NewLead Holdings Ltd. Completes Divestiture of Non-Core Vessels

PIRAEUS, Greece, Sept. 16 /PRNewswire-FirstCall/ -- NewLead Holdings Ltd. (Nasdaq: NEWL) ("NewLead" or the "Company"), an international, vertically integrated shipping company, today announced that it completed the divestiture of all seven non-core vessels with the sale of three product tankers the Ostria, the Nordanvind and the High Land.  Earlier this year, the Company sold two of its non-core product tankers, the Chinook and the High Rider and two container vessels, the MCS Seine and the Saronikos Bridge.  

The aggregate consideration of the divestiture of these seven non-core vessels is approximately $50.0 million. The divestiture is anticipated to favorably impact EBITDA by $7.8 million annually. NewLead has used a portion of the net proceeds from the sale of the containers to pay down bank indebtedness and intends to utilize the net proceeds from the sale of the non-core product tankers to renew its fleet or reduce its outstanding indebtedness.

Michael S. Zolotas, president and chief executive officer, stated: "I am pleased by the significant progress we have made towards implementing our strategy in less than a year's time. We have transformed the fleet and operations while creating a scalable platform capable of supporting significant growth."  

As a result of this divestiture, NewLead has a diversified fleet of 21 vessels, of which six are product tankers and 15 are dry bulk vessels, with a total dwt of 1,854,743 including newbuildings.

FLEET UPDATE

The following table details NewLead's fleet deployment as of September 16, 2010:

1. Vessel is under a bareboat charter party agreement. The operating expenses are for the account of the charterer. Accordingly, the vessel's Time Charter Equivalent (TCE) rate is grossed up to reflect estimated daily operating costs. As a result, the vessel's charter rate is adjusted to a TCE rate of $24,933, to include estimated operating costs of $6,700.
2. The time charter is expected to commence within Q4 2010.
3. After the end of the current time charter, the vessel is fixed for a period of 20-22 months earning 105.0% of the average of the 4 BPI routes less 5.0% commissions.
4. $28,985 for the first two years, $26,180 thereafter, plus 50.0% profit sharing above $26,600 based on the 85% of the average of the 4 BCI routes for all years. If charterers exercise their option for the third year of M/V Grand Ocean, third year hire of Brazil to remain $28,985.  
5. Charterer's option to extend for one additional year.
6. Charterer's option to extend for six additional months.
7. Profit sharing is based on 86.0% of the Baltic Panamax Average 4TC Routes.
8. Charterer's option for 1+1 additional years. Hire for first optional year $15,400 (net) plus 50/50 profit sharing. Hire for second optional year $16,844 (net) plus 50/50 profit sharing.
9. $28,710 five years charter, plus two optional years (1+1). Owners' put option for up to two years charter at a net charter rate between $19,800 and $28,710. This fixture is subject to Charterer not exercising their optional years, in order to secure seven-year charter duration for the vessel.
10. Base rate $12,000. Above $14,000 profit sharing 40.0% based on open book accounting on actual earnings.

About NewLead Holdings Ltd.

NewLead Holdings Ltd. is an international shipping company that owns and operates product tankers and dry bulk vessels. NewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. To learn more about NewLead Holdings Ltd., please visit the new website at www.newleadholdings.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

This press release includes assumptions, expectations, projections, intentions and beliefs about future events. These statements, as well as words such as "anticipate," "estimate," "project," "plan," and "expect," are intended to be ''forward-looking" statements. We caution that assumptions, expectations, projections, intentions and beliefs about future events may vary from actual results and the differences can be material. Forward-looking statements include, but are not limited to, such matters as future operating or financial results; statements about planned, pending or recent acquisitions and business strategy. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although NewLead believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, NewLead cannot assure you that it will achieve or accomplish these expectations, beliefs or projections described in the forward looking statements. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter rates and vessel values, failure of a seller to deliver one or more vessels, and other factors discussed in NewLead's filings with the U.S. Securities and Exchange Commission from time to time. NewLead expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in NewLead's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

SOURCE NewLead Holdings Ltd.