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June 13, 2002

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Star Cruises poised to order?
Which cruise line will be first to order additional newbuildings, beyond additional announced options? Star Cruises' NCL unit may, or may not, be the eventual buyer of the cruise ship hull now completing at Ingalls. Meantime, Star Cruises itself is reportedly in talks with Germany's Meyer Werft about ordering two ships worth some $450 million.

Star intends to invest $150 million in a 50,000-ton vessel that could carry as many as 3,000 passengers and would be used on the Chinese market, company chairman Lim Kok Thay is reported as saying. Another $300 million would be spent on a 100,000-ton ship with capacity of 4,000 passenger to be used in North America.

No agreement has been signed yet, but Star reportedly wants the new ships to be operational by 2005, Lim said.

Earlier this month, Star Cruises announced the completion of the placement of HK$624 million (about US $80 million) million worth of Star Cruises Shares to institutional, professional and other investors. The top-up subscription was due be completed on or before June 12, 2002 upon the Hong Kong Stock Exchange granting listing of the new shares. "It is intended that the net proceeds of the top-up subscription will be used for general capital of Star Cruises and the acquisition or construction of vessel(s)," said a statement from Star.

"The successful placement of the shares shows that there is an appetite for cruise companies shares in this part of the world. Star Cruises is the first international cruise line to access the equity market in Hong Kong in a sizable way," president and CEO Tan Sri Lim Kok Thay commented. "We are very encouraged by the response to the placement in Hong Kong and I am sure that with more shares in the Hong Kong market the trading volume of the stock will increase in Hong Kong," he added.

Star Cruises also announce that it has been granted a license by the Ministry of Transport and Communication of China permitting Star Cruises ships to sail from Chinese Ports to international destinations.

Star Cruises says it "sees a lot of potential for cruising in China and is very confident that the cruise industry will develop into a multi billion dollar industry in China similar to the experience of the cruise industry in the United States."

Star Cruises said it is "currently discussing with a few shipyards" on the design of new ships for the Chinese market. Compared to the Star Pisces that is currently operating in Hong Kong, the new ships for China will be bigger in length and breadth, able to carry more passengers, larger percentage of outside cabins and balcony cabins, more restaurant seating, more crew and larger entertainment facilities.

"Our experience in Singapore and Hong Kong tells us that we need new and modern tonnages to develop the cruise market. A market cannot develop successfully with old tonnage and that is why we are looking at new ships for the Chinese cruise market," Tan Sri Lim Kok Thay said.

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