Joint Venture between CECO and JACCAR Holdings in the ethylene segment

24 Sep, 2010

Camillo Eitzen & Co ASA (CECO) has on 24 September 2010 entered into a Heads of Agreement with JACCAR Holdings, a private investment company owned and founded by Mr. Jacques de Chateauvieux, to establish a leading joint venture in the ethylene shipping segment.

CECO's ownership of eight ethylene gas carriers and its other business activities related to the ethylene shipping segment (including its interest in the Eitzen Solvang Ethylene joint venture), is presently organized in Eitzen Gas a wholly owned subsidiary of CECO. This company will be re-named Eitzen Ethylene Carriers, which will be the continuing, and fully integrated entity, operating our Ethylene vessels going forward.

Following this name change, JACCAR Holdings will purchase 40% of the shares in Eitzen Ethylene Carriers from CECO at an agreed cash consideration of USD 15 million, subject to certain adjustments at closing. The agreed consideration is based on estimated market values of the vessels. Approximately USD 60 million in bank debt secured against the vessels will be assumed by Eitzen Ethylene Carriers.

Eitzen Ethylene Carriers will be 60% owned by CECO and 40% owned by JACCAR Holdings after the transaction.

As a part of the agreement, Eitzen Ethylene Carriers will commercially and technically manage Jaccar Holdings' "state of the art" 12,000 cbm gas carrier newbuildings ordered from Nantong Sinopacific Offshore and Engineering (SOE). Deliveries of the new gas carriers are scheduled to start in 2012.

JACCAR Holdings will hold an option to acquire an additional 40% of the shares in Eitzen Ethylene Carriers from CECO during the next 12 months at the same price as the initial share purchase.

The transaction is subject to satisfactory agreements with CECO's lenders.

Peter D. Knudsen says:
"We are very pleased that we have been able to reach an agreement for partnership with JACCAR Holdings; The transaction will secure a sustainable foundation for our ethylene business going forward in terms of renewing our existing fleet with the strong contribution of a new industrial shareholder. The market for our ethylene carriers has improved lately, and we are modestly optimistic on the near and medium term prospects of this market segment".

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)

Camillo Eitzen & Co ASA