Philly Shipyard Signs Letter of Intent with a Leading Jones Act Operator to Build Up to Four New Containerships for the

Philly Shipyard, Inc. (PSI), a wholly-owned subsidiary of Philly Shipyard ASA (Oslo: PHLY), is pleased to announce that it has entered into a Letter of Intent (LOI) with a blue chip U.S. shipping operating company for the construction and sale of up to four new, cost-efficient and environmentally friendly containerships with planned deliveries in 2020 and 2021. The LOI marks the entry into the next phase in the transaction process, building on ongoing discussions between the parties. The identity of the shipping operating company is not being disclosed at this time.

Under the terms of the LOI, it is contemplated that the shipping operating company will make an initial order for two 3,700 TEU containerships and receive options to order two additional sister ships. It is intended that these vessels will service the containership trade between the U.S. West Coast and Hawaii.

PSI has already begun construction of the vessels contemplated by the LOI in order to support their optimal delivery dates. These vessels are the continuation of the series of two similar 3,600 TEU “Aloha Class” containerships currently under construction at PSI for the Hawaii trade-lane.

The transaction contemplated by the LOI is subject to agreement by the parties on definitive documents and fulfillment of certain closing conditions. The LOI provides for a period of exclusivity to negotiate and complete this transaction.

Philly Shipyard is a leading U.S. commercial shipyard constructing vessels for operation in the Jones Act market. It possesses a state-of-the-art shipbuilding facility and has earned a reputation as the preferred provider of oceangoing merchant vessels with a track record of delivering quality ships. Philly Shipyard is listed on the Oslo Stock Exchange and is majority-owned by Aker Capital AS, which in turn is wholly-owned by Aker ASA. Aker is a Norwegian industrial investment company that creates value through active ownership. Aker’s investment portfolio is concentrated on key Norwegian industries that are international in scope: oil and gas, fisheries and biotechnology, and marine assets. Aker’s industrial holdings comprise ownership interests in Aker Solutions, Kvaerner, Aker BP, Aker BioMarine, Ocean Yield and Akastor.

Philly Shipyard has delivered 26 vessels in its nearly 20 year history, including four vessels for use in the Hawaii containership trade which were delivered in 2003-2006. Currently, Philly Shipyard is building two 50,000 dwt tankers for a subsidiary of Kinder Morgan, Inc. (Hulls 027 and 028) and two 3,600 TEU containerships for use in the Hawaii trade for Matson Navigation Company, Inc. (Hulls 029 and 030). As discussed above, Philly Shipyard has also initiated construction of up to four 3,700 TEU containerships for its own account (Hulls 031-034).
Source: Philly Shipyard