Eitzen cancels a third of its newbuild orders

Craig Eason - Wednesday 8 April 2009

OSLO-listed Eitzen Group has cancelled 11 newbuilding orders with a yard in Japan as it continues to struggle against the market conditions. Eitzen Gas, a fully-owned division of Oslo-listed Camillo Eitzen, has cancelled its total newbuilding commitment of six 2,500 cu m gas carriers, while Copenhagen-based Eitzen Chemical has axed five 12,000 dwt stainless steel chemical carriers with the same yard.

Eitzen Chemical, a separately listed company majority owned by the Eitzen Group, said the cancellation agreement is conditional upon the company providing satisfactory security to the yard for the cancellation fee. The company has agreed to compensate the yard a total of $15m but said it has subsequently reduced its capital expenditure by $175m. With the recent delivery of the 25,000 dwt epoxy coated Sichem Osprey from Korea, Eitzen Chemical has only three remaining newbuildings on order from Croatia.

Camillo Eitzen said that while the agreement to cancel the six gas vessels was against a settlement of $2.5m it had saved $105m in further costs. The company still has a further 17 vessels on order with its bulk division. Both Camillo Eitzen and Eitzen Chemical are in talks with their banks to try and further amend debt repayments and covenant structures.

Source: Lloyd's List