Eitzen Chemical - Update on new financial plan

24 Sep, 2009

As previously communicated, Eitzen Chemical ASA (OSE: ECHEM) is in the process of developing a new financial plan to re-establish a solid financial platform and to secure a robust business plan.

On 21 September 2009, Eitzen Chemical called for a bondholders' meeting to propose certain amendments to the loan agreement for the FRN Eitzen Chemical ASA Callable Bond Issue 2006 / 2011. The bondholders' meeting will be held on 29 September 2009.

The company has, among others, proposed to change the maturity date of the bond loan to October 2014 and to remove certain covenants. Eitzen Chemical has invited bondholders to participate in an information meeting to provide information about the planned restructuring. Enclosed is the presentation from the meeting.

Eitzen Chemical is also in the process of negotiating amendments to its current credit facility agreements to achieve a new and more favourable debt repayment schedule and covenant structure. The company has proposed to postpone all scheduled instalments until Q4 2012; however, with a potential for variable instalments from 2010 based on Eitzen Chemical's financial performance. Eitzen Chemical has also proposed to remove covenants to achieve a new structure which fit the current market environment and the company's financial position.

As previously communicated, Eitzen Chemical is also contemplating a new equity issue. The company plans to complete a new issue in the amount of USD 100 million to strengthen the company's liquidity buffer and balance sheet. The proposed amendments to the loan agreements described above, including the bond loan, will be conditional upon successful completion of the equity issue, and the equity issue will be conditional upon the lenders approving the proposed loan amendments. Further details regarding the potential equity issue will be communicated at a later stage.

The main objective with the new financial plan is to secure financial headroom and improve comfort for all stakeholders of Eitzen Chemical. The new equity issue and amended loan agreements will secure a robust business plan and re-establish a solid financial platform to weather challenging markets.

Eitzen Chemical is an industrial carrier of petrochemical and related cargos with a total fleet of 84 vessels. 63 vessels are owned and leased, and a further 21 vessels are operated for partners.

Eitzen Chemical ASA