NewLead Holdings Ltd. Announces Completion of First Phase of Turnaround

April 28, 2010

PIRAEUS, Greece, April 28 /PRNewswire-FirstCall/ — NewLead Holdings Ltd. (Nasdaq: NEWL) (“NewLead”) announced today that it has completed the first phase of its turnaround with the sale of three additional non-core vessels and the agreement to purchase one newbuild Post-Panamax vessel.

Since the recapitalization of NewLead in October 2009, management has focused on a new strategy including the disposition of inefficient vessels, exit from the container industry, acquisition of vessels with quality time charters and creation of a newbuilding program. As a result of these actions, NewLead’s fleet has expanded by over 50%. In addition, management focused on improving profitability by bringing in-house commercial and technical expertise.

As a result of the transactions announced today, NewLead will have a diversified fleet of 17 vessels, of which seven are product tankers and ten are drybulk vessels (including newbuildings) with an average age of 9.4 years and total dwt of 408,606 for product tankers and 1,141,308 for drybulk vessels (including newbuildings).

Michael S. Zolotas, President and Chief Executive Officer of NewLead Holdings Ltd., stated, “Our ability to secure the Post-Panamax contract at a competitive price is a testament to our relationship with the leading shipyards. With the two newbuild Kamsarmaxes announced earlier this year and the addition of this Post-Panamax, we are renewing our fleet in order to maintain a competitive position in the industry.”

Purchase of One Newbuild Post-Panamax Vessel

NewLead reached an agreement to purchase a 92,000 dwt Post-Panamax vessel, being constructed at a first-class shipyard in Korea. Delivery is expected in the second quarter of 2011. NewLead anticipates financing the vessel with a combination of debt and cash from the balance sheet. Once delivered, the vessel will immediately be chartered-out for approximately seven years at a floor rate of $15,000 per day plus 50/50 profit sharing from a first class European charterer.

    Newbuild Post-Panamax Details:

      Type/DWT     Anticipated   Annualized Aggregate  Charter Rate   Charter
                  Delivery Date   EBITDA(1) EBITDA(2)  (daily, net)  Duration
                                 (millions) (millions)

      Bulker        Q2 2011        $3.2(3)   $21.0(3)   $14,438       Seven
       Post                                              + 50/50       years
     Panamax/                                            Profit
      92,000                                            Sharing(4)

    (1) EBITDA calculation assumes daily operating expenses of $5,500 per
        day and 360 revenue days.
    (2) Aggregate EBITDA over the life of the contract; daily operating
        expenses of $5,500 per day (growing at 3% annually).
    (3) Assuming zero profit sharing. Using current (April 22, 2010)
        rates, the annualized EBITDA would be $6.2 million and aggregate
        EBITDA would be $42.1 million.
    (4) 50/50 profit sharing takes effect when 110% of the BPI route
        index exceeds $17,000.

Sale of Non-Core Vessels

NewLead concluded the sale of the High Rider and entered into an agreement to sell the Ostria and the Nordanvind for anticipated aggregate gross proceeds of $21.7 million. The High Rider is a 1991 Japanese-built, 41,502 dwt, MR tanker. The Ostria and the Nordanvind are 2000 and 2001, respectively, Romanian-built, 38,615 dwt, MR tankers. The sale of Ostria and Nordanvind is expected to be concluded during the second quarter of 2010. NewLead also intends to sell the High Land, its last non-core vessel, a 1992 Japanese-built, 41,450 dwt, MR tanker during the third quarter of 2010.

The four vessels had been operating at sub-par rates on the spot market for an extended period. Divesting these inefficient vessels is expected to favorably impact EBITDA by approximately $6.6 million annually. NewLead plans to use the proceeds from the sales to renew its fleet or reduce its outstanding indebtedness.

NewLead’s Fleet:

       Name          Size    Vessel      Year  Charter Rate    Charter
                    (dwt)     Type       Built (daily, net)   Expiration

    Product Tanker Vessels

    Stena                                       Bareboat        December
     Compass         72,750  Panamax      2006   charter         2010
                                                 rate of
                                                 + 30% of
                                                 above $26,000

    Stena                                       Bareboat
     Compassion      72,750  Panamax      2006   charter        June 2010
                                                 rate of
                                                 + 30% of
                                                 above $26,000
     Avra            73,495  Panamax      2004                  Spot

     Fortune         73,495  Panamax      2004                  Spot 

    Hiotissa         37,329  Handymax     2004  $19,012.50      min:
                                                 + profit        April 2011
                                                 sharing        max:
                                                                 June 2011

    Hiona            37,337  Handymax     2003  $19,012.50      min:
                                                 + profit        March 2011
                                                 sharing        max:
                                                                 May 2011

    Nordanvind(1)    38,615  Handymax     2001                  Spot

    Ostria(1)        38,615  Handymax     2000                  Spot

    High Land        41,450  Handymax     1992  $8,181.25       min:
                                                                 June 2010
                                                                 July 2010

    Drybulk Vessels

    Grand                                                    min: October
     Victoria        75,966  Panamax    2002    $16,875         2010
                                                             max: January

    Brazil(2)       151,738  Capesize   1995    $29,062.50   min: October
                                                 for 1st/2nd    2014
                                                 year,       max: February
                                                 $26,250        2015
                                                 balance years,
                                                 all plus profit
                                                 sharing above

    Australia       172,972  Capesize   1993    $20,662.50   min: November
                                                             max: January

    China           135,364  Capesize   1992    $12,753      min: November
                                                             max: October

    Grand Ocean     149,498  Capesize   1990    15,360, one  min: December
                                                 additional     2010
                                                 year        max: April 2011
                                                 charterer's  max (if option
                                                 option at     exercised):
                                                 $15,360       April 2012

     Venetico       134,982  Capesize   1990    $17,760      min: June 2011
                                                 Additional  max: October 2011
                                                 six month    max (if option
                                                 charterer's   exercised):
                                                 option at     April 2012
     Rodosi(3)       68,788  Panamax    1990      $10,174.50  min: June 2012
                                                   + 50/50    max: September
                                                   profit        2012


    Name         Size  Vessel Type   Expected    Charter Rate   Charter term
                 (dwt)               Delivery    (daily, net)

    TBN              92,000   Post-   Q2 2011   $14,438          Seven years
                             Panamax             + 50/50 Profit   time charter
                                                 Sharing when
                                                 110% of BPI
                                                 route index
                                                 exceeds $17,000

    TBN              80,000 Kamsarmax Q4 2010   $28,710 for      Seven years
                                                 first five       time charter
                                                 years; owner's
                                                 option for
                                                 two years at
                                                 $28,000 (less 1%)

    TBN              80,000 Kamsarmax Q4 2011   $27,300          Seven years
                                                                  time charter

     (1) MOAs for the sale of these vessels have been executed and the
         sales are expected to close during the second quarter of 2010.
     (2) $29,062.50 for the first and second years, $26,250 all years
         thereafter, plus profit sharing (85% of the Cape Spot 4 TCE Avg.
         Minus $26,600)
     (3) Profit calculation: 86% of Cape Spot 4 TCE Avg. minus $10,200

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 stock is listed on the NASDAQ Global Select Market where it trades under the symbol “NEWL”.

To learn more about the Company, please visit the Company’s 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.

    Investor and Media Contact:
    Laura A. Kowalcyk
    CJP Communications
    +1 (212) 279 3115 x 209

SOURCE NewLead Holdings Ltd.

Source: newswire

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