CECO in red

Camillo Eitzen (CECO) is planning to issue equity and reschedule debt repayments while it could also sell ships as it sinks into the red.

The Norwegian owner has been in breach of loan covenants in the second half and is looking to restructure its bank loans.

“Eitzen Chemical and CECO will present a long term financial plan to its lenders in the coming weeks, with the aim of creating a financially robust platform for the group which better fits the current challenging market environment and outlook,” Friday’s statement to the Oslo bourse read.

Axel Eitzen.

“Until long term agreements with the banks are obtained, the debt is still classified as short term.”

A new plan drawn up by the board of directors suggests a new debt repayment schedule and amended covenant structure.

“An integral part of the plan also includes an issue of new equity. The amount will depend on possible agreements with lenders as well as the timing of ongoing strategic processes.”

CECO also said it will focus on cost cutting and the sale of “non-strategic assets” which it did not identify but which Eitzen Chemical has previously said are older vessels.

The outline of the plan comes as CECO termed its second-quarter result “not satisfactory” as the gas, bulker, chemical and shipmanagement segmenets were hit by the global downturn and slumping rates.

Net profit from the second quarter last year of $28.75m was replaced this year by a loss of $15.83m.

Revenues were more than chopped in half from $449.11m to $209.75m while asset sale profit was virtual nil.

(To read CECO’s second-quarter result in full click on the link in the related media section to the right of this article.)

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