MATSON BUYS TWO MORE SHIPS FROM PHILLY SHIPYARD

Now that Matson Navigation has agreed to purchase the two remaining container ships that were being built on spec by Kvaerner Philadelphia Shipyard, the move is, effectively, a death knell for the Hawaiian startup OceanBlue Express. Matson claims the reason it decided to buy the new container ships was not to end the possible competitive challenge by OceanBlue Express, which was still trying to round up the financing, but due to its 10-year cargo sharing arrangement ending with APL to Guam. Matson is purchasing the ships from Kvaerner for $315 million (including add on items), with the first ship being delivered in July, 2005, and the second ship scheduled to be delivered in June, 2006. The deal also gives Matson the first right of refusal on four additional ships to be delivered by 2010. Matson took delivery on two new cargo ships in 2003 (M/V Manukai) and 2004 (M/V Maunawili). The company said that it has a good customer base in Guam, and with the agreement with APL ending, it felt that the purchase of these two new ships was critical to supporting its customer base. OceanBlue Express is led by former Matson Chief Executive C. Bradley Mulholland.