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Annual Report 2012

Annual Report 2012

The assumptions used for

The assumptions used for death and disability are standardised assumptions well known in the insurancebusiness. The Company’s pension scheme qualifies as mandatory occupational pension according to theNorwegian law regulations.Note 9 – Bond loanNOK 627.4 million of the Company’s bond debt has been classified as short term debt at year-end 2012 as thenew loan agreements with the trustee of the bond loan was finalized on 4 January 2013 and the exchange ofbonds was implemented on 17 January 2013. However, the bond debt has been restructured and is notpayable short term at the date of approval of these financial statements. Accrued interest expenses under thenew loan agreements are classified as non-current. Refer to note 13 for further information.Eitzen Chemical ASA had unsecured bond loans outstanding totalling NOK 490 million and USD 25 million at 31December 2012. Under the previous loan agreements, the bonds carried interest of NIBOR + 3.5 per cent andLIBOR + 3.5 per cent, respectively. The bond loans had a loan to value covenant effective from 6 November2012. No security was provided for the bonds.The Company was granted waivers on the existing financial covenant relating to its bond loan agreements at31 December 2012.Financial restructuring of bond loan agreementsOn 22 November 2012, Eitzen Chemical announced that the consensual financial restructuring of theCompany’s bank and bond debt was approved by all of the banks in the Company’s loan syndicates. Therestructuring is based on a slowly improving market and will secure headroom and stable operations in theyears to come. The new loan agreements were formally signed on 4 January 2013. Refer to note 13 for furtherinformation.The key terms in the restructuring agreement include:- The bond loan comprising a NOK tranche of NOK 490 million (ISIN NO 001033434.5) and a USDtranche of USD 25 million (ISIN NO 001033433.7) was in January 2013 exchanged into (i) a securedloan of approximately USD 50 million and (ii) an unsecured loan of approximately USD 60 million. Thesecured loan has a third ranking lien security in the Company’s vessels (owned through subsidiaries).Eitzen Chemical ASA is the borrower for both loans. The loans have NOK and USD tranches as in theprevious bond loan agreement.- The secured loan will mature in June 2016 with no instalments until maturity. The loan will receivepayment-in-kind interest of NIBOR/LIBOR plus 11 per cent p.a. due at maturity.- The restructured interest terms of the Company’s loans were effective from October 2012.- The unsecured loan will mature in September 2016 with no instalments or interest payments untilmaturity. If the Company raises new equity (in the form of cash) of at least USD 50 million, theunsecured loan can be called and redeemed in full in exchange for an amount equal to USD 10 millionof new equity in the Company.- The loans do not include any financial covenants.- The bond restructuring fee agreed in 2009 due in November 2012 are postponed to maturity of thesecured loan.On 17 January 2013 the exchange of bonds was implemented in accordance with the restructuring proposaladopted at the bondholders’ meeting held on 7 December 2012. Refer to note 13 for further information.68

Note 10 – Commitments and guaranteeEitzen Chemical ASA is the guarantor of some of the loans in the Company; the guarantees are listed below;- Eitzen Chemical (Singapore) Pte Ltd. has a USD 510 million facility agreement with final maturity inMay 2016. Eitzen Chemical ASA is the guarantor of the loan. The facility has a second ranking liensecurity inter alia in vessels and proceeds from the vessels.- Eitzen Chemical (Singapore) Pte Ltd. has a USD 265 million credit facilities agreement with finalmaturity in May 2016. Eitzen Chemical ASA is the guarantor of the loan. The facility has a secondranking lien security inter alia in vessels and proceeds from the vessels.- Eitzen Chemical (Singapore) Pte Ltd. has a USD 170 million credit facilities agreement with finalmaturity in May 2016. Eitzen Chemical ASA is the guarantor of the loan. The facility has a secondranking lien security inter alia in vessels and proceeds from the vessels.- Napoli Chemical KS has a loan agreement of USD 36 million for the purpose of financing the purchaseof Napoli Chemical KS' four vessels. The loan has a second ranking lien security inter alia in vessels.Final maturity is in May 2016.- Eitzen Chemical Invest (Singapore) Pte. Ltd, the new vessel owning entity of the vessel Tour Pomerolhas entered into a loan agreement of USD 4.7 million. The loan has a second ranking lien security interalia in the vessel Tour Pomerol. Final maturity is in May 2016.- Sichem Pearl Shipping Co. Pte. Ltd. has entered into a loan agreement in the amount of USD 15million. The loan has a second ranking lien security inter alia in the vessel Sichem Croisic.Finalmaturity is in May 2016.- Eitzen Chemical (Singapore) Pte. Ltd. has secured a working capital facility of USD 30 million. Thefacility is split into (i) a term loan facility of USD 10 million and (ii) a revolving credit facility of USD 20million. The facility was undrawn as of year-end 2012. Eitzen Chemical ASA is one of the guarantors ofthe loan. Final maturity of the term loan facility is May 2016 and the revolving credit facility willmature in April 2016. The loan is secured by a first ranking lien in the Company’s vessels.Eitzen Chemical ASA is the guarantor for some of the charter parties in the Company; the guarantees are listedbelow:- The Sichem Defender charter party commitments are guaranteed by Eitzen Chemical ASA, on behalfof Eitzen Chemical Shipping & Trading Pte. Ltd.- The Sichem Mississippi and the Sichem Pace charter party commitments are guaranteed by EitzenChemical ASA, on behalf of Eitzen Chemical Singapore Pte. Ltd.The vessel Sichem Casablanca, which is owned by Napoli Chemical KS, a subsidiary of the Company, was inAugust 2006 arrested in Turkey in respect of a claim of USD 0.8 million. The vessel was released against a bankguarantee from Eitzen Chemical ASA and arbitration is initiated.As of 31 December 2012, no provisions are made for the guarantees.The Company has a potential liability for 75 per cent of the unpaid corporate capital commitment in NapoliChemical KS of NOK 16.5 million. The Company sold its share in Napoli Chemical KS to Eitzen ChemicalShipholding AS in 2012, but is still jointly liable for the unpaid corporate capital commitment. As of 31December 2012, no provisions are made for the potential liability.Note 11 – EquityAs of 31 December 2012 the Company has a share capital of NOK 846,016,742.25, which consists of1,128,022,323 each with par value of NOK 0.75.On 5 February 2013 the Company held an extraordinary general meeting whereby a reverse share split in theratio 100:1 was approved. The company’s share capital is currently NOK 846,016,800 divided between11,280,224 shares, each with a par value of NOK 75. Also refer to note 13.69

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