships (two plus two optional), from an unrelated third party, for a purchase price of $62,825 each. The vessels are expected to be delivered into Navios Partners’ fleet during the second half of 2023 and in 2024. Navios Partners agreed to pay in total $25,130 in four installments for each vessel and the remaining amount of $37,695 plus extras for each vessel will be paid upon delivery of the vessel. During the year ended December 31, 2022, the aggregate amount of $43,978 in relation to the first installment for the four vessels, the second installment for the two vessels and the third installment for the one vessel, was paid. During the first quarter of 2023, the second installment of $6,282 for the one vessel, was paid. As of March 31, 2023, the total amount of $50,260 is presented under the caption “Deposits for vessels acquisitions” in the condensed Consolidated Balance Sheets.

In April 2022, Navios Partners agreed to purchase four 115,000 dwt Aframax/LR2 newbuilding vessels for a purchase price of $58,500 each (plus $4,158 in additional features). The vessels are expected to be delivered into Navios Partners’ fleet during 2024. Navios Partners agreed to pay in total $23,400 plus extras in four installments for each vessel and the remaining amount of $35,100 plus extras for each vessel will be paid upon delivery of each vessel. During the year ended December 31, 2022, the first installment of each vessel of $6,266, or $25,063 accumulated for the four vessels, was paid. During the first quarter of 2023, the second installment for the one vessel of $6,266, was paid. As of March 31, 2023, the total amount of $31,329 is presented under the caption “Deposits for vessels acquisitions” in the condensed Consolidated Balance Sheets.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

In June 2022, Navios Partners agreed to purchase two newbuilding liquefied natural gas (LNG) dual fuel 7,700 TEU containerships, from an unrelated third party, for an amended purchase price of $115,510 each (original price of $120,610 each). The vessels are expected to be delivered into Navios Partners’ fleet during the second half of 2024 and the first quarter of 2025. Navios Partners agreed to pay in total $92,408 in four installments for each vessel and the remaining amount of $23,102 for each vessel will be paid upon delivery of the vessel. During the year ended December 31, 2022, the first installment of each vessel of $23,102, or $46,204 accumulated for the two vessels, was paid. During the first quarter of 2023, the second installment for the one vessel of $23,102, was paid. As of March 31, 2023, the total amount of $69,306 is presented under the caption “Deposits for vessels acquisitions” in the condensed Consolidated Balance Sheets.

In September, 2022, Navios Partners agreed to bareboat charter-in, under a 15-year bareboat contract, from an unrelated third party, one newbuilding Capesize vessel, of approximately 180,000 dwt. Navios Partners has the option to acquire the vessel after the end of year four for the remaining period of the bareboat charter. Navios Partners agreed to pay in total $3,500, representing a deposit for the option to acquire the vessel after the end of the fourth year of which $1,750 was paid during the year ended December 31, 2022 and the remaining amount of $1,750 will be paid upon the delivery of the vessel. The vessel is expected to be delivered in the second quarter of 2023. As of March 31, 2023, the total amount of $2,096, including expenses, is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.

In November 2022, Navios Partners agreed to acquire two 115,000 dwt Aframax/LR2 newbuilding vessels for a purchase price of $60,500 each (plus $4,158 in additional features). The vessels are expected to be delivered into Navios Partners’ fleet during the first half of 2025. Navios Partners agreed to pay in total $24,200 plus extras in four installments for each vessel and the remaining amount of $36,300 plus extras for each vessel will be paid upon delivery of each vessel. During the first quarter of 2023, the first installment of each vessel of $6,050, or $12,100 accumulated for the two vessels, was paid. As of March 31, 2023, $12,100 is presented under the caption “Deposits for vessels acquisitions” in the condensed Consolidated Balance Sheets.

In December 2022, Navios Partners agreed to acquire two newbuilding Japanese MR2 Product Tanker vessels from an unrelated third party, under bareboat contracts. Each vessel has approximately 52,000 dwt and is being bareboat-in for ten years. Navios Partners has the option to acquire the vessels starting at the end of year four until the end of the charter period. Navios Partners agreed to pay in total $18,000, representing a deposit for the option to acquire the vessels after the end of the fourth year. The vessels are expected to be delivered into Navios Partners’ fleet during the second half of 2025 and the first half of 2026. The closing of the transaction is subject to completion of customary documentation.

Upon acquisition of the majority of outstanding stock of Navios Maritime Acquisition Corporation (“Navios Acquisition”), Navios Partners assumed the following commitments:

In September 2018, Navios Acquisition agreed to a 12-year bareboat charter-in agreement with de-escalating purchase options for the Baghdad and Erbil, two newbuilding Japanese VLCCs of 313,433 dwt and 313,486 dwt, respectively. On October 28, 2020, Navios Acquisition took delivery of the Baghdad. On February 17, 2021, Navios Acquisition took delivery of the Erbil. As of March 31, 2023, the total amount of $1,767 is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

In the first quarter of 2019, Navios Acquisition exercised its option to a 12-year bareboat charter-in agreement with de-escalating purchase options for the Nave Electron, a newbuilding Japanese VLCC of 313,239 dwt. On August 30, 2021, Navios Partners took delivery of the Nave Electron. As of March 31, 2023, the total amount of $1,626 is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.

In the second quarter of 2020, Navios Acquisition exercised its option for the Nave Celeste, a newbuilding Japanese VLCC of 313,418 dwt under a 12-year bareboat charter agreement with de-escalating purchase options. On July 5, 2022, Navios Partners took delivery of the Nave Celeste. As of March 31, 2023, the total amount of $1,052 is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.

As of March 31, 2023, an amount of $22,180 related to capitalized costs is presented under the caption “Deposits for vessels acquisitions” in the condensed Consolidated Balance Sheets.

As of March 31, 2023, the Company’s future minimum lease commitments under the Company’s charter-in contracts for undelivered vessels, are as follows:

 

Period ending March 31,

   Amount  

2024

   $ 8,117  

2025

     9,600  

2026

     10,868  

2027

     15,480  

2028

     15,775  

2029 and thereafter

     145,816  
  

 

 

 

Total

   $ 205,656  
  

 

 

 

NOTE 12 – TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES

Vessel operating expenses: In August 2019, Navios Partners extended the duration of its management agreement (“Management Agreement”) with the Manager until January 1, 2025, with an automatic renewal for an additional five years, unless earlier terminated by either party.

Following the completion of the merger with Navios Maritime Containers L.P. (“Navios Containers”), the fleet of Navios Containers is included in Navios Partners’ owned fleet and continued to be operated by the Manager pursuant to the terms of the Navios Containers’ management agreement with the Manager (the “NMCI Management Agreement”).

Following the completion of the merger with Navios Acquisition, the fleet of Navios Acquisition is included in Navios Partners’ owned fleet and continued to be operated by Tankers Manager pursuant to the terms of Navios Acquisition’s management agreement with Tankers Manager (the “NNA Management Agreement” and together with the Management Agreement and the NMCI Management Agreement, the “Management Agreements”).

The Management Agreements also provide for a technical and commercial management fee of $0.05 per day per vessel and an annual increase of 3% of the fixed daily fee after January 1, 2022 for the remaining period unless agreed otherwise.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

Following completion of the mergers with Navios Containers and Navios Acquisition, the Managers provided commercial and technical management services to Navios Partners’ vessels until December 31, 2021 for a daily fee of: (a) $4.35 per Ultra-Handymax Vessel; (b) $4.45 per Panamax Vessel; (c) $5.41 per Capesize Vessel; (d) $6.1 per Containership of TEU 1,300 up to 3,400; (e) $6.22 per Containership of TEU 3,450 up to 4,999; (f) $6.9 per Containership of TEU 6,800; (g) $7.78 per Containership of TEU 8,000 up to 9,999; (h) $8.27 per Containership of TEU 10,000 up to 11,999; (i) $6.83 per MR2 and MR1 product tanker and chemical tanker vessel; (j) $7.23 per LR1 product tanker vessel; and (k) $9.65 per VLCC. Commencing from January 1, 2022 vessel operating expenses are fixed for one year for a daily fee of: (a) $4.48 per Ultra-Handymax Vessel; (b) $4.58 per Panamax Vessel; (c) $5.57 per Capesize Vessel; (d) $6.28 per Containership of TEU 1,300 up to 3,400; (e) $6.40 per Containership of TEU 3,450 up to 4,999; (f) $7.11 per Containership of TEU 6,800; (g) $8.01 per Containership of TEU 8,000 up to 9,999; (h) $8.52 per Containership of TEU 10,000 up to 11,999; (i) $7.03 per MR2 and MR1 product tanker and chemical tanker vessel; (j) $7.44 per LR1 product tanker vessel; and (k) $9.94 per VLCC.

Pursuant to the acquisition of the 36-vessel drybulk fleet from Navios Holdings, which includes time charter-in vessels, Navios Partners and the Manager, on July 25, 2022, amended the Management Agreement to include a technical and commercial management fee of $0.025 per time charter-in vessel per day.

Commencing from January 1, 2023 vessel operating expenses are fixed for one year for a daily fee of: (a) $4.62 per Ultra-Handymax Vessel; (b) $4.72 per Panamax Vessel; (c) $5.74 per Capesize Vessel; (d) $6.47 per Containership of TEU 1,300 up to 3,400; (e) $6.59 per Containership of TEU 3,450 up to 4,999; (f) $7.32 per Containership of TEU 6,800; (g) $8.25 per Containership of TEU 8,000 up to 9,999; (h) $8.77 per Containership of TEU 10,000 up to 11,999; (i) $7.24 per MR2 and MR1 product tanker and chemical tanker vessel; (j) $7.67 per LR1 product tanker vessel; and (k) $10.24 per VLCC.

The Management Agreements also provide for payment of a termination fee, equal to the fees charged for the full calendar year preceding the termination date in the event the agreements are terminated on or before December 31, 2024.

Drydocking expenses are reimbursed at cost for all vessels.

During the three month periods ended March 31, 2023 and 2022 certain extraordinary fees and costs related to vessels’ regulatory requirements, including ballast water treatment system installation, exhaust gas cleaning system installation and scrubber system installation under the Company’s Management Agreements, amounted to $5,589 and $2,646, respectively, and are presented under the caption “Acquisition of/ additions to vessels” in the condensed Consolidated Statements of Cash Flows. During three month periods ended March 31, 2023 and 2022, certain extraordinary fees and costs related to COVID-19 measures, including crew related expenses, amounted to $1,294 and $2,955, respectively, and are presented under the caption of “Direct vessel expenses” in the condensed Consolidated Statements of Operations.

Total vessel operating expenses for each of the three month periods ended March 31, 2023 and 2022 amounted to $83,216 and $73,172, respectively.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

General and administrative expenses: Pursuant to the administrative services agreement (the “Administrative Services Agreement”), the Manager also provides administrative services to Navios Partners, which include bookkeeping, audit and accounting services, legal and insurance services, administrative and clerical services, banking and financial services, advisory services, client and investor relations and other. Under the Administrative Services Agreement, which provide for allocable general and administrative costs, the Manager is reimbursed for reasonable costs and expenses incurred in connection with the provision of these services. In August 2019, Navios Partners extended the duration of its existing Administrative Services Agreement with the Manager until January 1, 2025, to be automatically renewed for another five years. The agreement also provides for payment of a termination fee, equal to the fees charged for the full calendar year preceding the termination date in the event the Administrative Services Agreement is terminated on or before December 31, 2024.

Total general and administrative expenses charged by the Manager for the three month periods ended March 31, 2023 and 2022 amounted to $14,106 and $10,205, respectively.

Balance due from/ (to) related parties: Balance due from related parties long term as of March 31, 2023 and December 31, 2022 amounted to $39,844 and $41,403, respectively. Balance due to related parties, short-term as of March 31, 2023 and December 31, 2022 amounted to $31,454 and $104,751, respectively, and mainly consisted of payables to the Managers. The balances mainly consisted of administrative fees, drydocking, extraordinary fees and costs related to regulatory requirements including ballast water treatment system, other expenses, as well as fixed vessel operating expenses, in accordance with the Management Agreements.

Others: Navios Partners has entered into an omnibus agreement with Navios Holdings (the “Partners Omnibus Agreement”) in connection with the closing of Navios Partners’ IPO governing, among other things, when Navios Holdings and Navios Partners may compete against each other as well as rights of first offer on certain drybulk carriers. Pursuant to the Partners Omnibus Agreement, Navios Partners generally agreed not to acquire or own Panamax or Capesize drybulk carriers under time charters of three or more years without the consent of an independent committee of Navios Partners. In addition, Navios Holdings has agreed to offer to Navios Partners the opportunity to purchase vessels from Navios Holdings when such vessels are fixed under time charters of three or more years.

General partner: Olympos Maritime Ltd., an entity affiliated to our Chairwoman and Chief Executive Officer, Angeliki Frangou, is the holder of Navios Partners’ general partner interest.

NOTE 13 – CASH DISTRIBUTIONS AND EARNINGS PER UNIT

The amount of distributions paid by Navios Partners and the decision to make any distribution is determined by the Company’s board of directors and will depend on, among other things, Navios Partners’ cash requirements as measured by market opportunities and restrictions under its credit agreements and other debt obligations and such other factors as the Board of Directors may deem advisable. There is no guarantee that the Company will pay the quarterly distribution on the common units in any quarter. The Company is prohibited from making any distributions to unitholders if it would cause an event of default, or an event of default exists, under its existing credit facilities.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

There are incentive distribution rights held by Navios GP L.L.C., which are analyzed as follows:

 

     Marginal Percentage Interest in Distributions  
     Total
Quarterly
Distribution
Target Amount
   Common
Unitholders
    Incentive
Distribution
Right Holder
    General
Partner
 

Minimum Quarterly Distribution

   up to $5.25      98     —         2

First Target Distribution

   up to $6.0375      98     —         2

Second Target Distribution

   above $ 6.0375
up to $6.5625
     85     13     2

Third Target Distribution

   above $6.5625
up to $7.875
     75     23     2

Thereafter

   above $7.875      50     48     2

The first 98% of the quarterly distribution is paid to all common unitholders. The incentive distributions rights (held by Navios GP L.L.C.) apply only after a minimum quarterly distribution of $6.0375 per unit.

In January 2022, the Board of Directors of Navios Partners authorized its quarterly cash distribution for the three month period ended December 31, 2021 of $0.05 per unit. The distribution was paid on February 11, 2022 to all unitholders of common units and general partnership units of record as of February 9, 2022. The aggregate amount of the declared distribution was $1,541.

In January 2023, the Board of Directors of Navios Partners authorized its quarterly cash distribution for the three month period ended December 31, 2022 of $0.05 per unit. The distribution was paid on February 14, 2023 to all unitholders of common units and general partnership units of record as of February 10, 2023. The aggregate amount of the declared distribution was $1,540.

In April 2023, the Board of Directors of Navios Partners authorized its quarterly cash distribution for the three month period ended March 31, 2023 of $0.05 per unit. The distribution was paid on May 12, 2023 to all unitholders of common units and general partnership units of record as of May 9, 2023. The aggregate amount of the declared distribution was $1,540.

Navios Partners calculates earnings per unit by allocating reported net income for each period to each class of units based on the distribution waterfall for available cash specified in Navios Partners’ partnership agreement, net of the unallocated earnings (or losses). Basic earnings per common unit is determined by dividing net income by the weighted average number of common units outstanding during the period. Diluted earnings per unit is calculated in the same manner as basic earnings per unit, except that the weighted average number of outstanding units increased to include the dilutive effect of outstanding unit options or phantom units. Net loss per unit undistributed is determined by taking the distributions in excess of net income and allocating between common units and general partnership units on a 98%-2% basis. There were no options or phantom units outstanding during each of the three month periods ended March 31, 2023 and 2022.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

The calculations of the basic and diluted earnings per unit are presented below.

 

     Three Month
Period Ended
March 31,

2023
     Three Month
Period Ended
March 31,
2022
 

Net income

   $ 99,165      $ 85,665  

Income attributable to:

     

Common unitholders

   $ 97,183      $ 83,952  

Weighted average units outstanding basic

     

Common unitholders

     30,183,387        30,154,171  

Earnings per unit basic:

     

Common unitholders

   $ 3.22      $ 2.78  

Weighted average units outstanding diluted

     

Common unitholders

     30,184,388        30,197,087  

Earnings per unit diluted:

     

Common unitholders

   $ 3.22      $ 2.78  

Earnings per unit distributed basic:

     

Common unitholders

   $ 0.05      $ 0.05  

Earnings per unit distributed diluted:

     

Common unitholders

   $ 0.05      $ 0.05  

Potential common units of 1,001 and 42,916 for the three month periods ended March 31, 2023 and 2022, respectively, are included in the calculation of earnings per unit diluted.

NOTE 14 – LEASES

Time charter out contracts and pooling arrangements

The Company’s contract revenues from time chartering, bareboat chartering and pooling arrangements are governed by ASC 842.

Operating Leases

A discussion of the Company’s operating leases can be found in Note 22 – Leases to the Company’s consolidated financial statements included in the Annual Report filed on Form 20-F on March 24, 2023 with the SEC for the year ended December 31, 2022.

Based on management estimates and market conditions, the lease term of the leases is being assessed at each balance sheet date. At lease commencement, the Company determines a discount rate to calculate the present value of the lease payments so that it can determine lease classification and measure the lease liability. In determining the discount rate to be used at lease commencement, the Company used its incremental borrowing rate as there was no implicit rate included in charter-in contracts that can be readily determinable. The incremental borrowing rate is the rate that reflects the interest a lessee would have to pay to borrow funds on a collateralized basis over a similar term and in a similar economic environment. The Company then applies the respective incremental borrowing rate based on the remaining lease term of the specific lease. Navios Partners’ incremental borrowing rates were approximately 7% for the Navios Libra and the Nave Celeste, 5% for the Navios Amitie and the Navios Star, 6% for the Baghdad, the Erbil, the Navios Horizon I, the Navios Gemini, the Navios Venus and the Navios Lyra, and 4% for the Nave Electron.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

As of March 31, 2023 and December 31, 2022, the unamortized balance of the operating lease liability amounted $301,118 and $311,115, respectively, and is presented under the captions “Operating lease liabilities, current portion” and “Operating lease liabilities, net” in the condensed Consolidated Balance Sheets. Right-of-use assets amounted $310,492 and $323,048 as at March 31, 2023 and December 31, 2022, respectively, and are presented under the caption “Operating lease assets” in the condensed Consolidated Balance Sheets.

The Company recognizes the lease payments for its operating leases as charter hire expenses on a straight-line basis over the lease term. Lease expense incurred and paid for the three months period ended March 31, 2023 and 2022 amounted to $17,333 and $7,617, respectively, and is presented under the caption “Time charter and voyage expenses” in the condensed Consolidated Statements of Operations.

For the three month periods ended March 31, 2023 and 2022, the sublease income (net of commissions, if any) for vessels where the Company is a lessee amounted to $20,374 and $16,182, respectively. Sublease income is presented under the caption “Time charter and voyage revenues” in the condensed Consolidated Statements of Operations.

As of March 31, 2023, the weighted average useful life of the remaining operating lease terms was 9.4 years.

The table below provides the total amount of lease payments on an undiscounted basis on the Company’s chartered-in contracts as of March 31, 2023:

 

Period ending March 31,    Amount  

2024

   $ 53,702  

2025

     42,720  

2026

     38,340  

2027

     38,095  

2028

     37,394  

2029 and thereafter

     177,158  
  

 

 

 

Total

   $ 387,409  
  

 

 

 

Operating lease liabilities, including current portion

   $ 301,118  

Discount based on incremental borrowing rate

   $ 86,291  

Finance Leases

For a detailed description of the finance lease liabilities and right-of-use assets for vessels under finance leases, refer to Note 6 – Borrowings and Note 4 – Vessels, net, respectively.

For the three month periods ended March 31, 2023 and 2022 the sublease income (net of commissions, if any) for vessels where the Company is a lessee amounted to $17,785 and $0, respectively. Sublease income is presented under the caption “Time charter and voyage revenues” in the condensed Consolidated Statements of Operations.

As of March 31, 2023, the weighted average useful life of the remaining finance lease terms was 7.7 years.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

The table below provides the total amount of lease payments and options to acquire vessels on an undiscounted basis under the Company’s finance leases as of March 31, 2023:

 

Period ending March 31,    Amount  

2024

   $ 76,913  

2025

     124,380  

2026

     27,246  

2027

     26,822  

2028

     26,464  

2028 and thereafter

     240,027  
  

 

 

 

Total

   $ 521,852  
  

 

 

 

Finance lease liabilities, including current portion (see Note 6 – Borrowings)

   $ 381,259  

Discount based on incremental borrowing rate

   $ 140,593  

Bareboat charter-out contract

Subsequently to the charter-in agreement, the Company entered into bareboat charter-out agreements for a firm charter period of ten years for the Baghdad and the Erbil and an extra optional period of five years, for both vessels, and for a firm period of up to two-years for the Nave Celeste. The Company performed also an assessment of the lease classification under the ASC 842 and concluded that the agreements are operating leases.

The Company recognizes in relation to the operating leases for the charter-out agreements the charter-out hire income in the Consolidated Statements of Operations on a straight-line basis. As of March 31, 2023 and 2022 the charter hire income (net of commissions, if any) amounted to $7,977 and $5,185, respectively, and is presented under the caption “Time charter and voyage revenues” in the condensed Consolidated Statements of Operations.

NOTE 15 – SUBSEQUENT EVENTS

Acquisition of vessels

On April 27, 2023, Navios Partners took delivery of the Navios Sakura, a 2023-built Capesize vessel of 182,169 dwt (see Note 11 – Commitments and Contingencies).

Sale of vessels

On May 10, 2023, Navios Partners agreed to sell the Lumen N, a 2008-built LR1 Product Tanker vessel of 63,599 dwt, to an unrelated third party, for a sales price of $22,250. The sale is expected to be completed during the second quarter of 2023.

On April 12, 2023, Navios Partners agreed to sell the Navios Anthos, a 2004-built Panamax vessel of 75,798 dwt, to an unrelated third party, for a sales price of $11,000. The sale was completed on May 3, 2023.

The aggregate gain on sale of the above vessels and the committed sales of the Serenitas N and the Aurora N (see Note 4 – Vessels, net) is expected to be approximately $17,021.

 

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NAVIOS MARITIME PARTNERS L.P.

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

 

Financing arrangements

In May 2023, Navios Partners completed a $178,000 sale and leaseback transaction with an unrelated third party, in order to finance the acquisition of two newbuilding 5,300 TEU containerships and two newbuilding Aframax/LR2 tanker vessels. The sale and leaseback transaction: (i) matures ten years after the drawdown date; and (ii) bears interest at Term SOFR plus 210 bps per annum.

In May 2023, Navios Partners entered into a new credit facility with a commercial bank for up to $30,000 in order to refinance existing indebtedness of three product tanker vessels. The credit facility: (i) matures five years after the drawdown date; and (ii) bears interest at Term SOFR plus 100 bps per annum for any part of the loan (up to 70%) secured by cash collateral and 225 bps per annum for the remaining loan amount.

In April 2023, Navios Partners entered into an export credit agency-backed facility for a total amount of up to $165,638 in order to finance the acquisition of two newbuilding 7,700 TEU containerships. The facility: (i) matures 12 years after the drawdown date; and (ii) bears interest at SOFR plus 150 bps per annum.

In April 2023, Navios Partners entered into a new credit facility with a commercial bank for up to $65,000 in order to refinance existing indebtedness of five product tanker vessels. The credit facility: (i) matures five years after the drawdown date; and (ii) bears interest at SOFR plus 200 bps per annum.

 

F-31


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

NAVIOS MARITIME PARTNERS L.P.
By:  

/s/ Angeliki Frangou

Angeliki Frangou
Chief Executive Officer
Date: June 1, 2023
EX-99.1

Exhibit 99.1

 

‘BARECON 2001” STANDARD BAREBOAT CHARTER

PART1

 

1. Shipbroker

 

Mitsui & CO.LTD

  

BIMCO STANDARD BAREBOAT CHARTER CODE NAME : “BARECON 2001”

 

PART I

 

  

2. Place and date

 

At                      on              February 2023

 

3. Owners / Place of business (Cl. 1)

 

GLORY OCEAN SHIPPING S.A.

Banco General Tower, 15th Floor, Aquilino De La Guardia Street, Marbella, Panama City, Republic of Panama (as to 99% share) and

TEMM MARITIME CO., LTD.

Boeki Bldg Rm 801 123-1 Higashimachi Chuo-ku Kobe Japan (as to 1% share)

whose performance shall be guaranteed by Funada Kaiun Co., Ltd.

 

  

4. Bareboat Charterers / Place of business (Cl. 1)

 

Koufonisi Shipping Corporation of Marshall Islands.

5. Vessel’s name, call sign, flag and IMO number (Cl. 1 and 3)

 

NAVIOS FELIX, 3EXY3, Panamanian flag, 180,200 M.T. D/W Type Bulk Carrier, IMO Number9756743

 

6. Type of Vessel

 

180,200 M.T. D/W Type Bulk Carrier

  

7. GT / NT

 

GT : 93,044 tons

 

NT : 60,504 tons

 

8. When / Where built

 

September, 2016 at Imabari Shipbuilding Co., Ltd.

  

9. Total DWT (abt.) in metric tons on summer freeboard

 

180,200 M.T.

 

10. Classification Society (Cl. 3)

 

Nippon Kaiji Kyokai (NK)

  

11. Date of last special survey by the Vessel’s classification society

 

28 Jun 2021

 

12. Further particulars of Vessel (also indicate minimum number of months’ validity of class certificates agreed acc. to Cl. 3)

Cargoes to be carried; All lawful cargoes within the Vessel’s capabilities/Class, IMO, flag, her insurance

 

13. Port or Place of delivery (Cl.3)

 

As per Clause 5 of the MOA (as defined in Clause 1 hereof)

  

14. Time for delivery (Cl.4)

 

As per Clause 5 of the MOA

See Also Clause 32.

 

  

15. Cancelling date (Cl.5)

 

As per Clause 5 of the MOA

16. Port or Place of redelivery (Cl. 3)

 

See Clause 15

  

17. No. of months’ validity of trading and class certificates upon redelivery (Cl. 15)

 

3 months

 

18. Running days’ notice if other than stated in Cl.4

 

N/A

  

19. Frequency of dry-docking Cl. 10(g)

 

As per Classification Society and flag state requirements

 

20. Trading Limits (Cl.6)

 

Trading Limits: always safely afloat world-wide within International Navigation Conditions with the Charterer’s option to break same paying extra insurance, but always in accordance with Clause 13, 40 and 62.

 

Any country/place designated pursuant to any applicable, now or in the future, international laws or supranational laws or other regulations, imposing trade and economic sanctions, prohibitions or restrictions shall always be excluded..

 

21. Charter Period (Cl. 2)

 

Ten (10) years plus/minus 60 days in Charterers’ option (See Clause 34)

 

  

22. Charter hire (Cl. 11)

 

See Clause 35

23. New class and other statutory requirements (state percentage of Vessel’s insurance value acc. to Box 29 (Cl. 10(a)(ii))

N/A

 

24. Rate of interest payable acc. to Cl.11(f) and, if applicable, acc. to PART IV

N/A

 

  

25. Currency and method of payment (Cl.11)

 

United States Dollars payable calendar monthly in advance

26. Place of payment; also state beneficiary and bank account (Cl. 11)

 

To be advised

 

  

27. Bank guarantee / bond (sum and place) (Cl. 24 (optional)

 

N/A


‘BARECON 2001” STANDARD BAREBOAT CHARTER

PART1

 

28. Mortgage(s), if any (state whether Cl. 12(a) or (b) applies; if 12(b) applies, state date of Financial Instrument and name of Mortgagee(s)/Place of business) (Cl. 12)

 

See Clause 44

 

  

29. Insurance (hull and machinery and war risks) (state value acc. to Cl.13(f) or, if applicable, acc. to Cl. 14(k)) (also state if Cl.14 applies)

 

See Clause 40

30. Additional insurance cover, if any, for Owners’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))

 

N/A

 

  

31. Additional insurance cover, if any, for Charterers’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))

 

See Clause 40 (c)

32. Latent defects (only to be filled in if period other than stated in Cl.3)

 

N/A

 

  

33. Brokerage commission and to whom payable (Cl.27)

 

N/A

34. Grace period (state number of clear banking days) (Cl. 28)

 

See Clause 41

  

35. Dispute Resolution (state 30(a), 30(b) or 30(c); if 30(c) agreed, Place of Arbitration must be stated (Cl. 30)

 

London / English Law

 

36. War cancellation (indicate countries agreed) (Cl. 26(f))

 

N/A

 

37. Newbuilding Vessel (indicate with ‘yes’ or ‘no’ whether PART III applies) (optional)

 

No

 

  

38. Name and place of Builders (only to be filled in if PART III applies)

 

N/A

39. Vessel’s Yard Building No. (only to be filled in if PART III applies)

 

No

 

  

40. Date of Building Shipbuilding Contract (only to be filled in if PART III applies)

 

N/A

41. Liquidated damages and costs shall accrue to (state party acc. to Cl. 1)

 

a) N/A

 

b) N/A

 

c) N/A

 

42. Hire/Purchase agreement (indicate with ‘yes’ or ‘no’ whether PART IV applies) (optional)

 

N/A

  

43. Bareboat Charter Registry (indicate with ‘yes’ or ‘no’ whether PART IV applies) (optional)

 

N/A

 

See Clause 37(d)

 

44. Flag and Country of the Bareboat Charter Registry (only to be filled in if PART V applies)

 

N/A

 

See Clause 37 (d)

 

  

45. Country of the Underlying Registry (only to be filled in if PART V applies)

 

N/A

46. Number of additional clauses covering special provisions, if agreed

 

Clause 32 to 60 inclusive

 

 

PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter which shall include PART I and PART II. In the event of a conflict of conditions, the provisions of PART I shall prevail over those of PART II to the extent of such conflict but no further. It is further mutually agreed that PART III and/or PART IV and/or PART V shall only apply and shall only form part of this Charter if expressly agreed and stated in Boxes 37, 42 and 43. If PART III and/or PART IV and/or PART V apply, it is further agreed that in the event of a conflict of conditions, the provisions of PART I and PART II shall prevail over those of PART III and/or PART IV and/or PART V to the extent of such conflict but no further.

 

Signature (Owners)

 

GLORY OCEAN SHIPPING S.A. (as to 99% share)

   Signature (Charterers)
/s/ Hiroyuki Funada                                                             /s/ Georgios Panagakis                                             

By:        Hiroyuki Funada

Title:     Director/President

  

By:        Georgios Panagakis

Title:     Attorney-in-Fact

TEMM MARITIME CO., LTD. (as to 1% share)     

/s/ Katsuya Mito                                                             

By:        Katsuya Mito

Title:     President

  


PART II

“BARECON 2001” Standard Bareboat Charter

 

1.

Definitions

In this Charter, the following terms shall have the meanings hereby assigned to them:

“The Owners” shall mean the party identified in Box 3;

“The Charterers” shall mean the party identified in Box 4;

“The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12;

“Financial Instrument” means the mortgage, deed of covenant or other such financial security instrument as annexed to this Charter and stated in Box 28.

“MOA” means the Memorandum of Agreement entered into between the Owners as buyers and Koufonisi Shipping Corporation of the Marshall Islands as Sellers (the “Sellers”) dated                      February 2023 in respect of the Vessel.

“Banking Days” shall mean the days identified in Cl.36 (b)

“Total Loss” shall mean the situation identified in Cl.40 (a)

 

2.

Charter Period

In consideration of the hire detailed in Box 22, the Owners have agreed to let and the Charterers have agreed to hire the Vessel for the period stated in Box 21 (the “Charter Period”).

 

3.

Delivery Also See Clause 32

The Vessel shall be delivered and taken over by the Charterers as per Clause 32.

(not applicable when PART III applies, as indicated in Box 37)

(a) The Owners shall before and at the time of delivery exercise due diligence to make the Vessel seaworthy and in every respect ready in hull, machinery and equipment for service under this Charter.

The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place indicated in Box 13 in such ready safe berth as the Charterers may direct.

(b) The Vessel shall be properly documented on delivery in accordance with the laws of the flag state indicated in Box 5 and the requirements of the classification society stated in Box 10. The Vessel upon delivery shall have her survey cycles up to date and trading and class certificates valid for at least the number of months agreed in Box 12.

(c) The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall constitute a full performance by the Owners of all the Owners’ obligations under this Clause 3, and thereafter the Charterers shall not be entitled to make or assert any claim against the Owners on account of any conditions, representations or warranties expressed or implied with respect to the Vessel but the Owners shall be liable for the cost of but not the time for repairs or renewals occasioned by latent defects in the Vessel, her machinery or appurtenances, existing at the time of delivery under this Charter, provided such defects have manifested themselves within twelve (12) months after delivery unless otherwise provided in Box 32.

 

4.

Time for Delivery See Clause 32

(not applicable when PART III applies, as indicated in Box 37)

The Vessel shall not be delivered before the date indicated in Box 14 without the Charterers’ consent and the Owners shall exercise due diligence to deliver the Vessel not later than the date indicated in Box 15.

Unless otherwise agreed in Box 18, the Owners shall give the Charterers not less than thirty (30) running days’ preliminary and not less than fourteen (14) running days’ definite notice of the date on which the Vessel is expected to be ready for delivery.

The Owners shall keep the Charterers closely advised of possible changes in the Vessel’s position.

 

5.

Cancelling

(not applicable when PART III applies, as indicated in Box 37)

(a) Should the Vessel not be delivered latest by the cancelling date indicated in Box 15, the Charterers shall have the option of cancelling this Charter by giving the Owners notice of cancellation within thirty-six (36) running hours after the cancelling date stated in Box 15, failing which this Charter shall remain in full force and effect.

(b) If it appears that the Vessel will be delayed beyond the cancelling date, the Owners may, as soon as they are in position to state with reasonable certainty the day on which the Vessel should be ready, give notice thereof to the Charterers asking whether they will exercise their option of cancelling, and the option must then be declared within one hundred and sixty-eight (168) running hours of the receipt by the Charterers of such notice or within thirty-six (36) running hours after the cancelling date, whichever is the earlier. If the Charterers do not then exercise their option of cancelling, the seventh day after the readiness date stated in the Owners’ notice shall be substituted for the cancelling date indicated in Box 15 for the purpose of this Clause 5.

(c) Cancellation under this Clause 5 shall be without prejudice to any claim the Charterers may otherwise have on the Owners under this Charter.

 

6.

Trading Restrictions

The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise within the trading limits indicated in Box 20.

The Charterers undertake not to employ the Vessel or suffer the Vessel to be employed otherwise than in conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein) without first obtaining the consent of the insurers to such employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe.

The Charterers also undertake not to employ the Vessel or suffer her employment in any trade or business which is forbidden by the law of any country to which the Vessel may sail or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render her liable to condemnation, destruction, seizure or confiscation.

Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive products or waste are specifically excluded from the cargo permitted to be loaded or carried under this Charter. This exclusion does not apply to radio-isotopes used or intended to be used for any industrial, commercial, agricultural, medical or scientific purposes provided the Owners’ prior approval has been obtained to loading thereof.

 

7.

Surveys on Delivery and Redelivery

(not applicable when PART III applies, as indicated in Box 37)

The Owners and Charterers have the right of shall each appointing surveyors for the purpose of determining and agreeing in writing the condition of the Vessel at the time of delivery.redelivery hereunder. The Owners shall bear all expenses of the On-hire Survey including loss of time, if any, and the Charterers shall bear all expenses of the Off-hire Survey including loss of time, if any, at the daily equivalent to the rate of hire or pro rata thereof.

 

8.

Inspection See Clause 45, 59

The Owners shall have the right maximum once per yearat any time after giving reasonable 1 month prior notice to the Charterers to inspect or survey the Vessel or instruct a duly authorised surveyor to carry out such survey on their behalf:- provided it does not interfere with the operation/itinerary of the Vessel and/or crew

(a) to ascertain the condition of the Vessel and satisfy

themselves that the Vessel is being properly repaired and maintained. The costs and fees for such inspection or survey shall be paid by the Owners. unless the Vessel is found to require repairs or maintenance in order to achieve the condition so provided;

(b) in dry-dock if the Charterers have not dry-docked her in accordance with Clause 10(g). The costs and fees for such inspection or survey shall be paid by the Charterers; and

 


PART II

“BARECON 2001” Standard Bareboat Charter

 

(c) for any other commercial reason they consider necessary (provided it does not unduly interferer with the commercial operation of the Vessel). The costs and fees for such inspection and survey shall be paid by the Owners.

All time used in respect of inspection, survey or repairs shall be for the Charterers’ account and form part of the Charter Period.

The Charterers shall also permit the Owners to inspect the Vessel’s log books maximum once per year whenever reasonably requested and shall whenever required by the Owners furnish them with full information regarding any casualties or other accidents or damage to the Vessel.

 

9.

Inventories, Oil and Stores

A complete inventory of the Vessel’s entire equipment, outfit including spare parts, appliances and of all consumable stores on board the Vessel shall be made by the Charterers in conjunction with the Owners on delivery and again on redelivery of the Vessel. The Charterers and the Owners, respectively, shall at the time of delivery and redelivery take over and pay for all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding spare parts) in the said Vessel at the then current market prices at the ports of delivery and redelivery, respectively. The Charterers shall ensure that all spare parts listed in the inventory and used during the Charter Period are replaced at their expense prior to redelivery of the Vessel. SEE ALSO CLAUSE 32, 46, and 53

 

10.

Maintenance and Operation

 

  (a)(i)

Maintenance and Repairs - During the Charter period the Vessel shall be in the full possession and at the absolute disposal for all purposes of the Charterers and under their complete control in every respect. The Charterers shall exercise due diligence to maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of repair, in efficient operating condition and in accordance with good commercial maintenance practice and, except as provided for in Clause 14(l), if applicable, at their own expense, they shall at all times keep the Vessel’s Class unexpired fully up to date with the Classification Society indicated in Box 10 maintain all other necessary certificates in force at all times.

 

  (ii)

New Class and Other Safety Requirements

In the event of any improvement, structural changes or new equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation costing (excluding the Charterers’ loss of time) more than the percentage stated in Box 23, or if Box 23 is left blank, 5 per cent. of the Vessel’s insurance value as stated in Box 29, then the extent, if any, to which the rate of hire shall be varied and the ratio in which the cost of compliance shall be shared between the parties concerned in order to achieve a reasonable distribution thereof as between the Owners and the Charterers having regard, inter alia, to the length of the period remaining under this Charter, shall in the absence of agreement, be referred to the dispute resolution method agreed in Clause 30. SEE CLAUSE 38

 

  (iii)

Financial Security - The Charterers shall maintain financial security or responsibility in respect of third party liabilities as required by any government, including federal, state or municipal or other division or authority thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place, territorial or contiguous waters of any country, state or municipality in performance of this Charter without any delay. This obligation shall apply whether or not such requirements have been lawfully imposed by such government or division or authority thereof.

The Charterers shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy such requirements at the Charterers’ sole expense and the Charterers shall indemnify the Owners against all consequences whatsoever (including loss of time) for any failure or inability to do so.

(b) Operation of the Vessel - The Charterers shall at their own expense and by their own procurement man, victual, navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter Period and they shall pay all charges and expenses of every kind and nature whatsoever incidental to their use and operation of the Vessel under this Charter, including annual flag state fees and any foreign general municipality and/or state taxes. The Master, officers and crew of the Vessel shall be the servants of the Charterers for all purposes whatsoever, even if for any reason appointed by the Owners.

Charterers shall comply with the regulations regarding officers and crew in force in the country of the Vessel’s flag or any other applicable law.

(c) The Charterers shall keep the Owners and the mortgagee(s) advised of the intended employment, planned dry-docking and major repairs of the Vessel, as reasonably required.

(d) Flag and Name of Vessel

During the Charter Period, the Charterers shall have the liberty to paint the Vessel in their own colours, install and display their funnel insignia and fly their own house flag. The Charterers shall also have the liberty, with the Owners’ consent, which shall not be unreasonably withheld, to change the flag and/or the name of the Vessel during the Charter Period. Painting and re-painting, instalment and re-instalment, registration and de-registration, if required by the Owners, shall be at the Charterers’ expense and time. SEE CLAUSE 37 & 43

(e) Changes to the Vessel - Subject to Clause 10(a)(ii),

the Charterers shall make no structural changes in the Vessel or changes in the machinery, boilers, appurtenances or spare parts thereof without in each instance first securing the Owners’ approval thereof. If the Owners so agree, the Charterers shall, if the Owners so require, restore the Vessel to its former condition before the termination of this Charter. SEE CLAUSE 38

(f) Use of the Vessel’s Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit, equipment, and appliances on board the Vessel at the time of delivery, provided the same or their substantial equivalent shall be returned to the Owners on redelivery in substantially the same good order and condition as when received, ordinary wear and tear excepted. The Charterers shall from time to time during the Charter period replace such items of equipment as shall be so damaged or worn as to be unfit for use. The Charterers are to procure that all repairs to or replacement of any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Vessel. The Charterers have the right to fit additional equipment at their expense and risk but the Charterers shall remove such equipment at the end of the period unless agreed otherwise by the Owners and the Charterers. if requested by the Owners. Any equipment including radio equipment on hire on the Vessel at time of delivery shall be kept and maintained by the Charterers and the Charterers shall assume the obligations and liabilities of the Owners under any lease contracts in connection therewith and shall reimburse the Owners for all expenses incurred in connection therewith, also for any new equipment required in order to comply with radio regulations.

(g) Periodical Dry-Docking - The Charterers shall dry-dock the Vessel and clean and paint her underwater parts whenever the same may be necessary, but not

 


PART II

“BARECON 2001” Standard Bareboat Charter

 

less than once during the period stated in Box 19 or, if Box 19 has been left blank, every sixty (60) calendar months after delivery or such other period as may be required by the Classification Society or flag state.

 

11.

Hire     SEE CLAUSE 35

(a) The Charterers shall pay hire due to the Owners punctually in accordance with the terms of this Charter in respect of which time shall be of the essence.

(b) The Charterers shall pay to the Owners for the hire of the Vessel a lump sum in the amount indicated in Box 22 which shall be payable not later than every thirty running days in advance, the first lump sum being payable on the date and hour of the Vessel’s delivery to the Charterers. Hire shall be paid continuously throughout the Charter Period.

(c) Payment of hire shall be made in cash without discount in the currency and in the manner indicated in Box 25 and at the place mentioned in Box 26.

(d) Final payment of hire, if for a period of less than thirty (30) running days, shall be calculated proportionally according to the number of days remaining before redelivery and advance payment to be effected accordingly.

(e) Should the Vessel be lost or missing, hire shall cease from the date and time when she was lost or last heard of. The date upon which the Vessel is to be treated as lost or missing shall be ten (10) days after the Vessel was last reported or when the Vessel is posted as missing by Lloyd’s, whichever occurs first. Any hire paid in advance to be adjusted accordingly.

(f) Any delay in payment of hire shall entitle the Owners to interest at the rate per annum as agreed in Box 24. If Box 24 has not been filled in, the three months interbank offered rate in London (LIBOR or its successor) of the currency stated in Box 25, as quoted by the British Bankers’ Association (BBA) on the date when the hire fell due, increased by 2 per cent, shall apply.

(g) Payment of interest due under sub-clause 11(f) shall be made within seven (7) running days of the date of the Owners’ invoice specifying the amount payable or, in the absence of an invoice, at the time of the next hire payment date.

 

12.

Mortgage     SEE CLAUSE 44

(only to apply if Box 28 has been appropriately filled in)

*)

(a) The Owners warrant that they have not effected any mortgage(s) of the Vessel and that they shall not effect any mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld..

*)

(b) The Vessel chartered under this Charter is financed by a mortgage according to the Financial Instrument. The Charterers undertake to comply, and provide such information and documents to enable the Owners to comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and maintenance of the Vessel as laid down in the Financial Instrument or as may be directed from time to time during the currency of the Charter by the mortgagee(s) in conformity with the Financial Instrument. The Charterers confirm that, for this purpose, they have acquainted themselves with all relevant terms, conditions and provisions of the Financial Instrument and agree to acknowledge this in writing in any form that may be required by the mortgagee(s). The Owners warrant that they have not effected any mortgage(s) other than stated in Box 28 and that they shall not agree to any amendment of the mortgage(s) referred to in Box 28 or effect any other mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld.

 

*)

(Optional, Clauses 12 (a) and 12 (b) are alternatives; indicate alternative agreed in Box 28).

13.

Insurance and Repairs     SEE CLAUSE 40

(a) During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against hull and machinery, war and Protection and Indemnity risks (and any risks against which it is compulsory to insure for the operation of the Vessel, including maintaining financial security in accordance with sub-clause 10(a)(iii))in underwriter’s standard from as the Owners have received, reviewed and shall in writingapproved, which approval shall not be unreasonably withheld.in such form as the Owners shall in writing approve, which approval shall not be unreasonably withheld. Such insurances shall be arranged by the Charterers to protect the interests of both the Owners and the Charterers and the mortgagees (if any), and the Charterers shall be at liberty to protect under such insurances the interests of any managers they may appoint. Insurance policies shall cover the Owners and the Charterers according to their respective interests. Subject to the provisions of the Financial Instrument, if any, and the approval of the Owners and the insurers, the Charterers shall effect all insured repairs and shall undertake settlement and reimbursement from the insurers of all costs in connection with such repairs as well as insured charges, expenses and liabilities to the extent of coverage under the insurances herein provided for.

The Charterers also to remain responsible for and to effect repairs and settlement of costs and expenses incurred thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible franchise(s) or deductibles provided for in the insurances.

All time used for repairs under the provisions of sub-clause 13(a) and for repairs of latent defects according to Clause 3(c) above, including any deviation, shall be for the Charterers’ account.

(b) If the conditions of the above insurances permit additional insurance to be placed by the parties, such cover shall be limited to the amount for each party set out in Box 30 and Box 31, respectively. The Owners or the Charterers as the case may be shall immediately furnish the other party with particulars of any additional insurance effected, including copies of any cover notes or policies and the written consent of the insurers of any such required insurance in any case where the consent of such insurers is necessary.

(c) The Charterers shall upon the request of the Owners provide information and promptly execute such documents as may be reasonably required to enable the Owners to comply with the insurance provisions of the Financial Instrument.

(d) Subject to the provisions of the Financial Instrument, if any, should the Vessel become an actual, constructive, compromised or agreed total loss under the insurances required under sub-clause 13(a), all insurance payments for such loss shall be paid to the Owners who shall distribute the moneys between the Owners and the Charterers according to their respective interests. The Charterers undertake to notify the Owners and the mortgagee(s), if any, of any occurrences in consequence of which the Vessel is likely to become a total loss as defined in this clause. SEE CLAUSE 40

(e) The Owners shall, upon the request of the Charterers, promptly execute such documents as may be required to enable the Charterers to abandon the Vessel to insurers and claim a constructive total loss.

(f) For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-clause 13(a), the value of the Vessel is the sum indicated in Box 29. SEE CLAUSE 40

 

14.

Insurance, Repairs and Classification     N/A

(Optional, only to apply if expressly agreed and stated in Box 29, in which event Clause 13 shall be considered deleted).

(a) During the Charter Period the Vessel shall be kept insured by the Owners at their expenses against hull and machinery and war risks under the form of policy or

 


PART II

“BARECON 2001” Standard Bareboat Charter

 

policies attached hereto. The Owners and/or insurers shall not have any right of recovery or subrogation against the Charterers on account of loss of or any damage to the Vessel or her machinery or appurtenances covered by such insurance, or on account of payments made to discharge claims against or liabilities of the Vessel or the Owners covered by such insurance. Insurance policies shall cover the Owners and the Charterers according to their respective interests.

(b) During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against Protection and Indemnity risks (and any risks against which it is compulsory to insure for the operation of the Vessel, including maintaining financial security in accordance with sub-clause 10(a)(iii)) in such form as the Owners shall in writing approve which approval shall not be unreasonably withheld.

(c) In the event that any act or negligence of the Charterers shall vitiate any of the insurance herein provided, the Charterers shall pay to the Owners all losses and indemnify the Owners against all claims and demands which would otherwise have been covered by such insurance.

(d) The Charterers shall, subject to the approval of the Owners or Owners’ Underwriters, effect all insured repairs, and the Charterers shall undertake settlement of all miscellaneous expenses in connection with such repairs as well as all insured charges, expenses and liabilities, to the extent of coverage under the insurances provided for under the provisions of sub-clause 14(a).

The Charterers to be secured reimbursement through the Owners’ Underwriters for such expenditures upon

presentation of accounts.

(e) The Charterers to remain responsible for and to effect repairs and settlement of costs and expenses incurred thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible franchise(s) or deductibles provided for in the insurances.

(f) All time used for repairs under the provisions of sub-clause 14(d) and 14(e) and for repairs of latent defects according to Clause 3 above, including any deviation, shall be for the Charterers’ account and shall form part of the Charter Period.

The Owners shall not be responsible for any expenses as are incident to the use and operation of the Vessel for such time as may be required to make such repairs.

(g) If the conditions of the above insurances permit additional insurance to be placed by the parties such cover shall be limited to the amount for each party set out in Box 30 and Box 31, respectively. The Owners or the Charterers as the case may be shall immediately furnish the other party with particulars of any additional insurance effected, including copies of any cover notes or policies and the written consent of the insurers of any such required insurance in any case where the consent of such insurers is necessary.

(h) Should the Vessel become an actual, constructive, compromised or agreed total loss under the insurances required under sub-clause 14 (a), all insurance payments for such loss shall be paid to the Owners, who shall distribute the moneys between themselves and the Charterers according to their respective interests.

(i) If the Vessel becomes an actual, constructive, compromised or agreed total loss under the insurances arranged by the Owners in accordance with sub-clause 14(a), this Charter shall terminate as of the date of such loss.

(j) The Charterers shall upon the request of the Owners, promptly execute such documents as may be required to enable the Owners to abandon the Vessel to the insurers and claim a constructive total loss.

(k) For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-clause 14(a), the value of the Vessel is the sum indicated in Box 29.

(l) Notwithstanding anything contained in sub-clause 10(a), it is agreed that under the provisions of Clause 14, if applicable, the Owners shall keep the Vessel’s Class fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary certificates in force at all times.

 

15.

Redelivery    ALSO SEE CLAUSE 46

At the expiration of the Charter Period the Vessel shall be redelivered by the Charterers to the Owners at a safe berth or anchorage at a safe and ice-free port or place as indicated in Box 16, in such ready safe berth as the Owners may direct. The Charterers shall give the Owners not less than thirty (30) running days’ preliminary notice of expected date, range of ports of redelivery or port or place of redelivery and not less than fourteen (14) running days’ definite notice of expected date and port or place of redelivery. Any changes thereafter in Vessel’s position shall be notified immediately to the Owners.

The Charterers warrant that they will not permit the Vessel to commence a voyage (including any preceding ballast voyage) which cannot reasonably be expected to be completed in time to allow redelivery of the Vessel within the Charter Period. Notwithstanding the above, should the Charterers fail to redeliver the Vessel within the Charter Period, the Charterers shall pay the daily equivalent to the rate of hire stated in Box 22 plus 5 per cent or to the market rate, whichever is the higher, for the number of days by which the Charter Period is exceeded. All other terms, conditions and provisions of the Charter shall continue to apply.

Subject to the provisions of Clause 10, the Vessel shall be redelivered to the Owners in substantially the same or as good structure, state, condition and class as that in which she was delivered, fair wear and tear not affecting class excepted.

The Vessel upon redelivery shall have her survey cycles up to date and trading and class certificates valid for at least the number of months agreed in Box 17.

 

16.

Non-Lien     ALSO SEE CLAUSE 47

The Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which might have priority over the title and interest of the Owners in the Vessel. The Charterers further agree to fasten to the Vessel in a conspicuous place and to keep so fastened during the Charter Period a notice reading as follows:

‘This Vessel is the property of (name of Owners). It is under charter to (name of Charterers) and by the terms of the Charter Party neither the Charterers nor the Master have any right, power or authority to create, incur or permit to be imposed on the Vessel any lien whatsoever.’

 

17.

Indemnity     ALSO SEE CLAUSE 54

(a) The Charterers shall indemnify the Owners against any loss, damage or expense incurred by the Owners arising out of or in relation to the operation of the Vessel by the Charterers, and against any lien of whatsoever nature arising out of an event occurring during the Charter Period. If the Vessel be arrested or otherwise detained by reason of claims or liens arising out of her operation hereunder by the Charterers, the Charterers shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.

Without prejudice to the generality of the foregoing, the Charterers agree to indemnify the Owners against all consequences or liabilities arising from the Master, officers or agents signing Bills of Lading or other documents.

 

 


PART II

“BARECON 2001” Standard Bareboat Charter

 

(b) If the Vessel be arrested or otherwise detained by reason of a claims or claims against the Owners, the Owners shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.

In such circumstances the Owners shall indemnify the Charterers against any loss, damage or expense incurred by the Charterers (including hire paid under this Charter) as a direct consequence of such arrest or detention.

 

18.

Lien

The Owners to have a lien upon all cargoes, sub-hires and sub-freights belonging or due to the Charterers or any sub-charterers and any Bill of Lading freight for all claims under this Charter, and the Charterers to have a lien on the Vessel for all moneys paid in advance and not earned.

 

19.

Salvage

All salvage and towage performed by the Vessel shall be for the Charterers’ benefit and the cost of repairing damage occasioned thereby shall be borne by the Charterers.

 

20.

Wreck Removal

In the event of the Vessel becoming a wreck or obstruction to navigation the Charterers shall indemnify the Owners against any sums whatsoever which the Owners shall become liable to pay and shall pay in consequence of the Vessel becoming a wreck or obstruction to navigation.

 

21.

General Average

The Owners shall not contribute to General Average.

 

22.

Assignment, Sub-Charter and Sale

(a) The Charterers shall not assign this Charter nor sub-charter the Vessel on a bareboat basis except with the prior consent in writing of the Owners, which shall not be unreasonably withheld, and subject to such terms and conditions as the Owners shall approve.

(b) The Owners shall not sell the Vessel during he currency of this Charter except with the prior written consent of the Charterers, which shall not be unreasonably withheld, and subject to the buyer accepting an assignment of this Charter. SEE CLAUSE48

 

23.

Contracts of Carriage

 

*)

(a) The Charterers are to procure that all documents issued during the Charter Period evidencing the terms and conditions agreed in respect of carriage of goods shall contain a paramount clause incorporating any legislation relating to carrier’s liability for cargo compulsorily applicable in the trade; if no such legislation exists, the documents shall incorporate the Hague-Visby Rules. The documents shall also contain the New Jason Clause and the Both-to-Blame Collision Clause.

*)

(b) The Charterers are to procure that all passenger tickets issued during the Charter Period for the carriage of passengers and their luggage under this Charter shall contain a paramount clause incorporating any legislation relating to carrier’s liability for passengers and their luggage compulsorily applicable in the trade; if no such legislation exists, the passenger tickets shall incorporate the Athens Convention Relating the Carriage of Passengers and their Luggage by Sea, 1974, and any protocol thereto.

 

*)

Delete as applicable.

 

24.

Bank Guarantee

(Optional, only to apply if Box 27 filled in)

The Charterers undertake to furnish, before delivery of the Vessel, a first class bank guarantee or bond in the sum and at the place as indicated in Box 27 as guarantee for full performance of their obligations under this Charter.

25.

Requisition/Acquisition     ALSO SEE CLAUSE 40 (a)/(b)

(a) In the event of the requisition for Hire of the Vessel by any governmental or other competent authority (hereinafter referred to a “Requisition for Hire”) irrespective of the date during the Charter Period when “Requisition for Hire” may occur and irrespective of the length thereof and whether or not it be for an indefinite or a limited period of time, and irrespective of whether it may or will remain in force for the remainder of the Charter Period, this Charter shall not be deemed thereby or thereupon to be frustrated or otherwise terminated and the Charterers shall continue to pay the stipulated hire in the manner provided by this Charter until the time when the Charter would have terminated pursuant to any of the provisions hereof always provided however that in the event of “Requisition for Hire” any Requisition Hire or compensation received or receivable by the Owners shall be payable to the Charterers during the remainder of the Charter Period or the period of the ‘Requisition for Hire’ whichever be the shorter.

(b) Notwithstanding the provisions of clause 25 (a), in the event of the Owners being deprived of their ownership in the Vessel by any Compulsory Acquisition of the Vessel or requisition for title by any governmental or other competent authority, which for the avoidance of any doubt, shall exclude requisition for use or hire not involving requisition of title (hereinafter referred to as ‘Compulsory Acquisition’), then, irrespective of the date during the Charter Period when “Compulsory Acquisition” may occur, this Charter shall be deemed terminated as of the date of such “Compulsory Acquisition”. In such event charter hire to be considered as earned and to be paid up to the date and time of such “Compulsory Acquisition”, but not thenafter.

 

26.

War

(a) For the purpose of this Clause, the words ‘War Risks’ shall include any war (whether actual or threatened), act of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, or the Government of any state whatsoever, which may be dangerous or are likely to be or to become dangerous to the Vessel, her cargo, crew or other persons on board the Vessel.

(c) The Vessel shall not load contraband cargo, or to pass through any blockade, whether such blockade be imposed on all vessels, or is imposed selectively in any way whatsoever against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever, or to proceed to an area where she shall be subject, or is likely to be subject to a belligerent’s right of search and/or confiscation.

(d) If the insurers of the war risk insurance, when Clause 14 is applicable, should require payment of premiums and/or calls because, pursuant to the Charterers’ orders, the Vessel is within, or is due to enter and remain within, any area or areas which are specified by such insurers as being subject to additional premiums because of War Risks, then such premiums and/or calls shall be reimbursed by the Charterers to the Owners at the same time as the next payment of hire is due.

 


PART II

“BARECON 2001” Standard Bareboat Charter

 

  (e)

The Charterers shall have the liberty:

 

  (i)

to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever which are given by the government of the nation under whose flag the vessel sails, or any other government, body or group whatsoever acting with the power to compel compliance with their orders or directions’

 

  (ii)

to comply with the orders, directions or recommendations of any war risks underwriters who have the authority to give the same under the terms of the war risks insurance;

 

  (iii)

to comply with the terms of any resolution of the Security Council of the United Nations, any directives of the European Community, the effective orders of any other supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement.

(f) In the event of outbreak of war (whether there be a declaration of war or not ) (i) between any two or more of the following countries: the United States of America; Russia; the United Kingdom; France; and the People’s Republic of China, (ii) between any two or more of the countries stated in Box 36, both the Owners and the Charterers shall have the right to cancel this Charter, whereupon the Charterers shall redeliver the Vessel to the Owners in accordance with Clause 15, if the Vessel has cargo on board after discharge thereof at destination, or if debarred under this Clause from reaching and entering it at a near open and safe port as directed by the Owners, or if the Vessel has no cargo on board, at the port at which the Vessel then is or if at sea at a near, open and safe port as directed by the Owners. In all cases hire shall continue to be paid in accordance with Clause 11 and except as aforesaid all other provisions of this Charter shall apply until redelivery.

 

27.

Commission

The Owners to pay a commission at the rate indicated in Box 33 to the Brokers named in Box 33 on any hire paid under the Charter. If no rate is indicated in Box 33, the commission to be paid by the Owners shall cover the actual expenses of the Brokers and a reasonable fee for their work.

If the full hire is not paid owing to breach of the Charter by either of the parties, the party liable therefore shall indemnify the Brokers against their loss of commission. Should the parties agree to cancel the Charter, the Owners shall indemnify the Brokers against any loss of commission but in such case the commission shall not exceed the brokerage on one year’s hire.

 

28.

Termination

(a) Charterer’s Default

The Owners shall be entitled to withdraw the Vessel from the service of the Charterers and terminate the Charter with immediate effect by written notice to the Charterers if:

  (i)

the Charterers fail to pay hire in accordance with Clause 11. However, where there is a failure to make punctual payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the Owners shall give the Charterers written notice of the number of clear banking days stated in Box 34 (as recognised at the agreed place of payment) in which to rectify the failure, and when so rectified within such number of days following the Owners’ notice, the payment shall stand as regular and punctual. Failure by the Charterers to pay hire within the

  number of days stated in Box 34 of their receiving the Owners’ notice as provided herein, shall entitle the Owners to withdraw the Vessel from the service of the Charterers and terminate the Charter without further notice;
  (ii)

the Charterers fail to comply with the requirements of:

(1) Clause 6 (Trading Restrictions)

(2) Clause 13(a) (Insurance and Repairs)

provided that the Owners shall have the option, by written notice to the Charterers, to give the Charterers a specified number of days grace within which to rectify the failure without prejudice to the Owners’ right to withdraw and terminate under this Clause if the Charterers fail to comply with such notice;

  (iii)

the Charterers fail to rectify any failure to comply with the requirements of sub-clause 10(a)(i) (Maintenance and Repairs) as soon as practically possible after the Owners have requested them in writing so to do and in any event so that the Vessel’s insurance cover is not prejudiced. SEE CLAUSE 41 & 42

 

  (b)

Owners’ Default

If the Owners shall by any act or omission be in breach of their obligations under this Charter to the extent that the Charterers are deprived of the use of the Vessel and such breach continues for a period of fourteen (14) running days after written notice thereof has been given by the Charterers to the Owners, the Charterers shall be entitled to terminate this Charter with immediate effect by written notice to the Owners.

 

  (c)

Loss of Vessel

This Charter shall be deemed to be terminated if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss. For the purpose of this sub-clause, the Vessel shall not be deemed to be lost unless she has either become an actual total loss or agreement has been reached with her underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred. SEE CLAUSE 40 (d)/(e)

(d) Either party shall be entitled to terminate this Charter with immediate effect by written notice to the other party in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of the other party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangements or composition with its creditors.

(e) The termination of this Charter shall be without prejudice to all rights accrued due between the parties prior to the date of termination and to any claim that either party might have.

 

29.

Repossession

In the event of the termination of this Charter in accordance with the applicable provisions of Clause 28, the Owners shall have the right to repossess the Vessel from the Charterers at her current or next port of call, or at a port or place convenient to them without hindrance or interference by the Charterers, courts or local authorities. Pending physical repossession of the Vessel in accordance with this Clause 29, the Charterers shall

 


PART II

“BARECON 2001” Standard Bareboat Charter

 

hold the Vessel as gratuitous bailee only to the Owners. The Owners shall arrange for an authorised represent-ative to board the Vessel as soon as reasonably practicable following the termination of the Charter. The Vessel shall be deemed to be repossessed by the Owners from the Charterers upon the boarding of the Vessel by the Owners’ representative. All arrangements and expenses relating to the settling of wages, disembarkation and repatriation of the Charterers’ Master, officers and crew shall be the sole responsibility of the Charterers.

 

30.

Dispute Resolution

 

*)

(a) This Contract shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Contract shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

 

*)

(b) This Contract shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Contract shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgment may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.

In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conduced in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced.

*)

(c) This Contract shall be governed by and construed in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Contract shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.

(d) Notwithstanding (a), (b) or (c) above, the parties may agree at any time to refer to mediation any difference and/or dispute arising out of or in connection with this Contract.

In the case of a dispute in respect of which arbitration has been commenced under (a), (b) or (c) above, the following shall apply:-

(i) Either party may at any time and from time to time elect to refer the dispute or part of the dispute to mediation by service on the other party of a written notice (the “Mediation Notice”) (calling on the other party to agree to mediation.

  (ii)

The other party shall thereupon within 14 calendar days of receipt of the Mediation Notice confirm that they agree to mediation, in which case the parties shall thereafter agree a mediator within a further 14 calendar days, failing which on the application of either party a mediator will be appointed promptly by the Arbitration Tribunal (the “Tribunal”) or such person as the Tribunal may designate for that purpose. The mediation shall be conducted in such place and in accordance with such procedure and on such terms as the parties may agree or, in the event of disagreement, as may be set by the mediator.

  (iii)

If the other party does not agree to mediate, that fact may be brought to the attention of the Tribunal and may be taken into account by the Tribunal when allocating the costs of the arbitration as between the parties.

  (iv)

The mediation shall not affect the right of either party to seek such relief or take such steps as it considers necessary to protect its interest.

  (v)

Either party may advise the Tribunal that they have agreed to mediation. The arbitration procedures shall continue during the conduct of the mediation by the Tribunal may take the mediation timetable into account when settling the timetable for steps in the arbitration.

  (vi)

Unless otherwise agreed or specified in the mediation terms, each party shall bear its own costs incurred in the mediation and the parties shall share equally the mediator’s costs and expenses.

  (vii)

The mediation process shall be without prejudice and confidential and no information or documents disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under the law and procedure governing the arbitration.

(Note: the parries should be aware that the mediation process may not necessarily interrupt time limits.)

(e) If Box 35 in Part I is not appropriately filled in, sub-clause 30(a) of this Clause shall apply. Sub-clause 30(d) shall apply in all cases.

 

*)

Sub-clauses 30(a), 30(b) and 30(c) are alternatives; indicate alternative agreed in Box 35.

 

31.

Notices     SEE CLAUSE 51

(a) Any notice to be given by either party to the other party shall be in writing and may be sent by fax, telex, registered or recorded mail or by personal service.

  (b)

The address of the Parties for service of such communication shall be as stated in Boxes 3 and 4 respectively.

 


  

“BARECON 2001” Standard Bareboat Charter

 

PART III

  

 

OPTIONAL   PART  

                       

PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY

(Optional, only to apply if expressly agreed and stated in Box 37)

  

 

1.

Specifications and Shipbuilding Contract

(a) The Vessel shall be constructed in accordance with the Building Shipbuilding Contract (hereafter called the ‘Shipbuilding Building Contract’) as annexed to this Charter, made between the Builders and the Sellers Owners and in accordance with the specifications and plans annexed thereto, such Building Contract, specifications and plans having been countersigned as approved by the Charterers.

(b) No change shall be made in the Shipbuilding Building Contract or in the specifications or plans of the Vessel as approved by the Charterers as aforesaid without the Charterers’ consent.

(c) The Charterers shall have the right to send their representative to the Builders’ Yard to inspect the Vessel during the course of her construction to satisfy themselves that construction is in accordance with such approved specifications and plans as referred to under sub-clause (a) of this Clause.

(d) The Vessel shall be built in accordance with the Building Contract and shall be of the description set out therein. Subject to the provisions of sub-clause 2(c)(ii) hereunder, the Charterers shall be bound to accept the Vessel from the Owners, completed and constructed in accordance with the Building Contract, on the date of delivery by the Builders. The Charterers undertake that having accepted the Vessel they will not thereafter raise any claims against the Owners in respect of the Vessel’s performance or specification or defects, if any. Nevertheless, in respect of any repairs, replacements or defects which appear within the first 12 months from delivery by the Builders, the Owners shall endeavour to compel the Builders to repair, replace or remedy any defects or to recover from the Builders any expenditure incurred in carrying out such repairs, replacements or remedies. However, the Owners’ liability to the Charterers shall be limited to the extent the Owners have a valid claim against the Builders under the guarantee clause of the Building Contract (a copy whereof has been supplied to the Charterers). The Charterers shall be bound to accept such sums as the Owners are reasonably able to recover under this Clause and shall make no further claim on the Owners for the difference between the amount(s) so recovered and the actual expenditure on repairs, replacement or remedying defects or for any loss of time incurred.

Any liquidated damages for physical defects or deficiencies shall accrue to the account of the party stated in Box 41(a) or if not filled in shall be shared equally between the parties.

The costs of pursuing a claim or claims against the Builders under this Clause (including any liability to the Builders) shall be borne by the party stated in Box 41(b) or if not filled in shall be shared equally between the parties.

 

2.

Time and Place of Delivery - SEE CLAUSE 33

(a) Subject to the Vessel having completed her acceptance trials including trials of cargo equipment in accordance with the Building Contract and specifications to the satisfaction of the Charterers, the Owners shall give and the Charterers shall take delivery of the Vessel afloat when ready for delivery and properly documented at the Builders’ Yard or some other safe and readily accessible dock, wharf or place as may be agreed between the parties hereto and the Builders. Under the Building Contract, the Builders have estimated that the Vessel will be ready for delivery to the Owners as therein provided but the delivery date for the purpose of the Charter shall be the date when the Vessel is in fact ready for delivery by the Builders after completion of trials whether that be before or after as indicated in the Building Contract. The Charterers shall not be entitled to refuse acceptance of delivery of the Vessel

and upon and after such acceptance, subject to Clause 1(d), the Charterers shall not be entitled to make any claim against the Owners in respect of any conditions, representations or warranties, whether express or implied, as to the seaworthiness of the Vessel or in respect of delay in delivery.

(b) If for any reason other than a default by the Sellers Owners under the Shipbuilding Contract, the Builders become entitled under that Contract not to deliver the Vessel to the Sellers, the Owners shall upon giving to the Charterers written notice of Builders becoming so entitled, be excused from giving delivery of the Vessel to the Charterers and upon receipt of such notice by the Charterers this Charter shall cease to have effect.

(c) If for any reason the Owners become entitled under the Building Contract to reject the Vessel the Owners shall, before exercising such right of rejection, consult the Charterers and thereupon

(i) if the Charterers do not wish to take delivery of the Vessel they shall inform the Owners within seven (7) running days by notice in writing and upon receipt by the Owners of such notice this Charter shall cease to have effect; or

(ii) if the Charterers wish to take delivery of the Vessel they may by notice in writing within seven (7) running days require the Owners to negotiate with the Builders as to the terms on which delivery should be taken and/or refrain from exercising their right of rejection and upon receipt of such notice the Owners shall commence such negotiations and/or take delivery of the Vessel from the Builders and deliver her to the Charterers;

(iii) in no circumstances shall the Charterers be entitled to reject the Vessel unless the Owners are able to reject the Vessel from the Builders; SEE CLAUSE 33

(iv) if this Charter terminates under sub-clause (b) of this Clause, the Owners shall thereafter not be liable to the Charterers for any claim under or arising out of this Charter or its termination.

(d) Any liquidated damages for delay in delivery under the Building Contract and any costs incurred in pursuing a claim therefor shall accrue to the account of the party stated in Box 41(c) or if not filled in shall be shared equally between the parties.

 

3.

Guarantee Works - SEE CLAUSE 32

If not otherwise agreed, the Owners authorise the Charterers to arrange for the guarantee works to be performed in accordance with the Shipbuilding building Contract terms, and hire to continue during the period of guarantee works. The Charterers have to advise the Owners about the performance to the extent the Owners may request.

 

4.

Name of Vessel - SEE CLAUSE 44

The name of the Vessel shall be mutually agreed between the Owners and the Charterers and the Vessel shall be painted in the colours, display the funnel insignia and fly the house flag as required by the Charterers.

 

5.

Survey on Redelivery - SEE CLAUSE 46

The Owners and the Charterers shall appoint surveyors for the purpose of determining and agreeing in writing the condition of the Vessel at the time of redelivery.

Without prejudice to Clause 15 (PART II), the Charterers shall bear all survey expenses and all other costs, if any, including the cost of docking and undocking, if required, as well as all repair costs incurred. The Charterers shall also bear all loss of time spent in connection with any docking and undocking as well as repairs, which shall be paid at the rate of hire per day or pro rata.

 


  

“BARECON 2001” Standard Bareboat Charter

 

PART IV

  

 

OPTIONAL   PART  

                       

HIRE/PURCHASE AGREEMENT

(Optional, only to apply if expressly agreed and stated in Box 42)

  

 

On expiration of this Charter and provided the Charterers have fulfilled their obligations according to PART I and II as well as PART III, if applicable, it is agreed that on payment of the final payment of hire as per Clause 11 the Charterers have purchased the Vessel with everything belonging to her and the Vessel is fully paid for.

In the following paragraphs the Owners are referred to as the Sellers and the Charterers as the Buyers.

The Vessel shall be delivered by the Sellers and taken over by the Buyers on expiration of the Charter.

The Sellers guarantee that the Vessel, at the time of delivery, is free from all encumbrances and maritime liens or any debts whatsoever other than those arising from anything done or not done by the Buyers or any existing mortgage agreed not to be paid off by the time of delivery. Should any claims, which have been incurred prior to the time of delivery, be made against the Vessel, the Sellers hereby undertake to indemnify the Buyers against all consequences of such claims to the extent it can be proved that the Sellers are responsible for such claims. Any taxes, notarial, consular and other charges and expense connected with the purchase and registration under Buyers’ flag shall be for Buyers’ account. Any taxes, consular and other charges and expenses connected with closing of the Sellers’ register shall be for Sellers’ account.

In exchange for payment of the last month’s hire instalment the Sellers shall furnish the Buyers with a Bill of Sale duly attested and legalised, together with a certificate setting out the registered encumbrances, if any. On delivery of the Vessel the Sellers shall provide for deletion of the Vessel from the Ship’s Register and deliver a certificate of deletion to the Buyers.

The Sellers shall, at the time of delivery, hand to the Buyers all classification certificates (for hull, engines, anchors, chains, etc) as well as all plans which may be in Sellers’ possession.

The wireless installation and nautical instruments, unless on hire, shall be included in the sale without any extra payment.

The Vessel with everything belonging to her shall be at Sellers’ risk and expense until she is delivered to the Buyers, subject to the conditions of this Contract, and the Vessel with everything belonging to her shall be delivered and taken over as she is at the time of delivery, after which the Sellers shall have no responsibility for possible faults or deficiencies of any description.

The Buyers undertake to pay for the repatriation of the Maser, officers, and other personnel if appointed by the Sellers to the port where the Vessel entered the Bareboat Charter as per Clause 3 (PART II) or to pay the equivalent cost of their journey to any other place.

 


  

“BARECON 2001” Standard Bareboat Charter

 

PART V

  

 

OPTIONAL   PART  

                       

PROVISIONS TO APPLY FOR VESSELS REGISTERED IN A BAREBOAT CHARTER REGISTRY

(Optional, only to apply if expressly agreed and stated in Box 43)

  

 

1.

Definitions

For the purpose of this PART V, the following terms shall have the meanings hereby assigned to them:

The Bareboat Charter Registry” shall mean the registry of the state whose flag the Vessel will fly and in which the Charterers are registered as the bareboat charterers during the period of the Bareboat Charter.

The Underlying Registry” shall mean the registry of the state in which the Owners of the Vessel are registered as Owners and to which jurisdiction and control of the Vessel will revert upon termination of the Bareboat Charter Registration.

 

2.

Mortgage – See Clause 44

The Vessel chartered under this Charter is financed by a mortgage and the provisions of Clause 12(b) (PART II) shall apply.

3.

Termination of Charter by Default

If the Vessel chartered under this Charter is registered in a Bareboat Charter Registry as stated in Box 44, and if the Owners shall default in the payment of any amounts due under the mortgage(s) specified in Box 28, the Charterers shall, if so required by the mortgagee, direct the Owners to re-register the Vessel in the Underlying Registry as shown in Box 45.

In the event of the Vessel being deleted from the Bareboat Charter Registry as stated in Box 44, due to a default by the Owners in the payment of any amounts due under the mortgage(s), the Charterers shall have the right to terminate this Charter forthwith and without prejudice to any other claim they may have against the Owners under this Charter.

 


Additional Clauses

to

the Bareboat Charter Party dated 14 February 2023 (this “Charter”) by

GLORY OCEAN SHIPPING S.A. (as to 99% share) and TEMM

MARITIME CO., LTD. (as to 1% share) as owner (the “Owners”) and

Koufonisi Shipping Corporation as charterer (the “Charterers”)

in respect of MV “NAVIOS FELIX” (the “Vessel”)

 

32.

DELIVERY

(a) The Charterers shall take delivery of the Vessel under this Charter simultaneously with delivery by the Sellers (as defined in Clause 1 of this Charter) as sellers to the Owners as buyers under the MOA, and the Owners shall be obliged to deliver the Vessel to the Charterers hereunder in the same moment as the Owners are taking delivery of the Vessel under the MOA.

(b) In the event that the Vessel is not delivered to Owners under the MOA for any reason, this Charter shall automatically terminate.

(c) The Owners warrant that the Vessel, at time of delivery, is free from all charters, encumbrances, mortgages and maritime liens or any other debts whatsoever, other than (i) those incurred prior to the delivery of the Vessel hereunder, (ii) this Charter and (iii) the mortgage over the Vessel, assignment of insurance in respect of the Vessel and the assignment of the charter hires in respect hereof in favour of THE CHUGOKU BANK, LTD. (the “Mortgagee”).

(d) The Vessel shall be delivered under this Charter in the same condition and with the same equipment, inventory and spare parts as she is delivered to the Owners under the MOA. The Charterers know the Vessel’s condition at the time of delivery, and expressly agree that the Vessel’s condition as delivered under the MOA is acceptable and in accordance with the provisions of this Charter. The Vessel shall be delivered to the Charterers under this Charter strictly “as is/where is”, and the Charterers shall waive any and all claims against the Owners under this Charter on account of any conditions, seaworthiness, representations, warranties expressed or implied in respect of the Vessel (including but not limited to any bunkers, oils, spare parts and other items whatsoever) on delivery.

 

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33.

ISM CODE

During the currency of this Charter the Charterers shall procure at the costs and expenses and time of the Charterers that the Vessel and the “company” (as defined by the ISM code) shall comply with the requirements of the ISM code. Upon request the Charterers shall provide a copy of relevant documents of compliance (DOC) and safety management certificate (SMC) to the Owners. For the avoidance of any doubt any loss, damage, expense or delay caused by the failure on the part of the “Company” to comply with the ISM code shall be for the Charterers’ account.

 

34.

CHARTER PERIOD

 

(a)

The Owners shall let to the Charterers and the Charterers shall take the Vessel on charter for the period and upon the terms and conditions contained herein.

 

(b)

Subject always to the provisions hereto, the period of the chartering of the Vessel hereunder (hereinafter referred to as the “Charter Period”) shall comprise (unless terminated at an earlier date in accordance with the terms hereof) a firm charter period of 10 years from the date of the delivery of the Vessel by the Owners to the Charterers under this Charter (the “Delivery Date”) with up to 60 days more or less, provided always that the chartering of the Vessel hereunder may be terminated by the Owners pursuant to Clause 41 or shall terminate in the event of the Total Loss or Compulsory Acquisition of the Vessel subject to, and in accordance with provisions of Clause 40.

 

35.

CHARTER HIRE

Monthly Hire Rate

After the delivery of Vessel, the Charterers shall pay the hire monthly in advance for the Charter Period, which consist of (i) Monthly Fixed Hire, (ii) Monthly Variable Hire and (iii) Monthly Owners’ profit:

(i) Monthly Fixed Hire (same as Owners’ loan principal repayment based on 10 years equal monthly repayment schedule with US$750,000 balloon) is the sum of US$ 260,416.667- for Vessel, which is equal to one one hundred twentieth (1/120) of the initial Charter Principal Balance minus US$750,000 balloon; and

 

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(ii) Monthly Variable Hire is calculated from the number of the days in any relevant month, and daily variable hire in accordance with the following formula:

Monthly Variable Hire = Daily Variable Hire x the number of the days in the relevant month

Daily Variable Hire = Charter Principal Balance x (2.0% + one (1) month ICE LIBOR as applicable for the month in respect of which such Daily Variable Hire is to be calculated) / 360

Applicable one (1) month ICE LIBOR to be confirmed ten (10) Banking Days prior to hire due date (The both parties to discuss again about the exact date when the date for delivery of the vessel gets closer.). The Owners shall notify the Charterers in writing of the Monthly Variable Hire due on any due date for hire by sending to the Charterers a duly issued invoice for that Monthly Variable Hire and Monthly Fixed Hire at least four (4) Banking Days before such due date.

Charter Principal Balance means US$32,000,000.- less the aggregate Monthly Fixed Hire as has at any relevant time been paid to the Owners for Vessel.