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The Maritime Merchant Banking Firm www.amausa.com

The Maritime Merchant Banking Firm www.amausa.com. Index Our View of the Market A Brief Overview of AMA Current Assignments and Representative Completed Transactions Appendix - Detailed AMA Structure - Staff Biographies. Our View of the Market. Economic & Regulatory Shocks.

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The Maritime Merchant Banking Firm www.amausa.com

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  1. The Maritime Merchant Banking Firm www.amausa.com

  2. Index • Our View of the Market • A Brief Overview of AMA • Current Assignments and Representative Completed Transactions • Appendix • - Detailed AMA Structure • - Staff Biographies

  3. Our View of the Market

  4. Economic & Regulatory Shocks Market Comes Back in Balance VALUE CREATION Economic Pain - Older Ships Scrapped or Layed-up Freight Rates Adequate to Support Capital Investments Oversupply of Capacity Leads to Decline in Freight Rates Surplus Capacity Introduced into the Market Shipowners Aquire Secondhand or Newbuilding Tonnage VALUE DESTRUCTION Shipbuilding Shocks We recognize shipping to be an extremely volatile business, where timing can be everything Comparison of Historic Shipowner Costs and Freight Rates for a Capesize Vessel Shipping Cycles 1990 Built vessel 1995 Built vessel $20,000 $18,000 Cost Curves based on year of build $16,000 $14,000 $12,000 $US Per Day $10,000 $8,000 1986 Built vessel $6,000 Freight Rates – 1 yr Capesize TC $4,000 Costs (Operating, Capital, and Profit) $2,000 Revenues $0 1988 1989 1991 1992 1994 1996 1998 1986 1987 1990 1993 1995 1997 Source: Clarksons Shipping Review, Booz·Allen, AMA

  5. Shipping markets enjoyed a broad revival in 2000 but weakened in 2001… Tanker One Year Time Charter Rates Dry Bulk One Year Time Charter Rates …along with a weak global economy, persistent industry problems remain Note: Rates are for modern tonnage Source: Clarkson Research Studies

  6. While the picture is improving, low barriers to entry means fragmentation remains the rule • Due to low barriers to entry, shipowning is an exceptionally fragmented business • The percent of owners owning 20 or more tankers went recently went from 5 to 10 percent – but owners with just 1 to 2 ships comprise nearly half the market • Similar fragmentation can be found across shipping markets • The net effect is a unstable market, where marginal players can have significant impact • The situation, however, is improving • Mergers and pools/alliances are consolidating assets • The supply of easy finance is shrinking, helping restrain marginal owners Capacity Share of Top Vessel Operators Other Other COSCO APL MSC Teekay Evergreen Bergesen P&O Nedlloyd Chevron Mitsui OSK Saudi Aramco Maersk Frontline Note: Includes long term chartered vessels Source: Drewry, Intertanko, Containerisation International and Lloyd’s Register data

  7. Companies are consequently subscale with few very large or “corporate” players • With only a handful of vessels, most shipowners have not been able to take advantage of the benefits of scale • Lower operating costs • Lower capital costs • More commercial flexibility • Less in a position of price taker • More ways to create or extract value • While shipping is extremely capital intensive, few companies have matured to the point of having continuous access to equity markets • Few business have evolved beyond being able to provide a small portion of a customers needs – serving as one-off service providers rather than entrenched partners

  8. Overcapacity is a continuing threat in this highly cyclical business Tanker Orderbook Relative to Fleet Size Dry Bulk Orderbook Relative to Fleet Size The tanker orderbook was restrained in the mid 90s – helping set up the 2000/1 boom % of Fleet on Order % of Fleet on Order Long term sustainable orderbook • The world’s yards can still produce more ships than are needed – and are often given incentives to do so • The real threat is independent ordering from a number of owners all reading the same markets signs – which can quickly overwhelm supply Note: Assumes average vessel life of 25 years, 2-3 percent demand growth Source: Clarkson Research Studies

  9. Cycle ROCE (USA) =16% 80% Cycle ROCE (EUR) =12% 60% Industry WACC = 9% 40% 20% 0% -20% 1984 1990 1986 1992 1982 1988 1994 1996 1998 …All leading to inadequate long term returns Petrochemicals Average Returns On Capital Employed (1982-1998) Crude Shipping Average Returns On Capital Employed (1982-1998) 80% Industry WACC = 7% 60% Cycle ROCE (Aframax) =6% 40% Cycle ROCE (VLCC) =6% 20% 0% -20% 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 Source: Warburg Dillon Read Source:Chem Systems • While recent returns have been spectacular – long term returns in shipping investors have been very poor, in many cases destroying equity • Many industries have similar volatility to shipping – but earning peaks come far more regularly to make up for the troughs

  10. Additionally, sources of funding are becoming tighter • Banks – the traditional source of capital – are facing increasing difficulties and becoming more focused in their lending • Burgeoning problem loans (notably telecoms) • Tougher lending and pricing requirements, particularly in Europe (embracing the American relationship banking model) • Targeting larger relationships • Bond market now virtually closed to shipping • Equity markets difficult to tap • In all, shipping companies face the most difficult capital markets since the mid 80s

  11. Solutions lie, however, in evolving traditional business models while respecting the cycles… • There are immense benefits to scale in specific segments – and the companies pursuing this strategy, such as Teekay and Frontline, are benefiting • Shippers are also opening up to increased cooperation – but only a few shipowners, such as OSG with its relationship with PDVSA, are positioned to meet their needs • Security of return can be sought in either defensible niches – or raising barriers to entry • To take advantage of these changes, a more sophisticated approach to capital raising is needed • Companies need to know the supply and cost of capital in all markets – and be nimble in tapping new sources of funding as they open up • Shipping companies benefit from partners like AMA, which are always thinking about how to create equity value …and AMA can help companies chart this course

  12. A Brief Overview of AMA

  13. AMA is a unique merchant bank • Established in 1987, AMA is the only merchant banking firm in the U.S. exclusively focused on the maritime industry • AMA is staffed by twelve banking professionals, who on a combined basis, have over 140 years of experience in the maritime industry • Affiliated with NIB Capital of the Netherlands, an AA- rated bank, with a significant ship financing business • Offices in New York and Oslo

  14. We provide a wide range of services… • Provide strategic and M&A advisory services • Underwrite and distribute public debt and equity securities in the US • Advise, help access and arrange for capital – including all forms of debt and equity • Uncover investment opportunities for our shipping and non-shipping investor clientele American Marine Advisors, Inc. American Marine Securities, Inc. American Marine Credit, LLC. AMA Shipping Fund I, LLC.

  15. …across the whole of the globe AMA’s Global Experience AMA Offices Country experience of AMA professionals

  16. Our clients are industry leaders – and we bring them distinct strategic advantage AMA delivers… • An unparalleled global information network • Pro-active counsel based on long term relationships • A unique ability to bridge the worlds of shipping and Wall Street • Access to multiple capital markets including Norway and the US

  17. The value we deliver is well recognized

  18. Current Assignments and Representative Completed Transactions

  19. AMA is helping transform the maritime industry Building New Businesses • Advising a major tanker operator on a potential merger with a public tanker company • Advising a premier shipping company on its potential acquisition of a publicly traded, government owned shipping company • Advising a major European gas carrier on suitable M&A opportunities • Advising a major dry bulk player on merger opportunities Accessing Corporate and Low Cost Debt • Raising several hundred million dollars in unsecured debt for a top tier company • Advising a major tanker operator on an off-balance sheet synthetic lease structure • Arranging tax advantaged financing for a fleet of Panamax bulk carriers Restructuring Troubled Companies • Exploring recapitalizing a major shipping company – including using our own equity • Exploring merging two troubled liner companies for the benefit of both • Advising the Bondholders of Enterprises Shipholding Corporation • Helping Cruiseinvest find opportunities for the R cruise ships

  20. We have a long record of successful engagements • Advised the Creditors of Golden Ocean in the sale of the company to Frontline • Represented Pegasus Shipping (Hellas) Ltd. on restructuring its high yield bond issue • Represented the Bondholders in the restructuring of bonds issued in the high yield market by TBS Shipping • Advised the Estate of American Classic Voyages in the bankruptcy sale of the company to Delaware North Corporation • Represented the Bondholders in the restructuring of the high yield bonds issued by Global Ocean Carriers • Arranged off-balance sheet lease of $175 million for Overseas Shipholding Group (OSG) backed by charter commitment to BP-Amoco • Advised Overseas Shipholding Group (OSG) on a $350 million capital raising • Advised Deutsche Verkehrsbank on its acquisition of Nedship Bank

  21. We have a long record of successful engagements (continued) • Structured and arranged an $85 million working capital financing for Samsung Heavy Industries • Arranged a $110 million debt financing for Essar Shipping • Assessed and valued the shipping portfolio of a major European financial institution for the company’s board. • Arranged the financing for three container vessels with long-term time-charter to Hyundai Merchant Marine. • Arranged mezzanine financing used in a UK tax-lease for two newbuilding container vessels for P&O Nedlloyd (total project value $97 million). • Structured, arranged and funded the sale/lease-back of two multi purpose vessels for Griffin Shipping of South Africa (transaction value $14.6 million) and then sale of the vessels to a Norwegian K/S. • Managed the divestment of the shipping division of the India conglomerate, Larsen & Toubro Ltd.

  22. …and our efforts draw high praise

  23. Appendix - Detailed AMA Structure - Staff Biographies

  24. American Marine Securities, Inc. American Marine Advisors, Inc. American Marine Securities, Inc. American Marine Credit, LLC. AMA Shipping Fund I, LLC. • AMA’s wholly-owned broker dealer established in May 1998 • Member NASD SIPC • Underwrites and distributes public debt and equity securities in the US • Long-term goal to become the leading underwriter of public and private equity in the U.S. for the global maritime industry • Positioned to provide shipping expertise, something that has been notably absent in a number of transactions the last four years, to the U.S. capital markets

  25. American Marine Credit, LLC. American Marine Advisors, Inc. American Marine Securities, Inc. American Marine Credit, LLC. AMA Shipping Fund I, LLC. • Established to provide credit products to our clients • Provides and underwrites all types of secured debt from senior to mezzanine • Provides bridge financing to facilitate bonds offerings, equity issues or lease facilities • Arranges and distributes syndicated loans • Prices, underwrites and funds credit more quickly than banks • Since its inception in May 1998, AMC has committed to providing in excess of $800 million in debt facilities

  26. American Shipping Fund I, LLC. American Marine Advisors, Inc. American Marine Securities, Inc. American Marine Credit, LLC. AMA Shipping Fund I, LLC. • Established in January 2000 to acquire Dry Bulk Carriers, Containerships, Chemical Carriers, Product Tankers and Gas Ships. • Purchasing power: $200m. • Target ROE: 20% per annum. • The Fund’s investment period closed on 12/31/01. • Fund partners are NIB Capital and GATX, a major U.S. finance company

  27. AMA Shipping Fund I – Deal One: • Three 3,000 TEU second hand container vessels owned by HMM • Equity from Thor Dahl • $13.7 million second mortgage loan provided by the AMA’s Fund • Vessels time-chartered back to HMM • The first mortgage financing provided by NIB Capital Sale and Time Charter Back Transaction with HMM

  28. AMA Shipping Fund I – Deal Two: Purchase of Five Vessels and the Related Loans From Seoul Bank • The investment was sold in May 2002 yielding a net IRR to limited partners of 23.8 percent • Vessels were on bareboat charters to Pan Ocean of South Korea • The related loans were purchased at a discount to outstanding amounts • Senior Loan for the acquisition was provided by G.E. Capital • Vessels included: • Three 27,000 DWT bulkers • One 73,000 DWT bulker • One 700 TEU feeder vessel

  29. Appendix - Detailed AMA Structure - Staff Biographies

  30. Staff Biographies… Morten Arntzen - Chief Executive Officer Morten Arntzen has been involved in the global shipping industry continuously since 1979. He set up and ran the Global Shipping Group of Manufacturers’ Hanover Trust Company in 1984, during which period he was involved, among other things, in a number of high-profile debt restructurings. Prior to joining AMA in 1997, he ran the Global Transportation Group for Chase Manhattan Bank, the same position he held at the new Chemical Bank prior to its merger with Chase in 1995. He currently serves as a director of IM Skaugen of Norway, Essar Shipping of India, TBS Shipping in the USA and Chiquita Brands International. Rolf A. Wikborg – President of AMA Norway AS Mr. Wikborg was a founder of AMA in 1987, and now heads AMA’s expansion into Norway. Prior to AMA, Mr. Wikborg was the Managing Director of Fearnleys, Mexico. In 1983, he joined Fearnleys in the Project Department involved in sale & purchase, newbuildings and coordination with Fearnley Finans. He is an officer in the Royal Norwegian Navy and holds a BSc (Hons) in Management Sciences from UMIST, England and M.I.C. from Oslo in International Maritime and Marine Insurance Law.

  31. Staff Biographies… James G. Dolphin - Senior Vice President Jim Dolphin has spent well over a decade in the maritime industry. Before joining AMA, Jim led the global maritime management consulting practice at Booz Allen & Hamilton. He has extensive experience in strategy and financial execution, and has served a wide range of clients including large independent owners, liner companies, oil majors and other global resource companies, ports and maritime service companies. Jim previously worked as a commercial banker specializing in shipping and holds a BA from Rice University. Paul M. Leand, Jr. – Senior Vice President Paul Leand previously worked at the First National Bank of Maryland. Over a nine year period, he managed the Bank’s Railroad Division and, later, International Maritime Division. Paul has extensive experience in structuring leasing and debt facilities. Since joining AMA in 1998, he has been heavily involved in AMA’s high-yield and bank restructuring assignments as well as the large debt placement assignments. He holds a BS/BA from Boston University’s School of Management. Peter Shaerf – Senior Vice President Formerly Managing Director of Poseidon Capital Corp, Mr. Shaerf has over 27 years in the industry and has advised hedge funds and investors on a variety of maritime investments in both equity and distressed debt. He has been involved in raising equity and structuring transactions in the dry bulk, tanker and container sectors. Mr. Shaerf is a Director of General Maritime Corp, MC Shipping, TBS International, and Trailerbridge. Prior to co-founding Poseidon, he ran The Commonwealth Group, a leading broker and consultant in the container and liner sector. Peter is a Director of The Containerization and Intermodal Institute and a member of the Maritime Law Association.

  32. Staff Biographies… Harrys Kosmatos - Vice President Harrys Kosmatos begun his career in 1994 with Elka Shipping (London) Ltd., training in the chartering, operations and finance departments. In 1995 he joined the Shipping Banking Group of the Commercial Bank of Greece. There he worked as a credit analyst in the Bank’s London office. He joined AMA in May of 1997 and has focused on raising AMA’s profile and involvement in the Greek shipping market. Harrys has a BA (Hons) in Classical Studies and Politics from the University of London (Queen Mary & Westfield College) and an MSc in Shipping, Trade and Finance from City University Business School, London. Kevin O’Hara – Vice President Kevin O’Hara previously worked in the ship finance departments of Nedship Bank and the First National Bank of Maryland. During his time at Nedship and First National, he worked with shipping and offshore clients in North and South America, as well as working with distressed shipping companies in the special credits area of First National. He holds a BBA with a double major in Finance and International Business from Loyola College in Maryland. John C. Wobensmith – Vice President Prior to joining AMA, John C. Wobensmith worked at The First National Bank of Maryland. During his seven-year tenure at the Bank, he worked in the International Maritime Division. He then worked in the Bank’s Special Assets group restructuring and managing distressed maritime loans. While at AMA, he has been involved in the structuring and raising of both debt and equity, M&A transactions and working with companies through the restructuring/bankruptcy process. He also is currently responsible for AMA Shipping Fund I. He holds a BA in Economics (Hons) from St. Mary’s College.

  33. Staff Biographies… M.Y. Choi - Assistant Vice President Prior to joining AMA 1998, M. Y. Choi worked for at Fearnleys Korea Ltd. where she was in charge of ship financing and special projects. At AMA she has been principally responsible for maintaining, expanding and developing the Company’s client base and relationships in the Korean shipping and banking industry. M.Y. Choi has done multiple transactions with all the major Korean shipping and shipbuilding concerns. She holds a BA degree in Business Administration from Ewha Woman’s University in Korea. Yuan (Jack) Sun - Associate Jack Sun joined AMA in the summer of 1999. Prior to that he worked for seven years in international trade for China National Machinery I/E Corp., one of China's largest trading companies. Later, he worked as Project Manager in the International Marketing department of Sericol International Ltd., a division of Burmah Castrol Plc., in the U.K. Jack holds a B.Eng. from Xi’an Jiaotong University, China and an MBA in Finance and International Strategy from the Yale School of Management. Robert Longnecker –Associate Prior to joining AMA in 2002, Robert worked in the private equity group of Credit Suisse First Boston. Before that he spent three years at Lehman Brothers in the transportation group working on corporate finance and mergers and acquisitions. Robert holds a BA in economics from Cornell University.

  34. American Marine Advisors, Inc. 200 Park Avenue, 31st Floor New York, N.Y. 10166 Phone: (212) 682-3344 Fax: (212) 682-3464 Video Conf.: (212) 661 8012/5969 Contacts:Home/Mobile:Ext.:E-mail: Morten Arntzen (203) 966 3120 308 Marntzen@amausa.com MeeYoung Choi (646) 552 0499 312 Mchoi@amausa.com Jim Dolphin (646) 552 1192 306 Jdolphin@amausa.com Harrys Kosmatos (212) 535 3301 307 Hkosmatos@amausa.com Paul Leand (917) 442 2300 314 Pleand@amausa.com Robert Longnecker (917) 213 9320 304 Rlongnecker@amausa.com Kevin O’Hara (646) 552 0160 305 Kohara@amausa.com Peter Shaerf (646) 623 5333 313 Pshaerf@amausa.com Jack Sun (718) 263 3189 303 Jsun@amausa.com Rolf Wikborg +47 9061 2813 Rwikborg@amausa.com John C. Wobensmith (646) 552 4025 310 Jwobensmith@amausa.com

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