Norway: Eitzen Chemical to Discontinue Pooling Arrangements

Eitzen Chemical ASA reported that it has decided to discontinue its pool operation as an integral part of its announced strategy to improve operating cash flow and liquidity situation.

Eitzen Chemical operates two pools; the City Class Pool and Team Tankers. The City Class Pool currently consists of 35 vessels of around 13,000 dwt, coated and IMO2. 15 of the vessels are owned or leased by the Company and 20 vessels are operated on behalf of partners. Notice has been given that Eitzen Chemical will withdraw its vessels from the Pool and that the Company will discontinue as manager for the Pool. Team Tankers consists of 13 vessels in the Medium Range (MR) segment, between 40,000 dwt and 48,000 dwt, coated and IMO2. Eight of the vessels are owned or leased by the Company and five are owned by a partner. The partner is in the process of exiting Team Tankers and it is expected that the process will be finalized within the next few months.

The Company will operate a fleet of 54 owned and leased vessels following the discontinuation of the pool operation.

Per Sylvester Jensen, Chief Operating Officer, said: “We have decided to focus the Company’s resources on our own vessels during the current challenging market environment. It is expected the earnings per day on our own fleet within these ship classes will increase as result of improved utilization. We will loose fee income, but this will partly be offset by reduction a General & Administration expenses. An initiative to reduce G&A expenses has been launched today. The above actions are an integral part of our announced strategy to improve our operating cash flow and liquidity situation.”

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World Maritime News Staff, November 25, 2011; Image: Eitzen Chemical