Monday, August 7, 2000


Halter reports more losses
In second quarter 2000 results announced today, Friede Goldman Halter, Inc. reported continuing losses. It also announced that John Alford, previously president and chief operating officer, is replacing J.L. Holloway as CEO. Holloway, the company's largest shareholder, with 21% of the equity, will remain as chairman of the board.

In another management change, CFO Rick S. Rees resigned. His duties will be assumed by Emile J. Dumesnil, senior vice president-finance and treasurer.

FGH also announced it plans to undertake a private placement of term-debt securities aimed at raising $150 million.

For the quarter ended June 30, 2000 the company reported a net loss of $18.1 million, or $0.44 per fully diluted share, on revenue of $194 million. The second-quarter results were affected by an adjustment related to expected future costs of the Ocean Rig Bingo 9000 project. Friede Goldman Halter says it expects to deliver the Bingo 9000-1 and Bingo 9000-2 rigs in the fourth quarter of 2000 and the first quarter of 2001, respectively. A report issued on July 30 by Umoe Olje og Gass AS estimates delivery of Bingo 9000-2 during the second quarter of 2001 and says "only major efforts at this stage of the project may bring the delivery date back into the first quarter of 2001." Umoe Olje og Gass AS is the independent organization reviewing the BINGO 9000 program as part of a settlement reached by Friede Goldman Halter and Ocean Rig,

Excluding the effects of the Ocean Rig adjustment , the results would have been a loss of $0.15 per fully diluted share.

Backlog for the company totaled $450.8 million at June 30, 2000 and consisted of $221.6 million in the Offshore segment, $135.0 million in the Vessels segment and $94.2 million in the Engineered Products segment. Backlog at June 30 does not include approximately $31 million in vessel and engineered products contracts signed during the third quarter.


Kvaerner makes offer for Aker Maritime
Kvaerner ASA today announced a proposed all-share offer for Aker Maritime ASA. Simultaneously, the Kvaerner board said it was executing a previously announced decision to consolidate its A and B shares into new ordinary shares.

Under the terms of the offer shareholders of Aker Maritime will receive 0.79 new ordinary share in Kvaerner, for each Aker Maritime share. This values each Aker Maritime share at approximately NOK 80 (about $9) and the whole of the issued share capital of Aker Maritime at approximately NOK 4.5 billion (about $506 million) Kvaerner says the offer to Aker Maritime shareholders represents a premium of 39% based on the last five days of trading in both shares.

The offer comes after last month's news that Aker Maritime had acquired 26.39% of Kvaerner. Aker Maritime is 63% owned by Aker RGI. Aker RGI is 100% owned by Kjell Inge Røkke.

Kvaerner chairman Christian Bjelland called the offer for Aker Maritime "a value-enhancing opportunity for shareholders in both Kvaerner and Aker Maritime." President and CEO Kjell E Almskog said the rationale for this proposal "is to create a strong, truly global player with a complete range of products and services for the most attractive segments and regions of the oil and gas services industry worldwide."

He added "combined with Aker Maritime, Kvaerner will be second to none in the oil and gas products and technology area ­ with a particularly strong position in the sub-sea and deep-water sectors. " He noted that "given the current ownership situation in Kvaerner, a combination of the two businesses will also assist in neutralizing potential conflicts in the market-place.".

According to a Kvaerner statement, the principal activities of a combined oil and gas organization would be offshore field development, modifications, maintenance and operations, as well as technology-based products and solutions. "A combination of the two businesses will add strength particularly in terms of the technology and product portfolio through Kvaerner's prominent position in sub-sea products, and Aker Maritime's recognized deep-water technology." said the statement.

Kvaerner expects to achieve annual cost savings in excess of NOK 250 million per year from combining the two organisations. This will be derived from a co-ordinated effort in technology development, procurement economies, reduced tender costs and overheads. Within Norway, an acquisition will facilitate the necessary restructuring of the fabrication capacity required to adjust to the changes in the market-place.

Kvaerner said its offer will be conditional on acceptances from shareholders representing more than 90 per cent of the shares in Aker Maritime. It will also be conditional on Aker Maritime retaining its ownership interests in Kvaerner.

Aker Maritime commented that, since April 1999, it had been in regular contact with Norwegian and international players in the oil and gas sector with the aim of assessing how development of the group's operations could best be carried forward. These soundings it said, had "produced indications of Aker Maritime's value which exceed by far the price offered by Kværner today.

"As soon as Kværner's formal bid for the purchase of Aker Maritime's shares is received, the Aker Maritime board will evaluate the proposal and make a statement to shareholders," concluded the statement.

The Kvaerner offer follows Aker Maritime's announcement of a second quarter loss of NOK 77 million. In its second quarter report, Aker Maritime noted several significant new contracts taking its order backlog at the end of June to NOK 8.3 billion. The two largest contracts awarded in the period were for
the delivery of Spar platform hulls to Kerr-McGee and Vastar for U.S.Gulf fields. Since the end of June further contracts worth nearly NOK 1 billion
have been added to the backlog. The largest include the Kvitebjørn jacket structure for Statoil in Norway.


American Commercial Lines reports second-quarter results
"Our second-quarter results are disappointing, and reflect a spike in fuel prices as well as soft demand in grain export markets during the quarter,'' Michael Hagan, president and CEO of American Commercial Lines commented on the announcement that the company's second-quarter operating income was $16.5 million, compared with $20.0 million for the second quarter of 1999. Year-to-date operating income increased to $24.5 million from $24.3 million in the first half of 1999. "Looking forward to the second half, we expect fundamentals in the North American covered hopper market to improve significantly," said Hagan. "With ACL's recent acquisition of Peavey Barge Line's covered hopper fleet, we are well positioned to take full advantage of the USDA's strong export grain demand forecast of 2.25 billion bushel."

 

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