October 27, 2000

$110 million financing for FGH
Friede Goldman Halter, Inc today announced that it had completed a $110 million financing arrangement. The financing is a three-year commitment that includes a $70 million line of credit and a $40 million term loan. Proceeds from the term note were used to pay off the company's existing line of credit of $41 million.

"This new credit facility will allow us to focus on our primary objective of building profitable backlog'' said president and chief executive officer John Alford. "We are confident that the market is turning and we are positioning the Company to take advantage of all opportunities.''

Rolls-Royce, Northrop Grumman, and DCN team to produce new marine gas turbine
Northrop Grumman and Rolls-Royce have signed an agreement with the French marine engineering company Direction des Constructions Navales (DCN) to market and produce the WR-21 marine gas turbine.

The business agreement, augmented by a license agreement between Northrop Grumman and DCN signed earlier this year, establishes a world-class team for the intercooled and recuperated WR-21.

"The final qualification of the WR-21 now embraces work in three countries and is a good example of international co-operation,'' said George Lowe, Commercial Director-Marine, Rolls-Royce.

"The result of this effort will be a state-of-the-art marine gas turbine which is already attracting substantial interest from potential naval and commercial customers worldwide.''

Unlike conventional marine gas turbine engines, the WR-21's advanced cycle recovers energy from the engine's exhaust gas to increase fuel efficiency across the operating range.

"The intercooled and recuperated WR-21 has already demonstrated over 25 per cent annual fuel savings in mechanical drive configurations compared with existing simple cycle gas turbines and is on track to reach more than 27 percent in its final production configuration,'' said Jim Hupton, vice president of Northrop Grumman Marine Systems).

The increased fuel efficiency of the WR-21 delivers a number of benefits for ship operators: extended ship range for given fuel capacity, more unrefueled time on station or reduced fuel storage requirements for a given range.

"Due to its efficient fuel consumption, the WR-21 can fulfill the role of both a cruise and boost engine, giving designers the opportunity to take a fresh look at propulsion systems design,'' added Hupton.

The WR-21 successfully completed the development phase of the United States Navy, Royal Navy, and French Navy funded full scale development program in February of this year. As a part of the completed development, the engine accumulated approximately 2,100 fired test hours including a 500 hour endurance test in Pyestock, England, in 1998 and a 500-hour endurance test at the United States Navy's test facility in Philadelphia, Pennsylvania, United States, in late 1999.

The final phase of the WR-21 Program has now started, with DCN's facility in Indret performing the 3,000-hour endurance qualification in accordance with Memorandums of Understanding's between the U.S. and U.K. and U.S. and France. On final completion of this phase in early 2002 and the subsequent shock test, the engine will be fully qualified for service under standards set by the United States Navy and will meet or exceed standards set by other navies in the world.

In Indret, the first engine operation began in mid-October, and will be followed by the 3,150 hour endurance phase in late November. A full range of operating profiles will be undertaken that will strengthen the successful test record already established. This lengthy testing in Indret will serve to further reduce the risk normally associated with a new technology introduction, will reaffirm the reliability and fuel economy for WR-21, and will result in one of the world's most extensively tested engine prior to entry into service.

Northrop Grumman's Marine Systems business unit, based in Sunnyvale, California, United States, is prime contractor for the WR-21 engine program with overall responsibility for engineering and systems integration. Rolls-Royce Marine in the United Kingdom is designing and developing the gas generator and power turbine.

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