Eitzen axes again

Eitzen Chemical has cleared its newbuilding slate with the sale of its final three ships to clients of Laurin Maritime.
Eitzen Chemical managing director Terje Askvig

The trio of ships are building at Brodotrogir in Croatia and have been sold through a novation agreement, Eitzen said.

Under the deal Laurin Maritime will assume all rights and obligation the Company has towards the yard, including all further payment obligations.
The basis for the deal is a total price of $124m including extras. However, it is conditional on approval from the yard and its refund guarantors.
Earlier this month Eitzen Chemical chopped an order for five chemical carriers at Japan’s Sasaki Zosen due to the global financial crisis.

Walking away from those newbuildings cost the Oslo-listed owner the $7.5m deposit plus a further cancellation payment of $7.5m due in November.
However, the decision to axe the order for the 12,000-dwt ships helped slice $175m from its newbuilding commitments.

“Together with the agreement with the Japanese yard, which now is final and unconditional, and the four newbuilding delivered this year, our capital expenditure program has been reduced from $350m at the beginning of the year to zero,” said chief executive Terje Askvig.
“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.”

In addition Eitzen Chemical said it has found it necessary to increase the impairment charge as of year end 2008 to $313m, up from $156m previously reported.
It 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 $7.5m cancellation fee.
Eitzen Chemical operates a fleet of 84 vessels – 68 of which are owned and leased, and a further 16 vessels are operated for partners.

By Dale Wainwright in Singapore