Eitzen Chemical bondholders scheduled to vote on restructuring Jan. 9

By Caroline Salls

Pittsburgh, Dec. 29 – Eitzen Chemical ASA’s bondholders will meet on Jan. 9 to vote on the company’s proposed restructuring, according to a notice from bond trustee Nordic Trustee ASA.

As previously reported, Eitzen entered into a plan support agreement with the majority of its banks and bondholders and its largest shareholder that would result in the conversion of $850 million of bank and bond debt and the repayment of $46 million.

Following conversion of the bank and bond debt, the holders of the converted debt will own 98% of Eitzen’s outstanding shares.

In addition, the company said it entered into a term sheet for a new $100 million revolving credit and term loan facility, with an option to increase the total principal amount to $150 million by inviting additional lenders to participate in the financing.

The company said it will adopt a new name, Team Tankers International, and reincorporate in Bermuda as part of the restructuring.

Restructuring terms

The terms of the agreement include the following:

• Roughly $32 million of outstanding debt under some of the group’s bank facilities will be repaid in cash;

• All outstanding debt under the group’s remaining bank facilities will be converted into new equity representing 94.5% of the outstanding shares at completion of the conversion;

• The total amount of outstanding debt under the group’s bond loans, less $13.5 million, will be converted into new equity representing 3.5% of the outstanding shares at completion of the conversion. The remaining amount under the bond loans will be repaid in cash;

• Skandinaviska Enskilda Banken AB (SEB) will exchange its entire claim under one of the bank facilities for a sale-leaseback agreement involving three of the company’s existing vessels. The company said it is expected to recognize an estimated impairment of $90 million in the fourth quarter, which will align the book value of the vessels to current broker valuations.

Final settlement of the arrangement with SEB is subject to completion of the debt conversion;

• The company has entered into a term sheet with SEB and NIBC Bank NV regarding a $100 million credit facility, including a $66.7 million term loan facility and a $33.3 million revolving credit facility.

Subject to approval of a new lender by all lenders, the facility may be increased by up to $50 million, to be split with up to $33.3 million on the term loan facility and up to $16.7 million on the revolving facility; and

• In a voluntary offer, Team will acquire all existing shares in Eitzen and all consideration shares issued in the debt conversion in exchange for shares in Team to be listed on Oslo Bors, or, alternatively, Oslo Axess.

Pre-acceptance of the agreement must be obtained from in excess of 90% of the lenders participating in the debt conversion.

The support agreement will terminate if not completed by Feb. 28.

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

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