Eitzen OK'd to waive default, allow in-kind interest under 12% notes

By Susanna Moon

Chicago, Oct. 26 - Eitzen Maritime Services ASA said bondholders approved amending its 12% senior callable bonds due 2014 to bump up the maximum amount under the loan to about NOK 225 million from NOK 200 million.

The amendments also allow non-payment of the next coupon due on Oct. 24 and payment of interest in 2013 in-kind rather than in cash, according to a company press release.

The meeting was held on Oct. 25 in Oslo.

As noted on Oct. 17, Eitzen Maritime Services ASA held the meeting to propose amending its notes to allow paying interest in kind if it fails to secure enough funding through a planned rights offering.

The company needs to obtain NOK 87 million through the rights offering but is only guaranteed NOK 62,131,000 in proceeds so far, according to a previous notice by trustee Norsk Tillitsmann ASA.

As a result, the company looked for other options to fill the gap, including issuing interest in kind on the next three interest payments, for this year and next year.

If it fails to meet the threshold funding needed, Eitzen is asking to pay interest in kind in the form of new bonds equal to the difference between the amount needed and the proceeds from the rights offering.

The company also sought to skip the next interest payment on Oct. 24 and waive any default that arises as long as it makes the payment by Dec. 31, or sooner if it completes the rights offering before the end of the year.

The proposal sought to lift the maximum amount under the bond loan to allow for in-kind interest.

The rights offering is needed in order to give the company enough financing for the next 12 months to run the company, the previous notice said.

To allow the proposal, bondholders representing one-half of the notes needed to be represented at the meeting, and two-thirds of those needed to vote in favor of the measures.

The notes were issued in 2011.

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

© 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.