BLT Loses CECO Exclusivity

Berlian Laju Tanker (“BLT”) and Camillo Eitzen & Co ASA (“CECO”) provided an update on the acquisition progress. BLT is proposing a new transaction structure that involves the issuance of new shares to CECO shareholders, after its initial plans of a mandatory exchangeable bonds issue hit a roadblock with the Indonesian regulator. CECO re-affirmed that BLT’s offer is still attractive but no extension of the exclusivity agreement was granted to BLT. Immediate hurdles for BLT would be to raise USD 200 million in new equity and secure the green lights from all the lending banks of BLT and CECO.

Picking up Distresed Assets and Private Equity

John Kennedy has a quote: “When written in Chinese, the word “crisis” is composed of two characters-one represents danger, and the other represents opportunity.” But even as the shipping markets in general remain in doldrums, there have been surprisingly few mergers and acquisitions in the market, contrary to what one might expect. The lack of liquidity and funding from the banks could be a reason. Or could it also be that market watchers are still holding on to the view that asset prices have yet to hit rock bottom? So whether it is this fear of catching a fallen knife or the lack of financing and quality investment opportunities, seasoned shipping investors and private equity firms remain largely on the sidelines. There were few public distressed situations this year and this could well suggest that banks are working very hard with their clients to avoid foreclosures, rather than accepting haircuts on assets. Continue Reading

Still Many Moving Parts

Eitzen Chemical is now on firm footing. Newbuilding commitments are gone and the company’s finances with the banks and bondholders have been restructured. The requisite private placement of equity was successfully completed last month raising approximately $115 million and the subsequent share offering of approximately $15 million is on-going ensuring reasonable liquidity.

As Terje Askvig, CEO of Eitzen Chemical notes,  “we are confident the robust financial platform following the restructuring, coupled with the company’s modern fleet and strong market position will be a solid basis for creating shareholder value and safeguarding our various stakeholders going forward.” With 2010 expected to be a tough year again, this is a good thing.
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