Friday, February 18, 2000

Merger will create world's largest chemical
tanker fleet

Odfjell ASA and Ceres Hellenic Shipping Enterprises Ltd., the owner of Seachem, today said they have agreed to unite their respective chemical logistics assets to create the world's largest owner and operator of chemical tanker tonnage.

Seachem is the world's fourth largest chemical tanker operator, with a total of 23 ships in the range of 11 - 45,500 dwt currently in operation. Seachem has 8 sophisticated stainless steel newbuildings of 40,000 dwt on order for delivery in 2001 -2003.

Odfjell will issue new shares to Ceres in exchange for the following

  • 9 chemical tankers aggregating 335,000 dwt, built 1986 - 1988;
  • 4 newbuildings aggregating 160,000 dwt for delivery 2001 - 2002;
  • and in addition, Odfjell will purchase 100% of the shares in Seachem, the pool company

The balance of the Seachem fleet will be commercially managed by the combined company.

The transaction equals about $360 million investment on the combined company's balance sheet.

As part settlement, Odfjell will issue to Ceres a total of appr. 4.9 mill shares dividend into appr. 3.35 mill. A-shares and 1.57 mill. B-shares, at anagreed price of NOK 208 per share, in total the equivalent of about 1 billion NOK worth of equity. The transaction values Odfjell at appr. NOK 4.6billion before the issue of any new equity, and the combined company at appr. NOK 5.6 billion.

Commenting on the agreement, Dan Odfjell, Chairman of Odfjell ASA, said: This transaction will position the combined company as the world's premiere operator of deep sea chemical tankers, with a market share of about 26%. It meets the increasing demand of our customers following a period of consolidation in the chemical industry, and enables us to provide superior service through integration of skilled personnel and control of key assets.

Headquarters of the combined company will be in Bergen, Norway. Branch offices on five continents will be integrated into the new structure. Ceres Hellenic will continue ship management from its Piraeus headquarters.

Destiny incident underscores cruise ship evacuation concerns
The problems experienced by the Carnival Destiny earlier this week are likely to add to demands that the sheer number of passengers and crews carried by today's largest cruise ships mean that SOLAS should be reexamined.

Those sharing this concern about "Postpanamax" cruise ships are understood to include IMO Secretary General William O'Neill and the U.S. Coast Guard's Admiral Bob North. It is highly likely that the issue will be raisedat the next meeting of IMO's Maritime Safety Committee.

Carnival Destiny was left without propulsion power at 1.40 a.m. on February 15 when it experienced a technical problem with its two cycloconverters which control the transmission of electrical power to the ship's propulsion motors.

Carnival's polished crisis management planning swung into action with a full refund of passengers' cruise and air transportation costs plus a 50% discount on a future cruise.

The ship was carrying 2,956 guests and 1,063 crew, which underscores the scale of the problems that could have arisen not only in getting that large a number of people disembarked into lifecraft, but then getting them evacuated from the area.

Carnival in massive flag switch
Carnival, incidentally, is in process of switching all fifteen of its "fun ships," including the Destiny, from Liberian or Panamanian to Bahamas registry.

Warnow yard wins two newbuilding contracts worth US$62 million
Kvaerner's Warnow shipyard in Germany has received two orders worth approximately US$62 million for the construction of two container vessels of the WARNOW CV 2500 design. These vessels, ordered by German ship owners, are scheduled for delivery in the first and second quarters of 2001, respectively.

The ships have an overall length of 209 m and are 29.8 m wide. With a deadweight of 33,750 tons they have a container stowage capacity of 2,524 TEU and sockets for 392 reefer containers. The service speed is 22 knots. During 1997 and 1999 Kvaerner supplied five vessels of the same design. Kvaerner's German yard has previously delivered four container vessels to the same ship-owners.

Kvaerner has announced its intention to exit shipbuilding and says "these contracts will contribute to maintaining the activities at the Warnow yard, while the search for new owners continues."

Navy awards LPD 19
Litton Avondale Industries, a division of Litton Industries has announced that the U.S. Navy has exercised an option for the construction of LPD 19, valued at $491.9 million.

The award covers a cost-reimbursable contract to the Litton Avondale Alliance to build the third LPD 17 Class ship, the Navy's newest and most advanced amphibious assault ship. LPD 19 is planned for construction at Bath Iron Works (a subsidiary of General Dynamics), located in Bath, Maine.

Litton Avondale is as the prime contractor for the Litton Avondale Alliance, which, along with Bath Iron Works, includes Raytheon Electronic Systems and Intergraph Corp.

The first two ships in the LPD 17 Class, also awarded under cost-reimbursable contracts, will be constructed in Litton Avondale's shipyard in New Orleans. A total of 12 ships are planned for the LPD 17 Program with eight ships planned to be built at Avondale and four ships to be built at Bath. Design of the lead ship is underway at Litton Avondale, and actual construction is scheduled to start in mid 2000.

Two ships, LPD 19 and LPD 20, have been authorized and appropriated by Congress. LPD 20, which will be built at Avondale, isanticipated to be awarded in the near future.

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