Marine Log

August 4, 2006

Aker Yards and Damen finalize Ukraine yard agreement

Aker Yards and Damen Shipyards Group have finalized the process of establishing joint ownership of Ukrainian Damen Shipyards Okean, as announced on June 2, 2006.

The plans involve increasing the output capacity of the yard to 60,000 tonnes per year, and will contribute to a strengthened shipbuilding capacity of Aker Yards.

The Okean yard will be able to build a variety of large merchant vessels, as well as steel sections for all the three business areas of Aker Yards.

The construction of the Damen portfolio, including the series of cargo vessels for Ukrainian owners. will be continued.

Aker Yards will manage the yard, and will in addition to the existing projects, primarily focus the Group's production of merchant vessels. The operations will be consolidated into Aker Yards accounts as from the date of closing.

Jurgen Kennemann, President of Aker Yards' Merchant Vessels business area, says the cooperation "meets Aker Yards strategy to increase the steel and shipbuilding capacity within our merchant vessels business area."

"Together with the announced acquisition of Kleven Floro," he says, "Aker Yards will comprise 17 yards in seven countries. Following the successful privatization of the Okean yard, Aker Yards looks forward to participate in the future expansion of the Ukrainian shipbuilding industry."

Rene Berkvens, CEO of the Damen Shipyards Group, states that he has been confident regarding the outcome of establishing this very valuable cooperation and reemphasizes the positive consequences of the joint-venture for the Okean yard.

Aker Yards has paid EUR 10 million in cash. Additional payments will depend on the future performance of the yard. Aker Yards will also assume or procure repayment of EUR 11 million of debt.

Mr. Torben Levinsen of Aker Yards will become chairman of the Supervisory Board and Bernard Tijs, CFO of Damen Shipyards Group, a member of this board.

The joint venture will initially have an order book of 11 vessels, with a value of EUR 30 million. The yard consists of two production lines, the largest one having a dry dock 354 meters long, 60 meters wide, and 14 meters deep. The Okean yard has approximately 3,000 employees.