The Accountants Have Not Left the Building

Today, Camillo Eitzen & Co. issued a profit warning due to lower than expected earnings from the gas segment combined with increased provisions against postponement of cargos under COAs and potential but unrealized losses on FFAs.

As a result of the weak market, the company has impairment tested the book value of the gas fleet resulting in a write down of $40.9 million. The lower market values have also resulted in the breach of two of six covenants of the Eitzen Gas loan. The minimum value covenant was restored through the payment of the regularly scheduled installment while the minimum adjusted capital ratio, related to Camillo Eitzen, remains in default and discussions with the banks have begun in an effort to obtain a waiver. As a result of the

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