Hereby JSC Latvijas kuģniecība (Latvian Shipping Company - LASCO) informs that on 2 November 2007 the Company signed contracts with Hyundai Mipo Dockyard Co., Ltd. (HMD) on building four additional middle-range (MR) tankers, thus implementing the Group’s Tanker Fleet Further Development Plan that provides for the expansion of the given segment by approximately 200 thousand deadweight tons (DWT). The implementation of the above-mentioned project has been unanimously approved by JSC Latvijas kuģniecība Supervisory Council that also conceptually consented to the sale of the Group’s five reefer vessels and investment of the released funds into modern newbuildings.

The implementation of LASCO tanker fleet expansion project involved the investigation and assessment of various shipyards, as well as a careful appraisal of all the proposals received. As a result, the work group of LASCO shipping experts acknowledged the proposal presented by Hyundai Mipo Dockyard Co., Ltd. to be the most suitable for LASCO’s project implementation, as one of the significant factors mentioning also the Company’s previous successful cooperation with HMD: in 2007 LASCO took the delivery of four 37,000 DWT ice-classed tankers built by the Korean shipyard.

The Shipbuilding Contracts signed between JSC Latvijas kuģniecība and Hyundai Mipo Dockyard Co., Ltd. provide for the construction of four ice-classed tankers of 52,000 DWT each. Similar to the rest of LASCO fleet’s newbuildings, the above-mentioned tankers will be built to comply with all EU marine safety requirements and international conventions. The project requiring about USD 200 million investments will be financed both through equity (including funds to be released as a result of selling LASCO’s less profitable ships) and debt.

As already reported, on 28 December 2006, JSC Latvijas kuģniecība Management Board approved further development of the Group’s middle-range tanker fleet through ordering four additional tanker newbuilds with the total tonnage of 200 DWT. To ensure finance required for the investments in LASCO fleet renewal programme, the sale of other vessels with the tonnage inadequate for the segment in question and the reinvestment of the released funds into new and modern tankers were considered.

Mr. Imans Sarmulis, Chairman of JSC Latvijas kuģniecība Management Board who assumed office on 1 November 2007, acknowledged that it is both a significant responsibility and a big challenge to commence the implementation of such an important project. “Our goal is to retain and develop LASCO’s stable position in the middle-range and handy-size segment of the world shipping market, which is possible only through our intensive work, aimed the Company’s modernisation and growth of its competitiveness,” stressed Imants Sarmulis.

LASCO’s core business is transportation of cargoes by sea, the largest part of which is done by the Company’s product tanker fleet that ensures about 80% of the Group’s net voyage result. In the course of the implementation of its Tanker Fleet Renewal Programme LASCO has already taken the delivery of eleven newbuildings, thus expanding its activity in the target segment of the shipping market, which in combination with the Company’s rich experience, is regarded as an essential advantage.

At present JSC Latvijas kuģniecība fleet comprises 37 product tankers (of which three are time chartered in from other ship-owners) carrying both clean and dirty petroleum products, easy chemicals, oils and other liquid cargoes, 2 LPG carriers, 5 reefer vessels and 1 Ro-Ro/general type vessel.

On 30 October 2007, the delivery of m/t Piltene (the eleventh of in total fourteen tanker newbuilds ordered by LASCO) took place at 3.Maj shipyard in Croatia, while November 2007 will see the launching and naming ceremony of LASCO’s twelfth newbuilding.

For further information:
Marita Ozolina-Tumanovska
Head of PR Departament
Phone: +371 7020120, 29287169
E-mail : marita.ozolina@lscgroup.lv