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Oceania Class

Oceania Class

March 14, 2007

Fincantieri in newbuild agreements with Oceania and Silversea

Fincantieri has announced newbuilding agreements with Oceania Cruises and Silversea Cruises covering two 65,000 gt cruise ships for Oceania (plus one option) and a 36,000 gt ship (plus one option) for Silversea.

Oceania Cruises says its agreement is for two 1,260-guest ships to be delivered in the fall of 2010 and summer of 2011. The agreement includes an option for a third vessel to be delivered in 2012. The contract price for each vessel is $500 million dollars.

Formed in 2002 by luxury cruise industry veterans Joe Watters and Frank Del Rio, Oceania Cruises describes itself as "the world's largest upper premium cruise line." It currently operates three 30,277 gt, 684 passenger "Regatta Class" ships--the former R1, R2 and R5 built by Chantiers de l'Atlantique.

Last month, Oceania announced a "strategic partnership" with private equity investor Apollo Management L.P. The transaction, valued at approximately $850 million dollars including the assumption of debt, was expected to be completed in the second quarter. Oceania Cruises will remain a wholly independent brand, operating with the support of Apollo's $12 billion private equity fund.

Designed by Yran & Storbraaten, the new Oceania-Class vessels represent an evolution of the Regatta-Class ships. Designed to cruise to all corners of the globe, the new ships will have 20 percent higher cruising speed than the Regatta-Class and a greater range.

"With our new financial partners and this one billion dollar order, Oceania Cruises is poised to take its place as the market leader in upper-premium cruising. While the Regatta-Class ships have provided us with an exceptional foundation for the line and are extremely successful, the new Oceania-Class will be the perfect complement to our fleet and have been designed with all the signature features our unique and discerning guests love, plus new amenities to enhance their Oceania Cruises experience," says Frank Del Rio.

The design specifications for the Oceania-Class call for the vessels to be 825 feet long, 105 feet wide, a draft of 23 feet, and accommodate 1,260 guests on 9 guest decks. The ships will feature 630 staterooms and suites that are on average, 50 percent larger than the Regatta-Class; 96 percent of all guest accommodations will feature sweeping ocean views and 93 percent will boast oversized, private teak verandas.

The diesel electric ships will have twin screw propellers and a service speed of 20 knots. They will be equipped with two bow thrusters to enhance maneuverability, and will also be "green ships" employing the most advanced environmental systems and technology.

Giuseppe Bono, Fincantieri's Chief Executive Officer, commented: "The agreement with Oceania Cruises proves that Fincantieri, with the experience and expertise developed in all these years as world leading cruise shipbuilder, is ready to enter the rapidly growing upscale market. With this project, Fincantieri is further enhancing its offerings to cover all market segments - from mega yachts to 130,000-ton cruise ships and over along with "niche" products such as special "exploration" ships."

Silversea Cruises has thus far released fewer details about its 36,000-gt, 540-guest, ultra-luxury vessel (plus option) which is scheduled for delivery in the fourth quarter of 2009. The agreement with Fincantieri is conditional to final contract and financing. However, an irrevocable banking commitment, fully underwritten, has already been obtained and is only subject to the final loan agreement.

"This is a very exciting time for our company as we are now poised to further develop our unique style of luxury travel with a new generation of ship design," said Manfredi Lefebvre, Silversea's chairman. "Fincantieri is the ideal shipbuilder to craft our new luxury vessel that will carry on our tradition of being an innovator and trendsetter in ultra-luxury cruising."

Added Amerigo Perasso, Silversea's president, "This newbuild order shows great confidence in the luxury segment's potential for greater demand. Silversea will be well positioned to fully meet this future demand in North America and our international markets."

The newbuild order is the first one for Silversea since 1998 when contracts for Silver Shadow and Silver Whisper were signed. The award-winning vessels entered into service in 2000 and 2001, respectively.

With the newbuild, Silversea's overall fleet capacity grows from 1,356 berths to 1,896 berths, a 40 percent increase.

The purchase price and design details about the new vessel will be forthcoming over the next few weeks.

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