Friday, June 16, 2000

Frontline acquires Euronav Suezmaxes

Frontline Ltd. has entered into an agreement with Euronav to acquire the two 153,000 dwt Suezmax tankers M/T Ardenne and M/T Brabant for a total price of approximately $95 million. Built in 1997 and 1998, the two ships are sister vessels of existing vessels in the Frontline fleet. Frontline will be take over the ships when their current charter to Total Fina ends in September this year.

The two ships bring Frontline's fleet of Suezmaxes up to 28 modern vessels, and increase the Alliance fleet, including newbuildings, to 42 vessels.

Commenting on the deal, Frontline chairman John Fredriksen, says: "The take-out of Euronav from the Suezmax market is another step forward in the consolidation process. The additions of two modern double hull Suezmaxes should make it possible for us to improve the service to our customers, as well as further optimize the economy of scale and the trading flexibility of our fleet."

Fredriksen says that it is important for Frontline to find ways to grow in the present strong freight market "without adding new orders to the orderbook.

Hvide Marine enters guilty plea on unlawful payments charge
Hvide Marine, Inc. on June 6 pled guilty to a one count criminal information of making unlawful payments to Walter J. Browne, an official of a labor organization, the Justice Department's Organized Crime and Racketeering Section announced.

According to the information, filed on May 15, 2000 in U.S. District Court in Fort Lauderdale, Florida, Hvide Marine paid Walter J. Browne $60,000 between January 1, 1995 through at least December 31, 1995, while Browne was serving as an officer of a labor union which represented, sought to represent, or would have admitted to membership the employees of Hvide Marine, Inc. In its plea agreement, HVIDE Marine admits that at the time it made these payments and others, it understood Walter J. Browne to be an official of District 1, Marine Engineers Beneficial Association of the AFL-CIO.

Further, the Department of Justice announcement continues, Hvide Marine admits that in 1995, it entered into a venture with other business partners to build state-of-the-art double hulled tankers, which, based on certain financing restrictions, required Hvide Marine and its partners to obtain an agreement with a labor organization to crew these tankers with union based labor.

According to the plea agreement, in 1995, officers and agents of HVIDE Marine approached Walter J. Browne and inquired whether he could secure a labor contract between Hvide Marine and DI MEBA which would contain terms favorable to Hvide Marine's interests. Thereafter, officers and agents of Hvide Marine and its business partners in the double hull tanker project met with officials of DI MEBA, including Walter J. Browne, and attempted to negotiate an agreement for DI MEBA to provide union labor on the double hull tankers. Under the terms of the plea agreement, Hvide Marine has also agreed to cooperate in the government's continuing investigations.

The case was investigated by the U.S. Department of Labor, Division of Labor Racketeering, with the assistance of the Washington, D.C. Field Office of the FBI. The case was prosecuted by Sotiris Planzos and Julia Stiller of the Organized Crime and Racketeering Section of the Department of Justice.

According to a report in the Fort Lauderdale Sun Sentinel , federal prosecutors recommended a $60,000 fine against Hvide, matching the amount the company paid Browne, but far short of the $500,000 the company could have been forced to pay if a jury returned a conviction after trial.

Under the plea agreement, Hvide agreed to cooperate with federal investigators, pay the fine, and set up a training program to inform management and staff of the federal law which prohibits payments to union officials who have power to organize the company, says the Sun Sentinel..

"The officers of the corporation were unaware of the relevant sections of the Taft-Hartley Act at the time this took place," the newspaper quotes Jane Barrett, the lawyer representing Hvide, as saying.

U.S. District Court Judge William Dimitrouleas will determine whether to honor the prosecutors' recommendation or impose an even heavier fine. He will hand down a sentence on August 16.

MC shipping loses $3.5 million on sale of
multipurpose vessels

MC Shipping, Inc. has sold two multipurpose vessels that have been part of its fleet since its creation in 1989. The company operates a fleet of twenty one ships in the multipurpose, container and LPG sectors

The 1979-built Runner was sold to an unrelated buyer for ongoing operations. The 1977-built MC AMETHYST was sold for scrap in India. The sales have generated cash proceeds of $2.5 million and a book loss of about $3.5 million which will be reflected in the results for the second quarter.

The sales were completed in accordance with the Company's ongoing strategy of disposing of its older tonnage.

"The market for multipurpose vessels is quite depressed: demand for these vessels has been shrinking as they face competition from the more modern fully cellularized container vessels,"says MC Shipping's president Guy Morel. "The trading of these vessels could not generate positive returns and their disposal was necessary. The prices obtained for our vessels are an indication of the current low market for multipurpose tonnage."

"We intend to continue selling our older ships, in order to position the company for the future," added Morel.

New semi-tender for Smedvig
Smedvig has entered into a cooperation agreement with Keppel Shipyard in Singapore for the purpose of building a new semi-submersible self-erecting tender rig (semi-tender). Total capital expenditure for the unit is estimated at approximately $82.5 million, of which Smedvig's share is approximately USD 23 million.

The basics of the cooperation agreement will see Keppel build and own the $59.5 semi-submersible hull, while Smedvig will own the $23 million derrick equipment set.

Smedvig will be responsible for marketing, management and operation of rig for a ten year period , with an option to purchase the semi-submersible hull at any time during the ten-year period at a pre-agreed price.

The new semi-tender will be based on a similar design and specification to Smedvig's newbuilt West Menang, but upgraded for increased deckload and for mooring in deep water. It is scheduled for delivery in the fourth quarter 2001. The new rig is targeted to work on dry completion platforms such as TLPs and Spars in up to 6000 feet of waterdepth.

SEACOR announces IPO Filing by Chiles Offshore
Seacor Smit announced yesterday that Chiles Offshore LLC, a 55% owned subsidiary, has filed a registration statement for an initial public offering of its common stock.

The registration statement indicates that proceeds from the IPO would be used by Chiles to retire indebtedness, including its outstanding senior notes, and to fund further growth and working capital.

Ocean Rig in management agreement with Pride unit
Ocean Rig ASA has entered into a master agreement with Pride Foramer S.A., an affiliate of Pride International, Inc..The agreement covers operations of Ocean Rig's drilling units offshore Angola. It also covers operations of units owned by the Sonangol EP/Ocean Rig Joint Venture Company (JVC) as contemplated by Memorandum of Understanding (MoU) signed in February this year. The master agreement is thus co-signed by Sonangol EP.

The objective of the joint venture is to build, own and market drilling rigs for ultra deepwater operations in Angola and internationally, and it will be owned 51% by Ocean Rig and 49% by Sonangol. Establishing a satisfactory operation set-up in Angola is one of the conditions of the MoU.



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