Siem Industries Stock

Siem Industries Inc. (the company) was incorporated in 1980 under the laws of the Cayman Islands. The Company is the parent company of the Siem Industries Group. The Company operates as a diversified industrial holding company with current main interests in four industrial areas; the oil and gas services industry, the ocean transport of refrigerated cargoes, the ocean transport of automobiles and Swedish industrial investments through Siem Industrikapital AB. The Group also has substantial investments in different high-yield securities, concentrated in the industries where the Group has experience. Further, the Group holds a trading portfolio of equities, certain property investments, a German potash mining business, and some smaller interests within shipping and other segments.

Subsidiaries

The Company's main subsidiaries include DSND Inc., Star Reefers Inc., Siem Thoen Car Carriers Inc., Siem Industrikapital AB, Siem Acquisition and Reorganisation Fund Inc. and Siem Capital UK Ltd.

DSND Inc

DSND Inc. is a 72.2%-owned subsidiary was consolidated in December 2002. DSND Inc. is a offshore subsea contractor for the international oil and gas industry with activities in the North Sea, Gulf of Mexico, Brazil and West Africa.

In 2002, DSND Inc and Halliburton Subsea, a business unit of Halliburton's Energy Services Group, combined their respective subsea interests in the upstream oil and gas industry in the 50/50 owned company, Subsea 7 with effect from 23rd May 2002.

STAR Reefers Inc

As of December 31, 2002, the Company owned approximately 73.4% of its issued and outstanding shares. STAR Reefers Inc., a Cayman Islands company, was founded in 2001 in order to acquire shares of Swan Reefer ASA, a publicly-traded Norwegian company (ASA and AS denote publicly-traded and non-publicly-traded Norwegian companies, respectively; Swan Reefer AS will be used hereinafter to reflect the status of the company following its acquisition by Swan Reefer Inc.) (collectively, these entities are referred to as STAR).

STAR is a reefer owners and operators controlling a modern fleet of 39 owned and chartered vessels with a total capacity of 20.8 million cubic feet. The operations include the refrigerated transport of perishable commodities, such as fruits and vegetables with the shipping activities concentrated during the normal seasonal rush throughout the southern and northern hemisphere harvests.

The STAR fleet is one the most modern fleet available to charterers and shippers of fruit and other perishable food in the world. All ships are classed by Det norske Veritas and managed by Fleet Shipmanagement Ltd., Hong Kong, Dobson Shipmanagement Ltd, Cyprus and IUM Shipmanagement AS, Norway.

Caribbean Shipping Inc. (CSI), a wholly owned subsidiary, commenced operations in August 2003 after purchasing two reefer vessels.

Siem Thoen Car Carriers Inc

The Group controls 88% of Siem Thoen Car Carriers Inc. (STCC) a Cayman Island company. In August 2002, STCC acquired the three year 2000 built car carriers 'Verona', 'Dresden' and 'Mosel Ace' from companies affiliated with Thyssen Krupp AG. The vessels each have a capacity for 4,300 cars plus 400 high and heavy units. All three vessels are currently on charters to Volkswagen Transport GmBH until mid to late 2005.

Siem Offshore AS in Norway undertakes the vessels’ commercial management. Barber Shipmanagement Ltd. in Kuala Lumpur, Malaysia is the technical manager.

Siem Industrikapital AB

The Group holds 64% of the capital and 50% of the votes of Siem Industrikapital AB, a Swedish investment company.

Siem Industrikapital holds a number of investments in different Swedish industrial enterprises. Directly and indirectly through Shipinvest Interessenter AB, Siem Industrikapital controls approximately 28%of the votes and 15.5% of the capital of Broström AB, one of the world's major logistics companies for the oil and chemical industry, focusing on industrial product and chemical tanker shipping and marine services.

Siem Industrikapital holds approximately 31% of the Swedish group EFG European Furniture Group AB, one of Europe's major producers of office furniture. It also has significant holdings in Boule Diagnostics International AB, Gramineer International AB, Emotron AB, Opcon AB and the SRM Group AB.

Portfolio Investments

In addition to its industrial holdings, the Group controls a substantial portfolio of US, UK and Norwegian equities. The most significant of these investments is a holding of approximately 1.4 million shares in Transocean Inc., the world's major offshore drilling operator. The Group further holds 10% of the Norwegian bank, Privatbanken ASA.

Further, through its subsidiary, The Siem Acquisition and Reorganisation Fund, the Group controls a sizable portfolio of high-yield securities and loan notes, mainly within the shipping and offshore sectors where the Group has its main experience.

Siem Acquisition and Reorganisation Fund, Inc. (SARF) — SARF, an investment company incorporated in the Cayman Islands, was established by the Company to provide the Company and third party investors with a vehicle to originate and/or participate in the acquisition, reorganization or restructuring of investment opportunities in particular businesses experiencing distress situations. The Company owned approximately 99% of SARF’s outstanding shares at the end of 2002. SARF also holds 100% of the capital of DEUSA International GmbH, a German potash producer.

Amer Reefer Co. Limited — In September 2001, the Company together with Vroon B.V., acquired a total of $67,640,000 face value of bonds issued by Amer Reefer Co. Limited (ARC), a holding company for shipowning companies controlling 7 reefer vessels. The Group also has interests in two mid-sized container vessels and owns office properties in Oslo and Grimstad in Norway.