For thepast several years equity analysts have used quarterly conference calls as anopportunity to ask Navios Holdings chief executive Angelki Frangou aboutwhether the New York-quoted company intends to spin-off the logistics arm andtoday was no different.
The topic,and others related to the performance of Navios Logistics, took centre stage duringthe question-and-answer portion of the Athens-based operator’s third-quarterearnings briefing and appeared prominently in management’s overview of theperiod.
Like inyears past, Frangou said a separate listing of the Montevideo, Uruguay-headquarteredoperator of terminals, tankers, tugs and barges was a possibility at some pointin the future but failed to discuss the timing of a scenario that many believeto be increasingly likely.
Severalequity analysts who have been tracking the company’s performance and growthover the past few years tell TradeWinds there is little chance that an initial publicoffering will take place before year-end but were quick to point out that it’sa “strong possibility in 2014”.
WhenNavios Logistics first announced that it had landed a 20-year contract to storeand transship iron ore and other commodities on behalf of Vale earlier thismonth, Benjamin Nolan of US investment bank Stifel described the billion-dollardeal as “transformative”.
“Furthermore,this agreement could lead to other, more lucrative deals in the South Americanbusiness and we believe could lay the ground work for a separate IPO of thatbusiness,” he continued in a briefing issued on 14 November.
In Monday’sconference call, Navios Holdings pointed out that it currently owns a 53.8%stake in Navios Logistics. Frangou applauded the ongoing growth of the companyand said its board is still willing to consider the possibility of a spin-offbut indicated it wouldn’t jump the gun.
While theIPO window on Wall Street appears to be open to blue-chip shipowners withstrong management teams and exposure to niche segments that are benefiting fromsecular headwinds, observers are confident that Navios Logistics will wait patientlyuntil the timing is perfect.
“After listening to the call it seems the Valetransaction won’t impact the bottom line until late 2014, which is later thanwe originally expected,” said one market source. “Once you start seeing thatcontribution, that’s when I would expect them to move forward [with a USlisting].”
You can read more stories about Navios Logistics, including an article that stems from an interview with Angeliki Frangou, by clicking on the links located under the Related and Related Media sections to the right
