Nov 17, 2004

Victory for Stelios

Stelmar Shipping Ltd. shareholders failed to approve the proposed merger with affiliates of Fortress Investment Group LLC at a special meeting of shareholders held yesterday in New York.

Nick Hartley, Chairman of Stelmar Shipping, said, "We are disappointed in the outcome of today's vote, and the Board remains committed to delivering value for all Stelmar shareholders. The Board has already begun its consideration of appropriate actions in light of today's vote."

The board's defeat came despite a last minute sweetening of the Fortress offer from $38.50 a share to $40 a share.

The vote is a resounding victory for Stelmar's founder Stelios Haji-Ioannou, who was strongly opposed to the Fortress acquisition and who, prior to the special meeting, had announced he was prepared to join the board as interim Chairman to oversee a new auction process to obtain the maximum shareholder value for the sale of Stelmar.

"With the preliminary results showing that only less than 20 percent of the shareholders supported the Board's actions," he said in a statement issued yesterday, "the mandate is clear--the Stelmar Board needs to change its ways and do things differently now."

Subsequent to the shareholder meeting," he continued, "I met with the independent Directors and reiterated the terms under which I will rejoin the Board...and am awaiting a response from them. In any event, absent cooperation from the Board, I am working on contingent plans to ensure that all Stelmar shareholders receive maximum value on an expedited basis."

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