The equity analyst’s argument is based on an assessment that found the collective charter-free value of the five medium range product tankers and 2,000 to 3,400-teu containerships to be around $215m, which is $85m lower than the actual purchase price.

In the wake of filings that outlined the details of a venture between Navios Maritime Holdings and Navios Maritime Acquisition to acquire the units from the German lender Nokta told clients the deal underscores the “strong market position” of the Navios clan.

As we reported many believe the  transaction is groundbreaking but claim the structure is nothing new and note that private equity firms have been pitching similar proposals to HSH and its compatriots for quite some time.

Nokta says the Navios acquisition offers “solid” payback potential in the near and long-term as the joint venture is due to receive a 12.7% annual preferred return on its $10m cash investment, which has a preferred status if the ships are sold down the road.

Going forward, he notes 20% of all cash flows from operations or a sale will go to the joint venture while HSH will pocket the remaining 80%. When $170m of assumed debt is paid off the Navios companies will be entitled to 100% of excess cash flow.

While the analyst expects only a “modest impact” on the bottom line in the short run, if containership prices were to recover and hit levels seen in 2010 and 2011 he believes the value of the liner fleet alone could spike by more than $100m.

“The 10 ships had been operated by insolvent owners and the Navios Group is positioned to take advantage by ‘bailing’ out the bank and keeping optionality on a market recovery down the line,” he added in a report that focused on bulker specialist Navios Holdings.

“The near-term cash flow impact to Navios Holdings is likely modest but there is potential for outsized returns in the years ahead, in our view. We reiterate our Buy rating and $6.00 price target [for shares of Navios Holdings].”

You can read more articles about the transaction by clicking on the links located to the right of this article