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May 17, 2004

OMI set to acquire Stelmar

OMI Corporation (NYSE:OMM) of Stamford, Connecticut announced today that it had commenced discussions to combine OMI with Athens-headquartered Stelmar Shipping Ltd.

Stelios Haji-Ioannou, the founder of Stelmar, and his two siblings, who in the aggregate control approximately 27% of Stelmar's outstanding shares, have separately agreed to support this transaction and have entered into "standstill and support agreements" with OMI.

OMI says it has committed, subject to reasonable satisfaction of due diligence, to make an offer to Stelmar's Board of Directors to enter into a merger agreement with Stelmar subject to customary terms and conditions so that on a fully diluted basis the shareholders of Stelmar would receive 40.5% in the combined entity based on an all stock transaction. Each Stelmar holder would be offered OMI common stock, but is expected to have the option to receive up to 25% of the offer price in cash.

OMI has a fleet of 37 vessels aggregating approximately 3.0 million dwt and has six vessels on order at shipyards aggregating approximately 232,000 dwt. Stelmar has a fleet of 41 vessels aggregating approximately 2.3 million dwt including five vessels on order at shipyards. The fleets are both significantly younger than industry average and are predominantly double hulled. The majority of the vessels in each of the company's fleets are product carriers that are on time charter.

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