Avondale Industries Inc., Shipyards Div.f Secures $420-Million Sealift Contract

Navy takes option on two additional vessels; possibility still exists for three more Avondale Industries, Inc., Shipyards Divsion, was awarded a $420- million contract for the construction of two additional Strategic Sealift ships for the U.S. Navy. The contract may eventually total $450 million, after additional design components and cost escalation provisions are figured in.

These are the second and third ships which the yard has been awarded in the Sealift program. The contract Avondale was awarded a year ago for the initial Sealift ship contained options for five additional vessels. The remaining options covering the other three ships will be exercisable over the next three years. The first Sealift ship, currently under construction at the yard, is scheduled for delivery in 1997. The vessels measure 950 ft. long, with a beam of 106 ft. and a total of 397,413-sq.-ft. of usable cargo space. "The Navy's decision to exercise the option for two more Sealift ships increases Avondale's total backlog to more than $1.5 billion," said Albert Bossier, Jr., Avondale chairman and CEO. "The Sealift program is one of the few major Naval projects which has received budgetary funding. Today's announcement firmly establishes Avondale as a leading participant in this initiative, which will serve as a core activity for our shipyard over the next several years." He continued: "This positive development adds further momentum to Avondale's overall operations. Supported by the significant steps taken recently to strengthen the company's balance sheet, we are aggressively pursuing several other shipbuilding opportuniites relating to both military and commercial vessels."