Eitzen Chemical ASA: Agreement in principle for restructuring
of the Company's bank and bond debt

5 Oct, 2012

Eitzen Chemical ASA ("Eitzen Chemical" or "the Company") is pleased to announce that it has entered into an agreement in principle with a steering committee established by the Company's bank syndicates and representatives of the largest holders of the bond loan for a consensual financial restructuring. The agreement builds on the restructuring agreement announced on 9 August 2012, but includes a restructuring of the outstanding bond loan to secure a longer grace period as previously announced. The bank steering committee comprises the largest banks in Eitzen Chemical's bank syndicates. Bondholders holding a majority of the unsecured bond have confirmed to vote in favor of the restructuring in a bondholders' meeting. The agreement is a positive milestone for the Company, and is expected to provide for normal operations for several years.

The agreement keeps intact the terms of the agreement in principle announced on 9 August, which included an extension of the existing senior bank debt to May 2016 and no fixed installments until April 2015. Furthermore, the new agreement allows for deferral of certain bank debt installments in 2015 and 2016.

Importantly however this latest agreement in principle allows for the existing bond debt to be split in two instruments, with $ 50 million converted into a 2nd lien mortgage instrument, whilst the remaining $ 60 million will remain as an unsecured loan. This unsecured note will be callable by the Company into $ 10 million of equity in a future stock issue. The 2nd lien instrument will also include $ 30 million of converted senior bank debt.

The agreement is subject to formal approval by the banks' credit committees and a bondholder meeting. In anticipation of a definitive agreement, the banks have granted a waiver in respect of the current minimum cash covenant and loan-to-value covenant until the end of October. Furthermore, in anticipation of consummation of the agreement, the trustee of the bond loan and the banks' steering committee have agreed to give the Company a grace period for payment of interest until the end of October. Deferred interest for the bank and bond loan will be handled according to the new financial plan set out above.

ABG Sundal Collier has acted as advisors to the Company, Alix Partners as advisors to the banks and AMA Capital Partners as advisors to the bondholders.

The Company will announce more details regarding the refinancing and distribute summons to a bondholders meeting in due course.

Eitzen Chemical ASA press release