Wednesday, May 31, 2000

FGH to sell repair yards to Bollinger
Friede Goldman Halter, Inc. has signed a definitive agreement to sell its vessel repair unit to Bollinger Shipyards, Inc. of Lockport, La for $80 million. The all-cash transaction, which is expected to be completed in July 2000, is structured as an asset sale and is subject to certain conditions including approval under the Hart Scott Rodino Act.

The vessel repair business being acquired by Bollinger is an operating unit of Halter Marine, Friede Goldman Halter's Vessel segment, and consists of five facilities devoted to vessel repair and maintenance that are located in Louisiana and Texas. Halter had increased its focus on the vessel repair business with the purchase in 1997 of three of the repair yards.

The deal will make Bollinger the largest vessel repair company in the Gulf of Mexico region with a total of 43 dry docks.

Donald "Boysie" Bollinger, Chairman and CEO of Bollinger Shipyards, Inc., described the acquisition as "a continuation of the expansion of our core ship repair segment which has been our foundation since we started 54 years ago.

"We feel this is a perfect fit for Bollinger since it adds additional capacity, a broader customer mix, and a better geographical distribution to assist our customers," he continued. "We look forward to welcoming the additional 800 employees into the Bollinger family."

The shipyards involved are currently operating as:

  • Halter Gulf Repair, New Orleans, La.;
  • Gretna Machine & Iron Works, Gretna, La.;
  • Halter Calcasieu, Carlyss, La.;
  • Bloodworth Bond-Houston, Houston, Texas; and
  • Bloodworth Bond-Texas City, Texas City, Texas.

Bollinger will change the names of the facilities once the transaction is completed.

The acquisition will give Bollinger repair/conversion presence in
New Orleans, Algiers, Gretna, Harvey, Lockport, Larose, Port Fourchon,
Amelia, Morgan City and Carlyss, La. along with Houston and Texas City, Tex.
It will also add the barge cleaning, gas freeing and flaring operations of
Gretna and Calcasieu to similar Bollinger services in Amelia.

"This divestiture of our vessel repair unit is a result of an exhaustive and strategic review of all Friede Goldman Halter's operating assets and business activities,'' said J. L. Holloway, company chairman and chief executive officer. "`We undertook to evaluate the strategic fit of each of our business lines. We determined that the vessel repair business did not fit our primary and long-term focus on large-scale offshore energy projects, highly complex commercial and government shipbuilding, and engineered products.

"The sale of our vessel repair unit also underscores our commitment to the new construction side of the vessel business,'' Holloway said.

"The completion of this $80 million transaction and an additional $33 million in tax refunds expected to be collected during 2000 are anticipated to provide significant additional liquidity for Friede Goldman Halter as it enters a strengthening marketplace,'' said John Alford, president and chief operating officer.

"The sale of the vessel repair business also reduces the number of facilities that the company is actively operating, which was one of the goals of the merger. Since the merger was completed on November 3, Friede Goldman Halter has either sold or closed eight of its combined 24 domestic shipyards. Management believes that by concentrating production activities in fewer facilities, the company will be able to achieve meaningful incremental operating efficiencies and cost savings. In addition, we are projecting a significant decrease in selling, general and administrative expenses in 2000 and 2001 from 1999 levels,'' Alford concluded.

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