Marine Transport Corporation Purchases Mormac Marine Group Businesses

WEEHAWKEN, N.J., Feb. 10 /PRNewswire/ -- Marine Transport Corporation (``MTC'') (Nasdaq: MTLX - news) and Mormac Marine Group, Inc. jointly announced today that Mormac's ocean bulk transportation businesses will join the MTC group of companies which include Marine Transport Lines, Intrepid Shipping and MTL Petrolink. Mormac operates 10 U.S. flag vessels, including two tankers involved in crude oil transportation for another owner, three product carriers owned by Mormac employed on time charter and contracts of affreightment, and five vessels for the Maritime Administration. The operation of the two tankers trading in crude oil will be combined with Marine Transport Lines' ship management group. The three Mormac product carriers will be bareboat chartered by Marine Transport Lines and traded as a ``pooled'' fleet with MTC's three similar product tankers, thereby enhancing overall utilization and providing more flexible service to customers. Mormac's government operation will be maintained as a separate unit with its Baltimore office. The total consideration to be paid by MTC for the Mormac businesses is based on the performance of those businesses over a five year period. The minimum amount payable is approximately $7 million.

Richard du Moulin, Chairman and Chief Executive of Marine Transport Corporation said, ``We are extremely pleased to be joining forces with the Mormac organization whose superb reputation with a long, innovative and successful U.S. maritime history is thoroughly compatible with MTC. Our respective management teams are highly complimentary, which will be a significant advantage to the combined entity as will the considerable savings we anticipate in the administrative and operating costs of the businesses. This transaction is another step in the much-needed consolidation of the Jones Act shipping trade in the U.S., where we see MTC as one of the leaders. Our strategy continues to be focused on acquiring profitable businesses with excellent customer relationships, contract portfolios and experienced, committed personnel who share our vision for shipping in the U.S.''

In 1998, MTC divested its international fleet and purchased Marine Transport Lines, Inc., a large U.S. operator, and in 1999 it purchased two U.S. flag chemical tankers from Occidental Petroleum through a joint venture with Stolt-Nielsen Transportation Group, the world's largest operator of chemical tankers in international trade. Today, MTC operates one of the largest U.S. based bulk ocean fleets.

Paul Tregurtha, Chairman and Chief Executive of Mormac Marine Group, Inc., commented, ``The combination of our ocean tanker transportation businesses with MTC's businesses provides our tanker organization with expanded opportunities for growth and success. Our companies and our people are similar in many ways; with long maritime heritage, excellent service capabilities and reputation, and professionals dedicated to the industry. I am confident that MTC will be successful in its strategy as a leading Jones Act operator and I am happy to see many in our organization joining MTC.''

Last week MTC announced it had completed a transaction whereby $25 million of cash was added to the balance sheet resulting from the monetization of future charter earnings from an extended bareboat charter for its vessel Marine Columbia in service to BP Amoco. These funds are available for MTC's merger/acquisition activities, the chemical transportation joint venture with Stolt-Nielsen, and other initiatives to enhance shareholder value. MTC has approximately 6.2 million shares outstanding.

MTC will announce 1999 results on February 29 and host a conference call at 3.00 pm. EST that day to provide more details on transactions and future directions. To participate in the call, dial 212-896-6065.

Marine Transport Corporation is a U.S.-based supplier of marine transportation services, and owns and/or manages 35 ships, six work boats and five chartered-in vessels, making it one of the largest U.S. based fleets of ocean going vessels. The Mormac acquisition will add ten vessels to this total. MTC's core business is industrial shipping based on long-term alliances, some as long as 50 years, with leading chemical and energy customers. MTC's Houston-based operation, MTL Petrolink, provides crude oil lightering services in the Gulf of Mexico. MTC, as an operator with International Safety Management (ISM) certification, is able to provide services to support U.S. and international shipping expansion for quality- conscious commercial and U.S. government customers.

This news release contains certain forward-looking statements. These statements are based on management's current expectations and observations, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additional information concerning these statements and other matters is contained in the Company's periodic filings with the Securities and Exchange Commission.

SOURCE: Marine Transport Corporation and Mormac Marine Group, Inc.