Eitzen Chemical to concentrate on shoring up finances

(Aug 28 2009)

Eitzen Chemical reported EBITDA, excluding profit/loss sale of assets, of $16.4 mill for 2Q09, compared to $20.6 mill in previous quarter.

Eitzen said that full focus would be given on the delivery of a long term financial plan and to the strengthening of the company's financial position.
The 2Q09 TCE rates for the company's fleet below 30,000 dwt were down by 0.9 % compared to the previous quarter, while the vessels above 30,000 dwt reported average rate decreases of 1.2% compared to 1Q09.

Eitzen said that it continued to expect challenging market conditions in the short to medium term with an improvement dependent on a more broad based recovery in industrial production.
The company said that it was in the process of developing its long term financial plan, which will be presented to its lenders in the coming weeks. The plan will include a proposal for a new debt repayment schedule and covenant structure as well as a strengthening of the company's balance sheet and cash position through an issue of new equity.
During the quarter, several contracts of affreightment were renewed securing critical volumes and six additional vessels have come under the company's management through the City Class pool.

Terje Askvig, Eitzen Chemical ceo, said: "Following the successful execution of our strategy to eliminate our newbuilding commitments earlier in the year, we have been working on the development of a long term financial plan together with our advisors. The objective of the financial plan is to create a financially robust platform for the company. The plan will include, inter alia, a proposal for a new debt repayment schedule and an amended covenant structure to better fit the current market environment and outlook.

“Furthermore, an integral part of the financial plan is assumed to be the strengthening of the company's balance sheet through an issue of new equity. We believe that a robust financial structure coupled with the company's modern fleet and strong market position should form a solid basis for creating shareholder value and safeguarding our various stakeholders going forward. It is envisaged that the financial plan will be concluded in the fourth quarter, subject to relevant approvals," he concluded.