Proposed financial restructuring
6 Nov, 2010
As previously announced, Eitzen Maritime Services ASA ("Eitzen Maritime Services" or the "Company") has evaluated various financial restructuring alternatives to address debt installments due in November and December 2010 and create a viable financial platform going forward.
The Company is in the process of negotiating amendments to its current bond loan agreements. As part of the restructuring process, the Company will call for bondholders' meetings to consider a restructuring proposal and amendments to the loan agreements for the; i) FRN Eitzen Maritime Services ASA Callable Bond Issue 2007 / 2010 (the "FRN 2007 Loan"); ii) 13.15% Eitzen Maritime Services ASA Callable Bond Issue 2009 / 2012 (the "2009 Loan"); and iii) FRN Eitzen Maritime Services ASA Callable Bond Issue 2009 / 2012 (the "FRN 2009 Loan").
In the period between the bondholders' meetings and the completion of the Restructuring, the Company has requested the bondholders for a general temporary waiver of the Company's obligations under the present bond loan agreements.
Bondholders representing more than 2/3 of the votes in the FRN 2007 Loan, the 2009 Loan and the FRN 2009 Loan have committed to vote in favor of the proposed Restructuring and the temporary waiver.
As part of the proposed Restructuring, the Company will complete a new equity issue of NOK 146,250,000 at minimum price of NOK 0.60 per share (the "Equity Issue"). Camillo Eitzen & Co ASA, the main shareholder of the Company, has agreed to guarantee and subscribe for up to NOK 73,125,000 in the Equity Issue at a subscription price of NOK 0.60 per share. The remainder shall be guaranteed by the bondholders in the 2009 Loan and the FRN 2009 Loan, together, through a conversion of accumulated interest and principal at a price of NOK 0.60 per share (the "Bondholder Equity Guarantee").
Provided that the Bondholder Equity Guarantee is called, the Company will issue a new bond. The new bond is fully guaranteed and shall be in the same amount as the amount converted from the principal of the 2009 Loan and the FRN 2009 Loan (up to approximately NOK 50 million).
The Equity Issue is conditional upon approval of the material elements of the Restructuring by the bondholders in the FRN 2007 Loan, the 2009 Loan and the FRN 2009 Loan, and shareholders' approval. A notice for an extraordinary general meeting will be distributed shortly. Camillo Eitzen & Co ASA and affiliated companies have committed to vote in favor of the Equity Issue. The proposed amendments to the bond loan agreements are furthermore conditional on the completion of the Equity Issue.
Further details on the timing of the Equity Issue will be announced in due course. It is anticipated that the Equity Issue will be completed through a private placement shortly following the bondholders meetings to be held on 25 November 2010.
"We are very happy to have found a solid and robust re-organized financial structure, which will allow Eitzen Maritime Services to fully utilize its leading position as a worldwide ship supply organization. This will ensure time and cost efficient supply to our military and commercial clients." said Axel C. Eitzen, CEO of Eitzen Maritime Services.
ABG Sundal Collier Norge ASA and Carnegie ASA are acting as advisors to the Company in relation to the financial restructuring. The law firm Wikborg Rein acts as legal advisor to the Company.
Eitzen Maritime Services ASA