Philly Shipyard signs LOI with Jones Act operator to build four new boxships for Hawaii trade

Philly Shipyard, Inc. (PSI), a wholly-owned subsidiary of Philly Shipyard ASA (Oslo: PHLY) 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 shipbuilder's press release said. 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.

About Philly Shipyard:
Philly Shipyard builds vessels for operation in the Jones Act market, of oceangoing merchant vessels. Philly Shipyard 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.