A controversial $50m loan from one Navios company to another has sparked a lawsuit in the US.
Bulker owner Navios Holdings took the revolving credit facility from tanker firm Navios Acquisition in February in a move that swiftly brought recriminations from stock watchers in New York where the Angeliki Frangou firms are listed.
Now a lawsuit has been brought about by two shareholders that claims the loan was carried out “on terms that no rational person, much less a corporate director or controlling stockholder showing respect to their fiduciaries, would ever permit”.
The plaintiffs maintain: “The terms of the loan, including its miniscule interest rate, are wildly below the market rate an independent third party would charge Navios Holdings. “Navios Holdings’ equity owners, including Frangou, ought to have invested or raised new equity. However, that would have required making further personal investments or conducting a dilutive offering that would have reduced the equity interests of insiders in Navios Holdings. Thus, Navios Holdings turned to Navios Acquisition.”