Hallin Inks U.S. $36 Million Contract for New Vessel

Hallin Marine has signed a contract for the construction of an 80-meter DP2 Subsea Operations Vessel.

The vessel, to be named the Windermere, is scheduled for delivery in the second quarter of 2010 from the Singapore yard of Drydocks World Singapore Pte Ltd.

The Windermere will be fitted with an integral saturation diving system, a 50-tonne active heave compensated subsea crane and high efficiency diesel electric propulsion. It will be able to operate in deepwater, carry and deploy the company's Remote Operated Vehicles and accommodate up to 120 personnel.

The purchase of the Windermere is in line with Hallin's stated strategy of operating a mix of owned, long-term charter and short-term charter vessels. This strategy is designed to ensure the availability of competitively priced vessels - key to the Company's continued growth - and ensure flexibility within its operating fleet.

In addition Hallin will supply both the saturation diving system and the crane for the installation in the Windermere and the total cost of the finished vessel to the Company is calculated at US$49.6 million.

The Windermere will be 80% financed by debt, with the remainder coming from the Company's cash reserves, which include US$5m from the Ullswater sale that became available to Hallin upon placing this order for a further vessel.

As the construction contract is denominated in Singapore dollars and Hallin's revenue is predominantly US$ it is planned that the material part of the Company's exposure to any currency fluctuations during the build period will be hedged.

Drydocks World Singapore Pte Ltd, formerly Pan-United, is currently building the Ullswater, the first vessel Hallin ordered. Hallin subsequently sold the Ullswater at a significant profit and chartered the vessel back for 10 years.

John Giddens, the CEO of Hallin Marine, said: "The Windermere will be an outstanding Subsea Operations Vessel that will help deliver Hallin's strategy of continued, planned growth.

"The Windermere builds on the successful concept and design of the SOV Ullswater but with major improvements. The diesel electric propulsion system is more fuel efficient, the improved stern thrusters deliver better dynamic positioning performance and the more capable crane gives us deep-water capability.

"The cost of materials, in particular steel, has increased significantly and this is reflected in the contract price. But the business case for the Windermere remains very strong and we see substantial demand for this compact and capable purpose-built vessel.

"After an exhaustive, worldwide search we again chose Drydocks World Singapore Pte Ltd, who is building the Ullswater, to build the Windermere. The decision was based on price, quality, delivery and the good experience we have had working with the company."