Eitzen Maritime Services granted temporary waiver of bond covenants

By Angela McDaniels

Tacoma, Wash., March 22 - Eitzen Maritime Services ASA has received a temporary waiver of some financial covenants related to its floating-rate callable bonds due 2012 and its 13.15% callable unsecured bonds due 2012, according to a company news release.

The waiver was granted at a bondholder meeting on March 19 and is conditional on the managers of the bond issues, Fearnley Fonds ASA, First Securities ASA and Nordea Bank Norge ASA, being appointed as financial advisers to act on behalf of the bondholders.

According to the meeting summons sent to bondholders, the company is in breach of the covenants related to the leverage ratio and the absolute level of equity due to weaker-than-expected financial performance and the write-down of goodwill.

The resolution waives clauses 13.5(b) and 13.5(c) in the loan agreements until April 14.

The waiver can be withdrawn by trustee Norsk Tillitsmann before April 14 if holders of more than 50% of the outstanding bonds request it. The two bond issues total NOK 400 million.

The trustee requested that the company pay default interest until the breach is remedied, but the company declined.

The company said it is in dialogue with its other creditors about how to resolve a potential default situation.

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

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