Algoma Central Corporation Completes Refinancing to Support Fleet Renewal and
the Acquisition of Former Partner’s Interests in Seaway Marine Transport

July 19, 2011

Algoma Central Corporation (“Algoma”) today announced that is has completed a refinancing of its credit facilities, securing a source of funds to support the Corporation’s previously announced fleet renewal program and its acquisition of Upper Lakes Group Inc’s (“ULG”) interest in Seaway Marine Transport (“SMT”) including the vessels owned by ULG and used in SMT. Today’s refinancing completes a process begun in April of this year when the Corporation issued $69 million of seven-year 6% convertible unsecured subordinated debentures.

The new senior secured credit facilities include a $150 million five-year revolving credit facility, to be provided by a syndicate of six banks, and ten-year senior secured notes, comprising two tranches, one for US$75 million and one for C$75 million. A portion of the proceeds from the new facilities will be used to repay amounts outstanding under the Corporation’s existing credit facility, including amounts borrowed earlier this year to complete the acquisition of ULG’s interest in the Corporation’s domestic dry-bulk business. The balance of the new credit capacity is expected to be used to fund the construction of the Equinox Class vessels on order from Nantong Mingde Shipyard in China and for general corporate purposes. “Algoma Central Corporation took a bold step into the future in late 2010 with the announcement of our order of Equinox Class vessels,” said Greg Wight, President and Chief Executive Officer of the Corporation. “The financing completed today is designed to provide the Corporation with access to the funds necessary to complete this significant fleet renewal investment in our domestic dry-bulk fleet. This fleet renewal, together with the acquisition of ULG’s interests in SMT in April 2011 for $85 million plus closing adjustments, confirms our substantial commitment to the future of our Canadian marine transportation activities on the Great Lakes - St. Lawrence Waterway”, Mr. Wight continued.

Algoma expects to invest approximately $300 million to purchase six new state-of-the-art Equinox Class vessels consisting of four full-size self-unloading vessels and two full-size gearless bulkers. Equinox Class vessels represent the next generation of dry-bulk carriers on the Great Lakes – St. Lawrence Waterway. The Equinox Class will provide much needed improvements in operating efficiency and environmental performance. They will be able to carry significantly more cargo at faster speeds with substantially lower fuel consumption and with an estimated 40% lower emissions than conventional ships. The new ships are designed to accommodate engine-exhaust gas scrubbers to further reduce emissions and ballast-water treatment solutions once suitable technologies are available and regulatory requirements are established. The first new Equinox Class vessel is expected to be available for service in 2013, with additional ships following later that year and in 2014.

The announced Equinox Class vessel order complements the addition of two new maximum Seaway-size coastal class self-unloaders, M.V. Algobay (arrived in Canada in April, 2010) and M.V. Algoma Mariner (scheduled to arrive in Canada in August, 2011). When all Equinox Class vessels are delivered, Algoma will have added eight new dry-bulk vessels to its Canadian flag fleet operations since 2010. These investments in Algoma’s dry-bulk fleet follow the nearly $190 million spent by Algoma since 2002 to renew its fleet of Canadian flag double-hull product tankers, including the addition of the new product tankers, M.T. Algonova (2008) and M.T. AlgoCanada (2009). Also, as previously announced, the Canadian Wheat Board will purchase two additional Equinox Class gearless bulk vessels that will be operated and managed by Algoma. The vessels will be pooled with Algoma’s other gearless bulk cargo vessels.

About Algoma Central Corporation
Algoma Central Corporation owns and operates the largest Canadian flag fleet of dry and liquid bulk carriers operating on the Great Lakes - St. Lawrence Waterway, including 20 self-unloading dry-bulk carriers, 10 gearless dry bulk carriers and seven product tankers. Algoma also has interests in ocean dry-bulk and product tanker vessels operating in international markets. Algoma owns a diversified ship repair and steel fabricating facility active in the Great Lakes and St. Lawrence regions of Canada. In addition, Algoma owns and manages commercial real estate properties in Sault Ste. Marie, St. Catharines and Waterloo, Ontario.

Algoma Central Corporation press release