OSLO, Norway and NEW YORK, April 14, 2005 (PRIMEZONE) -- Kvaerner ASA (Oslo:KVI) and Overseas Shipholding Group, Inc. (NYSE:OSG) announced today that they had signed an agreement in principle pursuant to which Kvaerner's subsidiary, Kvaerner Philadelphia Shipyard, Inc. (KPSI), will construct ten Veteran MT-46 class Jones Act Product Tankers, with an option for two additional vessels, and transfer them to another subsidiary which will bareboat charter them to subsidiaries of OSG for initial terms of five or seven years, with extension options for the charterer. For Kvaerner, the proposed transaction is valued at more than USD 500 million. The agreement in principle is subject to, among other conditions, approval by the Boards of Directors of Kvaerner and OSG, preparation and execution of final agreements and relevant government approvals.
"The proposed construction of ten Jones Act Product Tankers by KPSI is one of the largest commercial ship building transactions undertaken by a U.S. shipyard and represents a significant achievement for the American shipbuilding industry," stated Dave Meehan, President of Kvaerner Philadelphia Shipyard, Inc.
"The proposed bareboat charters of ten newbuild Jones Act Product Tankers by subsidiaries of OSG represent a significant commitment by OSG to its U.S. Flag business," said Morten Arntzen, President and Chief Executive Officer of OSG. "With these charters, OSG will have one of the largest and most modern Jones Act Product Tanker fleets."
About Kvaerner ASA
Kvaerner is an industrial holding company, based in Oslo, Norway. Its main investments include Kvaerner Philadelphia Shipyard, Inc., nearly half of the shares in Aker ASA, one of Norway's largest industrial groups with world-wide operations within shipbuilding, oil & gas, energy and process and fish harvesting and processing, and a 20 percent interest in Sea Launch, Inc., a U.S. based satellite launch business.
About Overseas Shipholding Group, Inc.
OSG, one of the world's largest publicly listed bulk shipping companies, owns and operates a modern tanker fleet of 99 vessels aggregating 13.3 million deadweight tons comprised of International Flag and U.S. Flag vessels that transport crude oil, petroleum products and dry bulk commodities. Additionally, OSG's newbuilding program consists of four LNG vessels aggregating 864,800 cubic meters which will deliver in 2007 and 2008.
This release contains forward-looking statements regarding the prospects of Kvaerner and OSG, including the likelihood of signing definitive bareboat charters between subsidiaries of Kvaerner and OSG and the outlook for the Jones Act Product Tanker market. Factors, risks and uncertainties that could cause actual results to differ from expectations reflected in these forward-looking statements are described in OSG's Annual Report on Form 10-K.