With  reference to the inquiry made by Riga Stock Exchange, JSC Latvian

Shipping  Company  (LSC)  hereby gives further details of the agreement

reached  in  January  2004  by  Crown  Navigation  Inc. (a wholly owned

subsidiary  of  LSC  ) and 3 Maj shipyard in Croatia on the building of

eight handy-size ice classed product tankers.

JSC  Latvian  Shipping  Company  is one of the leading companies in the

world shipping industry with its activity being purposefully focused on

the  handy-size  product tanker segment. At the beginning of 2003 LSC's

fleet  consisted  of  52  vessels, including 36 product tankers with an

average  age  of  18 years, 13 reefer vessels with an average age of 16

years,  2 six-year-old LPG carriers and 1 Ro-Ro/general cargo vessel of

20  years  of  age. In terms of the size of its fleet LSC is one of the

world's  largest  owners  of  handy-size  product tankers. This segment

generates  the  major  part  of  the  Group's  net voyage result and is

considered to be more stable than the rest of the segments.

Ageing  fleet  is the main reason to consider the current prospects for

the employment of LSC's vessels as unfavourable. To improve the present

situation,  LSC  Group's  Strategic Plan 2003-2010 provides for USD 350

million  investment  in the Fleet Renewal Programme, 30% of which to be

financed  through  equity, and 70% - through bank loans raised from the

banks  that  participated  in  the  financing  of  the  Group's earlier

projects. As at the moment of the Programme development LSC's own funds

to  be  invested in the fleet renewal were planned to make up about USD

100   million.   However,   due   to  considerable  USD  exchange  rate

fluctuations,  LSC is now unable to give the precise total value of the

deal.  Subject to the final specification the price per vessel may vary

from USD 30 to 35 million.

"To  ensure  the  implementation  of  the  approved Strategic Plan, LSC

considered  a number of proposals received from different shipyards. As

a  result,  the  proposal  presented  by  3 Maj shipyard in Croatia was

acknowledged  to  be  economically  most  sound.  Also  LSC's  previous

positive experience of cooperation with 3 Maj encouraged the Company to

give preference to the Croatian shipyard . Besides, ordering tankers at

one  and  the same shipyard will enable LSC to reduce both building and

spare parts costs in future," stated Imants Vikmanis, LSC President.

At  the  present  stage  of the Fleet Renewal Programme it would be too

early  to either draw any conclusion or make an assessment of the deal,

since  the  Contract with 3 Maj will come into effect only upon receipt

of  a  reputable bank's guarantee on the performance of the Contract by

the shipyard.

It should be stressed that LSC tanker fleet renewal will have no impact

on  the  Group's  financial results 2003, since its first effect on the

Company's cash flow will be produced in 2004.



Marita Ozolina-Tumanovska

Head of PR Departament

Phone: +371 7020120, 9287169

Fax: +371 7820239

E-mail : ozolina@lsc.riga