Eitzen Maritime trustee details restructuring proposal, loan changes

By Caroline Salls

Pittsburgh, Nov. 18 - Eitzen Maritime Services ASA bond trustee Norsk Tillitsmann ASA detailed the terms of the company's proposed restructuring and repayment of 2009 loans against a payment in kind of new bonds, according to a bondholder summons.

Bondholders will vote on the proposals at Nov. 26 meetings.

As part of the restructuring process, the company said earlier this week that it would call for bondholders' meetings to consider a restructuring proposal and amendments to its loan agreements for the FRN Eitzen Maritime Services ASA callable bond issue 2007/2010, 13.15% Eitzen Maritime Services ASA callable bond

issue 2009/2012 and FRN Eitzen Maritime Services ASA callable bond issue 2009/2012.

The proposed restructuring includes a proposal for a new debt repayment schedule, as well as a strengthening of the company's balance sheet through an issue of new equity.

Specifically, the company will complete a new NOK 146.25 million equity issue at a minimum price of NOK 0.60 per share.

Main shareholder Camillo Eitzen & Co ASA has agreed to guarantee and subscribe for up to NOK 73.12 million in the equity issue at a subscription price of NOK 0.60 per share.

The remainder will be guaranteed by the bondholders in the 2009 loan and the FRN 2009 loan through a conversion of accumulated interest and principal at a price of NOK 0.60 per share.

If the bondholder equity guarantee is called, the company will issue a new bond in the same amount as the amount converted from the principal of the 2009 loan and the FRN 2009 loan, up to NOK 50 million.

The equity issue is expected to be completed through a private placement shortly following the bondholders meetings.

Also under the restructuring proposal, existing DnB Nor and Nordea credit facilities and currency hedges will be cancelled and repaid in full.

Loan amendments

The restructuring also includes amendments to the company's 2007 and 2009 loans.

Under the 2007 loan amendments, maturity will be increased by two years, and the coupon will be increased to three-month Nibor plus 700 basis points.

The amendment also includes a first-ranking security with a carve-out for a $5 million credit facility and new bond if the 2009 loans equity guarantee takes effect.

Under the 2009 loan amendments, both bond issues will be replaced with one bond issue in two tranches through a payment-in-kind transaction.

In addition, maturity will be postponed by three years to November 2015, quarterly amortization will be NOK 12 million starting with the maturity of the 2007 loan, and the initial coupon will be Nibor plus 1,000 bps for the floating-rate tranche and 13.15% for the fixed-rate tranche.

The 2009 amendment also includes a second-ranking security with step-up rights and a carve-out for a $5 million credit facility and new bond.

Oslo-based Eitzen Maritime Services provides ship supply, ship logistics, crew management and ship brokerage service.

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