Eitzen Chemical - Sells 3 newbuildings

29 Apr, 2009

Eitzen Chemical ASA (OSE: ECHEM) announced today that it has sold through novation three newbuildings from Croatia, and thereby completed its newbuilding program.

Eitzen Chemical has entered into an agreement with clients of Laurin Maritime to sell its three remaining newbuildings from Brodotrogir in Croatia through a novation agreement, whereby the buyer will assume all rights and obligation the Company has towards the yard, including all further payment obligations. The basis for the agreement is a total price of USD 124 mill. (including extras). The novation agreement is conditional on approval from the yard and its refund guarantors.

Terje Askvig, CEO said "we are under the present circumstance very pleased with this agreement, which means that our newbuilding program has been completed. Together with the agreement with the Japanese yard reported earlier, which now is final and unconditional, and the four newbuilding delivered this year, our capital expenditure program has been reduced from USD 350 mill. at the beginning of the year to zero. We believe this will contribute to facilitate an agreement which we have initiated with our lenders to amend the debt repayment schedule and the covenant structure to better fit the current market environment."

Eitzen Chemical has found it necessary to increase the impairment charge as of yearend 2008 to USD 313 mill., up from USD 156 mill. previously reported. The Company does not expect to record a loss from the above transaction, nor does it expect to record a loss from the cancellations in Japan reported earlier, except for the USD 7.5 mill. cancellation fee. Eitzen Chemical will release its 2008 annual accounts 30 April 2009.

Eitzen Chemical is an industrial carrier of petrochemical and related cargos with a fleet of 84 vessels. 68 vessels are owned and leased, and a further 16 vessels are operated for partners.

Eitzen Chemical ASA