Restructuring Committee News

Japan’s Kawasaki Heavy Industries (KHI) diverts more shipbuilding work to its joint-venture yards in China, local media says. According to a report in Nikkei, KHI will step up commercial shipbuilding in China and scale down production in Japan to improve cost competitiveness as the market rebounds from a yearslong slump. The Japanese firm plans a 50% capacity boost at a shipyard in Dalian, Liaoning Province, that builds mainly large ships, including tankers and bulk carriers. The facility is jointly operated with China Ocean Shipping (Group) Co., also known as Cosco. More than 20 billion yen ($176 million) will be invested at the site, including construction of a second dock about 550 meters long.

Friede Goldman Halter Inc., announced that it has engaged Glass & Associates, Inc., a national crisis-management firm, to serve as its Chief Restructuring Advisor. Jack R. Stone, Jr., principal of Glass, will serve in that capacity and will report directly to the Restructuring Committee of the Board of Directors. Stone will oversee all restructuring activities, working closely with company management and the investment-banking firm of Houlhan Lokey Howard Zukin. This action was taken to provide a separation of the restructuring effort from the day-to-day business operations, which are under the direction of John F. Alford, CEO.

Friede Goldman Halter, Inc. announced that the U.S. Bankruptcy Court has extended the exclusively period for filing of a reorganization plan until February 11, 2002. The primary secured lending group and the Official Unsecured Creditors’ Committee unanimously supported this extension. The restructuring committee of the board of directors has been evaluating expression of interest received from potential strategic and financial parties. These interested parties will conduct final due diligence in the next 30 days, and the restructuring committee expects to make its recommendation prior to February 1, 2002. Both the restructuring committee and the official unsecured creditors’ committee are evaluating all possible alternatives for the company.

Friede Goldman Halter, Inc. (FGH) announced today the debtor’s decision to file a joint plan to reorganize Friede Goldman Offshore (FGO) and Halter Marine, Inc. (HMI) under Chapter 11 of the Bankruptcy code. The Debtors and the Official Unsecured Creditors Committee are supporting this reorganization. The Restructuring Committee of the Board of Directors, after extensive review of options, will pursue the internal reorganization of the Offshore and Marine segments which is believed to be in the best interests of all parties. Details of the reorganization plan are being finalized and the reorganization plan will be filed with the United States Bankruptcy Court in the near future. Jack Stone, Principal, Glass & Associates, Inc.

Friede Goldman Halter, Inc. announced today that J.L. Holloway has resigned from the company's Board of Directors. Holloway, 57, has been the Chairman of the Board since April 1997. He served as the Chief Executive Officer and President of Friede Goldman Offshore, Inc. (formerly HAM Marine, Inc.) from its formation in 1982 until April 1997. "The Board has accepted J.L.'s resignation and is grateful for the many years of service he has given to Friede Goldman Halter and its predecessors," said T. Jay Collins, Board Member and Chairman of the Restructuring Committee; "We wish J.L. the best in his endeavors."

Friede Goldman Halter, Inc. announced that the purchaser has completed financing arrangements for the sale of its Friede Goldman Offshore division based in Pascagoula, Mississippi. On November 15, Friede Goldman Halter, Inc. (FGH) entered into a definitive contract to sell the assets of its Offshore division to ACON Offshore Partners LP, a Delaware limited partnership and an affiliate of ACON Investments, in a transaction valued at approximately $61 million (USD). The sale hearing will take place in the United States Bankruptcy Court for the Southern District of Mississippi, Southern Division, on December 16, 2002. Court approval is expected, with a year-end closing anticipated.

Friede Goldman Halter, Inc. has completed the previously announced auction of its Friede Goldman Offshore division and has entered into a contract to sell the assets to ACON Offshore Partners LLP, a Delaware limited partnership, for approximately $61 million. The purchase price consists of $18 million in cash plus the assumption of approximately $43 million in secured debt. The sale is contingent upon the buyer receiving specific refinancing terms from certain existing secured creditors by November 22, 2002 and the receipt by the seller of the buyer's contract deposit on the same date. If these conditions are met, the sale would be presented on December 16, 2002 to the United States Bankruptcy Court for the Southern District of Mississippi, Southern Division, for approval.

Friede Goldman Halter, Inc. (FGH) has completed the previous announced sale of substantially all of the assets of its offshore division to ACON Offshore Partners LP and its affiliates (ACON), a Delaware limited partnership. The sale was finalized for a purchase price of approximately $61 million (USD), consisting of cash and the assumption of secured debt. "We are pleased with the outcome in closing this transaction and we commend the Restructuring Committee of the Board of Directors and the Unsecured Creditors Committee for their efforts," said T. Jay Collins, FGH Chairman and CEO. Now that the sale of the offshore assets is complete, Friede Goldman Halter intends to concentrate on promulgation of its plan of reorganization.