United Heavy Machinery Acquires Friede & Goldman Ltd.

United Heavy B.V., a division of United Heavy Machinery, has purchased the Naval Architecture and Marine Engineering business unit Friede & Goldman Ltd. (FGL) from Friede Goldman Halter, Inc. for a sum of $15 million.

"We are pleased with the outcome of this auction," said Jack Stone, President and Chief Executive Officer of Friede Goldman Halter. "The competitive bidding for FGL shows the level of confidence the marketplace has in the products and services offered by Friede & Goldman Ltd. and in its future."

"The sale of Friede & Goldman Ltd. is positive for the estate and the terms of the agreement provide continued access to the FGL design technology for Friede Goldman Offshore which should prove beneficial to both companies going forward." said Ron Schnoor, President of Friede Goldman Offshore. Previously announced contract with FGL Acquisitions (USA) was rescinded.

The acquisition of Friede Goldman makes UHM the only Russian company with expertise in offshore rig construction, an increasingly important factor given that drilling activity in the Caspian Sea will increase. "Our aim is to increase our market share internationally as well as in Russia, but first and foremost in the Caspian," UHM President Kaha Bendukidze said in a statement. Bendukidze also said the company will use cash reserves to finance the acquisition. And added that further acquisitions are likely. UHM's main competitors in the Caspian market are Singapore's Keppel FELS Energy & Infrastructure Ltd., which also bid for Friede Goldman Ltd. Friede Goldman Ltd. has $9 million worth of contracts, including a contract with a Singapore affiliate of PPL Corp. Bendukidze said he expects Friede to secure another two major contracts by the end of the year.