May 22 - Fairstar Heavy Transportation, which opposes a takeover by Dutch rival Dockwise, has revealed a new credit line worth USD247 million.

The loan was concluded with a group of banks led by ING, creating a new phase in the takeover saga.

In announcing the deal, Fairstar stated its belief that 'Dockwise has been trying to talk down the value of our business in order to acquire it at the cheapest possible price'. It added that "hostile and dirty tactics are not in the best interests of creating value for all of our stakeholders."

The deal signed with the banks provides the necessary liquidity to satisfy the outstanding payment obligations toGuangzhou Shipbuilding International (GSI) due under the construction contracts for the 50,000 dwt semi-submersible vessels Forte and Finesse. In addition, the facility provides Fairstar with a USD20 million tranche for the performance bonds required under the Gorgon, Ichthys and Golden Eagle contracts.

Ingmar den Blanken, treasurer of Fairstar negotiated the deal with the banks and provided the following additional details: "The facility has a one year term and is priced for the first nine months at LIBOR plus 400 basis points, rising to LIBOR plus 600 basis points after nine months. In addition to providing the funds we need to pay our obligations for the Forte and Finesse; it re-finances the current loans we have with HSH Nordbank and ABN AMRO. The banks will hold first mortgages over the Fairstar fleet once funding has been made. While the terms are not nearly as attractive as the DNB Bank facility we signed last year, in light of the recent disruption to our business caused by Dockwise, we are pleased to be able to satisfy our obligations to GSI as well as our obligations to our "red box" clients."

Philip Adkins, Fairstar's ceo provided further elaboration: "We were very clear to the market last week that the payments we are obliged to make will be made and the performance bonds we are obliged to issue will be issued. At Fairstar, we keep our promises. Fairstar is a very valuable company."

The Fairstar statement clearly shows it believes that Dockwise 'exploited the financial instability of one of our large shareholders (Oceanus) and the naivety of others in order to acquire a large stake in Fairstar, before making their intentions public'. This 'has nothing to do with the value of our business. More importantly, the accretive value of our business to Dockwise has been completely overlooked in their Offer Document.

"We have invited representatives of Dockwise to meet with Fairstar and discuss in a constructive way how best to end the current hostile stalemate. Now that our financial obligations have been met, Dockwise must be prepared to address the facts that 46 percent of our shareholders have not accepted the NOK9.3 "offer" and Fairstar's shares have been consistently trading above that level since the attack on Fairstar began.

"Our clients have been very uncomfortable with the tactics that have been used by our competitor. It seems inappropriate to suggest to our partners that Fairstar needs to be saved by Dockwise. I am certain our clients knew what they were doing when they chose to award almost USD300 million in contracts to Fairstar. The Fairstar Boards are preparing a formal rebuttal to the Offer Document that is now in circulation. In the meantime our invitation for a constructive dialog goes unanswered," Adkins added.