Friday, January 28, 2000

French officials study U.S. OPA
Following the Erika disaster, the French government is moving forward with plans to push for a European Union initiative to minimize the risks and costs of pollution from tankers. With much talk of a "European OPA" in the air, has learned that French officials are closely studying the U.S. Oil Pollution Act of 1990. Their research includes an examination of the Act's legislative history. Something that has caught the French officials' attention is that charterer liability, which was in the House-passed version of the original OPA 90 legislation never made it out of the House-Senate conference.

Washington insiders offer two explanations for how charterers got off the OPA hook. One is that then Senate majority leader George Mitchell didn't want public utilities exposed to unlimited liability. The other is that Big Oil lobbyists agreed to yield gracefully on the issue of double hulls so long as charterer liability went away. Sources in Paris indicate that the French government is in no mood to be so accommodating.

NCL moves to block Star
While Singapore-listed Star Cruises says it is "currently evaluating all alternatives" in light of Carnival Corporation's renewed interest in acquiring NCL, the NCL Holding board is now moving to prevent Star from voting its 47% share at the company's upcoming February 4 general meeting.

NCL argues that Star failed to comply with Norway s Business Acquisition Act. This requires that any firm seeking to acquire parts of a Norwegian business notify the Industry Ministry when its holding exceeds one-third, one-half and two-thirds of the stock.

NCL says Star held one-third of the stock in December without informing the ministry. Shipping companies, however, are apparently exempt from this requirement and Star says that NCL is a shipping company and so is exempted from the notification
requirement. Not so, says NCL. It says it is classified as a travel business and, in any case, has a sales volume within Norway that makes it subject to the act.

On December 17, Star said it had acquired 50.2% of NCL's stock. NCL executives and top shareholders have since been scrambling to acquire stock. Yesterday, for example, several key executives exercised stock purchase options. Such moves and the conversion of debt to equity seem to have pushed Star's stake down to around 40%.

Today, shareholder Christen Sveaas said that his Kistefos A/S controlled 20.9 percent of NCL (9.5% in shares and 11.4% in options).

Ugland move
Yesterday we reported that Ugland International Holdings plc (UIH) is planning to dispose of its principle business--vehicle carrying. Seeing that UIH promotes itself as "the world leader in vehicle transportation," that raises the question of what the company does next. And, in particular, what happens to its ship management operations.These are performed though Interocean Ugland Management
in the USA and IUM Shipmanagement AS in Norway.

Here's the fleet list Interocean Ugland Management was showing on its website today:

Fleet List for IUM Corporation  

Vessel Type Registry Client
GREAT LAND Ro/Ro USA Totem Ocean Trailer Express
NORTHERN LIGHTS Ro/Ro USA Totem Ocean Trailer Express
WESTWARD VENTURE Ro/Ro USA Totem Ocean Trailer Express
GOPHER STATE Crane Ship USA Maritime Administration
FLICKERTAIL STATE Crane Ship USA Maritime Administration
CORNHUSKER STATE Crane Ship USA Maritime Administration
DIAMOND STATE Crane Ship USA Maritime Administration
EQUALITY STATE Crane Ship USA Maritime Administration
CAPE BON Breakbulk USA Maritime Administration
NORTHERN LIGHT Breakbulk USA Maritime Administration
HMI ASTRACHEM Chemical Tanker USA Hvide Marine Inc.
HMI DEFENDER Product Tanker USA Hvide Marine Inc.
HMI DYNACHEM Chemical Tanker USA Hvide Marine Inc.
HMI PETROCHEM Chemical Tanker USA Hvide Marine Inc.
HMI LOOKOUT SHOALS Product Tanker USA Lightship, LLC
HMI NANTUCKET Product Tanker USA Lightship, LLC
ALLEGIANCE Product Tanker USA Maritrans Operating Partners
INTEGRITY Product Tanker USA Maritrans Operating Partners
PERSEVERANCE Product Tanker USA Maritrans Operating Partners
DILIGENCE Product Tanker USA Maritrans Operating Partners
EL MORRO Lo/Lo - Ro/Ro USA Sea Star Line


Today, the UIH board was notified that the entire shareholding of the Ugland family in UIH, comprising 54,237,581 ordinary shares, has been acquired by Maiden Capital Partners ("Maiden") at a price of 63 U.K. pence per share. The board was also notified that Andreas O. Ugland has subsequently acquired 17,144,420 ordinary shares in UIH from Saltchuk Resources, Inc. ("Saltchuk") at a price of 63 pence per share, following which Mr. Michael Garvey, the principal shareholder of Saltchuk, resigned as a director of UIH.

Maiden is a Cayman Islands company, controlled by Andreas O. Ugland, other members of the Ugland family and Jonathan D. Palmer, and is therefore deemed to be acting in concert with Andreas O. Ugland. The combined holding of what is called "the Ugland Concert Party" therefore totals 71,382,001 ordinary shares in UIH, representing approximately 53.3 per cent.

Provisions in UIH's articles of association require that, the Ugland Concert Party is now required to make a mandatory unconditional offer for the balance of UIH's share capital not already owned. This cash offer is required to be made at not less than the highest price paid for UIH ordinary shares during the preceding twelve months by any member of the Ugland Concert Party.

The UIH Board has been informed that the mandatory offer will be made at 63 pence per share, and that the intention is to post the formal offer document to UIH shareholders during the month of February.

Navy contract for Moon Engineering
Moon Engineering Company, Inc, Portsmouth, Va., is being awarded a $5,387,767 fixed-price contract for a phased maintenance fixed price availability of USS CARTER HALL (LSD-50), which includes miscellaneous structural, electrical, and mechanical repairs and ship alterations. Work will be performed in Norfolk, Va., and is expected to be complete by June 2000. Contract funds will not expire by the end of the current fiscal year. This contract was competitively procured through the Commerce Business Daily and via the SUPSHIP Portsmouth web page, with eight proposals solicited and four offers received. The Supervisor of Shipbuilding, Conversion and Repair, USN, Portsmouth, Va., is the contracting activity (N00024-92-H-8636).

Repair pays off for Todd
Todd Shipyards Corporation has announced financial results for the third quarter ended January 2, 2000.

Net income for the quarter was $2.5 million or $0.26 per diluted share on revenue of $24.9 million. For the nine month period, net income was $7.0 million or $0.71 per diluted share on revenue of $87.7 million. In the prior year third quarter ending December 27, 1998, the company reported net losses of $1.8 million or $(0.19) per diluted share. For the nine month period then ended, the Company reported net losses of $1.7 million or $(0.17) per diluted share on revenue of $60.5 million.

Todd's third quarter revenue of $24.9 million reflects an increase of $10.9 million (78%) from fiscal year 1999 third quarter levels. Fiscal year 2000 nine month revenue of $87.7 million reflects an increase of $27.2 million (45%) from last year.

Todd says therevenue increases reflect its decision to discontinue new
construction and continue emphasizing commercial and government repair and overhaul activities. During the third quarter and first nine months, revenues from commercial and government repair and overhaul activities increased $19.2 million and $44.1 million, respectively, while new construction revenue decreased $8.3 million and $16.9 million, respectively from the comparable prior year periods.

BIMCO signs anti-drug smuggling agreement with Finland
A formal anti-drug smuggling agreement will be signed today by Director General
of the Finnish Customs, Tapani Erling, and BIMCO Deputy Secretary General, Ove
Tvedt. Finnish BIMCO member, Bengt Bj¢rkholm of Rederi Engship, will take part
in the official ceremony as well, which will be hosted by the National Board of
Customs in Helsinki.

The partnership, known as a Memorandum of Understanding, aims to address the increasing utiliszation of Finnish ports as transit points for illegal

This agreement is the eleventh MOU between European customs authorities and
BIMCO. Each MOU is designed to enable BIMCO shipowner members to reduce exposure to the most common repercussions arising from the discovery of smuggled
narcotics on board their vessels. Such a discovery often leads to heavy fines,
detention of vessels, and the arrest and incarceration of crew members.

The basic principles of the Finnish MOU are identical to those incorporated in
the previous European MOU's, as well as in the United States' Sea Carrier
Initiative Agreement (SCIA). Generally, shipowners agree to implement
preventive measures on board all their vessels in order to reduce the
opportunities available to drug smugglers. Additionally, owners agree to inform
Finnish customs authorities whenever they become aware of any suspicious
activities that might be connected with drug smuggling.

The Finnish customs authorities, in turn, agree to handle all information in the
strictest confidentiality. Should drugs be discovered on board, the customs will
take the established preventive measures into account, a consideration that can
significantly reduce vessel delays that could otherwise occur when such seizures
are made.

Under the agreement, Finnish customs officials also will also inform shipowners
if they obtain information regarding smuggling activities on board MOU
signatories' vessels.

Presently, 611 of BIMCO's owner members participate in one or more of the
anti-drug smuggling agreements, representing roughly 62% of all BIMCO owner

In addition to the Finnish MOU and the United States' Sea Carrier Initiative
Agreement, MOU's have been established with the following customs authorities:
Denmark, France, Germany, Greece, Ireland, Norway, Sweden, the Netherlands,
Belgium and the United Kingdom.


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