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                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549

                            FORM 20-F
                           (Mark One)
[ ]      REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g)
         OF THE SECURITIES EXCHANGE ACT OF 1934

                             OR

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934
         For the fiscal year ended September 30, 1999

                             OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934
         For the transition period from        to

                Commission file number 333-09294


                    CENARGO INTERNATIONAL PLC

     (Exact name of Registrant as specified in its charter)

                         UNITED KINGDOM

         (Jurisdiction of incorporation or organization)

                        Puttenham Priory
                            Puttenham
                         Surrey, England

            (Address of principal executive offices)

Securities registered or to be registered pursuant to Section
12(b) of the Act:  None

Securities registered or to be registered pursuant to Section
12(g) of the Act:  None

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act:  None

Indicate the number of outstanding shares of each of the issuer's
classes of capital or common stock as of the close of the period
covered by the annual report.




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Common Shares, par value 1 Pound Sterling           50,000 shares

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

         Yes           No   X

Indicate by check mark which financial statement item the
Registrant has elected to follow.

         Item 17             Item 18    X






































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                      TABLE OF CONTENTS (1)

                                                             Page

Part I   Item 1    Description of Business.................. 1

         Item 2    Description of Property..................22

         Item 3    Legal Proceedings........................23

         Item 4    Control of Registrant....................24

         Item 5    Nature of Trading Market.................24

         Item 7    Taxation.................................25

         Item 8    Selected Financial Data..................27

         Item 9    Management's Discussion and Analysis of
                   Financial Condition......................29

         Item 10   Directors and Officers of Registrant.....41

         Item 11   Compensation of Directors and Officers...42

         Item 13   Interest of Management in Certain
                   Transactions.............................42

Part IV  Item 19   Financial Statements and Exhibits........43

(1) Items omitted are inapplicable






















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                             PART I


ITEM 1 - DESCRIPTION OF BUSINESS

General

    Cenargo, an English company (the "Company"), is a diversified
international transportation group specializing in European
freight and passenger ferry services, deepsea dry cargo shipping
as well as the movement of surface and air freight and the
management of freight logistics.  Founded as a shipbroking
company in 1979 by the Company's Chairman, Michael Hendry,
Cenargo has been predominantly an owner and operator of deepsea
dry bulk vessels, becoming the largest privately held British
shipowner by deadweight tonnage ("dwt") and gross tonnage ("gt")
as of the end of fiscal 1997.  Cenargo acquired its first
vessels, three roll-on/roll-off ("RoRo") freight ferries, in
1982.  Since that time Cenargo's core business has been the
ownership of deepsea dry cargo vessels, which are employed mainly
on period time charters to established, internationally
recognized operators.  During fiscal 1998 and 1999, the Company
has been progressively withdrawing from this market and currently
is focused on ferry transportation, primarily in the Irish Sea.
During fiscal 1998 and 1999, the Company has furthered its
strategy of developing its Irish Sea ferry services by
acquisition and the commencement of a new roll-on/roll-off
passenger ("RoPax") service in February 1999. In October 1999 the
Company acquired Norse Irish Ferries Limited ("NIF"). NIF
operates a RoPax service on the Irish Sea. In addition to its
Irish Sea ferry service, the Company maintains Mediterranean
passenger ferry, and logistics operations.  The Company's
principal executive offices are located at Puttenham Priory,
Puttenham, Surrey, England.

Business

    Cenargo's Fleet and Deepsea Shipping Operations.
Historically, the Company has owned and operated a diverse
deepsea vessel fleet in order to mitigate volatility and generate
more regular and secure cash flows. In addition, Cenargo has
sought to capitalize on fluctuations in vessel values resulting
from such volatility by purchasing and selling vessels in the
ordinary course of its deepsea shipping operations.

    As of the date of this report, the Company's fleet consists
of 10 vessels, including, six RoRo freight ferries, two RoRo car
and passenger ferries and two state-of-the-art roll-on/roll-off
freight and passenger ("RoPax") ferries ("the RoPax Vessels")
which were delivered September, 1998 and January, 1999.  In
addition, the Company has contracted for the construction of two


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additional RoPax ferries (the "Newbuild Vessels"), which are
scheduled to be delivered in fiscal 2000.  In late 1997 and 1998,
the Company sold four of its Panamax bulk carriers for an
aggregate of $56.3 million because the Company believed that
charter rates and vessel values for Panamax bulk carriers would
fall.  In March 1998, the Company sold a multi-purpose vessel for
$5.0 million.  In September 1998, the Company contracted to sell
its two Capesize dry bulk carriers for an aggregate of $58
million and to sell another of its multi-purpose containerships
for $3.75 million.  On October 2, 1998 the bareboat charterer of
one of the RoRo freight ferries, exercised its option to purchase
that vessel at a price of 2.875 million Pounds Sterling ($4.8
million). On 12 August 1999 the Company sold its two remaining
dry cargo deepsea vessels for $1.1 million each.

    Following the recent delivery of the two new RoPax Vessels,
six of the Company's vessels are in two classes of sister
(substantially identical) ships, affording the Company
significant operating efficiencies and scheduling flexibility.

    Freight and Passenger Ferry Services.  The Company's freight
ferry services, in which it has been engaged since 1986, are
concentrated in the Irish Sea market between Great Britain and
Ireland.  Through its wholly owned subsidiary, Merchant Ferries
(Holdings) Limited ("Merchant Ferries"), the Company operates two
daily sailings in each direction between Heysham, England, and
Dublin, Republic of Ireland.  During fiscal 1999, Merchant
Ferries transported 72,000 trailer units, comprised mostly of
trailers unaccompanied by their cabs and drivers ("drop
trailers"). In February 1998, Cenargo acquired Scruttons plc
("Scruttons"), a London-based company whose core business,
Belfast Freight Ferries ("BFF"), operates four daily sailings in
each direction between Heysham, England, and Belfast, Northern
Ireland.  During fiscal 1999, BFF transported 105,000 trailer
units, comprised mostly of drop trailers, and 72,000 trade cars
(generally automobiles being transported to dealers).

    In February 1999, the Company commenced a new service between
Liverpool, England, and Dublin, Republic of Ireland.  Unlike the
existing Heysham-based service, which utilizes RoRo freight
ferries with certificates for a maximum of 12 passengers, the new
RoPax Vessels have certificates for a maximum of 250 passengers,
permitting the Company to significantly increase its carriage of
higher margin "driver accompanied" trailers. By the end of fiscal
1999 the new service was operating at an annualized rate of
96,000 trailer units.

    On September 30, 1999 the Company reorganized its Irish Sea
business by transferring the business and net assets of Merchant
Ferries and BFF into Scruttons Plc which was renamed Merchant
Ferries Plc.


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    The Company operates at the Belfast port under a permitted
user contract with the local port authority. This contract
permits the Company the preferential but not exclusive use of a
particular berth and to occupy a compound area and various
operations and administration buildings.  At Dublin, the Company
has a 60-year lease for the area used by Merchant Ferries for
conducting its onshore operations and an operating lease which
allows Merchant Ferries priority access to water space and a ramp
for the purpose of handling its vessels. At Heysham and
Liverpool, the Company has time slot agreements and contracts for
port services with the local port authorities. NIF operates its
own stevedoring services in Liverpool.

    In October 1999 the Company acquired NIF which operates a
service between Liverpool, England and Belfast, Northern Ireland
using two chartered RoPax vessels, both built in 1997. NIF was
established in 1991 and has built up a regular and reliable
service, currently carrying approximately 125,000 equivalent
trailer units per annum and approximately 75,000 passengers.

    Following this acquisition the Company has achieved its goal
of creating a unique matrix of services across the Irish Sea,
comprising RoRo freight services from Heysham to Belfast and
Dublin and RoPax services from Liverpool to Belfast and Dublin.
The Company has thus become a major operator on the Irish Sea
with the capacity to carry approximately 450,000 equivalent
trailer units per annum, over 32% of the market.

    Spanish/Moroccan Operations.  Since 1994, the Company has
operated a passenger and car ferry service between Almeria, in
southern Spain, and Nador, Morocco under the trade name
Ferrimaroc.  Cenargo employs the ferries Mistral and Scirocco on
this service.  In 1999, Ferrimaroc carried 306,000 passengers,
66,000 cars and approximately 4,000 units of freight.  In
accordance with Moroccan government regulations, Ferrimaroc
operates year round, although approximately 60% of revenues are
generated in July and August.  Ferrimaroc's customer base is
largely made up of the Moroccan workers who work in Europe during
the year and return home in the summer months.  To minimize the
effect of undercapacity and the impact of competition in the non-
peak months, the Company entered into a pooling arrangement with
its sole competitor on the Almeria-Nador route for the 1997/98
off-peak months.  Under this agreement, during the off-peak
months the Company shared all revenues and expenses with this
competitor.  Each operator takes its own bookings, although all
passengers and freight are carried on the Mistral.  No pooling
arrangements have been made for the 1998/99 or 1999/2000 off-peak
months.

    The Company expects competition to increase significantly
during 2000 as new operators come in to the trade. This can


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undermine profitability. Ferrimaroc is however well established
as the principal operator on the route carrying approximately 50%
of the passenger and car market.

    Logistics.  Since the early 1990's, the Company has expanded
the scope of its activity to cover general sea and air freight
forwarding.  In September 1997, the Company purchased 75% (with
an option on the remaining 25%) of Flair Forwarding (UK) Limited
("Flair"), a just-in-time air freight forwarding specialist, and
in June 1998, the Company, through a subsidiary, acquired the net
assets and trade of Stockglobal Limited ("Duncan"), a sea freight
forwarding business. In March 1999, the Company purchased
Freightwatch Ltd, a company specializing in outsourcing freight
management.

    The Company's logistics operations involve arranging the
worldwide transportation of a wide variety of commercial and
consumer products, specialized goods and documents.  Flair
specializes in providing just-in-time air freight services for
customers who require on time delivery of specific goods, often
to difficult locations and on short notice.  Duncan specializes
in sea freight forwarding to Africa.  The freight forwarding
services provided by Duncan include the procurement and sourcing
of consumer products for its African-based customers.

    As a logistics provider, the Company is developing a business
which arranges and manages the movement of goods from suppliers
to end customers with the goal of meeting specific customer
requirements and providing value-added services such as bonded
warehousing and unpacking and re-packaging merchandise for
delivery to retail outlets.  The Company intends also to provide
computerized monitoring of material movements of customers'
cargoes, status reporting at agreed intervals, cargo surveying,
superintendency and customs clearance.  The Company arranges for
the distribution of its customers' goods by subcontracting to
airlines, road haulers, shipping companies and rail lines.

    The Company's principal warehousing space is Eaglescliffe, a
former military supply center located in northeast England. The
Company previously occupied the site under a lease, completing
its purchase of the site in October 1999.  Eaglescliffe is
located near major English rail and road arteries which, the
Company believes, renders it extremely well placed to serve as a
logistics center in the general freight forwarding business.  The
Company has been granted a Customs Bond by the U.K. customs
service, allowing wines and spirits to be held on the site
without import duty and value added tax having to be paid.  The
Company has also been granted "ICD status" by the U.K. customs
service which allows the Company's customers to bring imported
containers from sea ports to the Eaglescliffe site without first
clearing customs.  Eaglescliffe is the only site with ICD status


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within a 20 mile radius.  As a result of its Customs Bond and ICD
status, all importing formalities can be completed at
Eaglescliffe, thus avoiding delays in the sea port areas.

    In October 1998 the Company leased additional office and
warehousing facilities near Heathrow to expand the logistics
business in the South of England.

Shipbroking and Ship Operating Activities

    Cenargo has historically conducted its shipbroking activities
through its wholly owned subsidiary, Cenargo Broking Services
Limited, which has acted as a commercial manager for the
company's deepsea fleet and provided shipbroking services for
third party customers. As the Company has sold its deepsea fleet
it has been significantly reducing its shipbroking and ship
operating activities. By the end of fiscal 1999 the Company's
shipbroking and ship operating activities were effectively
closed.

Business Strategy

    Following the acquisition of NIF, the Company now has four
complementary services operating across the Irish Sea. In the
short term the Company is seeking to maximize its competitive
position in the light of this unique matrix of services. It is
also looking to extract a number of synergies which have arisen
as a result of this latest acquisition.

    A new berth is being constructed in the Port of Dublin for
the Company and is scheduled to be completed by March 31, 2000.
This will enable the Company to operate both its Dublin services
at prime slot times, enabling rate improvement and also the
ability of the Company to increase its volumes on the Heysham-
Dublin route probably leading to the introduction of a third
vessel on this route.

    A new river berth is also being built in the Port of
Liverpool for the Company's use. Completion is expected early
2001. The Company will thereafter not have to dock inside the
lock system in Liverpool, thus saving time on each voyage. This
will enable the Company's sailings to depart later from Liverpool
while still arriving at the Belfast and Dublin destination is
accordance with the present schedules. This will give a further
competitive edge to the Company.

    The Company is also investigating new ferry markets
particularly following the abolition of cabotage in Europe. The
Company intends to capitalize on its established reputation,
management, booking, reservations and ticketing systems and



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agency networks to expand into new passenger and freight ferry
services.

    Following its acquisition of the ex-Royal Naval Supply at
Eaglescliffe, the Company is now in a position to offer long term
contacts to customers seeking warehousing and distribution. The
site also gives the Company a strong low cost base from which to
develop further its logistics businesses.

The Irish Sea Ferry Market

    Historically, the primary mode of freight movement across the
Irish Sea was by lift-on/lift-off ("LoLo") containership.
However, RoRo and RoPax ferries have gradually replaced the LoLo
services.  Currently, there are three basic types of RoRo vessels
that carry significant amounts of freight in the Irish Sea
market: (i) RoRo ferries, which carry trailers and a maximum of
twelve drivers and, consequently, primarily unaccompanied "drop"
trailers; (ii) RoPax ferries, which are designed to carry
accompanied and unaccompanied trailers and a limited number
(generally up to 300) of additional passengers; and
(iii) passenger ferries which are also capable of carrying some
freight trailers.

    According to industry sources, RoRo traffic across the Irish
Sea has more than doubled over the ten-year period from 1987 to
1997, growing at a compound annual growth rate of approximately
7.7%. During this period, RoRo traffic volume between Great
Britain and the Republic of Ireland has grown an aggregate of
151%, while RoRo traffic volume between Great Britain and
Northern Ireland has grown by an aggregate of 92%.  Industry
sources believe that RoRo traffic has grown rapidly as a
consequence of economic growth in Ireland and the decline of the
LoLo containership in this market.

    The growth in demand for RoPax and RoRo vessels in the Irish
Sea is determined in large part by cycles in the economies of the
U.K. and the Republic of Ireland and Northern Ireland, changes in
industrial production and the resulting demand for freight
trailer cargoes and the number of people traveling.  The
relationship between supply and demand, in turn, largely
determines the profitability of ferry service operators.  The
supply of vessels is primarily a function of the number of
Newbuild vessels, as scrappings of vessels to date in this market
have been infrequent although, unlike the bulk market, it is
difficult to place surplus vessels on just any route.

    The Irish Sea freight market generally is comprised of two
types of trailer traffic, the driver accompanied market and the
unaccompanied market.  Driver accompanied traffic, in which the
road tractor unit and the driver accompany the trailer on the


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ferry, is heavily concentrated in the shorter ferry crossings as
well as the overnight crossings that allow the driver to meet
minimum sleep requirements (on board the vessel) in order to
resume driving at the destination port.  The accompanied market
is predominantly used for time-sensitive freight, including fast
moving consumer goods and just-in-time deliveries.  This traffic
commands a higher freight rate per unit shipped than the
unaccompanied market and, combined with lower stevedoring costs
due to the ease of loading and unloading the accompanied trailer,
generates significantly higher margins.  Unaccompanied freight,
whereby only the trailer travels on the ferry, tends to use
longer sea crossings that maximize sea mileage and minimize land
miles.  Unaccompanied trailers typically carry less time
sensitive cargo, such as industrial products.

    In addition to the ability to accommodate both accompanied
and unaccompanied traffic, key factors affecting competition in
the Irish Sea freight ferry market include (i) the reliability of
the vessels, with newer vessels being less likely to break down
and delay passage; (ii) the speed of the vessels, with faster
ships generally being more desirable to customers and providing
the ability to offer multiple daily voyages, (iii) the size of
the vessels, with larger vessels generally being significantly
less expensive to operate on a per-trailer-unit basis and (iv)
the availability of peak slot times for berthing access to the
ports.

    According to industry sources, freight rates in the Irish Sea
market for both accompanied and unaccompanied trailers have been
declining over the past five years as a result of gradually
increasing competition between operators.  Consequently, in order
to maximize revenues and profitability, operators must seek to
maximize the number of trailers carried.  Operators' principal
strategies towards this end have been to increase the cargo
capacities of the fleet and to increase the speed of the fleet in
order to increase the number of daily sailings.

The Company's Ferry Fleet and Operations

    The Company's Ferry Fleet.  The Company's ferry fleet
consists of six RoRo ferries, two passenger/car ferries and two
RoPax ferries.  The Company has also contracted for the
construction of two Newbuild Vessels, RoPax ferries, to be
delivered in 2000.  The following table sets forth certain
information with regard to the Company's current ferry fleet:








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                                                             Year
Vessel Name         Vessel Type    Capacity           Built  Flag

MERCHANT BRAVERY    RoRo           40 cars
                                   100 trailer
                                   units              1978   Bahamas

MERCHANT BRILLIANT  RoRo           40 cars
                                   100 trailer
                                   units              1978   Bahamas

MERCHANT VENTURE    RoRo           55 trailer
                                   units              1979   British
                                                             (Isle of Man)

RIVER LUNE          RoRo           49 cars            1983   Bahamas
                                   93 trailer units

SAGA MOON           RoRo           50 cars            1984   British
                                   72 trailer units          (Gibraltar)

SPHEROID            RoRo           53 trailer units   1971    British
                                                      (Isle of Man)

MISTRAL             Passenger/Car  2,386 passengers   1981   Bahamas
                    Ferry          600 cars

SCIROCCO            Passenger/Car  1,315 passengers   1974   Bahamas
                    Ferry          296 cars
                                   30 trailer units

DAWN MERCHANT       RoPax          250 passengers     1998   British
                                   136 trailer               (Isale of Man)
                                   units

BRAVE MERCHANT      RoPax          250 passengers     1999   British
                    136 trailer units                        (Isle of Man)
LAGAN VIKING*       RoPax          330 passengers     1997   Italian
                    180 trailer units

MERSEY VIKING*      RoPax          330 passengers     1997   Italian
                                   180 trailer units

    *    Operated under time charters expiring in September 2001
         and January 2002.

The Company owns all of its ferries at the date of this report,
except the Lagan Viking and the Mersey Viking. The River Lune and
Saga Moon, which were operated under capital leases, were
purchased in October 1999.



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    The RoPax Vessels and the Newbuild Vessels will be sister
ships, affording the Company operating efficiencies and
scheduling flexibility. The first RoPax Vessel was employed on a
3-month time charter and was redelivered to the Company in late
December 1998.  The second RoPax Vessel was delivered on January
26, 1999 and both RoPax Vessels are employed in the Irish Sea
trade as discussed above.

    The Company has also time chartered an additional RoRo ferry,
the Varbola, for a period of six months with an option to extend
for a further six months, commencing January 5, 2000.

Deepsea Shipping Fleet and Charter Operations

    As discussed above, the Company continued to exit from its
deepsea fleet ownership during fiscal 1999 by selling its two
remaining multi-purpose container ships the Merchant Premier and
Merchant Principal in August 1999.

    The first of the Company's two additional RoPax ferry
Newbuildings is due to be delivered in late February 2000. The
Company has agreed an eighteen month time charter of this ferry
to Norfolk Line (part of Maersk).

Competition

    Irish Sea Competition.  There are five ferry operators,
including the Company, competing in the Irish Sea freight ferry
market.  In 1999, Cenargo estimates that Merchant Ferries, BFF
and NIF had a combined market share of approximately 28% of the
Irish Sea freight trade.  The Company's principal competitors
include Stena Line UK Ltd., P&O European Ferries (Ireland) Ltd
and Irish Ferries of Irish Continental Group, whose market shares
are estimated by Cenargo to be 21%, 36%, and 11%, respectively.
In 1996, most of the Irish Sea operators added ship capacity
which led to an oversupply of space.  Most operators then
repositioned, reducing overall freight capacity.  Competition,
however, remains strong and is expected to intensify, as
operators on the Irish Sea have made significant investments in
that market and particularly in vessel newbuildings. The Company
estimates that overall, traffic on the Irish Sea grew by 7.0% in
1999.

    Deepsea Fleet and Charter Competition.  The charter and the
vessel resale markets in which the Company's vessels compete are
highly competitive with many owners and operators, including
proprietary owners, state controlled shipping companies and
independent operators.  Competition in the charter market is
based principally on supply and demand.  Availability dates and
vessel characteristics play an important part in determining the
level of rates obtainable.  The reputation of the vessel and its


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operator can also be significant, especially when chartering for
long periods to leading charterers.  Competition in the resale
market for secondhand vessels is again dependent on supply and
demand.  Age, condition of the vessel and the reputation of the
sellers also influence the price.

    Spanish/Moroccan Competition.  Currently, there are three
other competitors, in addition to the Company, providing service
between Almeria, Spain and eastern Morocco.  A Moroccan
government-owned ferry service, Limadet Ferry S.A., operates a
car/passenger ferry service on the Almeria-Nador route, and a
Spanish government-owned ferry service, Trasmediterranea,
operates a car/passenger ferry service on the nearby Almeria-
Melilla route. Transmediterranea and COMARIT (a Moroccan owned
ferry company) have been granted permission to operate a vessel
each on the Almeria - Nador route. This service commenced
operations recently. In addition, a number of operators run
passenger and car ferry services on other routes in the region.
The Company believes that its passenger levels are particularly
susceptible to changes in available ferry capacities and
schedules.  Ferrimaroc emphasizes reliability and quality of
service to distinguish itself from its competition.

    Logistics Competition.  The freight forwarding and logistics
industries are highly competitive.  The Company competes
generally with other integrated logistics companies,
transportation service companies, consultants and information
technology vendors.  The Company also competes against carriers'
internal sales departments and shippers' transportation
divisions.  Competition is based on freight rates, quality of
service (such as damage-free delivery, on-time delivery and
consistent transit time), reliability and scope of operations.

Cyclicality of the Shipping Industry; Chartering Risks

    The shipping industry is highly cyclical, experiencing
volatility in profitability, charter rates and vessel values
resulting from changes in the supply of, and demand for, shipping
capacity.  The demand for ships is influenced by, among other
factors, global and regional economic conditions, developments in
international trade, changes in seaborne and other transportation
patterns, weather patterns, crop yields, armed conflicts, port
congestion, canal closures, political developments, conflicts,
embargoes and strikes.  The demand for ships is also influenced
by, among other things, the demand for consumer goods, perishable
foodstuffs and dry bulk commodities.  Demand for such products is
affected by, among other things, general economic conditions,
commodity prices, environmental concerns, weather and competition
from alternatives to coal and oil.  The supply of shipping
capacity is a function of the delivery of new vessels and the
number of older vessels scrapped, converted to other uses,


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reactivated or lost.  Such supply may be affected by regulation
of maritime transportation practices by governmental and
international authorities.  All of these factors which affect the
supply of and demand for vessel capacity are beyond the control
of the Company.  In addition, the nature, timing and degree of
changes in the shipping markets in which the Company operates, as
well as future charter rates and values of its vessels, are not
readily determinable.

Ship Management

    The Company has adopted a policy of maintaining the Company's
vessels at a high standard.  Technical management of all of the
day-to-day operational aspects of vessels, is outsourced to V.
Ships, and its subsidiary Celtic Marine under instruction and
supervision from the Company.

    The technical managers oversee the superintendence,
maintenance, repair and drydocking of the Company's vessels.  The
technical managers also employ the captains, officers, engineers
and other crew for the Company's vessels.  The technical managers
ensure that all seamen have the qualifications and licenses
required to comply with international regulations and shipping
conventions and that experienced and competent personnel are
employed for the Company's vessels.  The personnel on board
Cenargo's vessels are not considered the Company's employees.

    The day-to-day management by V. Ships and Celtic Marine also
includes arranging for protection and indemnity insurance,
insurance against fire, war risks and marine risks and handling
salvage and other claims for such vessels.  The managers divide
the vessels managed amongst small fleet teams. Two
superintendents, a technical coordinator, a purchasing manager, a
fleet accountant and a secretary comprise a typical fleet team.
A pool of staff comprising specialists in planned maintenance,
systems administration, bulk purchasing and newbuilding
supervision assist the fleet teams.  The Company benefits from
the managers buying power, especially for lubricating oil and
spare parts.  A safety and quality team is responsible for
implementing, monitoring and up-dating the managers quality
management system.  V. Ships' and Celtic Marine's management
offices are accredited for the International Safety Management
("ISM") Code and ISO 9002.

    Notwithstanding the delegation of day-to-day technical
management, the Company maintains a hands-on approach, making
frequent visits to the ships and conducting regular interviews
with masters both on-board and ashore.  The Company has a policy
of planned, continuous maintenance.  When necessary, riding
squads of up to five members are placed on board the deepsea
vessels to carry out specific tasks, supplementing routine


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maintenance carried out by permanent crewmembers.  The Company
believes its ship management policies have the result that its
vessels (i) spend less time in drydock and (ii) have developed a
reputation for high standards of maintenance and performance.

    V. Ships, a leading global ship management group, has been
the technical manager of the Company's deepsea vessels since 1988
and of Merchant Ferries' vessels since 1993.  Celtic Marine has
been the technical manager of BFF's vessels since 1986. Celtic
Marine was acquired by V Ships in 1999.

Customers

    Irish Sea Customers.  In the Irish Sea freight ferry trade,
both BFF, Merchant Ferries and NIF rely on road haulers for more
than 90% of cargo carried.  Both Merchant Ferries and BFF have
developed a specialization in the carriage of unaccompanied
trailers transporting general cargoes.  BFF also specializes in
carrying cars for distribution to both Belfast and Dublin. NIF
and Merchant Ferries RoPax services from Liverpool to Dublin and
Belfast specialize in accompanied trailers transporting more time
sensitive cargos, as well as a significant element of tourist
passengers and cars making use of the RoPax vessels passenger
capacity.

    Deepsea Vessel Customers.  The Company has chartered its
deepsea vessels to a variety of charterers.  In the case of dry
bulk carriers, the Company's customer base has included mining
houses, power stations, steel and aluminum producers, grain
houses and ship operators.  Over the last three years, the
charterers of the Company's dry bulk carriers have included such
representative customers as China National Cereals, Oils and
Foodstuffs, Kawasaki Kisen Kaisha, Leif Heogh, Mitsui OSK, Navix
Line, NYK, Shinwa Kaiun Kaisha, Mediterranean Shipping Company
Showa Line and BHP International Marine Transport.

    Spanish/Moroccan Customers.  The majority of Ferrimaroc's
customers are Moroccan workers who are employed in Europe during
the year and who return home during the summer.

    Logistics Customers.  The Company's customer base for its
logistics business come from a number of economic sectors
including the retail, chemicals, energy, steel, electronics and
manufacturing industries.  Customers include Safeway, Rothmans
Cleveland Potash Ltd., Sanyo Electric Manufacturing (UK) Ltd.,
Samsung Electronics Manufacturing (UK) Ltd and Ehrmanns Plc.







                               15



<PAGE>

Employees

    As of January 31, 2000, the Company employed 526 people, 474
of whom held full-time jobs and 52 of whom held part-time jobs.
The Company's technical managers employ approximately 300
employees on the Company's vessels at any one time.

Inspection by a Classification Society

    Every vessel's hull and machinery must be "classed" by a
classification society authorized by its country of registry.
The classification society certifies that the vessel is "in
class," signifying that the vessel has been built and maintained
in accordance with the rules of such classification society and
complies with applicable rules and regulations of the country of
registry of the vessel and the international conventions of which
that country is a member.  The classification society verifies
that the vessel is safe and seaworthy in accordance with IMO
regulations, Safety of Life at Sea ("SOLAS") and flag state
regulations.  Each vessel is inspected by a surveyor of the
classification society every year (an "Annual Survey"), every two
to three years (an "Intermediate Survey") and every four to five
years (a "Special Survey").  Most vessels, including the
Company's vessels, are also required, as part of the Intermediate
Survey process, to be dry-docked every 24 to 30 months for
inspection of the underwater parts of a vessel and for repairs
related to such inspection.  Should any defects be found, the
classification surveyor will issue a "recommendation" which has
to be rectified by the shipowner within the time limit
prescribed.  At the Special Survey, the vessel is thoroughly
examined, including audio-gauging to determine the thickness of
the steel structures.  Should the thickness be found to be less
than class requirements, steel renewals would be prescribed.  A
one-year grace period may be granted by the classification
society to the shipowner for completion of the Special Survey.
Substantial amounts of money may have to be spent for steel
renewals to pass a Special Survey if the vessel experiences
excessive wear and tear.  In lieu of the Special Survey every
four years (five years if a year of grace is given), a shipowner
has the option of arranging with the classification society for
the vessel's hull or machinery to be on a continuous survey
cycle, whereby every part of the vessel would be surveyed within
a five-year cycle.  Insurance underwriters make it a condition of
insurance coverage for the vessel to be certified as "in class"
by a classification society which is a member of the
International Association of Classification Societies.
Generally, the cost of maintaining a vessel's compliance with
safety and regulatory requirements increases with its age.





                               16



<PAGE>

Permits and Authorizations

    The Company is required by various governmental and quasi-
governmental agencies to obtain certain permits, licenses and
certificates with respect to its vessels.  The kinds of permits,
licenses and certificates required depend upon such factors as
the country of registry, the commodity transported, the waters in
which the vessel operates, the nationality of the vessel's crew
and the age of the vessel.  The Company believes that it has or
can readily obtain all permits, licenses and certificates
currently required to permit its vessels to operate.  Additional
laws and regulations, environmental or otherwise, may be adopted
which could limit the ability of the Company to do business or
increase the cost of its doing business and which may have a
material adverse effect on the operations of the Company.

Environmental, Safety and Other Regulations

    The Company is subject to regulation and supervision in the
various jurisdictions in which it trades, operates and conducts
business.  Changes to such regulations may adversely affect the
business of the Company.  The operations of the Company are also
affected by changing environmental protection laws, safety
regulations and other regulations, compliance with which may
entail significant expenses, including expenses for ship
modifications and changes in operating procedures.

    The IMO is an agency organized in 1958 by the United Nations.
Over 100 governments are members of the IMO, whose purpose is to
develop international regulations and practices affecting
shipping and international trade and to encourage the adoption of
standards of safety and navigation.  All IMO agreements must be
ratified by the individual government constituents.

    The Company's operations are affected by the requirements set
forth in the International Safety Management (ISM) Code adopted
by the IMO.  The ISM Code requires shipowners and bareboat
charterers of passenger vessels and bulk carriers to develop, no
later than July 1, 1998, an extensive "Safety Management System"
that includes, among other things, the adoption of a safety and
environmental protection policy setting forth instructions and
procedures for operating their vessels safely and describing
procedures for dealing with emergencies.  Owners, operators and
bareboat charterers of freight ferries and multi-purpose
container vessels must meet these requirements by July 1, 2002.
Noncompliance with the ISM Code may subject the shipowner or
bareboat charterer to increased liability, may lead to decreases
in available insurance coverage for affected vessels and may
result in the denial of access to, or detention in, certain
ports.  V. Ships and Celtic Marine are each certified as an
approved ship manager under the ISM Code.  As of April 1998, each


                               17



<PAGE>

of the Company's vessels which had to be ISM Code compliant by
July 1, 1998, was ISM Code certified by the due date.  Prior to
the July 1, 2002 deadline, Celtic Marine will obtain ISM Code
certification for all the Company's freight vessels. The Company
believes that certification will be achieved well in advance of
the 2002 deadline, however, there can be no assurance that Celtic
Marine will be able to do so.  Failure to obtain such
certification would have a material adverse effect on the
Company's business, results of operations and financial
condition.

    In 1995, the IMO issued new regulations under the
International Convention for the Safety of Life at Sea (SOLAS)
1990 requiring passenger ships to have sufficient buoyancy and
intact stability after collision or other damage causing ingress
of water, also called 'Damage Stability' and expressed in using a
Subdivision Index (A/Amax). The Scirocco and the new RoPax
ferries are fully complying with this regulation with
A/Amax=1.00. Work was carried out on the Mistral in May/June 1999
to increase the damage stability to achieve A/Amax>0.975, which
permits her to trade up to the first annual survey after October
1, 2005.

A further enhancement of the survivability characteristics with
specific stability requirements was agreed and issued by IMO in
1996 for RoRo passenger ships undertaking regular scheduled
international voyages between or from designated ports in North
West Europe and the Baltic. This agreement is known as the
Stockholm Agreement and essentially states that the ship shall be
able to withstand up to 0.5m of water on the main vehicle deck.
The new RoPax vessels fully comply with this regulation.

    E.U. Regulation.  E.U regulation of the environment has
largely been directly brought into U.K. law by U.K. legislation,
and all relevant E.U. environmental regulation applies directly
through U.K. laws.

    The European Commission has issued a proposal for a Water
Framework Directive, which would include coastal waters within
its ambit, and if any such Directive were to be implemented, it
would substantially alter U.K. law in relation to the control of
water pollution.  In addition, the European Commission has
recently adopted a White Paper on liability for remedying
environmental damage, which upholds the "polluter pays" principle
in establishing liability for causing environmental damage.  It
is impossible to predict what new environmental regulations may
be passed in the future by the E.U.

    U.K. Regulation.  The Water Resources Act 1991 ("WRA")
applies to the pollution of "controlled waters." The definition
of "controlled waters" in WRA includes coastal and relevant


                               18



<PAGE>

territorial waters.  Relevant territorial waters are waters which
extend seaward for three miles from the baselines from which
English territorial waters are measured.  Coastal waters are
defined as waters which extend landward from these baselines as
far as the limit of the highest tide.  The definition of
"controlled waters" in WRA also covers groundwaters.  The WRA
regime is therefore also applicable to contamination from land to
underground aquifers.

    There is a general offense under Section 85(1)(a) WRA of
"causing or knowingly permitting" any poisonous, noxious or
polluting matter or any solid waste to enter controlled waters.
"Polluting" requires simply that there is a likelihood or
capability of causing harm to animals, plants or those who use
the water.  Actual harm is not necessary.  The offense of
"causing" the discharge or entry is an offense of strict
liability.  The "knowingly permitting" offense attaches liability
where a party knows of the presence of contaminants and is in a
position to prevent or clean up the resulting pollution but does
not do so.

    Section 88 WRA provides a number of defenses to
Section 85(1)(a), including obtaining a consent from the U.K.
Environment Agency.  Section 89 provides a further defense if the
entry or discharge was made in an emergency in order to avoid
danger to life or health.  The penalty for a Section 85 offense
can be an unlimited fine and/or a two year jail sentence on
conviction on indictment.

    Section 161 WRA gives the Environment Agency wide powers to
prevent water pollution incidents, to clean up after them, to
carry out remedial or restorative works and to recover the costs
of doing so. Provisions in the Environment Act 1995 (brought into
force during 1999) provide for the Environment Agency to be able
to serve works notices on the responsible person to require them
to carry out works or operations.

    The Merchant Shipping Act 1995 ("MSA") makes it a criminal
offense to discharge from a vessel "any oil or mixture of oil"
into "U.K. national waters which are navigable by sea-going
ships." "U.K. national waters" are defined as waters on the
landward side of the line from which the territorial sea is
measured.  Either the owner or the master of the vessel can be
liable.  It is a defense if the discharge was to secure the
safety of any vessel, to prevent damage to a vessel or cargo or
to save life.  It is also a defense for the owner or master to
show that he exercised reasonable care.  Conviction on indictment
can lead to an unlimited fine.

    Section 153 MSA governs civil liability for oil pollution.
It provides for strict liability on the part of a shipowner for


                               19



<PAGE>

oil pollution damage caused by the discharge or escape of
persistent oil from a ship carrying a cargo of such oil. It
applies to damage in the territory of the U.K. or in any country
which is party to the 1969 Convention of Civil Liability for Oil
Pollution Damage.  Liability is for the damage itself, the cost
of the cleaning operation and any economic loss to affected
persons, for example fishermen and hoteliers.  The ship owner can
escape liability in cases of acts of war, some acts of God, the
act of a stranger or the acts of a government or other authority.
There is a limit as to the amount to which the owner may be
liable in the absence of intention or recklessness on his part.
For a vessel not exceeding 5,000 tons, the limit is currently
three million IMF special drawing rights.  In relation to a
vessel exceeding 5,000 tons, the limit is three million special
drawing rights, together with an additional 420 special drawing
rights for each ton of its tonnage in excess of 5,000 tons, up to
a maximum amount of 59.7 million special drawing rights.  The MSA
makes provisions for compulsory insurance against liability for
pollution.  In addition, Section 173 MSA provides for payment of
contributions to the International Fund for Compensation of Oil
Pollution Damage by all persons who import or receive oil into or
in the U.K. in excess of 150,000 metric tons per year.

    The Merchant Shipping (Control of Pollution by Noxious Liquid
Substances in Bulk) Regulations 1996 concerns other noxious
liquid substances carried by vessels in bulk, and contains
prohibitions and restrictions on the discharging of tank washings
into the sea. Vessels may not carry noxious liquid substances
without a certificate that the requirements as to construction
and equipment have been satisfied, and it is a criminal offense
to infringe these regulations.  Liability falls on the owner and
master of the vessel.  Other relevant legislation includes the
Food and Environment Protection Act 1985, Part II, which requires
a license for deposits at sea and to incinerate substances or
articles at sea; section 44 of the Clean Air Act 1993, which
prohibits emissions of dark smoke from vessels in U.K.
territorial waters or within a port or harbor; the Merchant
Shipping (Prevention of Pollution by Garbage) Regulations 1988,
which makes it a criminal offense to discharge garbage in U.K.
territorial waters, including all kinds of victual, domestic and
operational waste generated during the normal operation of a
ship, other than in accordance with the terms of the regulations;
and the Dangerous Substances in Harbour Areas Regulations 1987,
which regulate when defined dangerous substances can be brought
into harbor areas.

    In respect of contaminated land, the common laws of nuisance,
negligence and trespass can lead to a land owner being liable for
contaminated land.  There are three main requirements to
establish liability.  There must be a direct link between the
alleged cause of the contamination and the damage suffered.  The


                               20



<PAGE>

possibility of the particular damage caused must have been
foreseeable at the time when the damage was caused.  In addition,
the damage must not be too remote.  If these facts are
established, the resulting liability reflects not only the cost
of cleaning up the land but also the payment of compensation to
the parties who have suffered as a result.

    Part III of the Environmental Protection Act 1990 contains
statutory nuisance provisions.  Although these provisions are not
in practice often applied to nuisance associated with the state
of land, it is still possible that the local authority could
serve an abatement notice.  Failure to comply with the terms of
such notice is a criminal offense and the works can be carried
out in default.

    If land is to be developed or redeveloped and planning
permission is required, the local planning authority has power to
require remediation works to be carried out as a condition for
the grant of planning permission.  Planning powers are subject to
review and amendment both in relation to the requirement for
environmental impact assessments and the imposition of controls
on development.

    As previously discussed, the Water Resources Act 1991 can
apply to contamination on land.  The above remarks concerning
Section 85(1)(a) and Section 161 WRA apply equally in this
context.

    Part II A of the Environmental Protection Act 1990, which
comes into force on 1st April 2000 sets out a new regime for
dealing with liability for contaminated land.  When these
provisions are implemented, they will require contaminated land
to be remediated to a "suitable for use" standard (so that
contamination is no longer a matter of concern as long as the
land remains in its present use).  Liability will be allocated on
the "polluter pays" principle.  There will be two classes of
responsible persons: Class A persons, who "caused or knowingly
permitted" the pollution, and Class B, owners and occupiers of
the land.  Only if there is no Class A person who can be found
will a Class B person be liable.  If more than one appropriate
person is identified within the liability group, a series of
tests is set out, the application of which is designed to exclude
those less responsible from liability.  The question of liability
thus depends in part on whether someone else can be found who is
more "blameworthy."

    Proposals for a new regime to deal with radioactively
contaminated land were set out in a consultation paper dated
February 26, 1998 by the U.K. Department of the Environment,
Transport and the Regions.  It is currently intended that the



                               21



<PAGE>

approach will be broadly similar to the contaminated land regime
under the Environment Act 1995 described above.

    Studies commissioned by the Company indicate that there is a
limited amount of radiological contamination at Eaglescliffe,
which the Company anticipates purchasing from the U.K. Ministry
of Defence.  The approximate $6 million purchase price will be
adjusted and reduced by the cost of decontamination of the site
by an independent contractor.

    U.S. Regulation.  The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"),
applies to releases of any substance designated as a "hazardous
substance" or pollutant by the U.S. Environmental Protection
Agency (the "EPA").  Quantity and concentration are not factors
in determining whether a substance is hazardous for purposes of
CERCLA.

    Under CERCLA's liability scheme, Section 107 of CERCLA
governs liability while Section 113 of CERCLA creates a mechanism
for apportioning fault among potentially responsible parties
("PRPs").  CERCLA provides that the owner or operator or demise
charterer of a vessel is strictly liable for damages, removal
costs and investigative expenses associated with a release of a
hazardous substance.  Liability is joint and several with other
PRPs.

    Section 107 of CERCLA provides, in part, that the PRP shall
be liable for: (i) all costs of removal or remedial action
incurred by the U.S. Government or a state or an Indian tribe not
inconsistent with the National Contingency Plan ("NCP"); (ii) any
other necessary costs of response incurred by any other person
consistent with the NCP; (iii) damages for injury to, destruction
of, or loss of natural resources including the reasonable costs
of assessing such injury, destruction, or loss resulting from a
release; and (iv) the costs of any health assessment or health
effects study carried out under CERCLA.

    Generally, private litigants under CERCLA may recover their
response costs against the PRP. However, under CERCLA only the
U.S., a state or an Indian tribe may sue for damages for injury
to natural resources and punitive damages.  Punitive damages may
be awarded under CERCLA up to three times the amount incurred by
the U.S. Government to remediate a site.

    In addition, CERCLA provides that all costs and damages from
the release of a hazardous substance incurred by the U.S.
Government for which the owner or operator of a vessel is liable
will constitute a maritime lien in favor of the U.S. on such
vessel.  Such costs and damages, accordingly, may be recovered in
an action in rem.


                               22



<PAGE>

    The liability of a PRP for the release of a hazardous
substance is capped under CERCLA at $300 per gross ton, or $5
million, whichever is greater.  This limit on liability is not
available if the PRP violates an applicable safety, construction
or operating regulation or if the release was the result of the
PRP's gross negligence or willful misconduct.

    PRPs under CERCLA are entitled to only three defenses:
(i) act of God; (ii) act of war; and (iii) that the release was
caused solely by the acts or omissions of a third party other
than an employee or agent of the defendant or in connection with
a contractual relationship with the defendant if the defendant
exercised due care with respect to the hazardous substance and
took precautions against foreseeable acts or omissions of any
third party.  All other potential defenses of the PRP are
disallowed.

    The U.S. Oil Pollution Act of 1990, as amended ("OPA"),
applies to all owners, operators and bareboat charterers of
vessels that trade to the U.S. or its territories or possessions
or operate in U.S. waters, which include the U.S. territorial
seas and the 200 nautical mile exclusive economic zone of the
U.S.  Under OPA Responsible Parties (as defined therein) are
strictly liable on a joint and several basis for discharges of
oil (unless the discharge results solely from the act or omission
of a third party, an act of God or an act of war) for all oil
spill containment and clean-up costs and other damages arising
from actual and threatened discharges of oil pertaining to their
vessels.  Damages include: (i) natural resources damages and the
costs of assessment thereof; (ii) real and personal property
damages; (iii) net loss of taxes, royalties, rent, fees and other
lost government revenues; (iv) lost profits or impairment of
earning capacity due to property or natural resources damage;
(v) net cost of public services necessitated by a spill response,
such as protection from fire, safety or health hazards; and
(vi) loss of subsistence use of natural resources.  OPA limits
the strict liability of Responsible Parties to the greater of
$600 per gross ton or $500,000 per dry cargo vessel.  However,
this limit does not apply if the incident is caused by violation
of applicable U.S. federal safety, construction or operating
regulations, or gross negligence or willful misconduct of the
Responsible Party or that of a person in a contractual
relationship with the Responsible Party or if the Responsible
Party failed or refused to report the incident or to cooperate
and assist in connection with oil removal activities.  In
addition, OPA specifies that vessel manning, equipment and other
construction requirements that are in various stages of
development by the U.S. Coast Guard (the "USCG") are applicable
to new and to existing vessels.




                               23



<PAGE>

    The USCG has promulgated a rule which requires evidence of
financial responsibility equal to the aggregate of OPA's strict
liability limit of $600 per gross ton and $300 per gross ton for
potential liability for discharges of hazardous substances under
CERCLA.  Such financial responsibility, evidenced by issuance of
a Certificate of Financial Responsibility (a "COFR"), may be
demonstrated by a guaranty in the form of acceptable insurance,
surety bond, self-insurance or other means approved by the USCG.
Failure to obtain a COFR or maintain the COFR on board the vessel
may result in the vessel being detained or seized and the owner
or operator being fined.  Claimants may bring suit directly
against an insurer, surety or other party that furnishes the
guaranty.  In the event that such insurer, surety or other party
is sued directly, it is limited to asserting the following
defenses: (i) the defense that the incident was caused by the
willful misconduct of the responsible party; (ii) the defenses
available to the Responsible Party under OPA or CERCLA; (iii) the
defense that the claim exceeds the amount of the guaranty;
(iv) the defense that the claim exceeds the property amount of
the guaranty based on the gross tonnage of the vessel; and
(v) the defense that the claim has not been made under either OPA
or CERCLA.  Most Responsible Parties have procured financial
guaranties from special purpose insurers at additional cost.  The
Company believes that its vessels that travel within the 200
nautical mile exclusive economic zone of the U.S. comply with
these USCG requirements.

    OPA specifically permits individual states to impose their
own liability regimes with regard to oil pollution incidents
occurring within their boundaries, and most states that border on
a navigable waterway have enacted legislation providing for
unlimited liability for oil spills and the release of hazardous
substances.

    It is impossible to predict what additional legislation, if
any, may be promulgated by the U.S., any individual U.S. state,
or any other country or authority.

Insurance

    General.  The operation of any vessel is subject to the
inherent possibility of environmental mishaps including oil
spills, and the liabilities arising from owning and operating
vessels in international trade.  The Company insures its vessels
against the numerous risks associated with the operation of a
vessel, including mechanical failure, collision, property loss
and cargo loss or damage.  CERCLA and OPA, which impose virtually
unlimited liability upon owners, operators and demise charterers
of any vessel trading in the U.S.'s exclusive economic zone for
certain oil pollution accidents in the U.S., has made liability



                               24



<PAGE>

insurance more expensive for shipowners and operators trading in
the U.S. market.

    Hull and Machinery and War Risks Insurance.  The Company
maintains marine hull and machinery and war risks insurance on
each of its vessels, which includes the risk of actual or
constructive total loss, currently with deductibles of up to
$65,000 per vessel per incident.

    Protection and Indemnity Insurance.  Protection and indemnity
insurance covers the legal liability of the Company for its
shipping activities.  This includes the legal liability and other
related expenses of injury or death of crew, passengers and other
third parties, loss or damage to cargo, claims arising from
collisions with other vessels, damage to other third-party
property, pollution arising from oil or other substances, and
salvage, towing and other related costs, including wreck removal.
The coverage is generally viewed as unlimited with the exception
of oil pollution liability, which is limited to $500 million per
vessel per incident, which limit can be increased to $700 million
per incident if excess coverage is bought.

    This protection and indemnity insurance coverage is provided
by mutual protection and indemnity ("P&I") Associations.  Each of
the vessels currently in the fleet is entered in a
P&I Association which is a member of the International Group of
P&I mutual assurance associations ("International Group"). The
fourteen P&I Associations that comprise the International Group
insure approximately 90% of the world's commercial tonnage and
have entered into a pooling agreement to reinsure each
association's liabilities.  Each P&I Association has capped its
exposure to this pooling agreement at $4.25 billion.  As a member
of P&I Associations, which are members of the International
Group, the Company is subject to calls payable to the
associations based on its claim records as well as the claim
records of all other members of the individual associations, and
members of the pool of P&I Associations comprising the
International Group.

    The Company believes its insurance coverage is adequate to
the needs and generally meets or exceeds industry norms for
insurance coverage, although there can be no assurance that the
Company's coverage will be sufficient to protect it from material
loss under all circumstances.

Recent Developments

    On October 1, 1999, the Company completed its purchase of NIF
for a price of $38.7 million. NIF operates a service between
Liverpool and Belfast using two chartered RoPax vessels, both
built in 1997. NIF was established in 1991 and has built up a


                               25



<PAGE>

regular and reliable service currently carrying approximately
125,000 equivalent trailer units per annum and approximately
75,000 passengers.

    On October 22, 1999, the Company completed its purchase of
the Eaglescliffe Logistics Centre in the North East of England
for a price of $5.85 million.

    On October 22, 1999, the Company also completed the purchase
of the two ships River Lune and Saga Moon, previously operated
under capital leases.

    The above purchases were funded using the remaining $37.8
million held by the trustee for the Company's senior mortgage
notes, together with approximately $15 million of free cash.


ITEM 2 - DESCRIPTION OF PROPERTY

    The Company's headquarters are at Puttenham Priory,
Puttenham, Surrey, which are owned by the Company and subject to
a mortgage in the amount of $3.7 million as of September 30,
1999.

    The Company leases areas at Dublin, Belfast, Heysham and
Liverpool ports as follows:

    At Belfast, the Company has two contracts for (for BFF and
NIF) the preferential, but not exclusive, use of two port areas
which includes berths, vehicle ramps, compounds and various
operation and administration buildings.  The BFF permitted user
contract is for a period of 10 years from January 1, 1994, with
an option to renew. The NIF contract is for a period of 14 years
from April 1, 1994, with an option to renew.

    Merchant Ferries leases an area of about five hectares at the
Port of Dublin for a term of 60 years from July 1994.  The
Company has also entered into an operating agreement for a period
of 10 years from July 1994.  This agreement provides the Company
with the preferential, but not exclusive, right to use the water
space and a ramp for the purpose of handling its vessels for a
fixed charge plus various charges for port and pilot services
provided.

    At Heysham, the Company, through BFF and Merchant Ferries,
has contracts with Heysham Port Limited for the use of the port
facilities for a period of 10 years, until 2003.  These
agreements may be terminated upon 12 months' notice by either
party.  Both BFF's and Merchant Ferries' contracts with Heysham
Port Limited provide for the provision of slot times, during
which the respective company has the exclusive use of designated


                               26



<PAGE>

berths.  The contract also provides for stevedoring and other
services reasonable for the type of trade Merchant Ferries and
BFF operate and the facilities available at Heysham.

    At Liverpool, MF and NIF have entered into agreements for the
lease of certain berths during designated slot times.  The MF
lease will be replaced by a contract for preferential, but not
exclusive, use of the new river berth which is expected to be
built by early 2001. The NIF contract expires October 31, 2000.

    Although ferry operators' use contracts with port authorities
are generally confidential, the Company believes that its
contracts at each port are in keeping with industry standards.
The Company believes that its current space at Puttenham Priory
and each port is sufficient for its needs.

    The Company also leases office and warehousing space used by
Flair and Duncan at Heathrow Airport, London, England.  The
Company has also leased further office and warehousing facilities
near Heathrow to expand its logistics businesses in the south of
England.

    As of the end of Fiscal 1999 the Company was leasing
Eaglescliffe from the UK Ministry of Defence. This lease was for
a period of two years from February 20, 1998 until February 20,
2000. This lease was terminated on October 22, 1999 on completion
of the Company's purchase of Eaglescliffe. Following a successful
solicitation of the note holders, Eaglescliffe was purchased for
a cost of 3.555 million Pounds Sterling ($5.85 million). The
purchase was funded from monies on deposit with the trustee for
the Company's ship mortgage notes and the property was made
subject to a mortgage to secure those notes. The purchase price
includes the anticipated cost of cleaning up small amounts of
radiological contamination on the site. This contamination was
created by the burning of surplus aircraft following World War
II, as a consequence of which radium paint applied to the
instrument dials of the aircraft seeped into the ground. In
addition there is some asbestos present in the ground and certain
buildings. Of the total purchase price, 3 million Pounds Sterling
($4.9 million) has been placed in a joint escrow bank account to
be used to fund the decontamination work. The Company anticipates
that the decontamination clean up will be completed by late 2000.


ITEM 3 - LEGAL PROCEEDINGS

    In 1993 the Company attempted to commence its
passenger/vehicle service between Almeria, Spain and Nador,
Morocco.  The Spanish Government initially prevented the service
from operating.  Thereafter, Cenargo filed a complaint with the
European Commission, alleging violations by Spain of European


                               27



<PAGE>

Community regulations in prohibiting the Company's service, and
Spain permitted the service to start in November 1994.  The
Company thereafter submitted a claim for damages against the
Spanish Government which is presently proceeding in the Spanish
courts.  The amount of the claim is approximately $25.5 million,
plus interest.  Cenargo believes that were it to prevail in the
current proceeding, appellate proceedings might continue for a
significant time.  The Company and the Spanish Government
currently continue settlement discussions to resolve the issue
out of court.

    The Company has reached agreement with the Spanish Government
to receive a non refundable advance of Spanish Pesetas 2000
million (approximately $12 million) against the eventual outcome
of the court case. This is payable on delivery of the Company's
two newbuildings expected in February and June 2000.

    From time to time the Company is a party to various routine
litigation matters incidental to the Company's business arising
principally from personal injury and cargo damage claims.
Management believes that there are no current pending legal
proceedings, individually or in the aggregate which will have a
material adverse effect on the business, financial position, or
results of operations or liquidity of the Company.


ITEM 4 - CONTROL OF THE REGISTRANT

    The Company is a closely-held English holding company.  The
following table sets forth certain information, as of December
31, 1999, concerning the beneficial ownership of the Company's
outstanding Common Shares.

OWNERSHIP OF THE COMPANY
Name                     Number of Shares     Percent of Total
Michael Hendry           49,500               99%
Peter Morton             500                   1%


ITEM 5 - NATURE OF TRADING MARKET

    No active trading market within or outside the United States
exists for the equity securities of the Company.  The Company's
equity securities have not been registered under the Securities
Act of 1933, as amended (the "Securities Act").

    On December 22, 1998, the registration statement covering
$175,000,000 in aggregate principal amount of the Company's 9
3/4% First Priority Ship Mortgage Notes due 2008 was declared
effective, and the Company offered the registered notes (the
"Exchange Notes") in exchange for all of its otherwise identical


                               28



<PAGE>

outstanding restricted Notes (collectively, with the Exchange
Notes, the "Notes").  The offer to exchange closed on February 1,
1999 and all restricted Notes were exchanged for Exchange Notes.
While the Notes are listed on the Luxembourg Stock Exchange,
there is no active trading market on that exchange for the Notes.
The Notes trade in the United States in inter-dealer
transactions.


ITEM 7 - TAXATION

    The following is a summary of the principal U.K. tax
considerations with respect to ownership by U.S. Holders of the
Notes and is based on the laws as in force and as applied in
practice on the date of this report, including the U.K./U.S.
double taxation convention relating to income and capital gains
(the "Treaty"), and is subject to changes to those laws and
practices, and any relevant judicial decision, subsequent to the
date of this report.

    Interest.  In the opinion of Stephenson Harwood, U.K. counsel
to the Company, the Company will not be required to deduct or
withhold on account of U.K. income tax from payments of principal
or, for so long as the Notes are listed on the Luxembourg Stock
Exchange or some other stock exchange recognized by the U.K.
Inland Revenue, from payments of interest where:

         (a)  the payment of interest is made by a paying agent
    outside the U.K.; or

         (b)  the payment of interest is made by or through a
    person who is in the U.K. provided that (i) the person
    beneficially entitled to the interest is not resident in the
    U.K. and beneficially owns the Notes from which the interest
    derives or (ii) the Notes are held in a recognized clearing
    system, and either the person by or through whom the payment
    is made has received a declaration in a form required by law
    confirming that these requirements are satisfied or the
    Inland Revenue has issued a notice to that person stating
    that they consider them satisfied.

    In other cases interest will (subject to what is said below)
be paid after deduction of tax at the lower rate (currently 20
percent) on such interest.  A U.S. Holder of a Note who is
entitled to the protection of the Treaty will normally be
eligible to recover in full any U.K. tax withheld from payments
of interest to which such Holder is beneficially entitled by
making a claim under the Treaty on the appropriate form.  If the
claim is accepted by the Inland Revenue, they will authorize
subsequent payments to that U.S. Holder to be made without
withholding for U.K. tax.


                               29



<PAGE>

    For so long as the Notes are listed on a recognized stock
exchange, where any person in the U.K., in the course of a trade
or profession:

         (a)  acts as a custodian of a Note in respect of which
    he receives any interest or any interest is paid at his
    direction or with his consent; or

         (b)  collects or secures payment of, or receives
    interest, on a Note for another person

(except in any case by means only of clearing a check or
arranging for the clearing of a check) that person is liable to
account for U.K. income tax at the lower rate (currently 20
percent) on such interest and is entitled to deduct an amount in
respect thereof unless an exemption from such liability is
applicable including, for example, where the Note and the
interest is beneficially owned by a person not resident in the
U.K. and applicable administrative and procedural requirements
are satisfied, including the making of declarations as to status
and eligibility.

    Except for any income tax deducted as described above (and
except in the case of non-U.K. resident trustees of a trust
having an ordinarily resident or resident beneficiary) a U.S.
Holder will not generally be liable to U.K. tax on interest on a
Note unless it is resident in the U.K. or is chargeable to income
tax or corporation tax on a branch or agency in the U.K. through
which it carries on a trade, profession or vocation and in
connection with which the interest is received or to which the
Notes are attributable.  There are certain exemptions for
interest received by certain categories of agent (such as some
brokers and investment managers).

    Payments by Subsidiary Guarantors.  It is possible that
payments by a Subsidiary Guarantor would be subject to
withholding on account of U.K. tax, subject to any claims made by
U.S. Holders under the Treaty.

    Disposal of Notes.  For U.K. tax purposes, a disposal (which
includes redemption and could include the exchange of Notes for
Exchange Notes) of a Note will generally not be subject to U.K.
tax unless the holder is either resident or (if an individual)
ordinarily resident for tax purposes in the U.K. or carries on a
trade, profession or vocation in the U.K. through a branch or
agency to which the Note is attributable.

    Annual Tax Charges.  Provisions of the Finance Act 1993 which
could impose an annual charge on corporate holders of Notes by
reference to exchange rate fluctuations, and provisions of the
Finance Act 1996 which could apply so as to change corporate


                               30



<PAGE>

holders to corporation tax on income on any profits (and give
relief for permitted losses) by reference to accounting periods
on either an authorized accruals or mark to market basis, will
not apply to non-U.K. resident corporate U.S. Holders without a
branch or agency in the U.K.

    Stamp Duty and Stamp Duty Reserve Tax.  No U.K. stamp duty or
stamp duty reserve tax is payable on the issue of the applicable
Global Notes or on the issue or transfer of a Note in definitive
form or on its redemption.  No U.K. stamp duty will be payable in
respect of any instrument of transfer of Book-Entry Interests,
provided that any instrument relating to such a transfer is not
executed in the U.K., and remains at all times outside the U.K.
An agreement to transfer Notes should not give rise to stamp duty
reserve tax in any event.

    Inheritance Tax.  Notes represented by definitive notes that
are not treated as situated in the U.K. and are beneficially
owned by an individual domiciled outside the U.K. for U.K.
inheritance tax purposes will not be subject to U.K. inheritance
tax. The status of Notes held in the form of Book-Entry Interests
is, however, not free from doubt.  If a Note is subject to U.K.
inheritance tax and U.S. federal estate tax, the U.S./U.K. double
taxation convention relating to estate and gift taxes may entitle
a U.S. Holder to credit or relief in respect of the U.K. tax.

    U.S. HOLDERS OF NOTES ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS AS TO THE U.K., OR OTHER TAX CONSEQUENCES TO THEM OF THE
ACQUISITION, OWNERSHIP AND DISPOSITION OF NOTES, AS WELL AS ANY
APPLICABLE FOREIGN, STATE OR LOCAL TAX LAWS OR ESTATE OR GIFT TAX
CONSIDERATIONS.


ITEM 8 - SELECTED FINANCIAL DATA

    The following selected historical income and balance sheet
financial data as of and for the years ended September 30, 1995,
1996, 1997, 1998 and 1999 have been derived from the audited
Consolidated Financial Statements of the Company, which are
included elsewhere in this report.  The following information
should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
the Company's Consolidated Financial Statements, including the
notes thereto, included elsewhere herein.

<TABLE>
<CAPTION>
                                                     Year Ended September 30,
                                              ______________________________________
                                        1995       1996          1997       1998          1999
                                                      (U.S. Dollars in Thousands)


                               31



<PAGE>

<S>                              <C>          <C>          <C>          <C>           <C>
Statement of Income Data
Operating revenues
Charterhire revenues, net            $46,498      $48,750      $43,649     $ 33,790       $6,614
Ferry service revenues                 8,070       11,497       19,489       62,646       91,344
Logistics services and
  other revenues                       4,998        8,010        7,930       14,669       21,546
                                  ----------   ----------   ----------   ----------   ----------
Operating revenues                    59,566       68,257       71,068      111,105      119,504
                                  ----------   ----------   ----------   ----------   ----------
Operating expenses
Vessel and other operating
  costs                               29,274       34,127       41,159       72,103       80,366
Depreciation                           9,376       11,823       11,017       10,945       10,530
Provision for impairment
  in values of vessels                    --           --           --       22,636        3,100
Amortization of dry-docking
  and special survey costs             1,260        1,139        1,767        1,669        3,409
Amortization of goodwill                  --           --           --          108          112
General and administrative
  expenses                             8,295        7,094        7,932       13,590       17,790
Foreign exchange loss (gain)           (983)        (916)          889           88          468
                                  ----------   ----------   ----------   ----------   ----------
Operating expenses                    47,222       53,267       62,764      121,139      115,775
                                  ----------   ----------   ----------   ----------   ----------
Operating income (loss)               12,344       14,990        8,304     (10,034)        3,729
                                  ----------   ----------   ----------   ----------   ----------
Other income (expense)
Interest income                          722          672          573        2,210        4,303
Interest expense                     (6,599)      (8,894)      (8,227)(19,565)  (20,397)
Income (loss) from joint
  ventures                               681        (965)        (435)           --           --
Gain on sale of marketable
  security                                --        1,326           --           --           --
Gain on disposition of
  fixed assets                         6,415            3          97       14,018           782
                                  ----------   ----------   ----------   ----------   ----------
Other income (expense)                 1,219      (7,858)      (7,992)      (3,337)     (14,312)
                                  ----------   ----------   ----------   ----------   ----------
Income (loss) before income
  taxes                            $  13,563    $   7,132    $     312   $ (13,371)    $ 10,583)
                                  ==========   ==========   ==========  ===========   ==========
Other Financial Data
Net cash provided by (used
  in) operating activities         $  16,889    $  18,895    $  13,931    $  14,682     $(7,837)
Net cash (used in) provided
  by investing activities          $(61,200)    $ (6,724)    $(35,025)    $(21,723)     $ 13,854
Net cash provided by (used
  in) financing activities         $  49,737    $(17,889)    $  25,021    $  50,908     $ 10,371
Balance Sheet Data (at end
  of period)


                               32



<PAGE>

Cash and cash equivalents          $  10,863     $  5,146    $   9,072    $ 52,939      $ 69,327
Net book value of vessels          $ 174,634     $163,158    $ 177,002    $ 153,166     $138,353
Total assets                       $ 213,868     $206,523    $ 264,099    $ 349,932     $339,816
Total debt                         $ 131,153     $117,024    $ 164,469    $ 243,252     $256,193
Shareholders' equity               $  52,775     $ 56,391    $  56,751    $  53,338     $ 45,179
Fleet Data (at end of period) *
Total dwt of dry bulk
  carriers ('000s)                       585          585          585          323           --
Total dwt of multi-purpose
  vessels ('000s)                         95           95           95           55           --
Total capacity of ferries
Trailer units                            326          326          326          708          831
Passengers                             1,315        1,315        3,701        3,951        4,201
Total number of vessels                   16           16           17           15           10
</TABLE>

*Includes the Mistral operated under an operating lease (1997 and 1998) and
owned as at end fiscal 1999.


ITEM 9 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

General

    Cenargo, an English Company, is a diversified international
transportation group specializing in European freight and
passenger ferry services, deepsea dry cargo shipping as well as
the movement of surface and air freight and the management of
freight logistics.

    In recent years, Cenargo has been predominantly an owner and
operator of deepsea dry bulk vessels, but during the years ended
September 30, 1998 and 1999 ("fiscal 1998 and 1999") has been
progressively withdrawing from this market and sold its two
remaining multi-purpose dry cargo vessels in August 1999. The
Company, as at the date of this report, currently owns six RoRo
freight ferries, two RoPax freight/passenger ferries and two
passenger/car ferries. The Company has two RoPax
freight/passenger ferry newbuildings, with delivery scheduled for
early and mid-2000.

Segment Analysis

Deep Sea Operations

    Fiscal 1999 has been a year of significant change for the
Company. During the year the Company has totally exited from its
deepsea activities. The last two deepsea vessels were sold in
August 1999 and the Company's shipbroking activities have been
closed down.



                               33



<PAGE>

Irish Sea Services

The Company continued its strategy of concentrating on the
development of its Irish Sea ferry operations. A new Liverpool-
Dublin service was started in February 1999. This service, which
offers twice daily sailings between the two ports, is operated
with two RoPax newbuildings. The first of these was delivered in
September 1998 and second in January 1999. The start up of the
new service, was delayed by the late delivery of the new vessels,
which adversely effected the Company's existing Heysham-Dublin
service due to shortage of berthing facilities in Dublin. The
pre-tax losses incurred during fiscal 1999 attributable to the
start up of the new service including the adverse impact on the
Company's existing Heysham-Dublin service were approximately $8.6
million.

    The Heysham-Belfast service has continued to trade
successfully during the year. The service continues to offer four
sailings per day in each direction and carried approximately
123,000 equivalent freight units in fiscal 1999.

    The new Liverpool-Dublin RoPax service was operating at an
annualized rate of 96,000 trailer units at the end of fiscal
1999. Subsequent to the year-end, these volumes have continued to
increase, as users become aware of the regularity and reliability
of the service. In addition the Port of Dublin has agreed to
construct an additional berth adjacent to the Company's existing
berth in Dublin. Under its agreement with the port, the Company
will have exclusive rights to use this additional berth at the
peak loading and discharging times each day.

    In October 1999 the Company acquired Norse Irish Ferries
Limited ("NIF"). NIF operates a service between Liverpool and
Belfast using two chartered RoPax vessels, both built in 1997.
NIF was established in 1991 and has built up a regular and
reliable service, currently carrying approximately 125,000
equivalent trailer units per annum and approximately 75,000
passengers.

    Following this acquisition the Company has a unique matrix of
services across the Irish Sea, comprising RoRo freight services
from Heysham to Dublin and Belfast and RoPax services from
Liverpool to Dublin and Belfast. The Company has thus become a
major operator on the Irish Sea with the capacity to carry
approximately 450,000 equivalent trailer units per annum, over
32% of the market.







                               34



<PAGE>

Ferrimaroc

    Ferrimaroc, the passenger and freight ferry service operated
by the Company between Almeria in Southern Spain and Nador, in
Eastern Morocco has had another successful year. In fiscal 1999
the service carried over 306,000 passengers, 66,000 cars and
approximately 4,000 trucks, significantly more than in fiscal
1998. The passenger and car market on the Almeria-Nador route
continues to grow with the number of passengers from Almeria
increasing by almost 19% during the summer season and passengers
from Nador increasing by approximately 13%.

    The Company expects competition to increase significantly
during fiscal 2000 as new operators come into the trade. This
could undermine profitability. Ferrimaroc is however well
established as the principal operator on the route carrying
approximately 50% of the passenger and car market.

Logistics

    The Company's logistics businesses faced a difficult year.
The freight-forwarding market has been generally weak during the
year. Due to UK Government bureaucracy, the Company was unable to
complete the purchase of the ex Ministry of Defense supply depot
at Eaglescliffe until October 1999. This significantly inhibited
the Company's ability to market its warehousing and distribution
services, as it was not able to offer long term contracts due to
the Company's own short tenure on the site, pending legal
completion. The Company is confident that following the purchase
it will now be able to exploit the significant potential of the
site. The site gives the Company a strong low cost base from
which to develop further its logistics businesses generally.

Results of Operations

Year Ended September 30, 1999 compared to Year Ended
September 30, 1998

Operating Revenues

    Operating Revenues increased in the Year Ended September 30,
1999 (the "1999 year") by $8.4 million or 7.6% to $119.5 million
compared to $111.1 million in the Year Ended September 30, 1998
(the "1998 year") the increase comprises a $27.1 million, or
80.0%, decrease in charter hire revenues, a $28.7 million or
46.2%, increase in ferry service revenues and a $6.8 million or
36% increase in logistics services and other revenues. The
increase in ferry service revenues was due to the inclusion of
full years results for BFF in the 1999 year compared to nine
months in the 1998 year as BFF was acquired by the Company in
January 1998, together with revenues from Merchant Ferries' new


                               35



<PAGE>

Liverpool-Dublin RoPax ferry service which commenced in February
1999. The decrease in charter hire revenue represents the loss of
charter hire previously generated by nine of the Company's
deepsea vessels disposed in the first and second quarters of the
1998 year and the first quarter of the 1999 year. The increase in
logistics and other revenue was due to the inclusion of the
results of Duncan acquired in May 1998 and Freightwatch acquired
in 2 March 1999 together with increased revenue generated at
Eaglescliffe the Company's developing logistics Center in the
North East of England.

Operating Expenses

    Vessels and other operating costs increased in the 1999 year
by $8.3 million, or 11.5% to $80.4 million compared to $72.1
million in the 1998 year, primarily as a result of the inclusion
of BFF, Duncan and Freightwatch results and the operating costs
of the Liverpool-Dublin RoPax service in the 1999 year offset by
decreased deepsea vessels operating costs, as a result of the
nine vessels sold.

    Depreciation for the 1999 year has decreased by $0.4 million,
or 3.7%, to $10.5 million compared to $10.9 million in the 1998
year, which represents a reduction of depreciation of vessels
sold offset by the inclusion of depreciation on BFF vessels for
the whole of the 1999 year and the two RoPax vessels delivered in
September 1998 and January 1999. Amortization of dry-docking and
special survey costs increased by $1.7 million, or 100%, to $3.4
million compared to $1.7 million in the 1998 year, reflecting an
increase due to the inclusion of BFF vessels and increased costs
associated with the Company's Ferrimaroc service offset by a
decrease due to the vessels sold. The provision for the
impairment in value of vessels of $3.1 million in the 1999 year
represents the provision for permanent diminution in value of the
Company's two remaining multi-purpose dry-cargo vessels during
the year which were sold at the Year end. The provision of $22.6
million in the 1998 year was a full provision for the loss on the
disposal of the Company's two Capesize vessels disposed of in the
1999 year.

    General and administrative expenses for the 1999 year
increased by $4.2 million or 31.1%, to $17.8 million compared to
$13.6 million in the 1998 year, representing the inclusion of
BFF, Duncan, Freightwatch and Merchant Ferries increased overhead
costs relating to the new Liverpool-Dublin service for the 1999
year offset by reductions in Head Office costs.

    Foreign exchange loss increased by $0.4 million, or 400%, to
$0.5 million compared to $0.1 million in the 1998 year, primarily
reflecting the unrealized losses in the 1999 period on re-



                               36



<PAGE>

translation of Sterling monetary assets and liabilities within US
dollar reporting subsidiary companies.

Net Operating Income

    As a result of the foregoing factors, the Company had net
operating income of $3.7 million for the 1999 year, an increase
of $13.7 million or 137% compared to a net operating loss of $10
million for the 1998 year.

Other Operating Income / Expenses

    Interest income increased by $2.1 million, or 95%, to $4.3
million for the 1999 year compared to $2.2 million for the 1998
year. The increase was due to the increased interest income
attributable to cash deposits from the proceeds of the sale of
vessels. Interest expense increased by $0.8 million, or 4.1%, to
$20.4 million for the 1999 year compared to $19.6 for the 1998
year. The increase was due to the increased interest costs as a
result of the issue of the notes and the inclusion of interest on
BFF vessels capital leases for the whole of the 1999 year offset
by the inclusion in 1998 year of an interest cost of $6.7 million
on termination of interest rate swap contracts and the inclusion
of a non cash charge of $0.5 million representing an unamortized
finance charges written off in repayment of bank loan facilities,
from the proceeds of the notes issue (as defined below).

    The gain on disposal of fixed assets was $1.8 million in the
1999 year compared to $14.1 million in the 1998 year. The gain in
the 1999 year represents the profit on sale of the Merchant
Prince and the Moondance and the gain in the 1998 year represents
the profit on disposal of six of the Company's deepsea vessels.

Income Taxes

    Income tax benefit in the 1999 year was $2.4 million, or
22.9% of pre-tax results, compared to $9.5 million, or 71% of
pre-tax results in the 1998 year.

Net Loss

    As a result of the foregoing, net loss was $8.2 million, in
the 1999 year compared to net loss of $3.9 million in the 1998
year.

Year Ended September 30, 1998 compared to Year Ended
September 30, 1997






                               37



<PAGE>

Operating Revenues

    Operating revenues increased in the Year ended September 30,
1998 (the "1998 Year") by $40.0 million, or 56.2%, to $111.1
million compared to $71.1 million in the year ended September 30,
1997 (the "1997 Year").  The increase comprises a $9.9 million,
or 22.7%, decrease in charter hire revenues, a $43.1 million, or
220%, increase in ferry service revenues and a $6.8 million, or
86%, increase in logistics services and other revenues.  The
increase in ferry service revenues was due to the inclusion of
Merchant Ferries results (which were reflected in income from
joint ventures for 9 months of the 1997 Year) and BFF results.
The increase in logistics services and other revenues was due to
the inclusion of revenues from Flair (acquired in September
1997), inclusion of revenues from Scruttons (NI) Limited
(acquired as part of Scruttons) and revenues from Duncan acquired
in May 1998.  The decrease in charter hire revenue represents the
loss of charter hire previously generated by six of the Company's
deepsea vessels disposed of in the first and second quarters of
1998, the effect of the scheduled dry-docking of a Capesize
vessel offset by the inclusion of charter hire from a Merchant
Ferries vessel employed under a bareboat charter.

Operating Expenses

    Vessels and other operating costs increased in the 1998 Year
by $31.0 million, or 75.4%, to $72.1 million compared to $41.1
million in the 1997 Year, primarily as a result of the inclusion
of Merchant Ferries, BFF, Flair and Duncan results in the 1998
Year offset by decreased deepsea vessel operating costs as a
result of the six vessels sold.

    Depreciation for the 1998 Year has decreased by $0.1 million,
or 1%, to $10.9 million compared to $11.0 million in the 1997
Year, which represents the reduction of depreciation on vessels
sold and the inclusion of depreciation on Merchant Ferries and
BFF vessels in the 1998 Year.  Amortization of dry-docking and
special survey costs for both 1998 and 1997 Years was $1.7
million reflecting an increase due to the inclusion of BFF
vessels offset by a decrease due to the vessels sold.

    The provision for impairment in value of vessels of $22.6
million in the 1998 year was a full provision for the loss on the
disposal of Cenargo's two Capesize vessels disposed subsequent to
the fiscal year end.

    General and administrative expenses for the 1998 Year
increased by $5.6 million, or 70.9%, to $13.5 million compared to
$7.9 million in the 1997 Year, representing the inclusion of
Merchant Ferries, BFF, Flair and Scruttons costs in the 1998
Year.


                               38



<PAGE>

    Primarily as a result of these developments, total operating
expenses increased by $58.3 million or 92.8%, to $121.1 million
for the 1998 Year compared to $62.8 million for the 1997 Year.

Net Operating Income

    As a result of the foregoing factors, the Company had a net
operating loss of $10.0 million for the 1998 Year, a change of
$18.3 million or 220% from a net operating income of $8.3 million
for the 1997 Year.

Other Operating Income/Expenses

    Interest income increased by $1.6 million, or 266%, to $2.2
million for the 1998 Year compared to $0.6 million for the 1997
Year due to increased interest from cash deposits from the
proceeds of the disposal of vessels.  Interest expense increased
by $11.4 million, or 139%, to $19.6 million for the 1998 Year
compared to $8.2 million for the 1997 Year.  The increase was due
to increased interest costs as a result of the Notes issue (as
defined below), the inclusion of interest rate swap contract
termination costs of $6.7 million and inclusion of a non-cash
charge of $0.5 million representing unamortized finance charges
written off on repayment of bank loan facilities, from the
proceeds of the Notes issue (as defined below).

    Loss/gain on disposal of fixed assets increased by $13.9
million to a profit of $14.0 million in the 1998 Year compared to
a profit of $0.1 million in the 1997 Year.  The gain for the 1998
Year was due to the profit on the disposal of six deepsea
vessels.

Income Taxes

    Income tax benefit in the 1998 Year was $9.5 million, or 71%
of pre-tax results, compared to $0.1 million in the 1997 Year.

Net Income

    As a result of the foregoing, net loss was $3.9 million, or
3.5% of operating revenues, in the 1998 Year compared to net
income of $0.4 million in the 1997 Year.

Liquidity and Capital Resources

    Total shareholders equity at September 30, 1999 was $45.2
million compared to $53.3 million at September 30, 1998. The
decrease of $8.1 million is represented by a net loss of $8.2
million and accumulative translation adjustment of $0.1 million,
on translation of Sterling based subsidiary companies.



                               39



<PAGE>

    Long term debt at September 30, 1999 consists of $172.6
million 9 3/4% First Priority Ship Mortgage Notes (the "Notes")
and $59.75 million currently drawdown from an $85 million
facility to finance building contracts for the two new build
vessels, together with other secured debts and obligations under
capital leases. Principally the obligations under capital leases
comprise lease obligations for two of the Company's RoRo vessels,
these leases were bought out using notes escrow proceeds after
the 1999 fiscal year end.

    At September 30, 1999 the Company had cash and cash
equivalents of $69.3 million compared to $52.9 million at
September 30, 1998. Cash and cash equivalents increased by $16.4
million principally as the result of the proceeds of the
disposition of vessels. At September 30, 1999 approximately $37.8
million was held by the trustee for the Notes. These funds were
totally used in October 1999 to partially fund the acquisition of
Norse Irish Ferries Limited, Eaglescliffe Logistics Centre and to
buy out the capital leases for vessels Saga Moon and River Lune.
US$15 million of free cash was additionally utilized in October
1999 to fund the balance of the purchase price for the
aforementioned acquisitions.

The Notes

    Pursuant to a Purchase Agreement dated June 19, 1998, the
Company sold unregistered 9 3/4% First Priority Ship Mortgage
Notes due 2008 (the "Restricted Notes") in an aggregate principal
amount of $175,000,000 to BancBoston Securities Inc. (the
"Initial Purchaser") in reliance upon, and subsequently resold by
the Initial Purchaser thereof under, exemptions from the
registration provisions of the Securities Act (including those
provided by Section 4(2) thereof, and Rule 144A and Regulation S
promulgated thereunder).  The Initial Purchasers subsequently
placed the Restricted Notes with qualified institutional buyers
in reliance upon Rule 144A under the Securities Act and with a
limited number of accredited investors (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act).  The net
proceeds to the Company from the sale of the Restricted Notes
(the "Offering") were approximately $166.2 million.  The Company
used such net proceeds (i) to refinance approximately $131.9
million of existing indebtedness, (ii) to fund the final
installments of the purchase price of the two RoPax Vessels by
depositing $31.3 million into an escrow account, and (iii)
retained the balance for working capital purposes.

    Pursuant to a prospectus dated December 22, 1998, under a
Registration Statement declared effective on that date under the
Securities Act, the Company commenced an offer (the "Exchange
Offer") to exchange $1,000 principal amount of its registered
9 3/4% First Priority Ship Mortgage Notes due 2008 (the "Exchange


                               40



<PAGE>

Notes") for each $1,000 principal amount of the Restricted Notes.
The form and terms of the Exchange Notes are identical in all
material respects to those of the Restricted Notes, except for
certain transfer restrictions and registration rights relating to
the Restricted Notes.  The Exchange Notes have the same
redemption terms as the Restricted Notes.  The Exchange Notes
evidence the same indebtedness as the Restricted Notes and were
and will be issued pursuant to, and entitled to the benefits of,
an Indenture among the Company, the Subsidiary Guarantors and the
Bankers Trust Company, (the "Trustee"), dated as of June 19, 1998
governing the Restricted Notes and the Exchange Notes (the
"Indenture")(the Restricted Notes and Exchange Notes collectively
referred to herein as the "Notes").

    The Notes are secured by first priority statutory mortgages
and deeds of covenants (including first assignments of
insurances) collateral thereto (the "Mortgages") on the vessels
securing the Notes (the "Mortgaged Vessels"), the assets of NIF
and Eaglescliffe. In the event that the Company and the
Subsidiary Guarantors default on their obligations to make
payments in respect of the Notes, holders of the Notes would be
entitled to payment out of the proceeds from the sale of the
Mortgaged Vessels.

    Prior to June 15, 2003, the Notes will be subject to
redemption at the option of the Company, in whole but not in
part, upon a Change of Control, at specified redemption prices.
On and after June 15, 2003, the Notes will be subject to
redemption at any time at the option of the Company, in whole or
in part, at specified redemption prices.  In addition, the Notes
will be redeemable at the option of the Company, in whole but not
in part, at specified redemption prices, in the event changes in
withholding tax treatment of the Notes would obligate the Company
to pay Additional Amounts.  Moreover, at any time prior to June
15, 2001, the Company may redeem up to 35% of the aggregate
principal amount of the Notes at a redemption price equal to
109.75% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the
redemption date, with the net cash proceeds of one or more public
offerings of equity securities, other than Disqualified Stock, of
the Company, provided that at least $113.75 million in principal
amount of Notes remains outstanding immediately after the
occurrence of each such redemption.

    Upon the occurrence of a Change of Control, (a) each holder
of Notes will have the right to require the Company to repurchase
all or any part of such holder's Notes at a repurchase price
equal to 101% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of
repurchase.



                               41



<PAGE>

    The Notes are fully and unconditionally guaranteed on a
senior basis, jointly and severally, by the Subsidiary
Guarantors.

    The Notes and the Subsidiary Guarantees are senior
obligations of the Company and of the Subsidiary Guarantors,
respectively, will rank pari passu in right of payment with all
existing and future senior indebtedness of the Company and of the
Subsidiary Guarantors, respectively, and will be senior in right
of payment to all future subordinated indebtedness of the Company
and of the Subsidiary Guarantors, respectively.

    As to each Mortgaged Vessel, the Subsidiary Mortgagor granted
to the Trustee a Mortgage on such Mortgaged Vessel to secure the
payment of all sums of money (including principal, premium,
interest, and Liquidated Damages, if any) from time to time
payable by such Subsidiary Mortgagor under its Subsidiary
Guarantee, the payment of principal, premium, interest and
Liquidated Damages, if any, on the Notes, the payment of all
other sums payable by Cenargo under the Indenture and the payment
of all other sums payable under the Security Agreements.  The
Mortgages were recorded in accordance with the provisions of the
law of the country in which the applicable Mortgaged Vessel is
registered.  Concurrently with the closing of the Offering, all
previously existing mortgages on the Mortgaged Vessels were
released.  The maximum liability of each Subsidiary Mortgagor
under its Mortgages is limited to the same extent as such
Subsidiary Mortgagor's maximum liability under its Subsidiary
Guarantee.

The Credit Facility

    The Company entered into a credit facility with Bank Boston,
N.A. (the "Credit Facility") concurrently with the consummation
of the Offering.  The Credit Facility makes available to the
Company up to $85 million as a construction and term loan
facility to finance the acquisition and construction of vessels.

    Obligations under the Credit Facility are guaranteed by the
Subsidiary Guarantors and all future and direct and indirect
subsidiaries and parents of the Company.  In addition, drawings
under the Credit Facility are secured by, among other things,
first mortgages on vessels acquired with the proceeds of such
drawings and certain other vessels not serving as Collateral for
the Notes, assignments of insurance proceeds and earnings and, in
certain cases, assignments of charters.

    The Credit Facility contains various covenants that restrict
the Company from taking various actions and that require that the
Company observe certain financial covenants.  The Credit
Facility's covenants include covenants relating to loan to


                               42



<PAGE>

collateral value ratios, an interest coverage ratio, a leverage
ratio, a minimum net worth test and limitations on indebtedness,
granting of liens, mergers, acquisitions, disposition of assets,
change in business activities and certain other corporate
activities.

    The Credit Facility provides for events of default, including
nonpayment of principal, interest or fees, covenant defaults,
breaches of representations or warranties in any material
respect, cross default and cross acceleration to certain other
indebtedness, bankruptcy, certain environmental matters, material
judgment defaults and change of control.

Vessel Capital Leases

    Two of the Company's vessels (Saga Moon and River Lune) have
been financed in sale/leaseback transactions guaranteed by
Scruttons under which BFF has sold or bareboat chartered a vessel
to an unaffiliated third party and bareboat chartered the vessel
back from such third party. These leases have been bought out in
October 1999 with funds on deposit with the trustee for the
Notes, subsequent to the fiscal 1999 year end.

    The Mistral was leased by the Company under a five year
charter providing for charterhire of approximately $3 million per
year. The Company purchased the Mistral from the lessor in July
1999 using monies on deposit with the trustee for the Notes.

Substantial Leverage and Debt Service

    Upon consummation of the sale of the Restricted Notes, the
Company became highly leveraged, with $255.7 million of total
indebtedness outstanding (including the Notes) and $45.2 million
of shareholders' equity at September 30, 1999.  Subject to the
restrictions in the Indenture and under the Credit Facility, each
of Cenargo and its subsidiaries, including the Subsidiary
Guarantors, may incur additional indebtedness from time to time,
including under the Credit Facility.  The degree to which the
Company is leveraged could have important consequences for
holders of the Notes, including but not limited to the following:
(i) the Company's ability to obtain additional financing for
working capital, capital expenditures, acquisitions or general
corporate purposes may be limited; (ii) a substantial portion of
the Company's cash flow from operations must be dedicated to the
payment of interest on the Notes and any other future
indebtedness, thereby reducing the funds available to the Company
for other purposes; (iii) indebtedness outstanding under the
Credit Facility is secured by security interests in, or liens on,
certain of the assets of the Company, and may become due prior to
the time the principal on the Notes will become due; (iv) the
Company may be hindered in its ability to withstand competitive


                               43



<PAGE>

pressures and respond to changing business conditions; (v) the
Company may be more vulnerable in the event of a downturn in
general economic conditions or in its business; (vi) the Company
may be more highly leveraged than others with which it competes,
which may put it at a competitive disadvantage; and (vii) the
Company's indebtedness (other than the Notes), including under
the Credit Facility, may bear interest at floating rates, thereby
rendering the Company vulnerable to increases in interest rates.

Cyclicality of Shipping Industry

    The shipping industry has been highly cyclical, experiencing
volatility in profitability, vessel values and charter rates
resulting from changes in the supply of, and demand for, shipping
capacity.  The demand for ships is influenced by, among other
factors, global and regional economic conditions, developments in
international trade, changes in seaborne and other transportation
patterns, weather patterns, crop yields, armed conflicts, port
congestion, canal closures, political developments, conflicts,
embargoes and strikes.  The demand for ships is also influenced
by, among other things, the demand for consumer goods, perishable
foodstuffs and dry bulk commodities.  Demand for such products is
affected by, among other things, general economic conditions,
commodity prices, environmental concerns, weather and competition
from alternatives to coal and oil. The supply of shipping
capacity is a function of the delivery of new vessels and the
number of older vessels scrapped, converted to other uses,
reactivated or lost.  Such supply may be affected by regulation
of maritime transportation practices by governmental and
international authorities.  All of these factors which affect the
supply of and demand for vessel capacity are beyond the control
of the Company.  In addition, the nature, timing and degree of
changes in the shipping markets in which the Company operates, as
well as future charter rates and values of its vessels, are not
readily determinable.

Foreign Currency Risks

    The Company is exposed to the risk of fluctuations in foreign
currency exchange rates due to the international nature and scope
of its operations.  The Company's revenues and expenses are
affected by fluctuations in currency exchange rates among and
between the U.K. Pound Sterling, the European Euro and the U.S.
Dollar.  The Company does and will from time to time engage in
hedging to manage risks related to foreign currency fluctuations.
See Note 2 of Notes to the Company's Consolidated Financial
Statements as of and for the years ended September 30, 1996, 1997
and 1998.





                               44



<PAGE>

Interest Rate Swap Contracts

    The Company has used interest rate swap contracts to manage
its exposure to fluctuations in interest rates in recent years.
The Company was a party to two principal interest rate swap
contracts with a maximum nominal contract value of $92.25 million
in August 1998, amortizing to $51.75 million in August 2004,
bearing a fixed rate of interest of 6.98%. These contracts had
been in place to hedge the Company's exposure to interest rate
fluctuations on the Company's existing bank credit facility.  In
connection with the Offering, the Company has repaid all
outstanding borrowings under its existing bank credit facility
and terminated this facility.

    As a result of the termination of the Company's existing bank
credit facility and concerns over future interest rates, the
Company has terminated its interest rate swap contracts at a cost
of $6.7 million, reflected as part of the interest expense in the
1998 income statement.

The Year 2000 Computer Problem

    The Company announced prior to December 31, 1999 that the
tasks identified in its Year 2000 program had been completed and
that, as a result, all reasonable steps have been taken to
achieve Year 2000 readiness. No significant disruption to the
Company's business occurred on the date change roll over to
January 1, 2000.

    The overall objective of our Year 2000 program is to minimize
the chance of disruption to the services we provide to our
customers up to, during and after the turn of the millennium. For
the Company systems, equipment and services obtained from third
parties we have sought and received details of Year 2000
compliance from those parties and where appropriate obtained
details of testing and work done. Risks that we deemed
particularly crucial to business processes resulted in our own
testing of the relevant systems and equipment. We intend to take
appropriate further action including re-testing of our systems
and re checking of our contingency plans during the remaining
part of 1999 and into 2000.

    The completion of our program helped the Company to confirm
that we believed that an acceptable state of readiness had been
reached for the turn of the millennium. But, given the complexity
of the problem it is not possible for any organization to
guarantee that no Year 2000 problem will remain because at least
some level of failure may still occur.





                               45



<PAGE>

European Monetary Union-Euro

    On January 1, 1999 eleven member countries of the European
Union established fixed conversion rates between their existing
sovereign currencies, and adopted the Euro as their new common
currency. The Euro is currently trading on currency exchanges and
the legacy currencies will remain legal tender in participating
countries for a transition period between January 1, 1999 and
January 1, 2002. During the transition period, non-cash payments
can be made in the Euro and parties can elect to pay for goods
and services and transact business using either Euro or a legacy
currency. Between January 1, 2002 and July 1, 2002 the
participating countries will introduce Euro notes and coins and
will withdraw all legacy currencies so that they will no longer
be available.

    Although the United Kingdom is currently not participating in
the Euro the Company's businesses trade extensively within the
Euro Zone. The Company will continue to evaluate all pricing,
currency risk, accounting, tax, governmental, legal and
regulatory issues as guidance becomes available. Based on current
information the Company does not expect that Euro conversion will
have a material adverse affect on its business or financial
condition.


ITEM 10 - DIRECTORS AND OFFICERS OF THE REGISTRANT

    Set forth below are the names and positions of the directors
and executive officers of the Company.  Directors of the Company
are elected annually, and each director holds office until a
successor is elected.  Officers of the Company are elected from
time to time by vote of the Board of Directors and hold office
until a successor is elected.

The Company

    The directors and executive officers of the Company are
listed below:

    NAME                     AGE               POSITION

    Michael Hendry           46                Chairman

    Annabel Hendry           48                Director

    Paul Gregory             59                Finance Director

Certain biographical information with respect to each of these




                               46



<PAGE>

individuals is set forth below:

    MICHAEL HENDRY has been Chairman of the Company since its
founding in 1979.  Prior to that time, Mr. Hendry was employed by
Marine Development from 1975 to 1977 and Managing Director of
Transocean Broking from 1977 to 1979.  Mr. Hendry graduated from
Birmingham University in 1974 with a Bachelor of Science Degree
and immediately entered the shipping business, working in ship
agency, design and marine fabrication and shipbroking before
founding Cenargo in 1979, at the age of 26. Mr. Hendry has served
as a member since 1988 and as a Board Director since 1997 of the
General Council of Lloyd's Register of Shipping Trust Corporation
Limited, a classification society.

    ANNABEL HENDRY has been a director of the Company since its
founding.  Mrs. Hendry is the wife of Michael Hendry, the
Company's Chairman.

    PAUL GREGORY joined the Company in 1990 and has been a
director since 1994.  Prior to that time, Mr. Gregory worked for
12 years with Ocean Group plc, a large U.K. transportation group.
While at Ocean Group, he served for three years in Nigeria as
General Manager of Elder Dempster (Agencies Nigeria) Limited from
1983 to 1986, acted as a director of Elder Dempster Lines and
Palm Line Limited from 1986 to 1988, acted as managing director
of the U.K./West Africa lines joint service office from 1986 to
1988 and acted as Group Quality Director from 1988 to 1990.
Mr. Gregory is a Fellow of the Institute of Chartered Accountants
in England and Wales.


ITEM 11 - COMPENSATION OF DIRECTORS AND OFFICERS

    During the fiscal year ended September 30, 1999, the Company
paid an aggregate of approximately $2.4 million in compensation
to its chairman and directors (who comprise the Company's
executive officers) as a group.  The Company has written
employment contracts with all employees except Michael Hendry and
Annabel Hendry.  In addition, the Company provides certain non-
cash benefits to its employees and executive officers.


ITEM 13 - INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

    Not applicable


PART IV





                               47



<PAGE>

ITEM 19 - FINANCIAL STATEMENTS

    See pages F-1 through F-23, which are attached hereto and
incorporated herein.


ITEM 19 - FINANCIAL STATEMENTS AND EXHIBITS

    The following financial statements, together with the report
of Moore Stephens, Independent Chartered Accountants, are filed
as part of this annual report:

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Audited Financial Statements

    Report of Moore Stephens, Independent Chartered
      Accountants.........................................    F-1
    Consolidated Statements of Income for the years
      ended September 30, 1999, 1998 and 1997  F-2
    Consolidated Balance Sheets as of September 30, 1999
      and 1998............................................    F-3
    Consolidated Statements of Cash Flows for the
      years ended September 30, 1999, 1998 and 1997.......    F-4
    Notes to Consolidated Financial Statements............    F-6




























                               48



<PAGE>

                  INDEPENDENT AUDITORS' REPORT

             THE BOARD OF DIRECTORS AND SHAREHOLDERS
                    CENARGO INTERNATIONAL PLC


We have audited the accompanying consolidated balance sheets of
Cenargo International Plc and subsidiaries as of September 30,
1999 and 1998 and the related consolidated statements of income
and cash flows for each of the years in the three year period
ended September 30, 1999.  These consolidated financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States.  Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Cenargo International Plc and subsidiaries
as of September 30, 1999 and 1998, and the consolidated results
of their operations and their cash flows for each of the years in
the three year period ended September 30, 1999 in conformity with
accounting principles generally accepted in the United States.



Moore Stephens
Chartered Accountants
St. Paul's House
Warwick Lane
London  EC4P 4BN

February 15, 2000









                               F-1



<PAGE>

                          CENARGO INTERNATIONAL PLC

                      Consolidated Statements of Income
                Years ended September 30, 1999, 1998 and 1997
                    (U.S. Dollars expressed in thousands)


                       Note           1999            1998        1997

Operating revenues
Charterhire revenues                    $6,948         $34,906       $45,570
Ferry service revenues                  91,344          62,646        19,489
Logistics and other
  revenues             18(b)            21,546          14,669         7,930
Brokers' commission                      (334)         (1,116)       (1,921)
                                      --------        --------      --------
Operating revenues                     119,504         111,105        71,068
                                      --------        --------      --------

Operating expenses
Vessel and other
  operating costs                       80,366          72,103        41,159
Depreciation                            10,530          10,945        11,017
Provision for
  impairment
  in value of vessels  2(m)              3,100          22,636           -
Amortization of
  drydocking and
special survey costs                     3,409           1,669         1,767
Amortization of
  goodwill                                 112             108           -
General and administrative
  expenses                              17,790          13,590         7,932
Foreign currency loss                      468              88           889
                                      --------        --------      --------
Operating expenses                     115,775         121,139        62,764
                                      --------        --------      --------

Operating income
  (loss)               6                 3,729        (10,034)         8,304
                                      --------        --------      --------
Other income (expenses)
Interest income                          4,303           2,210           573
Interest expense       17(a)          (20,397)        (19,565)       (8,227)
(Loss) income from
  joint ventures                           -               -           (435)
Gain on disposition of
  fixed assets                           1,782          14,018            97
                                      --------        --------      --------
Other (expenses) income               (14,312)         (3,337)       (7,992)
                                      --------        --------      --------


                               F-2



<PAGE>

(Loss) income before
  income taxes                        (10,583)        (13,371)           312
Income taxes           7                 2,424           9,506            95
Minority interests                        (44)             -             -
                                      --------        --------      --------
Net (loss) income                     $(8,203)        $(3,865)          $407
                                      --------        --------      --------


See accompanying notes to consolidated financial statements.











































                               F-3



<PAGE>

                          CENARGO INTERNATIONAL PLC

                         Consolidated Balance Sheets
                      As of September 30, 1999 and 1998
                    (U.S. Dollars expressed in thousands)

Assets                       Note                       1999          1998

Current Assets
Cash and cash equivalents                              $29,677       $30,257
Cash held in escrow                    8                39,650        22,682
Trade accounts receivable                               22,557        17,247
Other receivables                                        4,810         5,892
Due from joint ventures                11                  585         2,024
Inventories                                              1,530         1,804
Prepaid expenses and accrued income                        860         3,902

Total current assets                                    99,669        83,808
Non current assets
Vessels and equipment                  9               143,431       158,541
Land and buildings                     9                13,293        11,827
Vessels under construction             10               62,472        77,115
Investments in joint ventures          11                  -             -
Loans to joint ventures                11                4,083         4,057
Goodwill, net                                            2,885         1,132
Trade investments                                          578           596
Deferred charges, net                  12                8,752         7,646
Pension fund debtor                    13                5,448         5,210
                                                      --------      --------
Total assets                                          $340,611      $349,932
                                                      ========      ========
Liabilities and shareholders' equity
Current liabilities
Current maturities of long-term debt   14                1,682         2,288
Capital lease obligations              19                3,563         3,537
Trade accounts payable                                   8,199        11,155
Accrued expenses                                         7,835         7,167
Accrued interest -
  ship mortgage notes                                    5,001         4,882
Other creditors                                          3,344        11,731
Due to joint ventures                  11                  -             -
                                                      --------      --------
Total current liabilities                               29,624        40,760
Long-term liabilities
Ship Mortgage Notes                    14              172,619       172,345
Long-term debt                         14               65,489        49,625
Capital lease obligations              19               12,840        15,457
Other creditors                                          1,474         2,010
Deferred taxation                      7                13,386        16,397
                                                      --------      --------
Total liabilities                                      295,432       296,594


                               F-4



<PAGE>

Contingent liability                   18                  -             -
                                                      --------      --------
Shareholders' equity
Share capital                          15                   21            21
Accumulated Other
  Comprehensive Income:
Cumulative translation adjustment      16                  428           384
Retained earnings                      16               44,730        52,933
                                                      --------      --------
Total shareholders' funds                               45,179        53,338
                                                      --------      --------
Total liabilities & shareholders' funds               $340,611      $349,932
                                                      ========      ========








































                               F-5



<PAGE>

                          CENARGO INTERNATIONAL PLC

                    Consolidated Statements of Cash Flows
                   As of September 30, 1999, 1998 and 1997

                    (U.S. Dollars expressed in thousands)

                                       1999               1998          1997
Operating Activities

Net (Loss) income                    $(8,203)         $(3,865)          $407

Adjustments to reconcile
  net income to net cash
  provided by operating
  activities:
Loss (income) from
  joint ventures                          -                -             435
Amortization of drydocking and
  special survey costs                  3,409            1,669         1,767
Amortization of ship mortgage
  notes discount                          340              -             -
Depreciation                           10,530           10,945        11,017
Amortization of goodwill                                   112           108-
Gain on disposition of fixed assets   (1,782)         (14,018)          (97)
Provision for diminution in value of
  assets                                3,100           22,636           -
Provision for diminution in value of
  investment in joint ventures              -              108           -
Foreign exchange loss (gain)              174              675           890
(Increase)/decrease in pension
  debtor                                (366)              182           -
(Increase) decrease in
  trade accounts receivable           (4,488)          (2,873)         3,368
(Increase) decrease in other
  receivables                           1,082            (810)       (2,553)
(Increase) decrease in inventories        274              501         (369)
(Increase) decrease in
  prepaid expenses
  and accrued income                    3,042          (5,406)         (215)
Increase (decrease) in trade
  accounts payable                    (3,630)             (96)       (1,698)
Increase (decrease) in accrued
  expenses                                787            6,486       (1,641)
Increase (decrease) in other
  creditors                           (9,718)            7,852         2,178
Increase (decrease) in deferred
  tax liabilities                     (2,500)          (9,412)           442
                                     --------         --------      --------
Net cash provided (absorbed) by
  operating activities                (7,837)           14,682        13,931


                               F-6



<PAGE>

                                     --------         --------      --------
Investing activities

Additions to land and
  buildings                           (2,083)            (804)         (274)
Additions to vessels and equipment   (17,176)          (3,254)         (648)

Additions to vessels under           (34,076)         (83,730)      (39,793)
construction
Purchase of subsidiary
  undertakings, net of
  cash acquired                       (1,306)          (5,170)       (1,143)
Purchase of other investment              -                -           (106)
Proceeds from sale of
  marketable security                     -                -           6,613
Proceeds from sale of
  fixed assets                         68,495           71,235           326
                                     --------         --------      --------
Net cash provided by (used in)
  investing activities                 13,854         (21,723)      (35,025)
                                     --------         --------     ---------
































                               F-7



<PAGE>

                          CENARGO INTERNATIONAL PLC
                    Consolidated Statements of Cash Flows
             As of September 30, 1999, 1998 and 1997 (Continued)

                    (U.S. Dollars expressed in thousands)

                                         1999             1998          1997
Financing activities

Proceeds from long-term debt           18,366          214,928       243,882
Repayment of long-term debt           (1,593)        (155,582)     (210,106)
Due (to) from joint ventures            1,413          (2,392)       (6,018)
Repayments of capital leases          (3,300)          (1,541)         (398)
Deferred charges paid                 (4,515)          (4,526)       (2,339)
Increase in share capital                 -                 21           -
                                     --------         --------      --------
Net cash provided by (used in)
  financing activities                 10,371           50,908        25,021
                                     --------         --------      --------
Net Increase (decrease) in cash and
  cash equivalents                     16,388           43,867         3,927
Cash and cash equivalents at
  beginning of year                    52,939            9,072         5,145
                                     --------         --------      --------
Cash and cash equivalents at
  end of year                         $69,327          $52,939        $9,072
                                     ========         ========      ========

Supplemental disclosure of cash flow information:

Interest paid, net of capitalized
  interest                            $20,397          $23,601        $9,025
Income taxes paid                         -                -             -
                                     ========         ========      ========

Cash and cash equivalents             $29,677          $30,257        $9,072
Cash held in escrow                    39,650           22,682            -
                                     --------         --------      --------
                                      $69,327          $52,939        $9,072

Purchase of subsidiary undertakings

Cash paid                              $1,440          $25,769        $1,176
Net proceeds on sale of divisions           -         (15,112)           -
Cash acquired                           (134)          (5,487)          (33)
                                     --------         --------      --------
                                       $1,306           $5,170        $1,143
                                     ========         ========      ========

See accompanying notes to consolidated financial statements.



                               F-8



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
             As of September 30, 1999, 1998 and 1997

1.  General

    The Company was incorporated in 1979 in the United Kingdom
    and has owned and operated vessels since 1982.  The Company's
    principal activities include ferry services, ship owning and
    operating, shipbroking, logistics services and freight
    forwarding.  The Company and its subsidiaries currently
    operate a fleet consisting of 10 owned and capital leased
    vessels, including freight and passenger ferries.

2.  Accounting Policies

    (a)  Basis of accounting

         The consolidated financial statements have been prepared
         in accordance with generally accepted accounting
         principles in the United States.

         The preparation of financial statements in accordance
         with generally accepted accounting principles requires
         management to make estimates and assumptions that affect
         the reported amounts of assets and liabilities and
         disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported
         amounts of revenues and expenses during the period.
         Actual results could differ from those estimates.  The
         following are significant accounting policies adopted by
         the Company.

    (b)  Consolidation

         The consolidated financial statements incorporate the
         assets and liabilities of the Company and its wholly-
         owned or majority controlled subsidiaries.  All
         intercompany balances and transactions have been
         eliminated upon consolidation.

         Entities in which the Company has a majority of the
         voting rights are consolidated.  Non-equity financing
         provided by the minority interests is accounted for as
         other loans.  Minority interest in the results of
         operations is not taken into account in the periods as
         the results were not material.





                               F-9



<PAGE>

    (c)  Investments in joint ventures

         The Company's investments in joint ventures are
         accounted for using the equity method of accounting
         whereby the carrying value is cost plus the Company's
         share of post-acquisition net income (loss).  Where
         investments in joint ventures are not material to the
         Company, the investments are carried at cost less any
         diminution for value which is other than temporary.

    (d)  Cash and cash equivalents

         For the purposes of the consolidated statements of cash
         flows demand and time deposits with original maturities
         of three months or less are considered equivalent to
         cash.

    (e)  Inventories

         Inventories which comprise fuel and consumable stores
         are stated at the lower of cost or market.  Cost is
         determined on a first-in, first-out basis.

    (f)  Vessels, equipment, land and buildings

         The cost of the vessels less estimated residual value is
         written off on a straight-line basis over the vessels'
         remaining lives.  The vessels' lives are estimated as
         being between 15 and 30 years from dates of delivery.
         Other equipment is depreciated over its estimated
         residual life at rates of between 14% and 25% on a
         straight-line basis, except for freehold buildings which
         are depreciated at a rate of 2% and ferry terminal
         buildings at between 5% and 10%.  Land is not
         depreciated.

    (g)  Vessels under construction

         The carrying value of vessels under construction
         represents the accumulated costs to the balance sheet
         date which the Company has had to pay by way of purchase
         instalments together with interest capitalized on loans
         raised to finance the purchase and other associated
         financing fees.  No charge for depreciation will be made
         until the vessels are delivered.

    (h)  Revenue and expense recognition

         Revenues and expenses are recognized on a daily accruals
         basis.  Revenues are generated from time charter hires,
         ferry services and freight income.  The consolidated


                              F-10



<PAGE>

         balance sheets reflect the deferred portion of revenues
         and expenses for total voyages in progress at the end of
         each period.  Estimated losses on voyages are provided
         for in full at the time such losses are known.

    (i)  Drydocking and special survey costs

         Expenditures incurred during drydocking are capitalized
         and amortized on a straight-line basis over the period
         until the next anticipated drydocking.

    (j)  Derivatives

         The Company enters into interest rate swap transactions
         from time to time to hedge a portion of its exposure to
         floating interest rates.  These transactions involve the
         conversion of floating rates into fixed rates over the
         life of the transactions without an exchange of
         underlying principal.  The differential is accrued as
         interest rates change and recognized as an adjustment to
         interest expense.  The related amount receivable from or
         payable to counterparties is included in accrued
         interest expense.  The fair values of the interest rate
         swaps are not recognized in the financial statements.

    (k)  Foreign currencies

         The Company's functional currency is the U.S. Dollar as
         US Dollar denominated transactions represent the single
         largest component of revenues, expenditures and cash
         flows.

         All assets and liabilities in the balance sheets of
         subsidiaries whose functional currency is other than the
         U.S. Dollar are translated at the year end exchange
         rate.  Revenue and expense items are translated at
         average exchange rates prevailing during the year.
         Translation gains and losses are not included in
         determining net income but are accumulated as a separate
         component of shareholders' equity.

         Foreign currency monetary assets are liabilities in the
         balance sheets of subsidiaries whose functional currency
         is the U.S. Dollar are translated at exchange rates in
         effect at the balance sheet date.  Foreign currency non-
         monetary assets and liabilities are translated using
         historical rates of exchange.  Foreign currency revenues
         and expenses are translated at the average exchange
         rates prevailing during the year and exchange gains and
         losses are included in the determination of net income.



                              F-11



<PAGE>

    (l)  Goodwill

         Goodwill represents the excess of purchase price over
         fair value of net assets acquired.  Goodwill is
         amortized over the expected periods to be benefited,
         generally 10 to 20 years.  The Company assesses the
         recoverability of this intangible asset by determining
         whether the amortization of the goodwill balance over
         its remaining useful life can be recovered through
         future operating activities of the acquired entity.

         If goodwill is negative as a result of the fair value of
         net assets acquired exceeding the purchase price the
         resulting negative goodwill is applied as a reduction in
         the value of non-current assets acquired on a pro-rata
         basis.

    (m)  Asset Impairment

         Certain long-term assets of the Company are reviewed
         when changes in circumstances require as to whether
         their carrying value has become impaired, pursuant to
         guidance established in Statement of Financial
         Accounting Standards No. 121, "Accounting for the
         Impairment of Long-lived Assets and for Long-Lived
         Assets to be Disposed Of". Management considers assets
         to be impaired if the carrying value of the asset
         exceeds the future projected cash flows from related
         operations (undiscounted and without interest charges).
         When impairment is deemed to exist, the assets are
         written down to fair value or projected discounted cash
         flows from related operations. Management also re-
         evaluates the period of amortization to determine
         whether subsequent events and circumstances warrant
         revised estimates of useful lives. In accordance with
         SFAS 121, the Company recorded impairment losses of $0,
         $22,636 and $3,100 for the years ended September 30,
         1997, 1998 and 1999, respectively.

    (n)  Assets under capital leases

         Assets used by the Company which have been funded
         through capital leases are capitalized and depreciated
         over their estimated useful lives in accordance with the
         Company's normal depreciation policy.  The resulting
         lease obligations are included in creditors.  Capital
         lease interest costs are charged directly to income.






                              F-12



<PAGE>

    (o)  Pension costs

         The Company operates defined contribution and defined
         benefit pension schemes.

         Contributions to defined contribution pension schemes
         are charged to income when incurred.  The costs of
         providing defined benefit pensions are charged to income
         in accordance with the advice of independent qualified
         actuaries.

3.  Segment Information

    The Company has adopted FASB Statement No. 131, "Disclosures
    about Segments of Business Enterprise and Related
    Information". The Company is managed in four operating
    segments: International Ship Owning and Operating, Irish Sea
    Ferries, Ferrimaroc and Logistics and Other Activities. The
    International Shipowning and Operating segment includes
    certain central overhead costs, central financing costs and
    other general corporate income and expenditure.

    The Company utilises EBITDA as a measure of segmental
    performance. The Company defines EBITDA as net income (loss)
    before taxes, interest expense, interest income,
    depreciation, provision for impairment in value of vessels,
    amortisation of drydocking and special survey costs,
    amortisation of goodwill, gain or loss from joint ventures
    and minority interest.

    Certain financial information is presented below: amounts are
    in thousands of US Dollars

                   INTERNATIONAL     IRISH                   LOGISTICS
                   SHIPOWNING        SEA                     AND
                   AND CHARTERING    FERRIES    FERRIMAROC   OTHER      TOTAL

    1999
    Revenue              6,614        72,238      19,106      21,546   119,504
    EBITDA               1,240        16,100       5,376        (54)    22,662
    Tangible assets     72,353       126,900      17,498       2,445   219,196
    Capital
      expenditures      18,192        16,896      15,738       2,508    53,334
    1998
    Revenue             33,790        45,982      16,664      14,669   111,105
    EBITDA              22,993        13,889       2,121         339    39,342
    Tangible assets    121,946       121,580       3,160         797   247,483
    Capital
      expenditures      44,899        41,689         424         729    87,741

    1997


                              F-13



<PAGE>

    Revenue             43,649         3,338      16,151       7,930    71,068
    EBITDA              19,349         1,223         267         346    21,185
    Tangible assets    165,857        62,357       3,808         192   232,214
    Capital
      expenditures      39,900           101       2,381         222    42,604

    EBITDA for all reportable segments differs from consolidated
    income (loss) before income taxes reported in the
    consolidated statements of income as follows: amounts are in
    thousands of US Dollars

                                     YEAR ENDED SEPTEMBER 30
                                    1999       1998       1997

    EBITDA                        $22,662     $39,342    $21,185
    Reconciling items:
    Depreciation                 (10,530)    (10,945)   (11,017)
    Provision for impairment
      in value of vessels         (3,100)    (22,636)          -
    Amortisation of goodwill        (112)       (108)          -
    Amortisation of drydocking    (3,409)     (1,669)    (1,767)
    Net interest expense         (16,094)    (17,355)    (7,654)
    Loss from joint ventures            -           -      (435)
                                ---------   ---------  ---------
    (Loss) income before
      income taxes              $(10,583)   $(13,371)       $312
                                ---------   ---------  ---------

4.  Adoption of New Accounting Standards

    The Financial Accounting Standards Board ["FASB"] issued
    Statement of Financial Accounting Standards ["SFAS"] No. 137,
    "Accounting for Derivative Instruments and Hedging Activities
    - Deferral of Effective Date of FASB Statement No. 133". The
    Statement defers for one year the effective date of FASB
    Statement No. 133 " Accounting for Derivative Instruments and
    Hedging Activities". The rule now will apply to all fiscal
    quarters of all fiscal years beginning after June 15, 2000.
    The Statement will require the Company to recognize all
    derivatives on the balance sheet at fair value. Derivatives
    that are not hedges must be adjusted to fair value through
    income. If the derivative is a hedge, depending on the nature
    of the hedge, changes in the fair value of derivatives will
    either be offset against the change in fair value of the
    hedged assets, liabilities, or firm commitments through
    earnings or recognized in other comprehensive income until
    the hedged item is recognized in earnings. The ineffective
    portion of a derivative's change in fair value will be
    immediately recognized in earnings. The adoption of SFAS No.
    137 is not expected to have a material impact on the



                              F-14



<PAGE>

    Company's consolidated results of operations, financial
    position or cash flows.

    In April 1998, the American Institute of Certified Public
    Accountants issued Statement of Position ("SOP") 98-5,
    "Reporting on the Costs of Start-Up Activities".  SOP 98-5
    provides guidance on the financial reporting of start-up
    costs and organization costs, and requires that such costs to
    be expensed as incurred.  SOP 98-5 applies to all non-
    governmental entities and is generally effective for fiscal
    years beginning after December 15, 1998.  Earlier application
    is encouraged in fiscal years for which annual financial
    statements previously have not been issued.  The adoption of
    SOP 98-5 is not expected to have a material impact on results
    of operations, financial position, or cash flows of the
    Company as the Company's current policy is substantially in
    accordance with SOP 98-5.

5.  Acquisitions

    In March 1999, the Company acquired 100% of the share capital
    of Freightwatch Limited ("Freightwatch") a company
    incorporated in the United Kingdom, for a total consideration
    of U.S.$1,174,391.  Freightwatch undertakes freight
    forwarding activities in the United Kingdom.

    This acquisition has been accounted for by the purchase
    method of accounting and accordingly the purchase price has
    been allocated to the assets acquired and the liabilities
    assumed based on the estimated fair values at the dates of
    acquisition.

    The excess of purchase price over the estimated fair value of
    the net assets acquired for Freightwatch has been recorded as
    goodwill, which is being amortized on a straight-line basis
    over 10 years.  Amortization of $46,689 has been charged in
    the year ended September 30, 1999.

    The estimated fair values of assets acquired and liabilities
    assumed are summarized as follows:

                                                   FREIGHTWATCH

    Capital assets                                       81
    Cash                                                134
    Accounts receivable                                 822
    Trade creditors                                   (673)
    Deferred tax                                        (1)
                                                   --------
                                                    $   363
                                                   ========


                              F-15



<PAGE>


    Operating results of Freightwatch are included in the
    Company's consolidated results of operations from the
    effective date of the acquisition which was March 1, 1999.

6.  Operating income (loss)

    The Company operates on a worldwide basis. The following are
    the customers that comprise 10% or more of operating
    revenues:

                                 1999       1998      1997

    Mitsui OSK Lines             $-         $-        $9,080
    Mediterranean Shipping
      Company                    $-         $-        $8,395
                                 ======     ======    ======

    During the year the Company terminated a vessel operating
    lease and purchased the vessel. After recognizing the costs
    of termination, the sale agency fee receivable on the sale of
    the vessel and other related costs, the Company recorded a
    profit on termination of $2,620,000. This amount has been
    included within vessel and other operating costs (income of
    $4,898,000) depreciation of ($1,157,000), and amortization of
    dry docking and special survey costs ($1,121,000).

7.  Taxation

    The Company records U.K. Corporation tax in accordance with
    Statement of Financial Accounting Standards No. 109,
    "Accounting for Income Taxes" which requires the Company to
    compute deferred taxes based upon the amount of taxes payable
    in future years, after considering known changes in tax rates
    and other statutory provisions that will be in effect in
    those year.

    The reconciliation of the Company's effective tax rate to the
    Corporation tax rate on income from continuing operations is
    as follows:













                              F-16



<PAGE>

                                     1999      1998       1997

    U.K. statutory rate (average
      rate for period)                 (30)      (31)         32
    Increase (decrease) in
      rate resulting from:
    Statutory rate reduction -
      deferred tax                        1         1        (1)
    Permanent book/tax differences
      and other                           4     (22)        (23)
    Revision to prior year estimate       2      (20)       (33)
                                    -------   -------    -------

    Net effective tax rate            (23)%     (72)%      (25)%
                                    =======   =======    =======

    The revision to prior year estimates represent adjustments to
    deferred tax estimates and differences between tax
    computations used for provisions and final computations
    submitted to the UK Inland Revenue.

    Income tax expense (benefit) attributable to income from
    continuing operations consists of:

                                 CURRENT    DEFERRED     TOTAL

    Year ended September 30, 1999
    US Federal and State           $   -      $    -    $      -
    Foreign - UK corporation tax        75     (2,499)   (2,424)
                                   -------     -------   -------
                                       $75    $(2,499)  $(2,424)
                                   =======    ========  ========

    Year ended September 30, 1998
    US Federal and State          $    -      $    -    $      -
    Foreign - UK corporation tax      (95)     (9,411)   (9,506)
                                  --------    --------  --------
                                  $   (95)    $(9,411)  $(9,506)
                                  --------    --------  --------

    Year ended September 30, 1997
    US Federal and State          $    -      $    -    $      -
    Foreign - UK corporation tax      (81)        (14)      (95)
                                  --------    --------  --------
                                  $   (81)    $   (14)  $   (95)
                                  ========    ========  ========

    The following table shows the tax effect of the Company's
    cumulative temporary differences and carryforwards included
    on the Company's Consolidated Balance Sheet at September 30,
    1999 and 1998.


                              F-17



<PAGE>

                                       1999          1998

    Excess of tax over book
      depreciation & deductions       $12,269      $15,142
    Holdover relief                     1,409        1,497
    Other                               (292)        (242)
                                      -------      -------
    Total net effective
      tax liability                   $13,386      $16,397
                                      =======      =======
    The Company and subsidiaries represent a U.K. tax group and
    file tax returns on that basis.  The Company has no material
    basic differences relating to its investments in
    subsidiaries.

8.  Cash Held in Escrow

    At September 30, 1999 the Company has cash held in escrow
    accounts to fund the purchases of Norse Irish Ferries
    Limited, Eaglescliffe Logistics Centre and two capital lease
    financed vessels, and is held as escrow property to secure
    the Ship Mortgage Notes.

9.  Vessels, Equipment, Land & Buildings

                                               1999       1998

    Cost
    Vessels                               $158,072    $216,558
    Land and buildings                      14,916      12,951
    Equipment                               10,837       9,799
                                          --------    --------
                                           183,825     239,308
    Accumulated depreciation              (27,101)    (68,940)
                                          --------    --------
    Net book value                        $156,724    $170,368
                                          ========    ========

    Included above are assets held under capital leases with a
    cost of $34,672,042 and accumulated depreciation of
    $13,439,613.

    The following is a summary of the vessels as of September 30,
    1999:









                              F-18



<PAGE>

     REGISTERED                                   YEAR    GROSS
     VESSELS OWNED           TYPE                 BUILT   TONNAGE

     m.v. Mistral            Passenger/Car Ferry  1981    20,220
     m.v. Scirocco           Passenger/Car Ferry  1974    11,177
     m.v. Merchant Bravery   RoRo                 1978    9,368
     m.v. Merchant Brilliant RoRo                 1978    9,366
     m.v. Merchant Venture   RoRo                 1979    6,058
     m.v. Spheroid           RoRo                 1971    7,171
     m.v. River Lune *       RoRo                 1983    7,765
     m.v. Saga Moon *        RoRo                 1984    7,746
     m.v. Dawn Merchant      RoPax                1998    22,152
     m.v. Brave Merchant     RoPax                1999    22,152

     The vessels are pledged as disclosed in Note 14.

     The insured value of vessels is $250.3 million.

     *   Vessels under capital leases (leases bought out in
October 1999)

10.  Vessels under Construction

                                            1999       1998

    Cost at beginning of the year          $77,115     $42,074
    Purchase instalments and other
      capital expenditure                   34,077      78,096
    Interest capitalized                         -       4,036
    Other associated financing
      fees capitalized                           -       1,598
    Transfer to vessels, equipment,
      land and buildings                  (48,720)    (48,689)
                                          --------    --------
    Cost at end of the year                $62,472     $77,115
                                          ========    ========

    The following is a summary of the Company's capital
    commitments for vessels under construction at September 30,
    1999:

                                                GROSS
                 SCHEDULED                      TONNAGE
    HULL NUMBER  DELIVERY     BUILDER    TYPE   (M.T.)    1999

    289          2000         A.E.S.A.   RoPax  22,150     8,550
    290          2000         A.E.S.A.   RoPax  22,150    17,100
                                                         -------

    $25,650
                                                         -------


                              F-19



<PAGE>

The shipyard contracts are assigned as disclosed in Note 14.

11. Loans to Joint Ventures

    Loans to joint venture companies represent advances to
    finance joint venture operations and are non-interest
    bearing.  Loans will only be repaid out of profits arising
    from operations or the sale of joint venture assets.

12. Deferred Charges

    Deferred charges represent debt arrangement fees and
    capitalized drydocking and special survey costs.  The debt
    arrangement fees are being amortized over the life of the
    long-term debt and are included within interest expense in
    the statement of income.  The drydocking and special survey
    costs are being amortized over the period to the next
    drydocking.  The deferred charges are comprised of the
    following amounts:

                                             1999        1998

    Debt arrangement fees                   $5,779      $4,394
    Drydocking and special survey costs      3,645       3,763
                                            ------      ------
                                             9,424       8,157
    Accumulated amortisation                 (672)       (511)
                                            ------      ------
                                            $8,752      $7,646
                                            ------      ------

13. Pension Costs

    (a)  Defined contribution pension plan

    The Company sponsors a defined contribution pension plan.
    Contributions to the plan for 1998 and 1999 were $331,000 and
    $280,633 respectively, which were charged to operations.

    (b)  Defined benefit pension plan

         Reconciliations of the pension benefit obligation and
         the value of plan assets follow:

                                              1999        1998
    Plan assets

    Fair value, beginning of year          $30,205     $30,165
    Actual investments returns               2,453         277
    Company contributions                       27         -



                              F-20



<PAGE>

    Benefits paid to participants            (814)       (237)
    Foreign exchange adjustment              (880)           -
                                            ------       -----
    Fair value, end of year                $30,991     $30,205
                                           -------     -------

    Pension benefits obligations              1999        1998

    Balance, beginning of year             $24,157     $25,015
    Service cost                               260         340
    Interest cost                            1,373       1,003
    Actuarial gains                          1,407     (1,963)
    Prior service cost                         729           -
    Company contributions                       34           -
    Benefits paid to participants            (814)       (238)
    Foreign exchange adjustment              (712)           -
                                            ------       -----
    Balance, end of year                   $26,434     $24,157
                                           -------     -------

    At September 30, 1999 and 1998, the funded status of the plan
    was as follows:

                                              1999        1998

    Surplus of plan assets over benefit
      obligations                           $4,557      $6,048
    Unrecognised net actuarial (gain) loss     891       (838)
                                            ------       -----
    Net amount recognised                   $5,448      $5,210
                                            ------      ------

    Components of net periodic benefit costs are:

                                              1999        1998

    Service cost                              $260         340
    Interest cost                            1,373       1,003
    Expected return on plan assets         (1,999)     (1,401)
                                           -------     -------
    Net periodic benefit cost (credit)      $(366)       $(58)
                                           -------     -------











                              F-21



<PAGE>

    For 1999 and 1998 the following
    weighted-average rates were used:         1999        1998

    Discount rate on the benefit
      obligation                             5.25%       6.00%
    Rate of expected return on
      plan assets                            6.50%       7.00%
    Rate of employee compensation
      increase                               5.00%       5.00%

                                              1999        1998

    Pension (credit)                        $(366)       $(58)
    Company contributions                      $34        $-
    Benefits paid                             $814        $238
                                             -----       -----

14.  Long-term Debt

     Ship Mortgage Notes and Construction Facility

     On June 19, 1998 Cenargo International Plc refinanced the
     majority of its group borrowings by concurrently issuing
     U.S.$175 million of 9.75% First Priority Ship Mortgage Notes
     in the United States of America and drawing down the first
     tranche of an associated U.S.$85 million bank loan facility.

     The Mortgage Notes issued at a discounted price of 98.445%
     are due for repayment at par in one instalment in June 2008.
     Interest is payable six monthly in arrears at 9.75%.  The
     Notes are secured by first preferred ship mortgages over the
     group vessels (excluding capital leased vessels and m.v.
     Spheroid) and guarantees from substantially all of the
     group's subsidiaries.

     The Notes are registered in the United States of America
     under the Securities Act of 1933 and listed on the
     Luxembourg Stock Exchange.

     The U.S.$85 million loan facility is a construction facility
     and can be converted to a term loan not later than June 19,
     2000.  The term loan is repayable by quarterly instalments
     with a final balance payable in June 2005.  Interest is
     payable at U.S. Dollar LIBOR plus 2.5%.  At September 30,
     1999 $59,750,000 had been drawn down under this facility.

     The facility is secured by an assignment of rights under
     newbuilding contracts for RoPax Hulls 289 and 290, together
     with guarantees from substantially all of the group's
     subsidiaries.



                              F-22



<PAGE>

     Other Loans

     402,780 Pounds Sterling (U.S.$663,338) nominal value of
     unsecured guaranteed loan notes issued as part consideration
     for the Company's acquisition of Scruttons Plc.  The loan
     notes are redeemable on application by the holder in March
     and September each year.

     Any notes in issue on 7th October 2002 will be redeemable by
     the Company at par.  Interest is payable semi-annually in
     arrears at the Midland Bank Plc offer rate for six months
     deposits of 1,000,000 Pounds Sterling in the interbank
     market minus 1%.  The loan notes are guaranteed by Midland
     Bank Plc secured by a collateral bank deposit of 727,880
     Pounds Sterling (reducing to 366,380 Pounds Sterling after
     the year end).

     A Sterling denominated loan of 2,250,000 Pounds Sterling
     ($3,705,525) is repayable as follows:

      (i)   25% from the proceeds on the maturity of life
            assurance policies maturing in 2015.

     (ii)   25% repayable in equal annual instalments over the
            last 15 years of the 20 year term of the loan.
    (iii)   50% on maturity in 2015.

            Interest is payable at a fixed rate of 9.625% per
            annum over the 20 year term of the loan and is
            secured by a fixed charge on the Company's head
            office freehold property.

    (c)  Other loans comprise a loan due to a former joint
         venture partner outstanding of 1,853,973 Pounds Sterling
         ($3,053,308).  The loan is unsecured and repayable on an
         annuity basis by ten equal six monthly instalments of
         384,623 Pounds Sterling ($621,320) including interest
         fixed at the inception of the loan at a rate of 8.07%.

    The outstanding long-term debt as of September 30, 1999 is
    repayable as follows:

    2000                                               $ 3,322
    2001                                                 8,128
    2002                                                10,859
    2003                                                13,672
    2004                                                21,922
    2005 and later                                     181,887
                                                       -------
    Total long-term debt                              $239,790
                                                      --------


                              F-23



<PAGE>


15. Share Capital

                                              1999        1998
    Share capital is as follows:

    Authorized
    500,000 ordinary shares of ?1 each
    (1998 - 500,000 ordinary shares)          $750        $750
                                             -----        ----
    Issued
    50,000 ordinary shares of ?1 each
    (1998 - 100 ordinary shares)               $21         $21
                                              ----        ----

     The company is subject to restriction on the payment of
     dividends imposed by covenants entered into in connection
     with the issue of Ship Mortgage Notes and Construction
     Facility (note 14).

16.  Changes in Shareholders' Equity

                                          ACCUMULATED
                                             OTHER
                                         COMPREHENSIVE
                                        INCOME (LOSS):
                               ORDINARY   CUMULATIVE   CUMULATIVE
                                 SHARE    TRANSLATION   RETAINED
                                CAPITAL   ADJUSTMENT    EARNINGS
                               --------- -------------  --------

    Balance at September 30, 1997  -          (47)         56,798
    Movement in year               -           431            -
    Net income (loss)              -           -          (3,865)
    Share capital issued            21         -              -
                                  ----       -----          -----

    Balance at September 30, 1998   21         384         52,933
    Movement in year               -            44            -
    Net income (loss)              -           -          (8,203)
    Balance at September 30, 1999  $21        $428        $44,730
                                 -----       -----        -------

17.  Financial Investments

     Off-balance sheet market and credit risk

     Market risk exists with respect to changes in interest rates
     and foreign exchange rates.  The Company enters into
     interest rate swap and forward exchange contracts from time
     to time to manage a portion of this risk.  Credit risk


                              F-24



<PAGE>

     exists to the extent that the counterparty is unable to
     perform the contracts, but this risk is considered remote.

     There were no derivative contracts outstanding at September
     30, 1999.

     (a)  Interest rate swap transactions

          The Company had entered into the following interest
          rate swap transactions involving the payment of fixed
          rates in exchange for LIBOR which were terminated
          during the previous year:

                                  INCEPTION   MATURITY
      PRINCIPAL (IN THOUSANDS)      DATE        DATE         RATE

      $48,196 increasing
      quarterly to $61,500 in
      August 1998 and
      reducing thereafter to
      $34,500                  June 1997      August 2004   6.98%

      $24,098 increasing
      quarterly to $30,750 in
      August 1998 and
      reducing thereafter to
      $17,250                  June 1997      August 2004   6.98%

      $7,050 reducing
      quarterly to $379        February 1996  October 1999  6.52%
      $2,199                   February 1996  October 1999  6.52%

     The cost of terminating these transactions was $6.7 million
     which has been included within the prior year interest
     expense.

     (b) Foreign currency hedging transactions

         The fair value of foreign currency hedging transactions
         is estimated based on the market value of these or
         similar instruments, as adjusted for differences in
         maturity.  There are no foreign currency contracts
         outstanding at September 30, 1999 and 1998.

     (c) Fair value of Ship Mortgage Notes

     (d) Other financial instruments

         The carrying amount of other financial instruments
         approximates to fair value as the long-term debt is at



                              F-25



<PAGE>

         floating rates of interest and all other financial
         instruments are short-term in nature.

18.  Contingent Liabilities and Assets

     (a)     The Company insures the legal liability risks for
             its shipping activities with the Steamship Mutual,
             UK Mutual and North of England mutual protection and
             indemnity associations.  As a member of mutual
             associations, the company is subject to calls
             payable to the associations based on the company's
             claims record in addition to the claims record of
             all other members of the associations.  A contingent
             liability exists to the extent that the claims
             records of the members of the associations in the
             aggregate show significant deterioration which
             result in additional calls on the members.

     (b)     The Company has entered a claim for damages in the
             amount of Spanish Pesetas 3,800,000,000 ($25.5
             million) against Ministeria de Comunicaciones,
             Transportes y Medio Ambiente now Ministeria De
             Fomento relating to the company being prevented from
             operating a ferry service between Spain and Morocco.
             The Company is actively pursuing the case. During
             the year the Company recognised a non-refundable
             cash receipt of $1,500,000 relating to this
             litigation claim. The amount has been included
             within logistics and other revenues.

19.  Capital and Other Commitments

     The Company has acquired certain fixed assets under capital
     leases.  The Company has the following commitments under
     those capital leases:


















                              F-26



<PAGE>

                                               1999

    2000                                        4,789
    2001                                        4,283
    2002                                        3,962
    2003                                        3,790
    2004                                        2,808
    2005 and later                                627
    -------
    Minimum lease payments                     20,259

    Less imputed interest                     (3,856)
                                             --------

    Present value of obligations under
      capital leases                          $16,403
                                              -------


         The Company is committed to make rental payments for
         vessels, properties and equipment under operating
         leases.  The future minimum rental payments under these
         operating leases are as follows:

                                                   1999

    Year ended September 30
    2000                                           $1,153
    2001                                           230
    2002                                           223
    2003                                           215
    2004                                           202
    2005 and late                                  1,816
                                                   -------
                                                   $3,839
                                                   -------

     Operating lease rentals paid in the year ended September 30,
     1999 amounted to $7,617,238(1998: $3,538,000, 1997:
     $1,367,000).

 20. Subsequent Events

     (a)  Purchase of company

          On October 1, the Company completed its purchase of
          Norse Irish Ferries Limited, a company operating an
          Irish Sea ferry service.  The purchase price of $38.7
          million has been met partly from escrow proceeds and
          partly from free cash.



                              F-27



<PAGE>

     (b)  Purchase of Eaglescliffe

          On October 22 the Company completed its purchase of the
          Eaglescliffe Logistics Centre in the North East of
          England for a price of 3.555 million Pounds Sterling
          ($5.85 million).  The purchase price has been funded
          from escrow proceeds.

      (c) Purchase of capital leased vessels

          On October 22, the Company completed the purchase of
          the two ships River Lune and Saga Moon, previously
          operated under capital leases. The purchase was funded
          from escrow proceeds.







































                              F-28



<PAGE>

                           SIGNATURES

     Pursuant to the requirements of Section 12 of the Securities
     Exchange Act of 1934, the registrant certifies that it meets
     all of the requirements for filing on Form 20-F and has duly
     caused this annual report to be signed on its behalf by the
     undersigned, thereunto duly authorized.

                                 Cenargo International Plc

                                 By:  /s/ Michael Hendry


                                 _______________________
                                 Name:  Michael Hendry
                                 Title:  Chairman

Dated: February 23, 2000



































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