View:
Mail Stop 3561
November 30, 2005
Via Fax and U.S. Mail
Angeliki Frangou
Chief Executive Officer
Navios Maritime Holdings, Inc
67 Notara Street
Pireaus, Greece 185 35
Re: Navios Maritime Holdings, Inc.
Registration Statement on Form F-1
File no. 333-129382
Filed November 2, 2005
Dear Ms. Frangou:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filings. We look forward to
working
with you in these respects and welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
As appropriate, please amend your registration statement
in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
General
1. Please revise throughout to indicate that your stock has been
listed on the Nasdaq National Market.
2. Please include a section describing the selling shareholders
including a selling shareholders table.
3. We note that in several places throughout the filing, you use
abbreviations that are not defined or apparent to the average
reader.
For example, you use terms such as COAs and FFAs without
sufficient
explanation. Please avoid abbreviations as much as possible
throughout the filing.
Front Page of Prospectus
4. On the front page of your prospectus you mention a "unit" and
you
also refer to units on page 20, without a description of what a
"unit" is. Please offer this information in the forepart of your
document.
Prospectus Summary, page 1
5. Please clarify in the summary heading that all material
information is presented in this section.
Summary Consolidated Financial Data, page 4
6. We note your disclosure both here and in selected consolidated
financial data on page 18 that "Navios historical information as
of
December 31, 2002, and as of and for the years ended December 31,
2000 and 2001 are derived from the unaudited financial statements
which are not included in this prospectus." You appropriately
label
the columns for 2000 and 2001 as unaudited, however, we are
unclear
to what extent information presented for the year ended December
31,
2002 has been audited based on your statement given that the audit
report on page F-13 seems to include 2002 as having been audited.
Please revise your disclosures to clarify that the December 31,
2002
balance sheet data is "unaudited."
7. Please revise this section and your selected consolidated
financial data on page 18 to include your total long-term debt,
including current portion for the most recent interim period
presented. We note that you have long-term debt in your June 30,
2005 balance sheet on page F-2.
8. Please disclose summary and selected financial data for ISE,
the
registrant, for all periods since its inception.
9. Please disclose your pro forma statement of operations data,
including earnings per share for the latest fiscal year and
subsequent interim period presented in your financial statements
giving effect to the merger transaction between ISE and Navios and
any related financing arrangements. Also, disclose pro forma
balance
sheet data as of the latest interim balance sheet date presented.
Risk Factors, page 6
10. Tell us whether there are any risk factors related to the
pricing
of fuel. You may wish to consider including a risk factor
regarding
the price of fuel if appropriate.
11. We note that your warrants become exercisable on December 10,
2005. In the event that your registration statement does not
become
effective by December 10, 2005, please consider adding a risk
factor,
if applicable, regarding the material risks presented to
shareholders
by the lack of an effective registration statement.
Certain of Navios`s directors..., page 10
12. You state on page 10 that some of your directors, officers and
shareholders are affiliated with parties engaged in activities
similar to those Navios will have "upon completion of the
acquisition." To what acquisition are you referring?
Navios intends to continue to grow its fleet...., page 12
13. What is the "contemplated Navios acquisition" referred to in
this
risk factor?
Navios is incorporated in the Republic of the Marshall
Islands...page
14
14. Please indicate in this section the material differences in
shareholder protections under Marshall Island law as compared to
the
law in a U.S. jurisdiction (i.e. Delaware), if any. Consider
providing a cross reference to page 95 where you highlight
material
differences in shareholder protections and corporate governance
matters.
Price Range of Our Securities, page 17
15. Please provide the average daily trading volume for each of
the
periods presented in the table on page 17.
Related party transactions, page 44
16. Please tell us whether your related party transaction where
you
issued shares at a discounted rate to executives and directors was
a
form of executive compensation.
Interest Rate Risk, page 45
Debt Instruments, page 45
17. Revise to disclose the effect of a change in interest rates on
interest expense associated with the $514.4 million of outstanding
borrowings under the senior secured credit facility with HSH
Norbank
AG as of August 25, 2005.
Interest Rate Swaps, page 46
18. Revise to clarify whether the interest rate swap arrangements
remain outstanding following the acquisition transaction with
Navios.
Foreign Currency Risk, page 46
19. Revise to quantify the impact that a change in currency rates
would have on the Company`s results of operations for the most
recent
annual period presented. This revised discussion should include
the
expected impacted of changes in all relevant currencies on all
foreign currency denominated revenues and expenses, rather than be
limited to solely a discussion of outstanding foreign exchange
contracts.
Acquisition and Merger Pro Forma Financial Information, page 73
20. Please revise the introductory paragraph to the pro forma
financial information to include a description of the material
terms
of the acquisition transaction including any bank financing
arrangements obtained to fund the transaction. Refer to the
requirements of Rule 11-02(b)(2) of Regulation S-X.
Unaudited Pro Forma Consolidated Balance Sheet
21. We note from the disclosure in note (d) that the company
considered the expected life of customer relationships of ten
years
in determining the amortization period to be used for the
tradename
acquired in the Navios acquisition. Given that you considered the
useful lives of customer relationships in determining the
appropriate
amortization period to use for the acquired tradenames, please
explain why none of the purchase price for Navios was allocated to
a
customer relationship intangible, when these intangible assets are
considered to have a useful life of approximately ten years. We
may
have further comment upon receipt of your response.
22. Revise the notes to the pro forma balance sheet to disclose
the
factors that contributed to a purchase price resulting in
recognition
of goodwill. Also, revise to disclose the weighted average
amortization period for each category of intangible assets
acquired
and disclose the aggregate amortization expense for each of the
next
five years. Refer to the requirements of paragraph 51b of SFAS
No.141 and paragraphs 44 and 45 of SFAS No.142.
23. We note that certain amounts in the ISE column do not match
amounts from the ISE June 30, 2005 financial statements from pages
80
and 81. Please revise or advise.
24. Revise note (c) to indicate that this adjustment also reflects
the elimination of the historical equity of Navios.
25. Please explain in the notes to your pro forma information why
common stock subject to redemption is being reclassified to
permanent
equity in connection with the acquisition transaction. Your
revised
disclosures should clearly explain why this reclassification is
directly attributable to the acquisition transaction as required
by
Rule 11-02(b)(6) of Regulation S-X and should explain how the
amount
of this reclassification adjustment was determined.
26. In addition, please explain in your footnote disclosures why
"deferred interest income" of $23,000 and $421,000 is being
recognized for the year ended December 31, 2004 and the six months
ended June 30, 2005 in connection with the reclassification of
temporary equity to permanent equity in your balance sheet, and
explain how the amounts of the adjustments for each period were
determined.
International Shipping Enterprises, Inc. Financial Statements,
page
80
27. Please revise to include a full set of audited financial
statements for ISE for the period from inception to year-end of
December 31, 2004 and interim statements through the most current
period. Include the report of the independent auditor in your
revision. Please note that the inclusion of the unaudited
financial
statements of ISE on pages 80 through 86 of the registration
statement does not satisfy the requirement for audited financial
statements outlined in Rules 3-01, 3-02, and 3-04 of Regulation S-
X.
Description of Securities, page 94
28. Item 7 of Form 20F requests that you should indicate what
portion
of your outstanding securities is held in the United States and
the
number of record holders thereof in the United States. Please
provide that information.
29. We note from the fourth paragraph under the heading "Common
Stock" that certain stockholders are entitled to registration
rights.
Please provide us with a summary of these rights in your response
and
file the appropriate registration rights agreements as an exhibit.
Legal Matters, page 103
30. In this section, please explain which matters Mintz Levin
intends
to address. The term `certain` does not adequately describe the
legal matters to be addressed. Please also describe the matters
to
be addressed in the Reeder & Simpson opinion using definite terms.
Navios Maritime Holdings Inc. June 30, 2005 Interim Financial
Statements
Consolidated Balance Sheets, page F-2
31. Please revise the column for December 31, 2004 to remove the
"unaudited" caption. We note from the audit report on page F-13
that
this period was audited as noted in the report on page F-13.
Consolidated Statements of Cash Flows, page F-4
32. If material, revise to disclose the effect of exchange rates
on
cash balances held in foreign currencies as a separate part of the
reconciliation of the change in cash and cash equivalents during
the
period. Refer to SFAS 95, paragraph 25.
Note 8: Segment Information, page F-11
33. Please revise to include comparative information for all
interim
periods presented from the prior year.
Report of Independent Auditors, page F-13
34. Please have your auditors revise the report to comply with
PCAOB
auditing standard 1. Refer to SEC Release 33-8422.
Navios Maritime Holdings Inc. December 31, 2004 Financial
Statements
Notes to the Consolidated Financial Statements, page F-21
Note 2: Summary of Significant Accounting Policies, page F-18
Revenue and Expense Recognition, page F-24
35. We note the disclosure indicating that voyage revenues and
expenses for the transportation of cargo are recognized ratably
over
the estimated relative transit time of each voyage. Note that
recognition of voyage expenses ratably over the voyage rather than
as
incurred is not considered appropriate as it does not comply with
the
guidance outlined in EITF 91-9. Please revise your recognition of
voyage expenses during all periods presented to comply with the
guidance outlined in EITF 91-9.
Employee Benefits, page F-25
36. Please clarify your accounting for pension liabilities under
Greek labor law as we note that you are unable to estimate the
number
of employees that will remain with the company until retirement
age.
Tell us if liabilities for these pensions are included in the
statutory indemnities liability you refer to in the same section
and
explain how these liabilities are reflected in your disclosures in
Note 14.
Note 16: Commitments and Contingencies, page F-43
37. Revise to provide an assessment regarding the potential impact
of
pending claims and arbitration with regards to the Company`s
financial statements as a whole. Your revised disclosure should
include management`s assessment regarding their potential impact
on
the Company`s results of operations and liquidity in addition to
its
financial position. The notes to the Company`s interim financial
statements should be similarly revised.
PART II- Information Not Required in Prospectus
Item 6. Indemnification of Directors and Officers, page II-1
38. Describe the laws governing indemnification in the Marshall
Islands in plain English. Mere recitation of the governing
statutes
does not describe the indemnification provisions.
Exhibits
Exhibit 5/1- Opinion of Reeder & Simpson
39. We note that you intend to file the legality opinion of Reeder
&
Simpson by amendment. We may have additional comments upon review
of
the legality opinion.
Report on Form 6-K filed October 7, 2005
40. We note that you have reconciled the non-GAAP measure EBITDA
to
net income rather than cash flow from operations in the press
release
furnished in the Form 6-K filed on October 7, 2005. As the
disclosures in your Form F-1 registration statement indicated that
this measure is used primarily as a liquidity measure by
management,
please revise future press releases and filings to reconcile this
non-GAAP measure to most comparable GAAP measure which is cash
flow
from operations.
Closing
As appropriate, please amend the registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that
* Should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* The action of the Commission or the staff, acting pursuant to
delegated authority in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* The company may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting
acceleration of a registration statement. Please allow adequate
time
after the filing of any amendment for further review before
submitting a request for acceleration. Please provide this
request
at least two business days in advance of the requested effective
date.
You may contact Heather Tress, Staff Accountant at (202)
551-
3624, or Linda Cvrkel, Branch Chief at (202) 551-3201 if you have
questions regarding comments on the financial statements and
related
matters. Please contact Lisa Beth Lentini at (202) 551-3334,
Attorney-Advisor, or me at (202) 551-3725 with any other
questions.
Sincerely,
H. Christopher Owings
Assistant Director
Cc: Todd Mason
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Fax (212) 983-3115
??
??
??
??
Angeliki Frangou
Navios Maritime Holdings, Inc.
November 30, 2005
Page 1 of 9