January 20, 2005

OSG completes Stelmar acquisition

Overseas Shipholding Group, Inc. (NYSE:OSG) announced today that it completed the purchase of Stelmar Shipping Ltd. (NYSE:SJH), a leading international provider of petroleum product and crude oil transportation services, for a cash purchase price of $48.00 per share.

At a special meeting of shareholders of Stelmar held earlier today in New York, N.Y., shareholders holding approximately 74 percent of Stelmar's outstanding shares approved the merger agreement.

The merger creates the second largest publicly traded oil tanker company measured by number of vessels and the third largest measured by deadweight tons. The combined company has a fleet of 90 international flag vessels totaling 12.8 million deadweight tons.

The combined international flag fleet is among the youngest fleets in the industry, and 97 percent of the vessels are double-hulled or double-sided.

The average ages of OSG's VLCC, Aframax and Panamax fleets are 5.4 years, 6.8 years and 4.4 years, compared with world fleet averages in these sectors of 8.7 years, 10.2 years and 13.9 years, respectively.

OSG's international flag Handymax fleet has an average age of 9.7 years compared with the world Handymax fleet average age of 13.8 years.

In addition, the Company has on order four LNG vessels of 864,800 cbm.

"The acquisition of Stelmar provides OSG a significant presence in product tanker and Panamax tanker markets and fulfills an important strategic objective for OSG," said Morten Arntzen, President and Chief Executive Officer of OSG. "This acquisition is accretive to earnings beginning today and complements OSG's already leading positions in the VLCC and Aframax sectors and its recent entry into the LNG sector."

GOODFELLOW OPTIONS FROZEN

The acquisition comes after a long and rancorous battle between Stelios Hadji-Ioannou, founder of Stelmar, and the company's management.

One of the parting shots in the battle: a posting on the website of Stelios's Easy Group, noting that yesterday a Greek judge has ordered that the share options owned by the CEO of Stelmar, Peter Goodfellow in Stelmar Shipping, worth more than $500,000, should be frozen, pending an investigation into his activities, despite the pending sale of the company.

According to the posting, Judge Maria Gragiadaki, of the court of Piraeus, Greece issued the interim judgment on January 19, January 2005 following an injunction filed by Demetris Thomas, the claimant against Goodfellow. You can read the rest of the post and access a facsimile of the injunction (in Greek) by going to the Easy Group web site www.easy.com and clicking the Stelmar link.

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