Eitzen Chemical debt restructuring approved by all banks in syndicate

By Caroline Salls

Pittsburgh, Nov. 26 - Eitzen Chemical ASA's consensual restructuring of its bank and bond debt has been approved by all of the banks in its loan syndicate, according to a news release.

As previously reported, holders of a majority of the company's bond loan have agreed to the restructuring and agreed to vote in favor of the restructuring in a bondholders' meeting.

Restructuring terms

The main elements of the restructuring agreement include

• Maturities for existing bank debt will be extended to May 2016 from July 2014;

• The grace period with no fixed debt installments will be prolonged until April 2015 with flexible repayment terms from that date to maturity;

• Cash interest payments will be limited to Libor until Jan. 1, 2015 and Libor plus 275 basis points from that point;

• Financial covenants will be suspended or significantly modified until maturity. The company will have a minimum liquidity covenant of $30 million;

• The maturity for the bond loan will be similarly extended with no interest payable in cash;

• About $50 million of the bond loan will be secured with a third-ranking lien in the company's fleet, while the remaining $60 million will be an unsecured loan maturing in September 2016 that can be converted into equity in a future refinancing;

• $30 million of the senior bank loan will be moved to a pari passu position with the secured bond loan; and

• The senior banks have committed to a total of $30 million in a new working capital facility to secure liquidity. This facility will be comprised of a $10 million term loan maturing in May 2016 and a $20 million revolving credit facility maturing in April 2016.

Eitzen said the restructuring is based on a slowly improving market and will secure headroom and stable operations in the years to come.

Waiver extension

In anticipation of final completion of the loan documentation and formal approval by the bondholders' meeting, the banks and the trustee of the bond loan have agreed to extend previously announced waivers and grant the company a grace period Dec. 15 to complete the restructuring transactions.

Eitzen Chemical is a marine transportation services provider based in Oslo.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.