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Closing of the transaction is expected to take place around 15 October 2010. The agreement is subject to the completion of a restructuring of EEC whereby CECO will transfer ownership of eight vessels to EEC, and customary closing conditions. JACCAR Holdings is Jacques de Chateauvieux's personal investment company, which he established in 1984 to acquire BOURBON Offshore. BOURBON operates in more than 30 countries focusing on marine and subsea services to the offshore, oil and gas industry. Since 2001, JACCAR Holdings has extended its investments into other industries: • Shipbuilding • Industrial fishing • Real estate development • Private equity JACCAR Holdings' main contribution to its partnerships lies in definition of strategy, development of a value creating entrepreneurial culture, and when applicable, listing on financial markets. DESCRIPTION OF EITZEN ETHYLENE CARRIERS A/S EEC is involved in the transportation of ethylene and petrochemical gases. EEC will own a fleet of eight ethylene vessels following the completion of the transaction. The Company has its main office in Denmark and employs nine people on a worldwide basis. Jaccar Holdings has as part of the transaction entered into a contract with Sinopacific Offshore & Engineering for the construction of eight 12.000 cbm ethylene carriers for delivery from 2012 which commercially will be managed by EEC. The technical management of the current fleet is handled by Thome Ship Management and EMS Ship Management (Singapore) Pte. Ltd. EEC has an ongoing joint venture with Solvang ASA for the purpose of joint marketing of the ethylene vessels owned and controlled by EEC and Solvang ASA. The joint venture is named Eitzen Solvang Ethylene ("ESE"). In total 13 ethylene carriers ranging from 8,000 - 15,000 cbm (eight EEC and five Solvang ASA vessels) are commercially operated by ESE through offices in Singapore and Copenhagen. The fleet operates worldwide and is mainly engaged in transportation of petrochemical gases (such as ethylene, propylene and butadiene) from the Middle East to destinations worldwide. During 2009, about 60% of the activities originated from period contracts (CoAs and time charters), while the remaining capacity was fixed in the spot market. Activity in the ethylene segment commenced at satisfactory levels during first half of 2009. During the second half of 2009 export of petrochemical gases from the Middle East declined substantially, mainly due to the start up of additional downstream production as well as delays in new production facilities. EEC was impacted by reduced nominations under cargo contracts (CoAs) and weak activity in the spot market, resulting in increased idle time and lower earnings. From the end of Q2 2010, EEC has experienced more ethylene trades from the Middle East as a result of increased nominations under contracts and higher activity in the spot market. T/C rates have recently increased from around USD 500,000 pcm to around USD 575,000 pcm for a standard 8,000 cbm ethylene carrier, which confirms a firmer trend in the market. The production of ethylene is expected to continue to increase during the latter part of 2010 and beginning of 2011, which in turn is expected to improve both nominations under CoAs, spot market rates and fleet utilization. Camillo Eitzen & Co ASA |
Agreement regarding sale of 40 percent of