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Berlian Laju confident Camillo Eitzen is a 'can't lose proposition'

Singapore: Berlian Laju Tanker (BLT) Finance Director Kevin Wong (pictured) tagged the proposed bid for Camillo Eitzen & Co (CECO) as a "can't lose proposition". Wong explained that BLT is buying in at a substantial discount and moreover when assets are already depressed. However, all debt is to be on a non-recourse basis, making risk value for BLT limited to the initial equity injection into CECO, which is estimated at $75-80m. BLT's proposal includes a prolonged moratorium period of about five years, with no fixed debt repayments.

BLT intends to make an all share voluntary offer for 100% of the outstanding shares in CECO. CECO for its part, owns Eitzen Chemical and BLT will likely own just below 50% of Eitzen which Wong said will remain "deconsolidated".

Wong was speaking at a press conference held in Singapore this morning, in response to the avid media interest in BLT's proposed buy out of the blue chip Norwegian owner. BLT has plans to list on the Oslo stock exchange within the second half of 2010.

BLT currently has 104 tankers with a total of 2.4 dwt and an average age of 7.5 years. BLT is a seaborne liquid bulk cargo transportation specialist and one of the largest chemical tanker operators in the world. The new entity will operate a fleet of 146 plus 10 chemical tankers, making it by far the largest operator in the world in terms of number of vessels. BLT's main presence is in Asia. In 2007, it acquired Chembulk which covers North and South America and now CECO predominantly operates in Europe. The combined entity will have a solid base around the world.

Wong estimated said that the CECO deal, which will give BLT expanded size, geographical footprint and "huge cost savings through economies of scale", will result in more than a doubling of BLT's revenue next year. Last year it saw its revenue increase by about 80% after it acquired Chembulk Tamkers. BLT places a a premium on consistent cash flow growth and has seen an annual growth rate of EDITDA in excess of 25% almost every year since 1990 ( with the exception of 2002.)

Wong is upbeat . "We believe a revival in world economic activity will generate strong demand for chemical tankers both through restocking of run-down inventories and higher industrial production.  [15/10/09]

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