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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, 2000

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:  9 % First Priority Ship Mortgage Notes
Due 2008




<PAGE>

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   Sterling Pound 1    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)

ITEM 1  -   IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
            ADVISORS........................................5
ITEM 2  -   OFFER STATISTICS AND EXPECTED TIMETABLE.........5
ITEM 3  -   KEY INFORMATION.................................5
ITEM 4  -   INFORMATION ON THE COMPANY.....................12
ITEM 5  -   OPERATING AND FINANCIAL REVIEW AND PROSPECTS...35
ITEM 6  -   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.....49
ITEM 7  -   MAJOR SHAREHOLDERS AND RELATED PARTY
            TRANSACTIONS...................................50
ITEM 8  -   FINANCIAL INFORMATION..........................50
ITEM 9  -   THE OFFER AND LISTING..........................51
ITEM 10 -   ADDITIONAL INFORMATION.........................51
ITEM 11 -   QUANTITATIVE AND QUALITATIVE DISCLOSURES
            ABOUT MARKET RISK..............................55
ITEM 12 -   DESCRIPTION OF SECURITIES OTHER THAN
            EQUITY SECURITIES..............................56
ITEM 13 -   DEFAULTS, DIVIDEND ARREARAGES AND
            DELIQUIENCIES..................................56
ITEM 14 -   MATERIAL MODIFICATIONS TO THE RIGHTS OF
            SECURITY HOLDERS AND USE OF PROCEEDS...........56
ITEM 18 -   FINANCIAL STATEMENTS AND EXHIBITS..............57






























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                             PART I

ITEM 1 - IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

    Not applicable

ITEM 2 - OFFER STATISTICS AND EXPECTED TIMETABLE

    Not applicable

ITEM 3 - KEY INFORMATION

Selected Financial Data

    The following selected historical income and balance sheet
financial data as of and for the years ended September 30, 1996,
1997, 1998, 1999 and 2000 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.






























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                                       Year Ended September 30,
                                ______________________________________________
                                1996     1997       1998     1999       2000
                                         (U.S. Dollars in Thousands)

Statement of Income Data
Operating revenues

Charterhire revenues, net    $48,750   $43,649   $33,790    $ 6,614   $ 8,529
Ferry service revenues        11,497    19,489    62,646     91,344   127,468
Logistics services and other
  revenues                     8,010     7,930    14,669     21,546    24,964
                              ______    ______    ______     ______   _______
Operating revenues            68,257    71,068   111,105    119,504   160,961
                              ______    ______    ______     ______   _______
Operating expenses

Vessel and other
  operating costs            34,127     41,159    72,103     80,366   118,402
Depreciation                 11,823     11,017    10,945     10,530     9,726
Provision for impairment
  in values of vessels           --         --    22,636      3,100        --
Amortization of dry-docking
  and special survey costs    1,139      1,767     1,669      3,409     3,123
Amortization of goodwill         --         --       107        112     1,742
General and administrative
  expenses                    7,094      7,932    13,590     17,790    20,144
Foreign exchange loss (gain)    (916)      889        88        468      (956)
                             _______   _______   _______    _______   _______
Operating expenses           53,267     62,764   121,139    115,775   152,181
                             _______   _______   _______    _______   _______
Operating income (loss)      14,990      8,304   (10,034)     3,729     8,780
                             _______   _______   _______     ______   _______
Other income (expense)
Interest income                 672        573     2,210      4,303     1,092
Interest expense             (8,894)    (8,227)  (19,565)   (20,397)  (19,303)
Income (loss) from joint
  ventures                     (965)      (435)       --         --        --
Gain on sale of marketable
  security                    1,326         --        --         --        --
Gain on disposition of
  fixed assets                   3          97    14,018        782        97
                            _______     _______  _______    _______   _______
Other income (expense)      (7,858)     (3,337)  (14,312)  (14,312)    (8,531)
                            _______    _______   _______    _______   _______
Income (loss) before
  income taxes              $ 13,563    $  312  $(13,371)  $(10,583)     $249
                            ========    ======  =========  ========   =======





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Other Financial Data
Net cash provided by (used
  in) operating activities  $18,895    $13,931   $ 14,682   $(7,837)   $7,663
Net cash (used in) provided
  by investing activities   $(6,724)  $(35,025) $(21,723)  $(13,854)  $13,752
Net cash provided by (used
  in) financing activities $(17,889)   $25,021   $ 50,908   $10,371  $(75,901)
Balance Sheet Data
  (at end of period)
Cash and cash equivalents    $5,146     $9,072    $52,939   $69,327   $14,841
Net book value of vessels  $163,158   $177,002   $153,166  $138,353  $132,702
Total assets               $206,523   $264,099   $349,932  $339,816  $265,745
Total debt                 $117,024   $164,469   $243,252  $256,193  $181,349
Shareholders' equity       $ 56,391   $ 56,751   $ 53,338  $ 45,179  $ 37,699
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        708       831     1,030
Passengers                    1,315      3,701      3,951     4,201     4,500
Total number of vessels          16         17         15        10        12

*Includes the Mistral operated under an operating lease (1997 and 1998) and
owned as at end fiscal 1999, and Northern and Midnight Merchant operated under
operating leases in 2000.


Risk Factors

    Substantial leverage and debt service could affect the
Company's ability to grow and service its debt obligations.

    Cenargo International plc (the "Company") is highly
leveraged.  As of September 30, 2000, the Company has $181.3
million in total indebtedness outstanding and $37.7 million of
shareholders' equity.  Subject to the restrictions in the
indenture for its outstanding senior notes and its loan
agreements, each of the Company and its subsidiaries may incur
additional indebtedness from time to time.  The degree to which
the Company is leveraged could have important consequences for
holders of the notes, including: (i) the Company's ability to
obtain additional financing for working capital, capital
expenditures, acquisitions or general corporate purposes may be
limited; (ii) the Company must dedicate a substantial portion of
its cash flow from operations dedicated to the payment of
interest on the notes and any other future indebtedness, reducing
the funds available to the Company for other purposes;


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(iii) indebtedness outstanding under some of its loan agreements
is secured by security interests in some of the Company's assets,
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 pressures and respond to changing
business conditions; (v) the Company may be more vulnerable than
others 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) some of the Company's
indebtedness may bear interest at floating rates, thereby
rendering the Company vulnerable to increases in interest rates.

It is possible that at some future date the Company could face a
potential inability to repay its debt.

    The Company currently must dedicate a large portion of its
cash flow from operations to satisfy its debt service
obligations.  The Company's ability to pay interest on, and other
amounts due in respect of, its notes and to satisfy its future
debt obligations will depend upon the Company's future operating
performance, which prevailing economic conditions and financial,
business and other factors, many of which are beyond its control,
will affect.  There can be no assurance that the Company's cash
flow and capital resources will be sufficient for payment of its
indebtedness in the future.  Any inability of the Company to
service its indebtedness or obtain additional financing, as
needed, could have a material adverse effect on the Company and
its note holders.

    As a holding company, the Company is dependent on the cash
flow from its subsidiaries which is necessary to meet its debt
obligations.

    The Company is a holding company with its subsidiaries
conducting substantially all of its operations and owning its
assets.  The Company depends for its cash flow and ability to
meet its debt service obligations, including payments of
principal and interest on its notes, on the cash flow of those
subsidiaries and the payment of funds by those subsidiaries to
the Company in the form of loans, dividends, advances or
otherwise.  A particular subsidiary's ability to generate cash
flow from operations, the corporate or insolvency laws of the
jurisdiction of its incorporation and by any financing agreement
to which it may become a party or be subject may restrict that
subsidiary's ability to pay dividends or make such distributions.
If the Company did not receive that cash flow, it may not be able
to service its debt obligations.

Restrictive covenants in the Company's loan agreements could
hinder its ability to grow and service its debt.


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    The indenture for the Company's notes and its loan agreements
impose, operating and financial restrictions that affect, and in
many respects significantly limit or prohibit the ability of the
Company and its subsidiaries to incur additional indebtedness,
grant liens, make certain investments, sell assets, engage in
mergers and acquisitions and make certain capital expenditures.
These sorts of restrictions could limit the ability of the
Company to increase the size of its fleet, respond to market
conditions and meet extraordinary capital needs, and could
otherwise restrict corporate activities.  Some of these
agreements also impose maintenance covenants with respect to
certain cash liquidity and financial ratios and the market value
of certain vessels relative to indebtedness.  The Company's
failure to comply with any of these covenants could result in a
default under these agreements, and under other agreements
containing cross default provisions, which would permit lenders
to accelerate the maturity of indebtedness under these agreements
and to foreclose upon collateral securing that indebtedness.

The Company faces strong competition.

    The markets in which the Company operates are highly
competitive, based primarily on supply and demand.  Many of the
Company's competitors are substantially larger and have greater
resources than the Company.  As a result, there can be no
assurance that the Company will be able to compete successfully
in its markets.

    While the Company has a strong position in the Irish Sea
ferry market, the Company's competitors could seek to increase
service offerings or reduce freight rates in that market, which
could negatively impact the Company and its note holders.

Certain risks associated with the purchase and operation of
secondhand vessels could affect the Company's operations.

    The Company buys both newly built and secondhand vessels.
Vessels purchased secondhand carry no warranties from the sellers
or manufacturers.  In the event of a casualty, the Company may
have no recourse to the builder.

The Company faces risks associated with its ferry operations.

    --   Repairs.  The ability to provide a regularly scheduled
         service directly affects ferry revenues.  Short
         interruptions to make repairs, or for other reasons,
         could adversely affect the results of the Company's
         operations.

    --   Civil Disturbances.  Civil disturbances and political
         turmoil have historically had an impact on investment


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         and trading levels in Northern Ireland.  The Irish peace
         accord may not hold.  Northern Ireland's civil
         disturbances may recommence in the future.  It is not
         possible to predict how political developments may
         affect investment and operating levels in Northern
         Ireland which could, in turn, affect the Company's
         results of operations.

    --   Availability of Berths.  The Company does not have
         written agreements for the use of berths and port
         facilities at either Almeria, Spain or Nador, Morocco.
         There can be no assurance that either the Spanish or
         Moroccan government will continue the Company's right to
         use the berths and port areas.  In addition, because
         there is a government imposed limit on the number of
         Moroccans granted immigrant status by many European
         countries, the Company's customer base in the
         Mediterranean could be limited.

The Company's growth strategy could adversely affect its business
and note holders.

    As part of its strategy, the Company has pursued the
acquisition of other companies, assets or business lines that
complement or expand its existing businesses.  Acquisitions
involve a number of risks that could adversely affect the
Company, including the diversion of management's attention,
insufficiency of management resources, the unsuccessful
integration of the operations and personnel of the acquired
companies, the potential loss of key employees or customers of
the acquired operations and the increase in the Company's debt
level.  The Company may not realize any of the anticipated
benefits of an acquisition.  An acquisition could materially and
adversely affect the Company's business, operating results or
cash flow.

The Company depends on its senior management.

    The Company depends on the service of its senior executives,
and particularly Michael Hendry, for the management of its
activities and strategic guidance.  The loss or unavailability of
one or more of its senior executives, and particularly
Mr. Hendry, for any extended period of time could have an adverse
effect on the Company's business and results of operations.  The
Company does not have long-term employment contracts with its
senior executives, nor does it maintain key man life insurance
with respect to any of its senior executives.

The Company may not be able to fulfill the conditions requiring
it to redeem notes in the event of a change of control and other
circumstances requiring redemptions.


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<PAGE>

    In the event of a change of control, the Company will be
required, subject to some conditions, to offer to purchase all
outstanding notes at a price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest.  A change of
control may also constitute an event of default under the
Company's loan agreements, permitting the lenders to declare the
loans  immediately due and payable.  The Company may not have the
financial resources necessary to repurchase notes or to satisfy
any obligations it may have under any other financing agreements
to which it is a party or may become subject on a change of
control or in the circumstances requiring redemption.

Environmental, safety and other regulations greatly affect the
Company's business.

    The Company is subject to regulation and supervision in the
various jurisdictions in which it trades, operates and conducts
business.  Changes to those regulations may adversely affect the
business of the Company.  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, also affect
the Company's operations.  Regulations may adversely affect the
Company's operations.

Possible catastrophic loss and liability could also adversely
affect the Company.

    A number of risks affect the ownership and operation of
ferries.  These risks include mechanical failure, personal
injury, vessel and cargo loss or damage, business interruption
due to political conditions in foreign countries, hostilities,
labor strikes, adverse weather conditions and catastrophic marine
disaster, including environmental accidents and collisions.  All
of these risks could result in liability to the Company and could
cause loss of revenues, increased costs or loss of reputation and
goodwill, impairing the Company's ability to meet its
obligations, including payment of debt service on its notes.

The Company's insurance may not cover all claims, which could
hurt the Company's results.

    The Company maintains insurance against those risks that it
believes are at least consistent with industry standards, and
believes that its coverage provides adequate protection based on
such standards and its historical claims experience.  The Company
cannot assure its note holders that it has adequately insured
against all risks, that the underwriters may pay any particular
claim or that the Company will be able to obtain adequate
insurance coverage at commercially reasonable rates in the
future.  In addition, more stringent environmental and other


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regulations may result in increased costs for, or the lack of
availability of, insurance against risks of environmental damage,
pollution and other claims for damages that may be asserted
against the Company.  Even if the Company receives insurance
proceeds to cover the financial losses incurred following the
occurrence of one or more of these events, the Company's business
reputation, and, therefore, its ability to obtain future
charters, may well be materially adversely affected by such an
event.

The Company's principal shareholder may have interests not
identical with those of its note holders

    Michael Hendry, the Company's Chairman, owns 99% of the
outstanding ordinary shares of the Company.  As a result,
Mr. Hendry exercises control over the business and affairs of the
Company by virtue of his control over the Company's Board of
Directors. Circumstances may give rise to perceived or actual
conflicts of interests between Mr. Hendry as 99% shareholder and
the note holders.

Increasing fuel prices could harm the Company's results.

    Fuel forms a significant part of the Company's expenses.
Unless the Company is able to increase fares while maintaining
market share, the Company's results could suffer from rising fuel
costs.

ITEM 4 - INFORMATION ON THE COMPANY

    Cenargo International plc, 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.  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.  The Company acquired its first
vessels, three roll-on/roll-off ("RoRo") freight ferries, in
1982.  Since that time its 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


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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.

    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 12 vessels, including, six RoRo freight ferries, two RoRo car
and passenger ferries and four state-of-the-art roll-on/roll-off
freight and passenger ("RoPax") ferries ("the RoPax Vessels"),
the first two of which were delivered September, 1998 and
January, 1999. The last two were delivered in March and September
2000, respectively.  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 August 12, 1999 the Company
sold its two remaining dry cargo deepsea vessels for $1.1 million
each.

    Following the recent delivery of the last two of the four 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 2000, Merchant
Ferries transported 56,000 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


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each direction between Heysham, England, and Belfast, Northern
Ireland.  During fiscal 2000, BFF transported 102,000 trailer
units, comprised mostly of drop trailers, and 63,000 trade cars
(generally new automobiles being transported to dealers).

    The Company has operated a ferry service between Liverpool,
England, and Dublin, Republic of Ireland since February 1999.
Unlike the previous Heysham-based services, which utilize RoRo
freight ferries with certificates for a maximum of 12 passengers,
the Company's RoPax Vessels have certificates for a maximum of
250 passengers, permitting the Company to significantly increase
its carriage of higher margin "driver accompanied" trailers.
During fiscal 2000 the services transported 99,500 trailer units,
including a large percentage of driver accompanied trailers.  The
service also carried over 43,000 passengers.

    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.

    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. A second ramp was
completed by the Port of Dublin for Merchant Ferries'
preferential, but not exclusive, use in June 2000. This enabled
both Merchant Ferries services from Heysham and Liverpool to
berth simultaneously at the crucial early morning and late
evening slot times. 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.

    A river berth is presently under construction by the Port of
Liverpool for the use of the Merchant Ferries' and Norse Irish
Ferries' services to Dublin and Belfast, respectively.  This will
avoid the companies' vessels having to negotiate the locks in the
Port's existing in-dock facilities, saving time and thus
improving the vessel's utilization.  The river berth should be
completed between the end of 2001 and the end of the first
quarter of 2002.

    In October 1999, the Company acquired "NIF" for a total
purchase price, including the costs of the transaction, of $44.0
million.  NIF operates a ferry service between Liverpool, England


                               14



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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.  In fiscal 2000, the service
transported 127,000 trailer units and 96,000 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.

    In October 1999, the Company also completed its purchase of
the Eaglescliffe Logistics Centre in the North East of England
for a price of $5.85 million and purchased the ships River Lune
and Saga Moon, which had been previously operated under capital
leases.  These purchases were funded using the remaining $37.8
million held by the trustee for the Company's Senior Mortgage
Notes, together with approximately $25 million of free cash.

    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 2000, Ferrimaroc carried 246,000 passengers,
53,000 cars and approximately 3,300 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.  In fiscal 1999
the company had operated two vessels during the summer season,
and one during the remainder of the year.  In June 2000 the
Moroccan government advised the Company that it would not be
permitted to operate two vessels during the summer. Two new
competitors (one Moroccan, one Spanish) came onto the route and
introduced a pool for themselves and the other competitor on the
route.  The Company is continuing to negotiate to join the pool.

    Logistics.  Since the early 1990's, the Company has expanded
the scope of its activity to cover general sea and air freight
forwarding.  The Company owns 75% (with an option on the
remaining 25%) of Flair Forwarding (UK) Limited ("Flair"), a
just-in-time air freight forwarding specialist, and Stockglobal
Limited ("Duncan"), a sea freight forwarding business.  The
Company also owns 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


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<PAGE>

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
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.

    The Company leases additional office and warehousing
facilities near Heathrow to expand its logistics business in the
South of England.

Shipbroking and Ship Operating Activities

    The Company 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


                               16



<PAGE>

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 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 for the Company in the Port of Dublin was
completed in June 2000.  This enables 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 service.  The Company is
contemplating 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
2002. 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 its 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
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


                               17



<PAGE>

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
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


                               18



<PAGE>

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.

Property, plants and equipment

    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


                               19



<PAGE>

which the respective company has the exclusive use of designated
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 2002.

    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.

    Following a successful solicitation of the note holders
Eaglescliffe was purchased on October 22, 1999 for a cost of
3.555 million pounds sterling ($5.85 million). The purchase
was funded from money on deposit with the trustee for the
Company's ship mortgage
notes and the property was made the subject to a mortgage to
secure the Company's ship mortgage notes. The purchase price
included 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. The
decontamination clean up was completed in December 2000.

    The Company's Ferry Fleet.  The Company's ferry fleet
consists of six RoRo ferries, two passenger/car ferries and four
RoPax ferries, of which two are chartered in.  The following
table sets forth certain information with regard to the Company's
current ferry fleet:












                               20



<PAGE>

                                                          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 units         (Isle of Man)

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

NORTHERN MERCHANT     RoPax           250 passengers      2000        British
                                      136 trailer units

MIDNIGHT MERCHANT     RoPax           250 passengers      2000        British
                                      136 trailer units

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





                               21



<PAGE>

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

    The RoPax Vessels Dawn, Brave, Northern and Midnight Merchant
are sister ships, affording the Company operating efficiencies
and scheduling flexibility. The Dawn Merchant and Brave Merchant
are employed in the Irish Sea trade as discussed above.

    The Company has also time chartered two additional RoRo
ferries: Varbola for 6 months from January 9, 2001 and the Merle
for 9 months from September 11, 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.

    RoPax vessels three and four were delivered in March 2000 and
the second in September 2000. The Company has agreed an eighteen
month time charter of both these ferries 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
2000.

    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


                               22



<PAGE>

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
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


                               23



<PAGE>

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.

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


                               24



<PAGE>

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
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 Rothmans Cleveland
Potash Ltd., Sanyo Electric Manufacturing (UK) Ltd., Samsung
Electronics Manufacturing (UK) Ltd., Ehrmanns Plc and Virgin
Cosmetics Ltd.



                               25



<PAGE>

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.

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


                               26



<PAGE>

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
of the Company's vessels which had to be ISM Code compliant by
July 1, 1998, was ISM Code certified by the due date.
Certification has also been obtained for all the Company's
freight vessels that are currently trading. Merchant Venture and
Spheroid (now being held for sale) do not have this certificate
yet.

    In 1995, the IMO issued new regulations under the
International Convention for the Safety of Life at Sea (SOLAS)


                               27



<PAGE>

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. The four
RoPaxes do comply with the Stockholm Agreement.

    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
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.


                               28



<PAGE>

"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
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


                               29



<PAGE>

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
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


                               30



<PAGE>

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
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


                               31



<PAGE>

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.

    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


                               32



<PAGE>

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.

    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


                               33



<PAGE>

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
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


                               34



<PAGE>

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 $1000 million per
vessel per incident.

    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.

ITEM 5 - OPERATING AND FINANCIAL REVIEW AND PROSPECTS

    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.

    In recent years, the Company 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 use of two RoPax ferries
under 12 year operating leases.







                               35



<PAGE>

Management's Discussion and Analysis of
Financial Condition and Results of Operation

Deep Sea Operations

    During 1999 the Company 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.

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 service offers two sailings per day in each
direction and carried approximately 99,500 equivalent freight
units and 43,000 passengers in fiscal 2000. The Port of Dublin
has completed the construction of an additional berth adjacent to
the Company's existing berth in Dublin. Under its agreement with
the port, the Company has preferential, but not exclusive, rights
to use this additional berth at the peak loading and discharging
times each day.

    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 2000.

    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.  The service carried approximately 127,000
equivalent trailer units and approximately 96,000 passengers in
fiscal 2000.

    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



                               36



<PAGE>

approximately 450,000 equivalent trailer units per annum, over
32% of the market.

Ferrimaroc

    Ferrimaroc, the passenger and freight ferry service operated
by the Company between Almeria in Southern Spain and Nador, in
Eastern Morocco has had a less successful year.  The Company
faced increased competition during fiscal 2000. In addition to
Limadet, Comarit (Moroccan lines) and Trasmediterranea (Spanish
line) joined the route.  The Company was informed by the Moroccan
government in June 2000 that it would not be allowed to use two
ships during the summer 2000. In the event the company used its
larger vessel Mistral but its total carryings dropped compared to
fiscal 1999. In fiscal 2000 the service carried over 246,000
passengers, 53,000 cars and approximately 3,300 trucks. The
passenger and car market on the Almeria-Nador route continues to
grow with the number of passengers from Almeria increasing by
almost 18% during the summer season and passengers from Nador
increasing by approximately 22%.

Logistics

    Following the purchase of the ex Ministry of Defense site at
Eaglescliffe, the Company has made significant progress in the
development of its warehousing and distribution services
including added value services such as pick and pack. A number of
significant contracts have been won by the site whose main
customers include Samsung, Virgin Cosmetics and BAT. The Company
is confident that following the purchase it will now be able to
further 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, 2000
compared to Year Ended September 30, 1999

Operating revenues

    Operating Revenues increased in the Year Ended September 30,
2000 (the "2000 year") by $41.5 million or 35% to $161 million
compared to $119.5 million in the Year Ended September 30, 1999
(the "1999 year"). The increase comprises a $1.6 million, or 23%,
increase in charter hire revenues, a $36.1 million or 40%,
increase in ferry service revenues and a $3.5 million or 16%
increase in logistics' and other revenues. The increase in
charter hire revenues results mainly from the delivery of the
Company's new build RoPax vessels in March and September 2000
which were chartered out to Norfolk Line (Maersk). The increase


                               37



<PAGE>

in ferry service revenues was mainly due to the inclusion of a
full year of the Liverpool - Dublin RoPax service started in
February 1999 and the inclusion of revenues from Norse Irish
Ferries Limited ("NIF") revenues acquired on October 1, 1999. The
increase in logistics and other revenues mainly results from the
purchase of the Eaglescliffe logistics site in October 1999.

Operating Expenses

    Vessels and other operating costs increased in the 2000 year
by $36.5 million, or 45%, to $118.4 million compared to $81.9
million in the 1999 year, primarily as a result of the inclusion
of NIF results, the Liverpool - Dublin service for a full year,
and the inclusion of the Northern and Midnight Merchant operating
costs from their delivery in March and September 2000. This was
offset by decreased deep sea operating costs as a result of the
vessels sold in the 1999 year.

    Depreciation was $9.7 million for the 2000 year compared to
$10.5 million in the 1999 year. The reduction is after taking
into account reduced depreciation on the company's present fleet
whose lives have been extended to 30 years and is after taking
into account a full year of the Liverpool - Dublin service
vessels and equipment, a full year's depreciation on Mistral
purchased in July 1999, and depreciation on NIF assets and
equipment, off set by the reduction of depreciation on deep sea
vessels sold in 1999.

    Amortization of dry-docking and special survey costs, in the
2000 year, was $3.1 million compared to $3.4 million in the 1999
year, mainly attributable to the higher number of new vessels
with consequent lower dry-docking costs.  Amortization of
goodwill in the 2000 year increased by $1.6 million, to $1.7
million from $0.1 million in the year 1999, mainly resulting from
the amortization of goodwill on the acquisition of NIF.

    General and administrative expenses for the 2000 year
increased by $2.3 million, or 13%, to $20.1 million from $17.8
million in the 1999 year, primarily due to the inclusion of NIF
costs.

    Foreign exchange gain for the 2000 year was $1.0 million
compared to a loss in the 1999 year of $0.5 million mainly due to
the effect of the currency fluctuations mainly between the US
dollar, Euro and Sterling in the year 2000 compared to 1999.

    Primarily as a result of these developments total operating
expenses for the 2000 year increased by $34.9 million or 30%, to
$152.2 million compared to $117.3 million in the 1999 year.




                               38



<PAGE>

Net Operating Income

    As a result of the foregoing going factors net operating
income increased by $6.6 million to $8.8 million for the 2000
year, compared to $2.2 million for the 1999 year.

Other operating income/expenses

    Interest income decreased by $3.2 million to $1.1 million for
the 2000 year, compared to $4.3 million for the 1999 year. In the
1999 year the majority of the interest income was attributable to
cash deposits from the proceeds of sale of vessels which were
disbursed in July and October 1999 on the purchase of vessels,
NIF and Eaglescliffe.

    Interest expense decreased by $1.1 million in the 2000 year
to $19.3 million from $20.4 million in the 1999 year. The
decrease in mainly attributable to the buy out of the capital
leases on River Lune and Saga Moon in October 1999. This was
offset by interest on the financing of the Midnight Merchant of
$0.7 million incurred in the 2000 year. (This is offset by late
delivery penalties on the vessel of $0.8 million included in
charter hire revenues).

Litigation claim

    Litigation claims of $9.6 million in the year 2000 compared
to $1.5 million in the year 1999, represents compensation
received from the Spanish government of 1000 million Pesetas per
vessel received on delivery of the Northern and Midnight Merchant
less the $1.5 million received in the 1999 year.

Gain on disposal of fixed assets

    The gain on disposal of fixed assets in the 2000 year was
$0.1 million compared to $1.8 million arising mainly from deep
sea vessel sales in the 1999 year.

Income/ (loss) before income taxes

    As a result of the foregoing factors, net operating income
for the 2000 year was $0.2 million, compared to a loss of $10.6
million in the 1999 year.

Income taxes

    Income taxes for the 2000 year were $3.2 million comprising
$2.4 million increase in deferred taxation and $0.8 million
attributable to foreign exchange translation.




                               39



<PAGE>

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
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


                               40



<PAGE>

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-
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.






                               41



<PAGE>

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

Operating Revenues

    Operating revenues increased in the Year ended September 30,
1998 (the "1998 Year") by $40.0m, or 56.2%, to $111.1m compared
to $71.1m in the year ended September 30, 1997 (the "1997 Year").
The increase comprises a $9.9m, or 22.7%, decrease in charter
hire revenues, a $43.1m, or 220%, increase in ferry service
revenues and a $6.8m, 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 $31.0m, or 75.4%, to $72.1m compared to $41.1m 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 $0.1m, or 1%,
to $10.9m compared to $11.0m 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


                               42



<PAGE>

Year.  Amortization of dry-docking and special survey costs for
both 1998 and 1997 Years was $1.7m 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 $22.6m 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 $5.6m, or 70.9%, to $13.5m compared to $7.9m in the
1997 Year, representing the inclusion of Merchant Ferries, BFF,
Flair and Scruttons costs in the 1998 Year.

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

Net Operating Income

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

Other Operating Income/Expenses

    Interest income increased by $1.6m, or 266%, to $2.2m for the
1998 Year compared to $0.6m for the 1997 Year due to increased
interest from cash deposits from the proceeds of the disposal of
vessels.  Interest expense increased by $11.4m, or 139%, to
$19.6m for the 1998 Year compared to $8.2m 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 $6.7m and inclusion of a
non-cash charge of $0.5m 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 $13.9m to
a profit of $14.0m in the 1998 Year compared to a profit of $0.1m
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 $9.5m, or 71% of pre-
tax results, compared to $0.1m in the 1997 Year.





                               43



<PAGE>

Net Income

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

Liquidity And Capital Resources

    Total shareholders equity at September 30, 2000 was $37.7
million compared to $45.2 million at September 30, 1999. The
decrease of $7.5 million is represented by a net loss of $3.2
million in the 2000 year and accumulative translation adjustment
of $4.3 million, on translation of Sterling based subsidiary
companies into US dollars.

    Long term debt at September 30, 2000 consists of $172.9
million 9% First Priority Ship Mortgage Notes (the "Notes")
together with other secured debts and obligations. The debt
drawndown to finance the purchase of two new build vessels
totaling $85 million ($59.75 million at September 30, 1999) was
repaid on delivery of the two vessels in 2000 from the proceeds
of the sale of the vessels to a British banking institution. The
vessels are now on 12 year operating leases to the Company.

    The principal obligations under capital leases of $12.8
million at 30 September 1999 were bought out using escrow
proceeds in October 1999.

    At September 30, 2000 the Company had cash and cash
equivalents of $18.8 million compared to $69.3 million at
September 30, 1998. Of the $18.8 million, $4.6 million was held
in blocked accounts principally as collateral for the operating
leases for Northern and Midnight Merchant. Cash and cash
equivalents decreased by $50.5 million principally as a result of
the purchase of Norse Irish Ferries Limited ($36.0 million)
buying out the capital leases for vessels Saga Moon and River
Lune and the purchase of Eaglescliffe ($5.6 million).

Tonnage Tax

    The UK Treasury published the Finance Bill in April 2000,
including the proposed UK tonnage tax regime. The bill became law
in early August 2000. The tonnage tax regime will allow UK
shipping companies to elect to pay corporate tax based on a
nominal profit derived from the net tonnage of its ships. Non
shipping activities will be "ring fenced" and taxed as before,
based on taxable net income. The regime is intended to promote
the UK shipping industry and its competitive position.

    Subject to a review of the final legislation Cenargo may
elect to enter the tonnage tax regime from October 1, 2000 or


                               44



<PAGE>

2001. This will allow Cenargo to operate its ferry and shipping
business virtually tax-free. Transitional rules of the regime
mean that the majority of the Company's deferred tax liability
($15.8 million at September 30, 2000) will be extinguished over a
seven year period at approximately 15% per annum.

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
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


                               45



<PAGE>

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.

    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


                               46



<PAGE>

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.

    This facility was repaid in full following delivery of the
two new build vessels in March and September 2000.

    The two vessels were sold to a British bank. The Company now
has operating leases for the two vessels. Both operating leases
are for twelve years starting March and September 2000
respectively.

    The operating leases contain various covenants that restrict
the Company from taking various actions and that require that the
Company observe certain financial covenants.  The operating
leases' covenants include covenants relating to loan to
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 operating leases provide 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.

Substantial Leverage and Debt Service

    The Company is highly leveraged, with $181.3 million of total
indebtedness outstanding (including the Notes) and $37.7 million
of shareholders' equity at September 30, 2000.  Subject to the


                               47



<PAGE>

restrictions in the Indenture and under the operating leases,
each of Cenargo and its subsidiaries, including the Subsidiary
Guarantors, may incur additional indebtedness from time to time,
including under the operating leases.  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
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



                               48



<PAGE>

well as future charter rates and values of its vessels, are not
readily determinable.

ITEM 6 - DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

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.

    Name                     Age                 Position

    Michael Hendry           47                  Chairman

    Annabel Hendry           49                  Director

    Paul Gregory             59                  Finance Director

Certain biographical information with respect to each of these
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.



                               49



<PAGE>

Compensation of directors and officers

    During the fiscal year ended September 30, 2000, the Company
paid an aggregate of approximately $1.1 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.

Employees

    As of September 30, 2000, the Company employed 884 people.
The Company's technical managers employ approximately 331
employees on the Company's vessels at any one time.

ITEM 7 - MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

    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.

Name                      Number of Shares       Percent of Total

Michael Hendry                  49,500                  99%

Peter Morton                    500                      1%

The Company did not engage in any related party transactions in
fiscal 2000.

ITEM 8 - FINANCIAL INFORMATION

A.  Consolidated Statements and Other Financial Information

    See Item 18

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
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


                               50



<PAGE>

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 $10.5 million) against the eventual
outcome of the court case. This was paid on delivery of the
Company's two newbuildings in March and September 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 9 - THE OFFER AND LISTING

    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
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 10 - ADDITIONAL INFORMATION

Memorandum and Articles of Incorporation

    The Company's Memorandum of Association provides that its
principal objects, among others, are to carry on all or any of
the business of shipowners, shipbrokers, managers of shipping
property and shipping companies, tug owners and shipping agents.






                               51



<PAGE>

Directors

    The Company's Articles of Association requires a director to
inform the Company, at a meeting of the Board of Directors, of
any interest in a contract or proposed contract with the Company.
No director may vote in respect of any contract made by him with
the Company or in any contract in which he is interested, and
such director shall not be counted for purposes of determining a
quorum.  However, these provisions do not apply to i) any
arrangement for giving any director any security or indemnity in
respect of money lent by him or to obligations undertaken by him
for the benefit of the Company, (ii) any arrangement for the
giving by the Company of any security to a third party in respect
of a debt or obligation of the Company for which the director
himself has assumed responsibility in whole or in part under a
guarantee or indemnity or by the deposit of a security, (iii) any
contract by a director to subscribe for or underwrite shares or
debentures of the Company or (iv) any contract or arrangement
with any other company in which he is interested only as an
officer of the company or as a holder of shares or other
securities.

    The Board of Directors may exercise all powers of the Company
to borrow or raise money, and to give guarantees, and to mortgage
or charge its properties and assets, and subject to section 14 of
the 1980 Act, to issue debentures, debenture stock and other
securities, outright or as security for any debt, liability or
obligation of the Company or any third party.

Rights of Note Holders

    Holders of the Company's Notes have no rights other than
those set forth in the Indenture.  They do not have voting
rights.  There are no limitations imposed by foreign law or the
Company's charter or bylaws on the rights to own the Notes.  The
Notes are senior obligations of the Company and rank pari passu
in right of payment with all existing and future senior
indebtedness of the Company.  The Notes are subject to redemption
at the option of the Company at redemption prices specified in
the Indenture.

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.


                               52



<PAGE>

    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
              agentoutside 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.

    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


                               53



<PAGE>

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
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


                               54



<PAGE>

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 11 -- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

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.

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.



                               55



<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 12 -- DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

    Not applicable

ITEM 13 -- DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

    None

ITEM 14 -- MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
HOLDERS AND USE OF PROCEEDS

Amendment to the Indenture

    In October 1999, the Company amended the Indenture pursuant
to which it had issued its 9 % First priority Ship Mortgage Notes
due 2008.  The Company had received the consent of the holders of
a majority of the Notes to amend the Indenture to permit the
Company to utilize part of the proceeds from the sale of three
mortgaged vessels to fund the acquisition of NIF and the
Eaglescliffe Logistics Center.  As a result of the amendment,
NIF, its assets and revenue streams, along with the land and
buildings of Eaglescliffe, are part of the collateral securing
the Notes.





                               56



<PAGE>

ITEM 18 - 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:
















































                               57



<PAGE>

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


































<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,
2000 and 1999 and the related consolidated statements of income
and cash flows for each of the years in the three year period
ended September 30, 2000.  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, 2000 and 1999, and the consolidated results
of their operations and their cash flows for each of the years in
the three year period ended September 30, 2000 in conformity with
accounting principles generally accepted in the United States.



Moore Stephens
Chartered Accountants

St. Paul's House

Warwick Lane

London  EC4P 4BN








                               F-1



<PAGE>

                    CENARGO INTERNATIONAL PLC


                Consolidated Statements of Income
          Years ended September 30, 2000, 1999 and 1998
              (U.S. Dollars expressed in thousands)



                                  Note          2000       1999       1998

Operating revenues
Charterhire revenues                        $   8,529   $  6,948   $ 34,906

Ferry service revenues                        127,468     91,344     62,646

Logistics and other revenues      1(b)         25,047     21,546     14,669

Brokers' commission                               (83)      (334)    (1,116)
                                             ________    _______    _______

Operating revenues                            160,961    119,504    111,105
                                             ________    _______    _______

OPERATING EXPENSES

Vessel and other operating costs              118,402     81,866     72,103

Depreciation                                    9,726     10,530     10,945

Provision for impairment
  in value of vessels             2(m)            -        3,100     22,636
Amortisation of drydocking and
  special survey costs                          3,123      3,409      1,669

Amortisation of goodwill                        1,742        112        108

General and administrative expenses            20,144     17,790     13,590

Foreign currency loss/(gain)                     (956)       468         88
                                             ________    _______    _______

Operating expenses                            152,181    117,275    121,139
                                             ________    _______    _______

Operating income (loss)             6           8,780      2,229    (10,034)
                                             ________    _______    _______

Other income (expenses)
Interest income                                 1,092      4,303      2,210



                               F-2



<PAGE>

Interest expense                  18(a)       (19,303)   (20,397)   (19,565)

Litigation claim                  19(b)         9,583      1,500        -

Gain on disposition of
  fixed assets                                     97      1,782     14,018
                                             ________    _______    _______

Other (expenses) income                        (8,531)   (12,812)    (3,337)
                                             ________    _______    _______

Income/(loss) before income taxes                 249    (10,583)   (13,371)

Income taxes                        7          (3,259)     2,424      9,506

Minority interests                               (134)       (44)       -
                                             ________    _______    _______

Net (loss) income                           $  (3,144)  $ (8,203)  $ (3,865)
                                              =======    =======    =======




        See accompanying notes to consolidated financial statements.




























                               F-3



<PAGE>

                          CENARGO INTERNATIONAL PLC

                       Consolidated Balance Sheets
                     As of September 30, 2000 and 1999
                    (U.S. Dollars expressed in thousands)

Assets                               Note          2000             1999

CURRENT ASSETS
Cash and cash equivalents                      $    14,258       $   29,677

Cash held in escrow                    9             4,619           39,650

Trade accounts receivable                           28,937           22,557

Other receivables                                    1,811            4,810

Due from joint ventures               12               675             585
Inventories                                          1,519            1,530

Prepaid expenses and accrued income                  2,166              860
                                                  ________          _______
Total current assets                                53,985          99,669
NON CURRENT ASSETS

VESSELS AND EQUIPMENT                 10           138,661          143,431

LAND AND BUILDINGS                    10            17,999           13,293

Vessels under construction            11               -             62,472
Investments in joint ventures         12               -                -
Loans to joint ventures               12             3,963            4,083
Goodwill, net                          8            30,613            2,885
Trade investments                                      519              578
Deferred charges, net                 13             6,687            8,752
Pension fund debtor                   14             5,126            5,448
Prepaid expenses and deposits                        8,192              -
                                                  ________          _______
Total assets                                   $   265,745       $  340,611
                                                  ========          =======

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Bank overdrafts                                      4,037              -
Current maturities of long-term debt  15             1,290            1,682
Capital lease obligations             19             1,124            3,563
Trade accounts payable                               9,117           8,199
Accrued expenses                                     4,584            7,835
Accrued interest - ship mortgage notes               5,119            5,001


                               F-4



<PAGE>

Other creditors                                      6,050            3,344
Due to joint ventures                 12               402              -
                                                  ________          _______
Total current liabilities                           31,723           29,624

LONG-TERM LIABILITIES

Ship Mortgage Notes                   15           172,891          172,619
Long-term debt                        15             4,185           65,489
Capital lease obligations             20             1,859           12,840
Other creditors                                      1,569            1,474
Deferred taxation                      7            15,819           13,386
                                                  ________          _______
Total liabilities                                  228,046          295,432
Contingent liability                  19               -                  -
                                                  ________          _______

SHAREHOLDERS' EQUITY

Share capital                         16                21               21
Accumulated Other Comprehensive Income:
  Cumulative translation adjustment   17            (3,908)             428
Retained earnings                     17            41,586           44,730
                                                  ________          _______
Total shareholders' funds                           37,699           45,179
                                                  ________          _______
Total liabilities and
  shareholders' funds                          $   265,745       $  340,611
                                                  ========          =======
























                               F-5



<PAGE>

                          CENARGO INTERNATIONAL PLC

                    Consolidated Statements of Cash Flows
                Year ended September 30, 2000, 1999 and 1998
                    (U.S. Dollars expressed in thousands)

                                                2000       1999       1998



Operating activities

Net (Loss) income                           $  (3,144)  $ (8,203)  $ (3,865)

Adjustments to reconcile net income
   to net cash provided by operating
   activities:
   Amortisation of drydocking and
     special survey costs                       3,123      3,409      1,669
   Amortisation of ship mortgage
     notes discount                               272        340          -
   Depreciation                                 9,726     10,530     10,945
   Amortisation of goodwill                     1,742        112        108
   Gain on disposition of
     fixed assets                                 (97)    (1,782)   (14,018)
   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)                (3,554)       174        675
   (Increase) decrease in
     pension debtor                               322       (366)       182
   Decrease (increase) in
     trade accounts receivable                  1,179     (4,488)    (2,873)
   Decrease (increase) in
     other receivables                          3,080      1,082       (810)

   Decrease in inventories                        278        274        501
   (Increase) decrease in prepaid expenses
     and accrued income                        (4,675)     3,042     (5,406)
   Decrease in trade accounts payable            (479)    (3,630)       (96)
   (Decrease) increase in accrued
     expenses                                  (4,034)       787      6,486
   Increase (decrease) in other creditors       1,681     (9,718)     7,852
   Increase (decrease) in deferred tax
     liabilities                                2,243     (2,500)    (9,412)
                                             ________    _______    _______

Net cash provided (absorbed) by operating
   activities                                   7,663     (7,837)    14,682
                                             ________    _______    _______


                               F-6



<PAGE>

INVESTING ACTIVITIES

Additions to land and buildings                (5,687)    (2,083)      (804)
Additions to vessels and equipment             (3,252)   (17,176)    (3,254)
Additions to vessels under construction       (29,155)   (34,076)   (83,730)
Purchase of subsidiary undertakings, net
   of cash acquired                           (35,955)    (1,306)    (5,170)
Purchase of other investment                        -        -          -
Proceeds from sale of fixed assets             87,801     68,495     71,235
                                             ________    _______    _______
Net cash provided by (used in) investing
   activities                                  13,752     13,854    (21,723)
                                             ________    _______    _______








































                               F-7



<PAGE>

                          CENARGO INTERNATIONAL PLC

                    Consolidated Statements of Cash Flows
          Year ended September 30, 2000, 1999 and 1998 (Continued)
                    (U.S. Dollars expressed in thousands)


                                         2000          1999        1998

FINANCING ACTIVITIES

Proceeds from long-term debt              25,250        18,366      214,928
Repayment of long-term debt              (86,260)       (1,593)    (155,582)
Due to (from) joint ventures                 432         1,413       (2,392)
Repayments of capital leases             (14,407)       (3,300)      (1,541)
Deferred charges paid                       (916)       (4,515)      (4,526)
Increase in share capital                    -             -             21
                                        ________       _______      _______

Net cash (used in) provided by
   financing activities                  (75,901)       10,371       50,908
                                        ________       _______      _______

Net (decrease) increase in cash and
   cash equivalents                      (54,486)       16,388       43,867
Cash and cash equivalents at
   beginning of year                      69,327        52,939        9,072
                                        ________       _______      _______

Cash and cash equivalents at
   end of year                        $   14,841   $    69,327   $   52,939
                                         =======       =======      =======

Supplemental disclosure of cash flow
  information:

Interest paid, net of capitalised
   interest                           $   19,303   $    20,397   $   23,601
Income taxes paid                            -             -            -
                                         =======       =======      =======

Cash and cash equivalents             $   14,258   $    29,677   $   30,257
Cash held in escrow and blocked
   deposits                                4,619        39,650       22,682
Bank overdraft                            (4,036)          -            -
                                        ________       _______      _______

                                      $   14,841   $    69,327   $   52,939
                                         =======       =======      =======




                               F-8



<PAGE>

Purchase of subsidiary undertakings

Cash paid                             $   44,614   $     1,440   $   25,769
Net proceeds on sale of divisions              -             -      (15,112)
Cash acquired                             (8,659)         (134)      (5,487)
                                        ________       _______      _______
                                      $   35,955   $     1,306   $    5,170
                                         =======       =======      =======


        See accompanying notes to consolidated financial statements.










































                               F-9



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
             As of September 30, 2000, 1999 and 1998

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 vessels and 2 vessels
    on long term operating leases, 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-10



<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.

    During the year the directors reviewed the life and residual
    value of the fleet.  As a result of this review the useful
    life of certain vessels was increased from 25 to 30 years.
    The effect of this change in estimate on the result for the
    year was to reduce the depreciation charge by U.S.$2,258,000.

    (g)  Vessels under construction

    The carrying value of vessels under construction in 1999
    represented the accumulated costs to the balance sheet date
    which the Company has had to pay by way of purchase
    instalments together with interest capitalised on loans
    raised to finance the purchase and other associated financing
    fees.  No charge for depreciation will be made until the
    vessels are delivered.




                              F-11



<PAGE>

    (h)  Revenue and expense recognition

    Revenues and expenses are recognised on a daily accruals
    basis.  Revenues are generated from time charter hires, ferry
    services and freight income.  The consolidated 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 capitalised and
    amortised 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
    recognised 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 recognised in the financial
    statements.

         1.   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


                              F-12



<PAGE>

    the year and exchange gains and losses are included in the
    determination of net income.

    (l)  Goodwill

    Goodwill represents the excess of purchase price over fair
    value of net assets acquired.  Goodwill is amortised using
    the straight line method over periods ranging from 10 to 20
    years.  The Company periodically assesses the recoverability
    of this intangible asset by determining whether the
    amortisation 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

    Long lived assets of the Company, including goodwill, 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 $22,636, $3,100 and $0 for the years ended
    September 30, 1998, 1999 and 2000, respectively.

    (n)  Assets under capital leases

    Assets used by the Company which have been funded through
    capital leases are capitalised 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-13



<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,
    amortization of drydocking and special survey costs,
    amortization of goodwill, gain or loss from joint ventures
    and minority interest.

























                              F-14



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
            As of September 30, 2000, 1999, and 1998

3.  Segment Information (Continued)

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

                          Vessel    Irish Sea
                        Chartering   Ferries  Ferrimaroc  Logistics  Total
    2000
    Revenue                8,446     112,446     15,022     25,047  160,961
    EBITDA                (2,725)     32,874      1,231      1,671   33,051
    Tangible assets          -       121,552     15,732     19,376  156,660
    Capital expenditures  29,155       1,718         24      7,890   38,787

    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

    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,
                                  2000       1999        1998

   EBITDA                     $ 33,051   $  22,662   $  39,342
   Reconciling items:
   Depreciation                 (9,726)    (10,530)    (10,945)
   Provision for impairment
    in value of vessels              -      (3,100)    (22,636)
   Amortisation of goodwill     (1,742)       (112)       (108)
   Amortisation of drydocking   (3,123)     (3,409)     (1,669)
   Net interest expense        (18,211)    (16,094)    (17,355)
                              ________     _______     _______






                              F-15



<PAGE>

   Income/(loss) income
     before income taxes      $    249   $ (10,583)  $ (13,371)
                               =======     =======     =======


















































                              F-16



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
            As of September 30, 2000, 1999, and 1998

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 recognise 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 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 organisation
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

The principal acquisition during the year was that of 100% of the
share capital of Norse Irish Ferries Limited ("NIF"), which was
completed with effect from 1 October 1999. The consideration
(including all costs of the transaction) paid in cash was
$44,396,933. NIF acts as a passenger and freight operator between
Belfast and Liverpool.


                              F-17



<PAGE>

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 NIF has been recorded as goodwill, which
is being amortised on a straight-line basis over 20 years.
Amortisation of $1,477,416 has been charged in the year ended
September 30, 2000.

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

                                         Norse Irish Ferries

Capital assets                                         1,600
Cash                                                   8,659
Accounts receivable                                    8,645
Trade creditors                                       (3,844)
Deferred tax                                            (212)
                                                     _______
                                                   $  14,848
                                                     =======

    The operating results of NIF are included in the Company's
consolidated results of operations from the effective date of the
acquisition which was October 1, 1999.

6.  Operating income (loss)

    The Company operates on a worldwide basis. No customers
comprised 10% or more of operating revenues.

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.











                              F-18



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
            As of September 30, 2000, 1999, and 1998

7.  Taxation (Continued)

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

                                     2000      1999       1998

U.K. statutory rate
    (average rate for period)         (30)       (30)      (31)
Increase (decrease) in rate
    resulting from:
    Statutory rate reduction
      - deferred tax                    -          1         1
    Permanent book/tax
      differences and other        (1,178)         4       (22)
    Revision to prior year
      estimate                       (101)         2       (20)
                                 ________    _______   _______

Net effective tax rate             (1,309)%      (23)%     (72)%
                                  =======    =======   =======

    Permanent book/tax differences and other includes the effect
of the exchange movement between sterling and dollars within the
deferred tax calculations.

    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.

















                              F-19



<PAGE>

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

                                 Current    Deferred     Total

Year ended September 30, 2000
   US Federal and State        $    -     $     -     $    -
   Foreign - UK
     corporation tax               (338)      3,597      3,259
                                _______    ________    _______
                               $   (338)  $   3,597   $  3,259
                                =======    ========    =======

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)
                                =======    ========    =======

























                              F-20



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
            As of September 30, 2000, 1999, and 1998

7.  Taxation (Continued)

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, 2000
and 1999.

                                             2000         1999
Excess of tax over book depreciation
    and deductions                     $   14,554   $   12,269
Holdover relief                             1,265        1,409
Other                                           -         (292)
                                         ________     ________

Total net effective tax liability      $   15,819   $   13,386
                                         ========     ========


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.

2.  Goodwill

                                             2000         1999

Goodwill, net of accumulated
    amortisation of
    $1,742 and $112                        30,613        2,885
                                         ________     ________
                                       $   30,613   $    2,885
                                         ========     ========

9.  Cash Held in Escrow

At September 30, 2000 the Company had cash in blocked deposit
accounts as security for the two operating leases.

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





                              F-21



<PAGE>

10. Vessels, Equipment, Land & Buildings

                                             2000         1999
Cost
    Vessels                            $  154,456   $  158,072
    Land and buildings                     20,112       14,916
    Equipment                              14,484       10,837
                                         ________     ________
                                          189,052      183,825

    Accumulated depreciation              (32,392)     (27,101)
                                         ________     ________
    Net book value                     $  156,660   $  156,724
                                         ========     ========

Included above are assets held under capital leases with a cost
of $5,776,592 and accumulated depreciation of $2,063,646.




































                              F-22



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
            As of September 30, 2000, 1999, and 1998

10. Vessels, Equipment, Land & Buildings (Continued)

    During the year the company completed the purchase of two
    ships, River Lune and Saga Moon, previously operated under
    capital leases. The purchase was funded from escrow proceeds.

    The following is a summary of the vessels as of September 30,
    2000:

                                                          Gross
                                                 Year  Registered
    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 15.
    The insured value of vessels is $250.3 million.

11. Vessels under Construction

                                              2000        1999

    Cost at beginning of the year        $  62,472   $  77,115
    Purchase instalments and other
      capital expenditure                   25,250      34,077
    Interest capitalised                     2,024           -
    Other associated financing
      fees capitalised                       1,880           -
    Transfer to vessels, equipment,
      land and buildings                   (91,626)    (48,720)
                                           _______     _______

    Cost at end of the year              $     -     $  62,472
                                           =======     =======





                              F-23



<PAGE>

12. 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.

13. Deferred Charges

    Deferred charges represent debt arrangement fees and
    capitalised drydocking and special survey costs.  The debt
    arrangement fees are being amortised 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 amortised over the period to the next
    drydocking.  The deferred charges are comprised of the
    following amounts:

                                              2000   1999

    Debt arrangement fees                $   5,779   $   5,779
    Drydocking and special survey costs      4,868       3,645
                                           _______     _______
                                            10,647       9,424
    Accumulated amortisation                (3,960)       (672)
                                           _______     _______
                                         $   6,687   $   8,752
                                           =======     =======

14. Pension Costs

    (a)  Defined contribution pension plan

         The Company sponsors a defined contribution pension
         plan.  Contributions to the plan for 1999 and 2000 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:











                              F-24



<PAGE>

                                              2000        1999

    Plan assets

    Fair value, beginning of year        $  30,991   $  30,205
    Actual investments returns               1,512       2,453
    Company contributions                       39          27
    Benefits paid to participants           (1,949)       (814)
    Foreign exchange adjustment             (3,108)       (880)
                                           _______     _______

    Fair value, end of year              $  27,485   $  30,991
                                           =======     =======








































                              F-25



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
            As of September 30, 2000, 1999, and 1998

4.  Pension Costs (Continued)

                                              2000   1999

    Pension benefits obligations

    Balance, beginning of year           $  26,434   $  24,157
    Service cost                               327         260
    Interest cost                            1,308       1,373
    Actuarial gains                            210       1,407
    Prior service cost                          -          729
    Company contributions                       41          34
    Benefits paid to participants           (1,949)       (814)
    Foreign exchange adjustment             (2,699)       (712)
                                           _______     _______
    Balance, end of year                 $  23,672   $  26,434
                                           =======     =======

    At September 30, 2000 and 1999,
      the funded status of the plan
      was as follows:

                                              2000        1999

    Surplus of plan assets over
      benefit obligations                $   3,813   $   4,557
    Unrecognised net actuarial
      (gain) loss                            1,313         891
                                           _______     _______
    Net amount recognised                $   5,126   $   5,448
                                           =======     =======

    Components of net periodic benefit costs are:

                                              2000        1999

    Service cost                         $     327   $     260
    Interest cost                            1,308       1,373
    Amortisation of prior service costs         47           -
    Expected return on plan assets          (1,892)     (1,999)
                                           _______     _______
    Net periodic benefit cost (credit)   $    (210)  $    (366)
                                           =======     =======





                              F-26



<PAGE>

    For 2000 and 1999 the following
     weighted-average rates were used:        2000        1999

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

                                              2000        1999

    Pension (credit)                     $    (210)  $    (366)
    Company contributions                $      41   $      34
    Benefits paid                        $   1,949   $     814
                                           =======     =======





































                              F-27



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
            As of September 30, 2000, 1999, and 1998

15. Long-term Debt

    Ship Mortgage Notes and Construction Facility

    On June 19, 1998 Cenargo International Plc refinanced the
    majority of its group borrowings by issuing U.S.$175 million
    of 9.75% First Priority Ship Mortgage Notes in the United
    States of America.

    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 m.v. Spheroid), the group's freehold
    property at Eaglecliffe, a fixed charge over the group's
    shares in Norse Irish Ferries Limited and a fixed charge over
    the net assets of Norse Irish Ferries Limited as well as
    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.

    Other Loans

              3.   217,030 pounds sterling (U.S.$320,879) 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 HSBC 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 HSBC
         Bank Plc secured by a collateral bank deposit of
         367,000 pounds sterling.

              4.   A Sterling denominated loan of 2,250,000 pounds
         sterling ($3,326,625) is repayable as follows:

         1.   25% from the proceeds on the maturity of life
         assurance policies maturing in 2015.



                              F-28



<PAGE>

         2.   25% repayable in equal annual instalments over the
         last 15 years of the 20 year term of the loan.

         3.   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.

    1.   Other loans comprise a loan due to a former joint
         venture partner outstanding of 1,235,292 pounds sterling
         ($1,826,379).
         The loan is unsecured and repayable on an annuity basis
         by ten equal six monthly instalments of 382,623 pounds sterling
         ($565,708) including interest fixed at the inception of
         the loan at a rate of 8.07%.

    The outstanding long-term debt as of September 30, 2000 is
    repayable as follows:

                                                         $
    2001                                               1,290
    2002                                                 969
    2003                                                  55
    2004                                                  55
    2005                                                  55
    2006  and later                                  175,942
                                                    ________
    Total long-term debt                           $ 178,366
                                                    ========

16. Share Capital

                                                 2000        1999
    Share capital is as follows:

    Authorised
      500,000 ordinary shares of
      1 pound sterling each
      (1999 - 50,000 ordinary shares)      $      750  $      750
                                              =======     =======

    Issued
      50,000 ordinary shares of
      1 pound sterling each, 25p paid
      (1999 - 50,000 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 (note 15).


                              F-29



<PAGE>

17. Changes in Shareholders' Equity

                                                Accumulated Other
                                                  Comprehensive
                                                 Income (loss):
                                      Ordinary     Cumulative     Cumulative
                                        share      translation     Retained
                                       capital     adjustment      earnings

    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

    Movement in year                       -          (3,480)          -
    Net income (loss)                      -             -          (3,144)
                                      ________      ________       _______

    Balance at September 30, 2000    $      21     $  (3,908)   $   41,586
                                       =======      ========       =======































                              F-30



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
            As of September 30, 2000, 1999, and 1998

18. 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 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, 2000.

    (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 1998.

                                         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 1998 year
         interest expense.

         There are no interest rate swap transactions outstanding
         at September 30, 2000 and 1999.




                              F-31



<PAGE>

    (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, 2000 and 1999.

    (c)  Fair value of Ship Mortgage Notes

         The fair value of the Ship Mortgage Notes at September
         30, 2000 was $136,500,000 (1999: $157,500,000).  Fair
         value was determined from quoted market prices at which
         they traded.

    (d)  Other financial instruments

         The carrying amount of other financial instruments
         approximates to fair value as the long-term debt is at
         floating rates of interest and all other financial
         instruments are short-term in nature.

19. 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 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. During the year the Company
         received a non-refundable cash receipt of $9,583,674
         relating to this litigation claim.  This has been
         included within ferry services revenues.

20. 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-32



<PAGE>

                                                       2000

    2001                                              1,325
    2002                                                853
    2003                                                588
    2004                                                445
    2005                                                209
    2006 and later                                       22
                                                     ______

    Minimum lease payments                            3,442

    Less imputed interest                              (459)
                                                     ______
    Present value of obligations
      under capital leases                         $  2,983
                                                     ======




































                              F-33



<PAGE>

                    CENARGO INTERNATIONAL PLC

           Notes to Consolidated Financial Statements
            As of September 30, 2000, 1999, and 1998

20. Capital and Other Commitments (Continued)

    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:

                                                       2000

    2001                                             29,385
    2002                                             11,028
    2003                                              9,709
    2004                                              9,677
    2005                                              9,677
    2006 and later                                   58,349
                                                    _______
                                                 $  127,825
                                                    =======

    Operating lease rentals paid in the year ended September 30,
    2000 amounted to $23,245,577 (1999: $7,617,238 1998:
    $3,538,000).


























                              F-34



<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 9, 2001



































                               35
02442005.AA6