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Hawaii Superferry

June 4, 2004

Austal starts Hawaii ferry construction

A traditional Hawaiian blessing was held Thursday in Mobile, Alabama, marking the start of construction of the first of two 345 foot ferries for Hawaii Superferry (HSF) at Austal USA for $75 million dollars each.

Construction is getting started some six months ahead of schedule. Austal Limited noted that HSF's first phase of equity has been successfully raised and the company is currently applying to MARAD for Title XI finance. Austal said it is "confident that this MARAD funding should be forthcoming."

Last month, Maui Land & Pineapple Co., which already has agriculture, land development and property management in its diverse portfolio, said it has invested $1 million in the venture.

The investment, in the form of Series A convertible preferred stock, completed the initial equity financing of $3.3 million that the ferry company set out to raise, according to Hawaii Superferry Chief Executive John Garibaldi.

David Cole, chairman, president and CEO of Maui Land and Pineapple, said the company's desire to diversify its agricultural operations prompted the investment.

"We think this is one of the most dramatic developments that has occurred here in Hawaii for a long time," Cole said. "The ferry has the potential to shrink the archipelago down to one island. Maui could become to Hawaii what the California Central Valley is to the rest of the country."

Superferry's Garibaldi said the ferry gives Maui Land and Pineapple an advantage over the two other modes of product transportation--air and barge.

Pricing is significantly lower than airfreight and though "compared to barges we're slightly higher, the products would travel in a matter of hours rather than days."

Maui Land and Pineapple, interestingly, has reportedly been working on various trial crops and has been collaborating with Maui-based Pacific Biodiesel Inc. on fuel crops.

Austal Limited said the decision to commence construction follows the announcement last week that the Austal and General Dynamics team has been awarded a final design contract for the U.S. Navy's planned Littoral Combat Ship (LCS).

Austal says it considers the HSF contract as an outstanding opportunity to further develop resources at Austal USA in preparation for the anticipated commencement of LCS construction in October 2005.

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