UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 20-F

|o                                                                    | Registration Statement pursuant to section 12(b) or 12(g) of the Securities Exchange Act of 1934
|-------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------
|or                                                                  
|ý                                                                    | Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934            
|For the Fiscal Year Ended December 31, 2007                         
|or                                                                  
|o                                                                    | Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934        
|For the transition period
from                                    to
|or                                                                  
|o                                                                    | Shell Company report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934     

Commission file number: 333-141113

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BRITANNIA BULK PLC

(Exact name of registrant as specified in its charter)

England and WalesRegistered No: 03842976

(State or other jurisdiction of incorporation or organization)

Dexter House, 2 Royal Mint Court, London, EC3N 4QN
United Kingdom

(Address of principal executive offices)

Tel No: + 44 (0) 20 7264 4900

(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registeredNone

None


Securities
registered pursuant to Section 12(g) of the Act:NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act: 11% Senior Secured Notes due 2011

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:
8,204,314 as of December 31, 2007.

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
Yes o    No ý

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934. Yes o    No ý

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 ý    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in
Rule 12b-2 of the Exchange Act):

|Large accelerated filer o |  | Accelerated filer o |  | Non-accelerated filer ý
|------------------------- |  | ------------------- |  | -----------------------

Indicate
by check mark which financial statement item the registrant has elected to follow. Item 17 o    Item 18
ý

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o    No ý



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TABLE OF CONTENTS

|                                                     |  |                                                            |  |                                                         |  | Page
|---------------------------------------------------- |  | ---------------------------------------------------------- |  | ------------------------------------------------------- |  | ----
|Cautionary Note Regarding Forward Looking Statements |  | 3                                                         
|PART I                                              
|Item 1.                                              |  | Identity of Directors, Senior Management and Advisers      |  | 5                                                      
|Item 2.                                              |  | Offer Statistics and Expected Timetable                    |  | 5                                                      
|Item 3.                                              |  | Key Information                                            |  | 5                                                      
|                                                     |  | A.                                                         |  | Selected Financial Data                                 |  | 5   
|                                                     |  | B.                                                         |  | Capitalisation and Indebtedness                         |  | 7   
|                                                     |  | C.                                                         |  | Reasons for the Offer and Use of Proceeds               |  | 7   
|                                                     |  | D.                                                         |  | Risk Factors                                            |  | 7   
|Item 4.                                              |  | Information on the Company                                 |  | 21                                                     
|                                                     |  | A.                                                         |  | History and Development of the Company                  |  | 21  
|                                                     |  | B.                                                         |  | Business Overview                                       |  | 23  
|                                                     |  | C.                                                         |  | Organisational Structure                                |  | 33  
|                                                     |  | D.                                                         |  | Property, Plant and Equipment                           |  | 35  
|Item 4A.                                             |  | Unresolved Staff Comments                                  |  | 35                                                     
|Item 5.                                              |  | Operating and Financial Review and Prospects               |  | 35                                                     
|Item 6.                                              |  | Directors, Senior Management and Employees                 |  | 53                                                     
|                                                     |  | A.                                                         |  | Directors and Senior Management                         |  | 53  
|                                                     |  | B.                                                         |  | Compensation                                            |  | 56  
|                                                     |  | C.                                                         |  | Board Practices                                         |  | 56  
|                                                     |  | D.                                                         |  | Employees                                               |  | 57  
|                                                     |  | E.                                                         |  | Share Ownership                                         |  | 58  
|Item 7.                                              |  | Major Shareholders and Related Party Transactions          |  | 58                                                     
|                                                     |  | A.                                                         |  | Major Shareholders                                      |  | 58  
|                                                     |  | B.                                                         |  | Related Party Transactions                              |  | 59  
|                                                     |  | C.                                                         |  | Interests of Experts and Counsel                        |  | 60  
|Item 8.                                              |  | Financial Information                                      |  | 60                                                     
|                                                     |  | A.                                                         |  | Consolidated Statements and Other Financial Information |  | 60  
|                                                     |  | B.                                                         |  | Significant Changes                                     |  | 60  
|Item 9.                                              |  | The Offer and Listing                                      |  | 60                                                     
|                                                     |  | A.                                                         |  | Offer and Listing Details                               |  | 60  
|                                                     |  | B.                                                         |  | Plan of Distribution                                    |  | 60  
|                                                     |  | C.                                                         |  | Markets                                                 |  | 61  
|                                                     |  | D.                                                         |  | Selling Shareholders                                    |  | 61  
|                                                     |  | E.                                                         |  | Dilution                                                |  | 61  
|                                                     |  | F.                                                         |  | Expenses of the Issue                                   |  | 61  
|Item 10.                                             |  | Additional Information                                     |  | 61                                                     
|                                                     |  | A.                                                         |  | Share Capital                                           |  | 61  
|                                                     |  | B.                                                         |  | Memorandum and Articles of Association                  |  | 61  
|                                                     |  | C.                                                         |  | Material Contracts                                      |  | 65  
|                                                     |  | D.                                                         |  | Exchange Controls                                       |  | 68  
|                                                     |  | E.                                                         |  | Taxation                                                |  | 68  
|                                                     |  | F.                                                         |  | Dividends and Paying Agents                             |  | 75  
|                                                     |  | G.                                                         |  | Statement by Experts                                    |  | 75  
|                                                     |  | H.                                                         |  | Documents on Display                                    |  | 75  
|                                                     |  | I.                                                         |  | Subsidiary Information                                  |  | 75  
|Item 11.                                             |  | Quantitative and Qualitative Disclosures about Market Risk |  | 77                                                     

1

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|Item 12.  |  | Description of Securities Other Than Equity Securities                       |  | 78                        
|--------- |  | ---------------------------------------------------------------------------- |  | --------------------------
|          |  | A.                                                                           |  | Debt Securities           
|          |  | B.                                                                           |  | Warrants and Rights       
|          |  | C.                                                                           |  | Other Securities          
|          |  | D.                                                                           |  | American Depositary Shares
|PART II  
|Item 13.  |  | Defaults, Dividend Arrearages and Delinquencies                              |  | 79                        
|Item 14.  |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |  | 79                        
|Item 15.  |  | Controls and Procedures                                                      |  | 79                        
|Item 16A. |  | Audit Committee Financial Expert                                             |  | 80                        
|Item 16B. |  | Code of Ethics                                                               |  | 80                        
|Item 16C. |  | Principal Accountant Fees and Services                                       |  | 80                        
|Item 16D. |  | Exemptions from the Listing Standards for Audit Committees                   |  | 81                        
|Item 16E. |  | Purchases of Equity Securities by the Issuer and the Affiliated Purchasers   |  | 81                        
|PART III 
|Item 17.  |  | Financial Statements                                                         |  | 82                        
|Item 18.  |  | Financial Statements                                                         |  | 82                        
|Item 19.  |  | Exhibits                                                                     |  |                           

2

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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This document contains or incorporates by reference a number of forward looking statements within the meaning of Section 27A of the United States
Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act 1934, as amended, with respect to:



This
annual report includes "forward-looking statements" as defined by U.S. federal securities laws, with respect to our financial condition, results of operations and business and our
expectations or beliefs concerning future events. Words such as, but not limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "projects," "likely," "will," "would,"
"could" and similar expressions or phrases may identify forward-looking statements.

All
forward-looking statements involve risks and uncertainties. The occurrence of the events described in this annual report, and the achievement of the expected results associated
therewith, depend on many events, some or all of which are not predictable or within our control. Our actual results may differ materially from our expected results.

Factors
that may cause our actual results to differ from our expected results include:



3

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We
have based these statements on assumptions and analyses formed by applying our experience and perception of historical trends, current conditions, expected future developments and
other factors we believe are appropriate under the circumstances. All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified
in their entirety by the cautionary statements contained or referred to in this section.

You
should not unduly rely on these forward-looking statements in this annual report, as they speak only as of the date of this annual report. Except as required by law, we undertake no
obligation, and specifically decline any obligation, to publicly release any revisions to these forward-looking statements to reflect events or circumstances occurring after the date of this annual
report or to reflect the occurrence of unanticipated events.

See
the information under the heading "Item 3. Key InformationRisk Factors" for a discussion important factors that could affect our financial performance or could
cause actual results to differ materially from estimates contained in forward-looking statements. These factors and the other risk factors described in this annual report are not necessarily all of
the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also
could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the
expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

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PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.

ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM 3.    KEY INFORMATION

A.    SELECTED FINANCIAL DATA

The selected consolidated historical financial data of Britannia Bulk Plc as of and for the years ended December 31, 2007, 2006, 2005 and 2004 are
derived from our audited consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
Britannia Bulk Plc commenced operations in 2004 with the acquisition of certain assets and therefore selected consolidated historical financial data as of and for the year ended December 31,
2003 has not been presented herein. The data in the following table should be read together with, and is qualified in its entirety by reference to, the historical consolidated financial statements and
the accompanying notes included in this annual report. The financial information should also be read together with "Item 5.Operating and Financial Review and Prospects" included
elsewhere in this annual report.

|                              |                                                        | Years ended December 31, |       
|----------------------------- | ------------------------------------------------------ | ------------------------ | ------
|
|
|STATEMENT OF OPERATIONS DATA: |                                                        |                          |       
|                              | Revenues                                               |                          | $     
|                              |                                                        |                          |       
|Operating expenses            |                                                        |                          |       
|                              | Voyage expenses, charter hire expenses and commissions |                          |       
|                              | Vessel operating expenses                              |                          |       
|                              | Depreciation and amortization                          |                          |       
|                              | General and administrative                             |                          |       
|                              | Expense to related parties                             |                          |       
|                              | Foreign currency transaction losses and (gains), net   |                          |       
|                              |                                                        |                          |       
|                              |                                                        | Total operating expenses |       
|                              |                                                        |                          |       
|Operating income              |                                                        |                          | 66,743
|                              | Minority interest expense                              |                          |       
|                              | Interest income                                        |                          |       
|                              | Interest expense                                       |                          |       
|                              |                                                        |                          |       
|Income before taxes           |                                                        |                          | 47,517
|                              | Provision for taxes                                    |                          |       
|                              |                                                        |                          |       
|Net income                    |                                                        | $                        | 46,017
|                              |                                                        |                          |       
|                              | Weighted average number of ordinary shares outstanding |                          |       
|                              |                                                        |                          |       
|                              | Basic earnings per ordinary share                      |                          | $     
|                              |                                                        |                          |       

5

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|
|

|                                                                 |       | Year ended December 31, |        
|---------------------------------------------------------------- | ----- | ----------------------- | -------
|
|
|STATEMENT OF CASH FLOWS DATA:                                    |       |                         |        
|Net cash provided by operating activities                        |       | $                       | 51,601 
|Net cash used in investing activities                            |       |                         | (3,738 
|Net cash provided by financing activities                        |       |                         | (9,826 
|BALANCE SHEET DATA:                                              |       |                         |        
|Cash                                                             |       | $                       | 55,207 
|Current assets, including cash                                   |       |                         | 155,867
|Vessels and other fixed assets, net                              |       |                         | 143,404
|Total assets                                                     |       |                         | 318,416
|Current liabilities, including current portion of long-term debt |       |                         | 70,349 
|Total long-term debt, excluding current portion                  |       |                         | 175,290
|OTHER FINANCIAL DATA:                                            |       |                         |        
|EBITDA(1)                                                        |       | $                       | 89,274 
|OPERATING STATISTICS:                                            |       |                         |        
|Owned vessels (at end of period)                                 |       |                         | 19     
|Chartered-in vessels (at end of period)                          |       |                         | 44     
|                                                                 | Total |                         |        
|Tonnes of cargo shipped (in '000's)                              |       |                         | 11,811 
|Average Daily Results                                            |       |                         |        
|Owned vessels:                                                   |       |                         |        
|Average number of vessels(2)                                     |       |                         | 17     
|Available days(3)                                                |       |                         | 3,345  
|Operating days(4)                                                |       |                         | 3,218  
|Time-charter equivalent(5)                                       |       | $                       | 18,854 
|Daily vessel operating expenses(6)                               |       | $                       | 7,141  
|Chartered-in vessels:                                            |       |                         |        
|Average number of vessels(7)                                     |       |                         | 31     
|Operating days(8)                                                |       |                         | 11,194 
|Time-charter equivalent(5)                                       |       | $                       | 34,878 
|Charter hire expense(9)                                          |       | $                       | 27,670 
|                                                                 |       |                         |        

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6

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Year ended December 31,2007

2006

2005

2004($ in thousands)Net income:

$
46,017

$
2,394

$
8,248

$
7,579Plus:Interest expense, net


19,193


4,026


1,081


248Provision for taxes


1,500


160


284


49Depreciation and amortization


22,564


10,894


9,341


1,114EBITDA

$
89,274

$
17,474

$
18,954

$
8,990


Exchange Rates

For a discussion of the impact of currency fluctuations on our consolidated results of operations and combined financial position, see
"Item 5.Operating and Financial Review and Prospects."

B.    CAPITALISATION AND INDEBTEDNESS

Not applicable.

C.    REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

D.    RISK FACTORS

The key risks to our business are included below. Additional risks not presently known to us or that we currently deem immaterial may also
impair our business. The risks described below are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be
immaterial may also impair our business operations. The occurrence of any of the events described in this section or any of these risks may have a material adverse effect on our business, financial
condition, results of operations and cash flows.

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RISKS RELATING TO OUR BUSINESS

We depend on the Baltic trade of coal, fertilizers, scrap metals and iron-ore for a large part of our revenues, and a decline in demand may
negatively impact our results.

We depend on the Baltic trade for coal, fertilizers, scrap metals and iron-ore for a significant part of our revenues, and a decline in demand for the
commodities we transport from the Baltic region may result in a decrease in demand for our services. The principal factors affecting demand for these commodities are outside of our control, and the
nature, timing and degree of changes in economic conditions are unpredictable.

The
principal factors that influence demand for the commodities we transport include:



Our
ability to employ a significant portion of our vessels at profitable rates will depend upon, among other things, the current state of the trade for the commodities we transport. If
rates are low when our vessels' contracts expire, or when we are trying to employ newly acquired vessels, we may be forced to charter them at reduced rates or even possibly a rate whereby we incur a
loss, which may reduce our earnings or adversely affect our financial condition.

We may not be able to grow or effectively manage our growth, which could cause us to incur additional indebtedness and other liabilities and adversely
affect our business.

A principal focus of our business strategy is to grow by expanding our business. The addition of vessels to our fleet will result in an increase in the size of
our fleet and impose significant additional responsibilities on our management and staff. As we expect our fleet to grow, we may be required to increase the number of our personnel. We will also have
to increase our customer base to provide continued employment for the additional vessels. Our future growth will depend on a number of factors, some of which we can control and some of which we
cannot. These factors include our ability to:



8

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Future
vessel acquisitions could result in the incurrence of additional indebtedness and liabilities that could have a material adverse effect on our business, results of operations,
cash flows and financial condition. In addition, competition from other buyers for vessels due to a significant increase in charter rates available to vessel owners could reduce our acquisition
opportunities or cause us to pay a higher price than we might otherwise pay. We cannot assure you that we will be successful in executing our growth plans or that we will not incur significant
expenses and losses in connection with these plans.

As we expand our business, we will need to improve our operations and financial systems. If we are unable to improve or experience delays in improving
these systems, we may not be able to effectively control our operations.

Our current operating and financial systems may not be adequate as we continue to implement our expansion plan, and we may experience delays or failures in our
attempts to improve these systems. If we are unable to operate our financial and operations systems effectively or to recruit suitable employees for our vessels and offices as we expand our
operations, we may be unable to effectively control and manage the increased size of our operations. Additional management, infrastructure and operations and financial systems will be needed to
effectively oversee our growing operations and prevent any errors that might otherwise result from the rapid growth of our operations.

Purchasing and operating previously owned vessels and the aging of our owned fleet may result in unexpected repair costs, increased operating costs and
reduced fleet utilization.

Our current business strategy includes the acquisition and operation of previously owned vessels, including the vessels we have recently acquired. While we have
the right to inspect previously owned vessels prior to purchase and have performed such inspection when we deemed it advisable to do so, such an inspection does not provide us with the same knowledge
about their condition that we would have if these vessels had been built for and operated exclusively by us. Previously owned vessels may have conditions or defects that we were not aware of when we
bought the vessels and that may require us to incur costly repairs to the vessels, particularly since secondhand vessels generally do not receive the benefit of warranties. If this were to occur, such
hidden defects or problems may be expensive to repair when detected and, if not detected, may result in accidents or other incidents for which we may become liable to third parties. Repairs may
require us to put a vessel into drydock, which would reduce our fleet utilization and increase our costs.

In
addition to these risks involved relating to potential undisclosed liabilities and obligations, we also face the possibility that indemnification agreements pertaining to the
acquisition of a vessel, if any, will be unenforceable or insufficient to cover potential losses and we also face difficulties associated with imposing common standards, controls, procedures and
policies and obtaining additional qualified personnel.

Our
owned fleet, as at December 31, 2007, had a combined capacity of 522,250 dwt and an average age of 20.3 years, compared to an average age of the worldwide drybulk
carrier fleet of approximately 15 years. In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel. Older vessels are typically less
fuel-efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates also increase with the age of a vessel,
making older vessels more expensive and less desirable to charterers and vessel owners. Governmental regulations, including environmental regulations, safety or other equipment standards relating to
the age of vessels may also require expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in which our vessels may engage or how and
when vessels need to be dismantled and disposed of. We cannot assure you that, as our vessels age, market conditions will justify those expenditures or enable us to operate our vessels profitably
during the remainder of their useful lives.

9

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We may be unable to attract and retain key management personnel and other employees, which may negatively affect the effectiveness of our management and
our results of operations.

To a significant extent, our success depends upon the abilities and efforts of our management team and our ability to hire and retain key members of our
management team. Specifically, individuals on our management team have established strong relationships with many of our significant customers, which in some cases predate such executive's employment
with us. The loss of any of these individuals could adversely affect our business prospects and financial condition, and relationships with those customers for which such departing executive had an
established relationship. In addition, difficulty in hiring and retaining personnel could adversely affect our business, results of operations, cash flows and financial condition.

The rapid growth of our chartered-in fleet may disqualify us from the United Kingdom tonnage tax regime and could result in an increased tax
burden on future earnings as well as a significant one-time charge from the recognition of a deferred tax liability.

We currently operate under the United Kingdom tonnage tax regime for corporation tax purposes. Under this regime, subject to our continued qualification and
compliance with certain conditions, we are taxed on the tonnage of our fleet, rather than on corporate income earned from operations. Our election to be taxed under the tonnage tax regime is effective
until 2014 so long as we maintain our tonnage tax qualification by chartering-in no more than 75% of our net owned and chartered-in tonnage during a rolling
12-month accounting period. We may make a re-election to be taxed under this regime for an additional 10 years at any point up to 2014.

As
a result of the rapid growth of our chartering-in business, we exceeded the 75% limit on chartered-in tonnage in 2007. We actively monitor our business to
comply with the requirements, but we cannot guarantee that we will not breach the limit in 2008 or in subsequent years. If we breach this limit in two or more consecutive annual accounting periods, we
may be excluded from the United Kingdom tonnage tax regime and, as a result, will become subject to normal United Kingdom corporation tax rules, with our profits taxable at 30% going forward. Any such
exclusion would be entirely prospective from the date of exclusion from the regime. If we breach the United Kingdom tonnage tax limitations again in 2008, the first date on which we would become
subject to United Kingdom corporation tax would be January 1, 2009. Under the tonnage tax regime, our effective tax rate, defined as our tax expense expressed as a percentage of our income
before taxes, was approximately 3% for 2007 and 6% for the fiscal year 2006, respectively. In addition, if we were excluded from the regime, we would incur a significant deferred tax liability which
would have a significant effect on our financial results for the year in which we were so excluded.

The shipping industry has inherent operational risks that may not be adequately covered by our insurance.

We procure insurance for our fleet against risks commonly insured against by vessel owners and operators. Our current insurance includes hull and machinery
insurance, war risk insurance, protection and indemnity insurance, which includes environmental damage and pollution insurance. We can give no assurance that we are adequately insured against all
risks that we may face or that our insurers will pay a particular claim. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the
event of a loss. Furthermore, we may not be able to maintain or obtain adequate insurance coverage at reasonable rates for our fleet. We may also be subject to calls, or premiums, in amounts based not
only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we receive indemnity insurance coverage for tort liability. Our
insurance policies also contain deductibles, limitations and exclusions that may increase our costs. All our policies are renewed and, if necessary, coverage amounts adjusted, on an annual basis, but
due to market fluctuations in vessel valuations, we may not be fully covered for any losses sustained throughout the year.

10

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We depend on COAs, which could lock us in at unfavorable rates for our shipping services for a certain amount of time.

Historically, we have depended in large part on COAs, and we expect we will continue to utilize these contracts in the future to achieve our business strategy.
While COAs provide a relatively stable and predictable source of income, they fix the rate we are paid for our drybulk shipping services for a given volume of freight and voyage. Once we have entered
into a COA, factors beyond our control may cause the rates we are paid under that COA to become unprofitable. Nevertheless, we would be obligated to continue to perform at these rates for the term of
the COA. The requirement to perform these contracts on the terms of the COA regardless of intervening factors may adversely affect our results of operations and financial condition.

Our business strategy includes chartering-in vessels, and the inability to find employment for our chartered-in vessels at rates
that cover our charter-in costs or to find suitable vessels at suitable rates could result in material adverse effects on our business, results of operations and financial condition.

Our business strategy depends in part on our ability to charter-in vessels. As of December 31, 2007, our total payment obligations under
existing charter-in contracts
were $926.9 million, of which $566.6 million are scheduled to become due in the next three years. If charter rates were to subsequently decrease substantially relative to rates at which
we have chartered-in vessels or we were unable to find immediate employment for such chartered-in vessels, our obligation under the charters to pay above-market charter rates
would remain until the expiration of the charter-ins which may adversely affect our results of operations and financial condition. Furthermore if we are not able to find vessels to
charter-in in the future, or to charter-in vessels at what we deem to be a reasonable rate, we may experience a material adverse effect on our business, results of operations
and financial condition. See "Item 5. Operating and Financial Review and ProspectsContractual Obligations."

We are subject to certain credit risks with respect to our counterparties on contracts and failure of such counterparties to meet their obligations
could cause us to suffer losses on such contracts, decreasing our revenues and earnings.

We charter some of our vessels to other parties who pay us a daily rate of hire. We also enter into contracts of COAs and voyage charters. In circumstances where
we charter out our vessels, we rely on the ability of time charterers to pay charter hire, especially when rates available in the spot market are less than previously agreed upon time charter rates.
Additionally, we may from time to time enter into drybulk forward freight agreements, or FFAs, as economic hedges relating to identifiable ship or cargo positions and as economic hedges of
transactions we expect to carry out in the normal course of our shipping business. While historically we have not experienced any material collection problems with counterparties, COAs and FFAs
subject us to credit risks at various levels, including with charterers or cargo interests. If our counterparties fail to meet their obligations, we could suffer losses on such contracts which would
decrease our revenues and earnings.

We are highly dependant upon volatile spot market charter rates.

We depend on spot market charters for a significant portion of our revenues. In 2007, 2006 and 2005, we derived approximately 23%, 6% and 18%, respectively, of
our revenues in the spot market. Although chartering a significant portion of our vessels on the spot market affords us greater opportunity to increase income from operations when rates rise,
dependence on the spot market could result in earnings volatility. A significant decrease in our spot market rates could adversely affect our profits or result in cash losses.

11

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Trading and complementary hedging activities in Forward Freight Agreements (FFAs) and related FFA options subject us to trading risks and we may suffer
trading losses that reduce our earnings.

Volatility in the shipping market requires constant adjustment of the balance between chartering out vessels for long periods of time and trading them on a spot
basis. We may from time to time attempt to manage and mitigate that risk through trading and complementary hedging activities in forward freight agreements, or FFAs, and related FFA options. However,
there is no assurance we will be able to successfully protect ourselves from volatility in the shipping market. If we take positions in FFAs or related FFA options and do not correctly anticipate
charter rate movements over the specified route and time period, we could suffer losses in the settling or termination of the FFAs. This could adversely affect our results or operations, cash flows
and earnings.

Labor interruptions could disrupt our business.

Our vessels are crewed by seafarers who generally have employment contracts with us, typically with terms ranging from six months to a year. Industrial action or
other labor unrest could prevent or hinder our operations from being carried out normally and if such industrial or other action is not resolved in a timely and cost-effective manner it
could have a material adverse effect on our business, results of operations, cash flows and financial condition.

It may be difficult to serve process on or enforce a United States judgment against our officers, our directors and us.

We are a public limited company incorporated under the laws of England and Wales. All of our directors and executive officers live outside of the United States.
Substantially all of the assets of our directors and officers and our assets are located outside the United States. As a result, it may not be possible for you to serve process on such persons or us
in the United States or enforce judgments obtained in United States courts against them or us to the extent assets located in the United States are insufficient to satisfy the judgments. In addition,
there is uncertainty as to whether the courts of the United Kingdom would (i) enforce judgments of United States courts obtained against us or our officers and directors predicated on the civil
liability provisions of the United States federal or state securities laws, or (ii) entertain original actions brought in courts in the United Kingdom against us or our officers and directors
predicated on United States federal or state securities laws.

Industry Specific Risk Factors

The international drybulk shipping industry is cyclical and volatile, and, although charter rates for drybulk carriers have been at historically high
levels recently, future growth will depend on continued growth in the world economy and a downturn may lead to reductions and volatility in our charter or contract rates, vessel values and results of
operations.

The international drybulk shipping industry is cyclical, with attendant volatility in charter rates, contract rates for COAs and, as a result, company
profitability. The degree of charter and contract rate volatility across different types of drybulk carriers has varied widely. For example, although charter rates decreased slightly during 2005 and
the first half of 2006, since July 2006, charter rates have risen sharply and are currently at or near their historic highs. Fluctuations in charter and contract rates result from changes in the
supply and demand for vessel capacity and changes in the supply and demand for the major commodities carried by marine vessels internationally. The factors affecting supply and demand for vessels and
for products or materials transported by drybulk carriers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.

We
anticipate that future demand for our drybulk carriers and drybulk charter rates will be dependent, in part, upon continued economic growth in the Asia Pacific region and the rest of
the world, seasonal and regional changes in demand and changes in the capacity of the world fleet. For

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example,
currently China, Japan and other Asia Pacific economies are the principal driving force behind the increase in the seaborne drybulk trade and, therefore, the demand for drybulk carriers.
Demand from such economies has driven increases in charter rates and vessel values. The capacity of the world fleet is likely to increase and there can be no assurance that economic growth will
continue. If such growth slows or the economy contracts, such would create an oversupply of vessels to transport declining volumes of drybulk commodities, which would lead to a significant drop in
charter rates for drybulk vessels.

The
factors that influence demand for drybulk carriers include:



The
factors that influence the supply of drybulk carriers include:



Our
ability to recharter or recontract our drybulk carriers upon the expiration or termination of their current time charters or COAs and the charter or contract rates payable under any
renewal or replacement charters or COAs will depend upon, among other things, the then current state of the drybulk carrier market and the demand for the cargoes we carry, primarily coal. If the
drybulk carrier market or the market for coal or other drybulk commodities that we ship is in a low period when our vessels' charters or contracts expire, or we are trying to charter, or enter into
COAs, with respect to newly acquired vessels, we may be forced to charter or contract them at reduced rates or even possibly a rate whereby we incur a loss, which may reduce our earnings or make our
earnings volatile.

In
addition, because the market value of our vessels may fluctuate significantly, we may incur losses when we sell vessels, which may adversely affect our earnings. If we sell vessels at
a time when vessel prices have fallen and before we have recorded an impairment adjustment to our financial statements, the sale may be at less than the vessel's carrying amount on our financial
statements, resulting in a loss and a reduction in earnings.

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The operation of drybulk carriers has certain unique operational risks, which can result in damage to vessels, equipment and cargoes.

The operation of certain ship types, such as drybulk carriers, has certain unique risks. With a drybulk carrier, the cargo itself and its interaction with the
ship creates risks. By their nature, drybulk cargoes are often heavy, dense, easily shifted and react badly to water exposure. In addition, we may incur significant losses or costs relating to the
operation of vessels used for the purpose of carrying various products and raw materials, including ammonia nitrate. Due to the potentially destructive and dangerous nature of the cargo, in particular
ammonia nitrate on board the vessels, any such event may result in uncontrolled or catastrophic circumstances, including fires, explosions, accidents and severe pollution. Such circumstances may
result in severe damage and/or injury to property, the environment and humans. Furthermore, from December to May, many of our typical trade routes are ice restricted. These conditions increase the
risk to vessel and crew safety as vessels are more difficult to navigate and may be damaged by the ice. Furthermore, drybulk carriers are often subjected to battering treatment with grabs, jackhammers
(to pry encrusted cargoes out of the hold) and small bulldozers during unloading operations. This treatment may cause damage to the vessel. Vessels damaged due to treatment during unloading procedures
may be more susceptible to breaching at sea and hull breaches in drybulk carriers may lead to the flooding of the vessels' holds. If a drybulk carrier suffers flooding in its forward holds the bulk
cargo may become so dense and waterlogged that its pressure may buckle the vessels' bulkheads leading to the loss of the vessel. If we are unable to adequately maintain our vessels we may be unable to
prevent these events. We also may experience collisions from time to time with other vessels, tugs or barges which may result in significant damage to our fleet. In addition, the loss of any of our
vessels could harm our reputation as a safe and reliable vessel owner and operator.

If
our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of repairs are unpredictable and can be substantial. In addition, space at drydocking
facilities is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking facility or we may be forced to travel to a
drydocking facility that is distant from the relevant vessel's position. The loss of earnings while our vessels are being repaired, repositioned and forced to wait, as well as the actual cost of these
repairs, would decrease our earnings and reduce the amount of cash that we have available for servicing our debt, paying dividends and acquiring additional vessels. We may not have insurance that is
sufficient to cover all or any of these costs or losses and may have to pay costs not covered by our insurance. Any of these circumstances or events could negatively impact our business, financial
condition and results of operations.

The international drybulk shipping industry is highly competitive, and we may not be able to compete successfully for charters with new entrants or
established companies with greater resources.

We employ our vessels in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some
of whom have substantially greater resources than we do. Competition for the transportation of drybulk cargo by sea is intense and depends on price, location, size, age, condition and the
acceptability of the vessel and its operators to the charterers. Due in part to the highly fragmented market, competitors with greater resources could
enter the drybulk shipping industry and operate larger fleets through consolidations or acquisitions and may be able to offer lower charter or contract rates than we are able to offer.

Rising fuel prices may adversely affect our profits.

We bear the cost of fuel used to power our vessels in many of our shipping operations, including when our vessels are subject to COAs and spot charters. The price
and supply of fuel are unpredictable and fluctuate based on events outside our control, including geopolitical developments, overall supply and demand for oil and gas, actions by OPEC and other oil
and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. A

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substantial
increase in the cost of fuel may adversely affect our profitability and reduce the competitiveness of our business versus other forms of transportation such as truck or rail.

We are subject to regulation and liability under environmental and operational safety laws that could require significant expenditures and affect our
cash flows and net income.

Our business and the operation of our vessels are materially affected by government regulation in the form of international conventions and treaties, regional,
national, state and local environmental and operational safety laws and regulations in force in the jurisdictions in which our vessels operate, including those described below, as well as in the
country or countries of their registration. Because such conventions, treaties, laws and regulations are often revised, we cannot predict the ultimate cost of compliance or the impact thereof on the
resale price or useful life of our vessels. Additional conventions, treaties, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing
business and which may materially adversely affect our operations. We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates and other
authorizations with respect to our operations, and some of the conditions imposed by such governments and agencies to obtain or renew such authorizations may include requirements or conditions outside
of our control.

These
regulatory requirements can affect the resale values or useful lives of our vessels, require a reduction in cargo capacity, ship modifications or operational changes or
restrictions, lead to decreased availability of insurance coverage for environmental matters or result in the denial of access to certain jurisdictional waters or ports, or detention in certain ports.
Under local, national and foreign laws, as well as international treaties and conventions, we could also incur material liabilities, including cleanup obligations, in the event that there is a release
of pollutants from our vessels or otherwise in connection with our operations. We could also become subject to personal injury or property damage claims relating to the release of or exposure to
hazardous materials associated with our current or historic operations. Violations of, or liabilities under, environmental requirements also can result in
substantial penalties, fines and other sanctions, including in certain instances, seizure or detention of our vessels and may not be covered fully or at all by insurance policies.

In
addition, in complying with existing environmental laws and regulations and those that may be adopted, ship owners may incur significant additional costs in meeting new maintenance
and inspection requirements, in developing contingency arrangements and the associated plans for potential spills and in obtaining insurance coverage. Government regulation of vessels, particularly in
the areas of safety and environmental requirements, can be expected to become stricter in the future and to require significant capital expenditures for our vessels to remain in compliance, or even to
lead to the scrapping or selling of certain vessels altogether. For example, various jurisdictions are considering regulating the management of ballast water to prevent the introduction of
non-indigenous species considered to be invasive. In addition, as a result of accidents such as the November 2002 oil spill from the motor tanker Prestige, a 26-year old
single-hull tanker (which was owned by a company unrelated to us), we believe that regulation of the shipping industry will continue to become more stringent and more expensive for us and
our competitors. Future accidents can be expected in the industry, and such accidents or other events could be expected to result in the adoption of even stricter laws and regulations, which could
limit our operations or our ability to do business and which could have a material adverse effect on our business and financial results. For further information, see "Item 4.B. Business
OverviewEnvironmental and Other Regulations."

Compliance with safety rules and other regulations administered by classification societies may be very costly.

The hull and machinery of large, ocean-going commercial vessels must be certified as being "in class" by a classification society authorized by a vessel's country
of registry. The classification society

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certifies
that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of that registry.

An
ocean-going drybulk vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey, a vessel's machinery may be placed on a continuous
survey cycle, under which the machinery would be surveyed periodically over a five-year period. Our vessels are on special survey cycles for hull inspection and continuous survey cycles
for machinery inspection. Every vessel is also required to be drydocked every two to three years for inspection of the vessel's underwater parts. In addition to the shipyard costs and the cost of the
vessel's out-of-service time, these scheduled surveys may be very costly depending upon deficiencies that may be recorded by the classification society prior to
re-certifying the vessel as "in class."

If
any vessel required to be inspected by a classification society does not maintain its class or fails any annual, intermediate or special surveys, the vessel may be unable to trade
between certain ports or may otherwise be unemployable, which would negatively impact our business, results of operations, cash flows and financial condition.

Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.

International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination. Inspection procedures
can result in the seizure of the contents of our vessels, delays in the loading, offloading or delivery and the levying of customs duties, fines or other penalties against us.

It
is possible that changes to inspection procedures could impose additional financial and legal obligations on us, including significant time delays. Furthermore, changes to inspection
procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or
developments may have a material adverse effect on our business, results of operations, cash flows and financial condition.

World events could affect our results of operations and financial condition.

Terrorist attacks such as those in New York on September 11, 2001 and in London on July 7, 2005, as well as the threat of future terrorist attacks
in the United States, United Kingdom or elsewhere, may cause uncertainty in the world's financial markets and may affect our business, operating results and financial condition. Terrorists have
specifically targeted vessels in the past, and there can be no assurance they will not do so in the future. The continuing conflict in Iraq may also lead to additional acts of terrorism and armed
conflict around the world, which may contribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtain additional
financing on terms acceptable to us or at all. Any of these occurrences could have a material adverse impact on our business, results of operations, cash flows, costs and financial condition.

Maritime claimants could arrest our vessels, which could interrupt our cash flow.

Certain claimants may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. Such liens may arise in support of, among other
things, claims by unpaid shipbuilders or ship repairers remaining in possession of the vessel, claims for salvage, claims for damage caused by a vessel
in collision, claims for seamen's wages, master's wages and other employment benefits and master's disbursements and claims for pilotage, as well as potential claims for necessary goods and services
supplied to a vessel. The ranking of such liens and the degree to which they are enforced vary from one jurisdiction to another.

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In many jurisdictions, a claimant may seek to obtain security for its claim by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels
could interrupt our cash flow and require us to pay large sums of money to have the arrest lifted.

In
addition, in some jurisdictions, under the "sister ship" theory of liability, it may be possible for a claimant to arrest both the vessel subject to the claimant's maritime lien and
any "associated" vessel, including any vessel owned or controlled by the same owner. Claimants could try to assert "sister ship" liability against one or more vessels in our fleet for claims relating
to another of our vessels.

Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.

A government could requisition one or more of our vessels for title or hire. Requisition for title occurs when a government takes control of a vessel and becomes
the owner, while requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period
of war or emergency, although governments may elect to requisition vessels in other circumstances. Although we would be entitled to compensation in the event of a requisition of one or more of our
vessels, the amount and timing of payment would be uncertain. Government requisition of one or more of our vessels may negatively impact our business, results of operations, cash flows and financial
condition.

Risks Relating to Our Debt

The terms of the indenture governing our senior secured notes impose significant operating and financial restrictions on us. These restrictions may
limit our ability to successfully carry out our business strategy, which could materially and adversely affect our business, financial condition or results of operations.

The indenture governing our senior secured notes imposes significant operating and financial restrictions on us, including those that limit our ability to engage
in actions that may be in our long-term interests. These restrictions limit our ability to, among other things:



In
addition, we will be required to use specified portions of our excess cash flow, if any, to make annual offers to repurchase notes.

These
restrictions, among others, could limit our ability to finance our future operations or capital needs, make acquisitions or pursue available business opportunities.

If
we fail to comply with covenants contained in any of our debt, it could lead to the acceleration of the related debt and the acceleration of debt under other debt instruments
containing cross acceleration or cross default provisions. If this occurred, we might not be able to refinance or otherwise repay this debt.

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Our substantial amount of debt may adversely affect our financial health and could affect our ability to service debt or obtain additional financing or
refinancing, if necessary, and any failure to meet our debt obligations could harm our business, financial condition and results of operations.

As of December 31, 2007, we had total outstanding indebtedness equal to $175.3 million. We may also incur additional debt, which may be secured in
certain circumstances, to acquire vessels in the future.

Our
level of debt could have important consequences for our business, results of operations and ability to effectively service such indebtedness, including the following:



The
terms of our debt restrict, but do not fully prohibit, us and our subsidiaries from borrowing. Accordingly, despite our current debt levels, we may still be able to incur
substantially more debt. If we incur additional debt, the risks described above could intensify.

To
service our indebtedness we require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt obligations
could harm our business, financial condition and results of operations. This ability is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other
factors that are beyond our control and we cannot assure you that our business will be able to generate sufficient cash flow from operations in the future to service our debt, make necessary capital
expenditures or to fund our other liquidity needs. If we fail to do so, we may be required:



In
addition, any failure to make scheduled payments of interest and principal on our debt may result in a reduction of our credit rating, which could harm our ability to incur additional
indebtedness on acceptable terms. Our cash flow and capital resources may be insufficient for payment of interest on
and principal of our debt in the future, including payments on the senior secured notes and any such alternative measures may be unsuccessful or may not permit us to meet scheduled debt service
obligations, which could cause us to default on our obligations and could impair our liquidity.

Furthermore,
we may need to refinance all or a part of our debt at final maturity and any additional debt financing, if available, may involve further restrictions on our financing and
operating activities and our ability to make scheduled payments of the principal of, to pay interest on or to refinance our debt, and to make payments on our other obligations depends on our future
performance.

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In the event of foreclosure, the proceeds from a sale of the collateral securing our senior secured notes may not be sufficient to satisfy amounts due
thereunder.

Our senior secured notes are secured by, among other things, a first priority lien in favor of the trustee for the benefit of the holders of the notes on certain
of our existing vessels. The amount to be received from a foreclosure or similar disposition of the collateral will depend upon numerous factors, including market and economic conditions, the
availability of buyers, the timing and manner of sale and similar factors. There can be no assurance that the collateral can or will be liquidated in a short period of time or at all. As a result, we
cannot assure you that the proceeds of any sale of the collateral would be sufficient to satisfy the amounts due on our senior secured notes. If the proceeds from the sale of the collateral are not
sufficient to repay all amounts due on our senior secured notes, the holders of our senior secured notes would have only a senior unsecured claim against our remaining assets. Furthermore, the
collateral will likely decline in value over time.

We may not be able to repurchase our senior secured notes upon a change of control.

Upon the occurrence of a change of control, holders of our senior secured notes will have the right to require us to repurchase all or any part of such holders'
senior secured notes at a price equal to 101% of the accreted value of the senior secured notes, plus accrued and unpaid interest, if any, to the date of purchase. We may not have sufficient funds at
the time of the change of control to make the required repurchases. The source of any funds for any repurchase required as a result of a change of control will be our available cash or cash generated
from our business operations or other sources, including borrowings, sales of assets, sales of equity or funds provided by a new controlling entity. We cannot assure you, however, that sufficient
funds would be available at the time of any change of control to make any required repurchases of the senior secured notes tendered.

A court may void the guarantees of our senior secured notes or subordinate the guarantees to other obligations of the guarantors.

Although standards may vary depending upon applicable law, a court could void all or a portion of the guarantees of the senior secured notes or subordinate the
guarantees to other obligations of the guarantors. If the claims of the holders of the senior secured notes against any guarantor were voided or held to be subordinated in favor of other creditors of
that guarantor, the other creditors would be entitled to be paid in full before any payment could be made on the senior secured notes. If one or more of the guarantees is voided or subordinated, we
cannot assure you that after providing for all prior claims, there would be sufficient assets remaining to satisfy the claims of the holders of the senior secured notes.

Maritime liens may arise and take priority over the liens securing our senior secured notes.

If maritime liens are attached to our vessels, such liens may take priority over the liens securing the senior secured notes. Maritime liens, such as liens for
unpaid crew wages or personal injuries, may attach without any court action, registration or documentation and accordingly their existence cannot necessarily be identified. Maritime liens that attach
to the collateral would reduce the amount available to our noteholders for recovery in the event of a default on the senior secured notes.

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Insolvency could adversely affect the ability of holders of the senior secured notes to enforce their rights under the senior secured notes.

There is a risk under English law that if we and/or our English subsidiaries were to go into liquidation, administration or other insolvency proceedings
("Insolvency") the ability of the holders of the senior secured notes to recover in full or in part may be impaired. In particular:



Upon
such an application, the court must make such order as it thinks fit but the court must not make such an order in respect of (i) a transaction at an undervalue if it is
satisfied that the company which
entered into the transaction did so in good faith and for the purpose of carrying on its business, and that, at the time it did so, there were reasonable grounds for believing that the transaction
would benefit the company; or (ii) a preference given to any person unless the company which gave the preference was influenced in deciding to give it by a desire to produce, in relation to
that person, the effect of putting that person into a position which, in the event of the company going into insolvent liquidation, would be better than the position he would otherwise have been in.

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It
should be noted that pursuant to the European Union Regulation on Insolvency Proceedings 2000, the courts of the member state in which the debtor's centre of main interests is
situated has jurisdiction to open insolvency proceedings. There is a presumption that the centre of main interests will be where the company's registered office is located, but this presumption can be
rebutted by evidence to the contrary. In addition, the centre of main interests to the company may change over time. There is therefore a risk that if, on the facts at the time the relevant company is
insolvent, the centre of our main interests or those of our relevant subsidiary may not be England but another member state. In those circumstances we and/or the relevant subsidiary as appropriate
will be subject to insolvency proceedings and the insolvency laws of that member state. Further, subsidiary insolvency proceedings may be commenced in other EU states.

Insofar
as a claim is accepted by the Liquidator, there may be a significant delay in obtaining any payment from the Liquidator as it will inevitably take the Liquidator time to realise
the company's assets. This delay is unlikely to be compensated in interest. The holders of senior secured notes may receive in exchange for their claims the recovery that could be substantially less
than the amount of their claims, or even nothing, and any such recovery could be in the form of cash, new debt instruments or some other security. Further, the Liquidator's ability to enforce security
or collateral on behalf of the relevant company may be compromised by defects, procedural restrictions, consent of third parties and practical considerations as stated with the realisation of assets.

Insofar
as assets exist in the form of vessels or cargoes, these may be subject to arrest in foreign jurisdictions, and the disposition of those assets will be subject to foreign law and
procedure. It is therefore impossible to predict whether and to what extent the value of those assets will be available to any liquidator.

It
is impossible to predict what recovery, if any, would be available to a holder of the senior secured notes in an insolvency.

Changes in law may affect the senior secured notes

No assurance can be given as to the impact of any possible change to U.S., English, Danish, Panamanian or Luxembourg law, tax, regulatory or administrative
practice after the date of this document.

ITEM 4.    INFORMATION ON THE COMPANY

A.    HISTORY AND DEVELOPMENT OF THE COMPANY

We are a public limited company organized in the United Kingdom on September 13, 1999. We commenced operations in 2004. In November 2007, we carried
out a corporate reorganization which involved the incorporation of Britannia Bulk Holdings Plc (a public limited company incorporated in England and Wales) and the exchange by the shareholders
of Britannia Bulk Plc of their ordinary shares in Britannia Bulk Plc for ordinary shares in Britannia Bulk Holdings Plc. As a result of the reorganization, our former shareholders
are now the shareholders of Britannia Bulk Holdings Plc, and we are a wholly-owned subsidiary of Britannia Bulk Holdings Plc. Our founder is our Chief Executive Officer, Mr. Arvid
Tage. Mr. Tage and certain other directors and members of senior management hold in excess of 90% of our outstanding equity interests. For more information on our major shareholders and share
capital, please see "Item 7.Major Shareholders and Related Party Transactions." Our technical management is provided through our majority-owned subsidiary, Svendborg Ship
Management A/S. Substantially all of our tugs and barges are owned by our wholly-owned Danish subsidiary, Britannia Bulk DK A/S, and each of our drybulk vessels, as well as one of our
tugs, is owned by one of our wholly-owned subsidiaries incorporated in Panama. See "Item 4.C.Organizational Structure."

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We
were primarily incorporated to concentrate on handy size business but have now entered the Panamax sector, as well as the oceangoing barge sector, in order to further extend our
expanding portfolio of charterers. Five of our ocean-going drybulk carriers were acquired in 2004 and the first half of 2005. In December 2005, we took delivery of three tugs and four barges.
In October 2006 and
February 2007, respectively, we acquired an additional barge and tug. In 2007, following the completion of the offering of the senior secured notes, we purchased three Panamax vessels, one
Handymax vessel and one Handysize vessel. In January 2008, we purchased a Handysize vessel pursuant to a 2007 memorandum agreement. In February 2008, we purchased two Handyman vessels pursuant
to a 2007 memorandum agreement. For more information on our fleet, please see "Item 4.B. Business OverviewOur Fleet and Operations."

On
November 16, 2006, we completed a private placement of $185 million in aggregate principal amount of our 11% senior secured notes due 2011. The senior secured
notes were issued pursuant to an Indenture in a transaction exempt from the registration requirements under the Securities Act. The senior secured notes were sold within the United States only to
qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States only to non-U.S. persons in reliance on Regulation S
under the Securities Act. The senior secured notes will mature on December 1, 2011 and interest is payable on the senior secured notes on each June 1 and December 1, beginning
June 1, 2007. The senior secured notes are guaranteed on a senior secured basis by all of the existing subsidiaries and certain of our future subsidiaries.

Pursuant
to a registration rights agreement, we and our subsidiaries filed an exchange offer registration statement on Form F-4 with the SEC with respect to an
offer to exchange the senior secured notes for substantially identical notes that are registered under the Securities Act. The exchange offer registration statement on Form F-4 was
declared effective on March 9, 2007. In addition, on March 14, 2007, we commenced an offer to exchange substantially similar registered notes for the senior secured notes. This exchange
offer was completed on April 11, 2007 with substantially all outstanding unregistered notes exchanged for registered notes. The description set forth above is qualified in its entirety by the
indenture, the form of senior secured notes and the registration rights agreement, which are filed as exhibits to the exchange offer registration statement on Form F-4.

In
April 2007, we entered into an agreement with North Western Neva Limited to repurchase 434,168 of our ordinary shares. The total consideration was to be $7.5 million and
payable in three tranches. The first tranche was for 159,681 ordinary shares and closed on April 16, 2007 for a consideration of $2.8 million in cash. The second tranche was for 159,681
ordinary shares and was scheduled to close on April 15, 2008 for a consideration of $2.8 million in cash. The third and final tranche was for 114,806 ordinary shares and was scheduled to
close on April 15, 2009 for a consideration of $2.0 million in cash. The purchase agreement also included a provision whereby our shareholders had the option to purchase the remaining
44,875 shares held by North Western Neva Limited for $775.

In
November 2007, this agreement was amended enabling us to complete the repurchase of the outstanding second and third tranche of ordinary shares, immediately. As a result of the
amendment, on November 14, 2007, we repurchased 274,487 ordinary shares for $4,742.

Simultaneous
with the execution of the amended agreement, Arvid Tage, our chief executive officer, purchased 44,875 ordinary shares held by North Western Neva Limited and covenanted to
perform North Western Neva Limited's obligation to sell the additional 44,875 ordinary shares back to us, in
each case, pursuant to a plan approved by our board of directors. As a result of the simultaneous amendment agreement and assignment agreement, we completed the repurchase of all ordinary shares held
by North Western Neva Limited on November 8, 2007.

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Our
principal executive and registered office is located at Dexter House, 2nd Floor, 2 Royal Mint Court, London EC3N 4QN, United Kingdom. Our telephone number
at that address is 011 44 20 7264 4900. Our corporate website address ishttp://www.britbulk.com.

B.    BUSINESS OVERVIEW

Overview

We are an international provider of drybulk shipping and maritime logistics services with a leading market position in transporting drybulk commodities in and out
of the Baltic region. Our current owned fleet is diversified and consists of 22 vessels, including 13 drybulk vessels, five of which are ice-class, five ocean-going
ice-class barges, and four ice-class tugs. Ice-class vessels are those that have been specifically constructed and certified for transportation in icy conditions,
which are a particular feature of the Baltic region for approximately half of each year. Based on our market knowledge, there are currently fewer than 10 ice-class Panamax drybulk
vessels which are less than 10 years old.

To
complement our owned fleet, we actively charter-in a significant number of vessels to increase our overall dwt capacity and enhance our service to our customers. As at
December 31, 2007, the number of chartered-in drybulk vessels under our control was 44, nine of which were ice-class. These chartered-in vessels added
dwt capacity of 2,064,155, significantly increasing our total fleet of controlled vessels. Revenues from our chartered-in tonnage have grown significantly in the last year as we have
expanded our fleet, broker network and customer base. Further, growth has been aided by a stronger overall demand in the drybulk shipping market, coupled with strong freight rates and increased trade
for the commodities we transport. The combination of owning and chartering-in our fleet provides us with the flexibility to capitalize on profitable opportunities.

Our
managed drybulk vessels serve a wide variety of ports and carry multiple cargoes, while our tug and barge vessels provide the flexibility for us to serve ports that are too small or
otherwise unable to accommodate traditional drybulk vessels. We derive a significant portion of our revenue primarily from the short-haul transportation of coal, fertilizers, scrap metals,
iron-ore, grain and other bulk cargoes from ports in the Baltic region to countries in northern and western Europe, including the United Kingdom, Denmark and Germany. In addition, we
transport these bulk cargoes from the Baltic region along global trade routes to India, Brazil and Argentina, and across South East Asia trade routes, from India to China, and from Australia to India.
A typical long-haul trade route for us would involve the transportation of Baltic-sourced fertilizers to Brazil and Argentina, and the transportation of South American-sourced grain back
to Europe.

We
have long-standing relationships with key customers, includingCorus, Glencore International, Siberian Coal Energy Company
(SUEK)andWeglokoks, and more recent relationships withBHP Billiton, Peabody EnergyandRio Tinto. Our customer base is diversified and, for the year ended
December 31, 2007, no customer represented more than 7% of our revenues. A significant portion of our revenue with such customers is earned under fixed price COAs, more fully described below.

In
addition to vessel operation and chartering, we also provide maritime logistics services for our customers. These logistics services include port modification, fendering (the
provision of materials used to prevent damage to vessels when docking), lightening, dredging of berths to accommodate larger vessels, maximizing vessel throughput in ports, provision of floating
cranes and self-discharging equipment. We believe our maritime logistics services enhance our profitability, add value and depth to the services we can provide and result in stronger
relationships with our customers, which in turn enhance our customer retention and create new and repeat business opportunities.

For
the year ended December 31, 2007, approximately 40% of our revenue was earned from the shipment of drybulk commodities from the Baltic region, where we have significant
operational expertise and capabilities. The Baltic region represents an attractive market in the international drybulk

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shipping
industry with unique characteristics, such as a predominance of short-haul trades and icy conditions, for which our fleet is ideally suited. Drybulk transportation in this region
has increased substantially in recent years due to increased exports of Russian coal to Europe. In addition, we have experienced recent growth in our involvement in the shipment of fertilizers and
grain in and out of the region.

A
significant portion of our revenue is earned under fixed price COAs, under which we deliver certain amounts of cargo for our customers over terms ranging from a few weeks to over
a year, providing us with stable and predictable cash flows in the near to medium term. COAs are priced on a US$per cargo tonne basis, as opposed to being priced on a per day basis, as with
time charter contracts. We benchmark our COA rates against Time-Charter Equivalent (TCE) Rates. See "Item 5.
Operating and Financial Review and ProspectsOperational Metrics." We believe that the trade in the Baltic region relies on COAs rather than spot or time charters (under which we generate
the balance of our revenue) because of the predominance of short-haul trades.

The
following table sets forth tonnes of cargo shipped under COA contracts for the periods indicated:

Year ended December 31,2007

2006

2005Tonnes shipped under COAs (millions)

4.6

5.6

4.4Total tonnes of cargo shipped (millions)

11.8

10.7

8.0


As
at December 31, 2007, we had secured COAs for the shipment of over 10.8 million tonnes of cargo scheduled to be shipped in 2008.

For
the fiscal year ended December 31, 2007, we generated revenue, EBITDA and net income of approximately $566.6 million, $89.3 million and $46.0 million,
respectively. For the fiscal year ended December 31, 2006, we generated revenue, EBITDA and net income of approximately $191.5 million, $17.5 million and $2.4 million,
respectively. For the definition of EBITDA and its reconciliation to net income, see footnote (1) under "Item 3. Key InformationSelected Financial Data."

Our Fleet and Operations



Our initial fleet consisted of five Handymax drybulk vessels, which we acquired in 2004 and the first half of 2005. In December 2005, we took delivery of
three ice-class tugs and four ice-class barges and, in October 2006, an additional ice-class barge. In 2007, we acquired and took delivery of three Panamax vessels,
one additional Handymax vessel and one additional Handysize vessel and an ice-class tug. We took delivery of one ice-class Handysize vessel in January 2008 and two
ice-class Handymax vessels in February 2008.

Our
owned fleet of drybulk vessels consists of Panamax, Handymax and Handysize vessels. The principal difference between the three categories of vessel is the carrying capacity:



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The
following table lists the vessels in our existing owned fleet, together with details of vessels we have contracted to purchase:

Vessel Name

Year Built

Date Acquired/
Estimated Delivery Date

Purchase Price

DWT($ in thousands)Drybulk Vessels:PanamaxNavigator II

1998

February 27, 2007

$
28,500

69,146Endurance II

1994

April 10, 2007


36,735

70,029Endeavour II

1994

May 8, 2007


36,735

70,003HandymaxVoyager II

1986

November 26, 2004


13,776

33,288Explorer II

1977

November 30, 2004


2,100

39,814Challenger II

1977

September 30, 2004


2,100

39,814Adventure II

1980

May 27, 2004


7,100

38,871Discovery II

1984

April 8, 2005


11,500

32,813Commander II

1983

May 2, 2007


10,750

31,431Ice Trader II

1995

February 14, 2008


35,500

43,705Ice Power II

1995

February 18, 2008


35,500

43,705HandysizeEnforcer II(1)

1981

July 11, 2007


6,244

23,794Holmön

1978

January 16, 2008


5,700

10,800Barges:(2)Drejoe II

1991

December 1, 2005


2,138

15,820Hjortoe II

1992

December 1, 2005


2,138

15,820Sioe II

1991

December 1, 2005


2,138

15,820Skaroe II

1992

December 1, 2005


2,138

15,820Iholm II

1979

October 2, 2006


1,400

9,330Tugs:Bregninge II

1984

December 1, 2005


1,584

105Troense II

1983

December 1, 2005


1,584

106Vindeby II

1981

December 1, 2005


1,584

105Vornaes II

1970

February 9, 2007


1,000

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Our drybulk vessels principally focus on the transportation of commodities in and out of the Baltic region, including coal, fertilizer, scrap metals,
iron-ore and grain. Two of our current drybulk vessels, Voyager II and Discovery II, are ice-class, which permits them to operate in shipping areas with icy

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conditions
and enter icy or ice-restricted ports. We took delivery of three additional ice-class vessels, the Holmön, and the Ice Trader II and Ice
Power II, in January and February 2008, respectively. Certain of our vessels are geared, which means they are built with on-board cranes that enable them to load and discharge cargo
in countries and ports with limited infrastructure, and, in particular, the Holmön, which we took delivery of on January 16, 2008, was renovated in 1991 into a
specialist self-loading and self-unloading vessel and accordingly is equipped to discharge cargo continuously either on shore or to another vessel, at a capacity of
5001,000 tonnes per hour, depending on the commodity being transported.



Our tugs and barges are principally used to serve ports that are too small to accept traditional drybulk vessels. Our tugs are used to push the barges, with the
typical route being intra-Baltic. Customers for
these vessels include Danish and Russian power companies that often utilize special ports and discharging facilities. In addition, these vessels are less expensive to operate than traditional drybulk
vessels. Each of our tugs and barges are ice-class, which increases our ability to service our customers' needs in ice restricted ports. This additional capacity and the
ice-classification of our entire tugs and barges fleet has permitted us to expand our areas of operation and increase our market share in the Baltic region.



To complement our owned fleet, we actively charter-in a significant number of vessels to increase our service capacity for our customers and to
enhance our overall dwt capacity. As at December 31, 2007, the number of chartered-in vessels under our control was 44, nine of which were ice-class. These
chartered-in vessels added dwt capacity of 2,064,155, significantly increasing our total fleet of controlled vessels. Revenues from our chartered-in tonnage have grown
significantly in the last year as we have expanded our fleet, broker network and customer base. Further, this growth has been aided by a stronger overall demand in the drybulk shipping market, coupled
with strong freight rates and increased trade for the commodities we transport. For a breakdown of the average remaining days and average daily charter-in rate by vessel type as of
December 31, 2007, see "Item 5. Operating and Financial Review and ProspectsContractual Obligations."

The
chartered-in fleet is a demand driven business. Where we anticipate or identify demand that cannot be met through our existing fleet, we seek to meet it through
chartering-in vessels. Our chartered-in fleet gives us the flexibility to capture profitable business without the capital investment associated with owning vessels and allows
us to adjust our fleet size according to prevailing market conditions.

Our
senior management team is highly experienced in chartering-in. Our chief executive officer and our directors of chartering have, on average, 20 years of experience
in shipping and a long track record in the chartering business. As a result, our senior management team has built a longstanding reputation within the industry and have significant experience in
trading in periods of both increases and decreases in charter rates.



Svendborg Ship Management A/S, our technical management subsidiary, is based in Svendborg, Denmark, and, together with our other Danish subsidiaries, has
17 employees averaging over 20 years of experience and an additional five consultants. It has experience managing several types of drybulk vessels, including tweendeckers, tugs and barges and
bulk carriers and manages no vessels except those owned by our subsidiaries. Commercial management of our vessels in Denmark is limited to those

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vessels
owned or chartered-in by our Danish entity, whereas commercial management for the balance of our fleet is conducted out of the United Kingdom.

Svendborg
Ship Management A/S currently carries out the critical ship management functions of vessel maintenance, crewing, shipyard supervision and financial management services
for our fleet. It establishes key performance indicators to facilitate regular monitoring of our operational performance. We set targets on an annual basis to drive continuous improvement, and we
review performance indicators monthly to determine if remedial action is necessary to reach our targets. We believe that the adoption of common equipment standards provides operational efficiencies,
including with respect to crew training and vessel management, equipment operation and repair and spare part ordering.

Svendborg
Ship Management A/S's particular expertise is managing our vessels in icy and ice restricted conditions. This expertise, together with our growing fleet of
ice-class vessels, allows us to compete effectively for charter or contract opportunities. In addition, Svendborg Ship Management A/S's office is located in an area known as the
Great Belt, where many of our vessels routinely operate. This proximity to our vessels allows Svendborg to quickly respond to any on-board issues as they arise.

Through
Svendborg Ship Management A/S, we are currently in the process of obtaining ice passports for certain of our non ice-class vessels. Ice passports are issued by
the St. Petersburg port authorities and enable non-ice-class vessels that have passed extensive and rigorous surveys by the authorities and been deemed suitable to
operate in ice restricted ports and regions in Russia. To date, we have obtained ice passports for Endeavour II, Endurance II, Adventure II, Navigator II and
Commander II, materially increasing the ice-capabilities of our fleet that we can offer to our customers.

Svendborg
Marine Surveyors A/S undertakes work for us and third parties providing independent marine inspections and surveys and surveys of cargo including draft surveys,
including issuing all required interim certificates in regards to registration and statutory certificates for non IACS class vessels. It also has experience in connection with port operations of
container vessels, bulk carriers, loading of various iron-ore, plates and steel coils, heavy-lift operations,
timber vessels as well as working out project and supervisors of same in all foreign ports. In particular, in accordance with our ISM Code compliance, through ongoing internal and external
audits, Svendborg Marine Surveyors A/S maintains all our vessels' safety management certificates. In addition, Svendborg Marine Surveyors A/S is engaged by parties such as the World Food
Program, United Nations and the U.S. Armed Forces, governments and supranational organizations to aid in the development of logistics.

Safety
and environmental compliance are among our top operational priorities. Svendborg Marine Surveyors A/S has achieved ISO 9001 certification under Lloyds Register
Copenhagen. Svendborg Ship Management A/S has achieved International Standards Management (or ISM) certification under Isthmus Business Shipping (IBS) and RINA (Registro Italiano
Navale). Britannia Bulk DK A/S has achieved International Standards Management (or ISM) certification under Lloyds Register Copenhagen.

Employees

As of December 31, 2007 we had a team of 55 shore-based employees, including 22 in Svendborg, and four consultants. Our personnel have substantial shipping
experience and together speak over 10 languages. In addition, we currently have approximately 305 seafaring employees.

Competition

Generally, our business fluctuates in line with the main patterns of trade of the major drybulk cargoes and varies according to changes in the supply and demand
for these items. We operate in markets that are highly competitive and affected by supply and demand. We compete for charters on

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the
basis of price, vessel location relative to port of loading, size, age and condition of the vessel, as well as on our reputation as an owner and operator. We compete with other owners and
operators of drybulk carriers in the Panamax, Handymax and Handysize sectors, predominantly in transportation of commodities from the Baltic region. Ownership of drybulk carriers in the global drybulk
shipping market is highly fragmented and is divided among a large number of independent bulk carrier owners and charterers, many of whom have significantly greater resources than us. The Baltic
drybulk shipping market is more concentrated amongst fewer number of independent bulk carrier owners and charterers. Our principal competitors are Polish Steamship Company, Murmansk Shipping,
ESL Shipping, Norden and Armada.

Permits and Authorizations

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates and other authorizations with respect to
our vessels. The kinds of permits, licenses, certificates and other authorizations required for each vessel depend upon several factors, including the commodity transported, the waters in which the
vessel operates, the nationality of the vessel's crew and the age of the vessel. We believe that we have all material permits, licenses, certificates and other authorizations necessary for the conduct
of our operations.

A
variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national
coast guard, harbor master or equivalent), classification societies, flag state administrations (countries of registry), charterers, and terminal operators. Certain of these entities require us to
obtain permits, licenses and certificates for the operation of our vessels.

Environmental and Other Regulations

Governmental and other regulation significantly affects the ownership and operation of drybulk carriers. A variety of government and private entities subject
drybulk vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national coast guard, harbor master or equivalent), classification
societies, flag state administrations (country of registry), charterers or COA counterparties, and terminal operators. Certain of these entities will require us to obtain permits, licenses and
certificates for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or temporarily suspend the operation of one or more of our
vessels.

The
heightened level of environmental and quality concerns among funders, insurance underwriters, regulators and charterers may lead to greater inspection and safety requirements on all
vessels and may accelerate the scrapping of older vessels throughout the drybulk shipping industry as well as increasing the costs of dismantling vessels. Increasing environmental concerns have
created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality
maintenance, continuous training of officers and crews and compliance with local and international regulations. As with the industry generally, our operations will entail risks in these areas and
compliance with these laws and regulations, which may be subject to revisions, increases our overall cost of business.



The International Maritime Organization, or IMO, has negotiated international conventions that impose liability for oil pollution in international waters
and a signatory's territorial waters. This includes the 1973/78 International Convention for the Prevention of Pollution from Ships (the "1973/78 MARPOL Convention"). Several Annexes have been agreed
upon under MARPOL covering the prevention of pollution by oil, noxious liquids, garbage, etc. In September 1997, the IMO adopted

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Annex VI
to the International Convention for the Prevention of Pollution from Ships to address air pollution from ships. Annex VI was ratified in May 2004, and became effective in May
2005. Annex VI set limits on emissions from ship exhausts and prohibits deliberate emissions of ozone depleting substances, such as chlorofluorocarbons. Annex VI also includes a global
cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions. These requirements have been adopted by the European Union in
Directive 2005/33/EC (amending Directive 1999/32/EC), which requires, among other things, a 0.1% sulfur limit for fuels used by seagoing ships while at berth in EU ports as of 2010. The
vessels that we currently own and that we will acquire will be in compliance with MARPOL's requirements, including the Annex VI regulations.

The
United States and other IMO member states submitted proposals in 2007 to the IMO to enact more stringent emission limits for particulate matter, nitrogen oxide,
sulfur oxide and volatile organic compound emissions that would phase-in at different periods from 2011 to 2016. The Marine Environment Protection Committee of the IMO is
currently negotiating these proposed amendments. If these amendments are implemented and apply to existing vessels (as opposed to vessels manufactured after the effective date), we may be
required to incur costs to install equipment in our vessels to comply.

The
operation of drybulk carriers is also affected by the requirements set forth in the IMO's Management Code for the Safe Operation of Ships and Pollution Prevention, or
ISM Code. The ISM Code requires the party with operational control of a vessel to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and
environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. The failure of a ship owner or bareboat charterer
to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or
detention in, certain ports. Each of the vessels in our fleet has received an ISM safety management certificate evidencing compliance with the ISM Code's requirements.

For
vessels that do not carry persistent oil as cargo, such as our drybulk vessels, barges and tugs, there is no international oil pollution regime in force that comprehensively governs
liability for oil pollution from ship's bunkers. In 2001, the IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, which
imposes strict liability on ship owners
for pollution damage in contracting states caused by discharges of bunker oil from drybulk vessels. The Bunker Convention also requires registered owners of ships over a certain size to maintain
insurance to cover their liability for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount
calculated in accordance with the Convention on Limitation of Liability for Maritime Claims 1976, as amended, or the 1976 Convention). The Bunker Convention has not yet received sufficient
ratifications to come into force. In the meantime, liability for such bunker oil pollution typically is determined by the national or other domestic laws in the jurisdiction where the spillage occurs.
The Bunker Convention is modelled after the International Convention on Civil Liability for Oil Pollution Damage, 1969, as amended, which concerns releases from vessels carrying oil as cargo.

On
June 14, 2007, the IMO's Protocol on Preparedness, Response and Co-operation to Pollution Incidents by Hazardous and Noxious Substances, 2000 (OPRC-HNS
Protocol) entered into force. This Protocol follows the principles of the International Convention on Oil Pollution Preparedness, Response and Co-operation, 1990 and is intended to provide
a global framework for international cooperation in combating major incidents or threats of marine pollution from "Hazardous and Noxious" substances. That term generally applies to any substance other
than oil that is likely to create hazards to human health or marine life or interfere with legitimate uses of the seas. Vessels will be required to develop a shipboard emergency plan to deal
specifically with incidents involving these substances. Parties to the convention will be required to adopt implementing legislation. Although to

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date
we have not incurred any material costs in complying with the requirements of this convention, we may do so in the future.



From time to time, our vessels call on United States ports and enter United States waters. Vessels entering into United States waters are subject to various
federal, state and local laws relating to protection of the environment, including the Oil Pollution Act of 1990 ("OPA"), Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), and the Clean Water Act ("CWA").

OPA
established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills in U.S. waters, including bunker oil spills from
drybulk vessels. Under OPA, vessel owners, operators and bareboat charterers are "responsible parties" and are jointly, severally and strictly liable (unless the spill results solely from the act or
omission of a third party, an act of God or an act of war) for all containment and clean-up costs, damages to natural resources and other damages arising from discharges or threatened
discharges of oil from their vessels.

OPA
and the Coast Guard and Maritime Transportation Act of 2006 limit the liability of responsible parties for vessels other than crude oil tankers to the greater of $950
per gross tonne or $800,000 per vessel per incident (subject to possible adjustment for inflation). These limits do not apply, however, if an incident was directly caused by
violation of applicable United States federal safety, construction or operating regulations or by a responsible party's gross negligence or willful misconduct, or if the responsible party fails or
refuses to report the incident or to cooperate and assist in connection with oil removal activities.

CERCLA,
the CWA and state law also contain pollution liability schemes applicable to drybulk carriers operating in United States waters. CERCLA contains a similar liability regime
to OPA, but imposes strict joint and several liability upon the owner, operator or bareboat charterer of a vessel for clean-up costs arising from a discharge of "hazardous
substances" rather than "oil." Although petroleum products would not be considered hazardous substances under CERCLA, additives to oil and other chemicals or materials might fall within its scope.
The CWA prohibits the discharge of oil or hazardous substances in United States navigable waters and imposes strict liability in the form of penalties and for the costs of removal, remediation
and damages. Finally, OPA and CERCLA each preserve the right of recovery under existing law, including maritime tort law, and permit individual states to impose their own liability regimes with regard
to oil or hazardous substance pollution incidents occurring within their boundaries. We intend to comply with OPA, CERCLA, the CWA and all applicable state and maritime law in the ports where
our vessels call. We also intend to maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the damages from a catastrophic spill
were to exceed this insurance coverage, however, that could have an adverse effect on our business.

OPA
requires owners and operators of vessels entering and operating in United States territorial waters to establish and maintain with the United States Coast Guard evidence of financial
responsibility sufficient to meet their potential liabilities under OPA/CERCLA. Current United States Coast Guard regulations require evidence of financial responsibility in the amount of $900
per gross tonne, which includes the former OPA limitation on liability of $600 per gross tonne and CERCLA liability limit of $300 per gross tonne. The Coast Guard has issued a
notice of policy change indicating its intention to change the financial responsibility regulations to comport with the amended statutory limits of OPA. Under the Coast Guard regulations,
vessel owners and operators may evidence their financial responsibility by showing proof of insurance, surety bond, self-insurance or guaranty. Under OPA, an owner or operator of a fleet
of vessels is required only to demonstrate evidence of financial responsibility in an amount sufficient to cover the vessels in the fleet having the greatest maximum

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liability
under OPA/CERCLA. We intend to comply with the United States Coast Guard regulations by providing a certificate of responsibility from third party entities that are acceptable to the United
States Coast Guard evidencing sufficient self-insurance.



The European Union has adopted legislation that would: (1) ban manifestly sub-standard vessels (defined as those more than 15 years old
that have been detained by port authorities at least twice in a six month period) from European waters and create an obligation of port states to inspect vessels posing a high risk to maritime safety
or the marine environment; and (2) provide the European Union with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority
of negligent societies. On September 7, 2005, the European Union also adopted legislation on ship-source pollution and the introduction of criminal penalties for
ship-board discharges of polluting substances if committed with intent, recklessly or by serious negligence. On October 23, 2007, however, the European Court of Justice annulled the
specific minimum and maximum fines and imprisonment sentences specified in conjunction with this legislation on the basis that the determination of the type and level of criminal sanctions were
matters properly reserved for determination by the Member States.

European
Union regulations currently require a maximum sulfur limit of 1.5% in bunker fuel consumed by vessels operating in the Baltic. Therefore, drybulk carriers that use standard
bunkers are either less likely to operate in the Baltic, or will incur additional costs because they must take on board bunker fuel that complies with the sulfur limit, often in addition to the bunker
fuel already on board. Although these requirements make operating in the Baltic more expensive than other areas without these restrictions, they apply generally to all operators in these areas.



Recent scientific studies have suggested that emissions of certain gases, commonly referred to as "greenhouse gases," may be contributing to warming of the
Earth's atmosphere. According to the IMO's study of greenhouse gas emissions from the global shipping fleet, greenhouse gas emissions from ships are predicted to rise by 38% to 72% due
to increased bunker fuel consumption by 2020 if corrective measures are not implemented. Any passage of climate control legislation or other regulatory initiatives by the IMO or individual countries
where we operate that restrict emissions of greenhouse gases could require us to make significant financial expenditures we cannot predict with certainty at this time.



Various jurisdictions in which we operate have adopted or proposed regulations regarding the discharge of ballast water to protect against the invasion of alien
species. Some states in the United States, like California and Michigan, have enacted laws containing hull cleaning and ballast water treatment requirements, respectively. At the international level,
the IMO also proposed the International Convention for the Control and Management of Ships' Ballast Water and Sediments, which contains ballast water exchange and performance standards but has yet to
receive ratification by a sufficient number of countries to enter into force. These regulations may require us to install ballast water treatment systems onboard our vessels to meet the various
ballast water discharge requirements. There is not enough information available to determine the nature of any treatment system that may be required or what the associated costs will be.

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Since the terrorist attacks of September 11, 2001, a variety of national and international initiatives to enhance vessel security have been implemented.
Following legislative and regulatory developments in the United States, the International Convention for the Safety of Life at Sea, or SOLAS, created a new chapter dealing specifically with maritime
security in December 2002. The new chapter took effect in July 2004 and imposes detailed security obligations on vessels and port authorities, most of which are contained in the newly created
International Ship and Port Facilities Security Code or ISPS Code. Among the various requirements for vessels are automatic information systems, alert security systems, vessel security plans and
compliance with flag state security certification requirements.

We
will implement and comply with the various security measures addressed by the MTSA, SOLAS and the ISPS Code and similar national legislation or regulation to the extent they are
applicable to us or our vessels.



Every large, commercial seagoing vessel, including those certified for use in icy conditions, must be "classed" by a classification society. 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 the classification society and complies with applicable
rules and regulations of the vessel's country of registry and the international conventions of which that country is a member.

For
maintenance of the class, regular and extraordinary surveys of hull, machinery, including the electrical plant, and any special equipment classed, are required to be performed by the
classification society, to ensure continuing compliance. Most vessels are also drydocked every 30 to 36 months for inspection of the underwater parts and for repairs related to inspections. If
any defects are found, the classification surveyor will issue a "recommendation," which must be rectified by the ship owner within prescribed time limits. The classification society also undertakes on
request of the flag state other surveys and checks that are required by the regulations and requirements of that flag state. These surveys are subject to agreements made in each individual case and/or
to the regulations of the country concerned.

Most
insurance underwriters make it a condition for insurance coverage that a vessel be certified as "in class" by a classification society that is a member of the International
Association of Classification Societies (IACS). Our tugs and barges, with the exception of the Vornaes, and all of our drybulk vessels are certified as being "in class" by Registro Italiano Navale
(RINA) (Italian Classification Society) or any other society member of IACS as applicable, and all secondhand vessels that we purchase must be certified prior to their delivery.



The Paris Memorandum of Understanding on Port State Control enforces IMO and ILO legislation concerning ships operating in the Baltic region. Its requirements
mean that ships must be maintained to higher standards than ships operating in other areas of the world. In addition, it is advisable for vessels trading under icy conditions to employ a Master and
Chief Engineer who are trained to deal with such conditions.

Risk of Loss and Liability Insurance



The operation of any cargo vessel includes risks such as mechanical failure, structural damage to the vessel, collision, personal injuries, property loss, cargo
loss or damage and business interruption due to political circumstances in foreign countries, hostilities or labor strikes. In addition, there is always an

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inherent
possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. We carry insurance
against loss of hire, which protects against business interruption following a loss under our hull and machinery policy. This policy does not protect us from business interruptions caused by any other
losses. While we believe that our present insurance coverage is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be
able to obtain adequate insurance coverage at reasonable rates.



We have obtained marine hull and machinery and war risk insurance, which covers damage to a vessel's hull and machinery, collisions and the risk of actual or
constructive total loss, for all of our vessels. The vessels are each covered up to at least fair market value with a deductible of $125,000 per incident. Under regular circumstances, salvage and
towing expenses are covered in connection with casualties. We also arranged increased value and freight interest coverage for each vessel. Under this coverage, in the event of total loss or total
constructive loss of a vessel, we will be able to recover for amounts not recoverable under the hull and machinery policy.



Protection and Indemnity insurance is provided by mutual protection and indemnity associations, or P&I Clubs, which cover our third party liabilities in
connection with our shipping activities. This includes third-party liability and other expenses and claims in connection with injury or death of crew, passengers and other third parties, loss or
damage to cargo, damage to other third-party property, pollution arising from oil or other substances, wreck removal and related costs. Subject to the "capping" discussed below, our coverage, except
for pollution, is unlimited.

Our
current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The 13 P&I Clubs that comprise the International Group of
P&I Clubs insure more than 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's liabilities. Each P&I Club has capped its
exposure under this pooling agreement at $1 billion. As a member of a P&I Club, which is a member of the International Group, we are 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 Clubs comprising the International Group.

Material Contracts

See "Item 5. Operating and Financial Review and ProspectsLiquidity and Capital Resources" for a description of the material contracts we have
entered into with respect to vessel acquisitions.

Website

We maintain a website athttp://www.britbulk.com. The information contained in or accessible from our corporate
website is not part of this annual report.

C.    ORGANISATIONAL STRUCTURE

We maintain offices in London, England and Svendborg, Denmark. Our corporate structure is organized into two principal groups: vessel and technical management,
and vessel ownership and

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operations.
All of our subsidiaries are wholly-owned except Britannia Bulkers Plc, of which we own 99.99% of its outstanding ordinary shares. The following table sets forth our corporate
structure:

|Company Name                              |  | Percentage
Owned |  | Country of
Incorporation |  | Principal Activity                
|----------------------------------------- |  | ---------------- |  | ------------------------ |  | ----------------------------------
|Britannia Bulkers Plc                     |  | 99.99%           |  | England and Wales        |  | Ship operator                     
|BBL Denmark Holding A/S                   |  | 100%             |  | Denmark                  |  | Holding company                   
|Britannia Bulk S.A.                       |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Flagship Maritime S.A.                    |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Baltic Navigation Company S.A.            |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Danmar Shipping S.A.                      |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Northern Star Navigation S.A.             |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Great Belt Shipping Company S.A.          |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Channel Bulk Services S.A.                |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Navigator Bulk Services S.A.              |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Atlantic Bulk Services S.A.               |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Western Bulk Services S.A.                |  | 100%             |  | Panama                   |  | Ship owner and operator           
|International Bulk Services S.A.          |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Unity Bulk Services S.A.                  |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Eastern Bulk Services S.A.                |  | 100%             |  | Panama                   |  | Dormant                           
|Southern Bulk Services S.A.               |  | 100%             |  | Panama                   |  | Dormant                           
|Oceanic Bulk Services S.A.                |  | 100%             |  | Panama                   |  | Ship owner and operator           
|Enterprise Bulk Services S.A.             |  | 100%             |  | Panama                   |  | Ship owner and operator           
|British Bulk Transport S.A.               |  | 100%             |  | Panama                   |  | Dormant                           
|British Bulk Services S.A.                |  | 100%             |  | Panama                   |  | Dormant                           
|British Bulk Carriers S.A.                |  | 100%             |  | Panama                   |  | Dormant                           
|Britannia Bulk Services S.A.              |  | 100%             |  | Panama                   |  | Dormant                           
|Britannic Bulk Services S.A.              |  | 100%             |  | Panama                   |  | Dormant                           
|Nordel Bulk Services S.A.                 |  | 100%             |  | Panama                   |  | Dormant                           
|Maden Bulk Transport S.A.                 |  | 100%             |  | Panama                   |  | Dormant                           
|Seamoon Bulk Transport S.A.               |  | 100%             |  | Panama                   |  | Dormant                           
|Inmotion SEA Transport S.A.               |  | 100%             |  | Panama                   |  | Dormant                           
|Orion Bulk Services S.A.                  |  | 100%             |  | Panama                   |  | Dormant                           
|Force Bulk Services S.A.                  |  | 100%             |  | Panama                   |  | Dormant                           
|Ice Bulk Services S.A.                    |  | 100%             |  | Panama                   |  | Dormant                           
|Britannia Bulk DK A/S                     |  | 100%             |  | Denmark                  |  | Tugs and barges owner and operator
|Britannia Bulkers A/S                     |  | 100%             |  | Denmark                  |  | Ship operator                     
|Svendborg Ship Management A/S             |  | 100%             |  | Denmark                  |  | Ship management                   
|Svendborg Marine Surveyors A/S            |  | 100%             |  | Denmark                  |  | Marine surveyor                   
|Inspecciones Maritimas De Costa Rica S.A. |  | 100%             |  | Costa Rica               |  | Marine surveyor                   

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D.    PROPERTY, PLANT AND EQUIPMENT

We lease office space in London, England where our principal office is located and we own real estate property in Svendborg, Denmark, where our Danish office
building is located. Our interests in the vessels in our fleet are our only other material properties.

ITEM 4A.    UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following operating and financial review and prospects should be read in conjunction with our historical consolidated financial
statements and accompanying notes included elsewhere in this report. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial
performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section entitled
"Cautionary Note Regarding Forward Looking Statements" and "Item 3.D. Risk Factors" included elsewhere in this annual report.

Overview

We are an international provider of drybulk shipping and maritime logistics services with a leading market position in transporting drybulk commodities in and out
of the Baltic region. Our current owned fleet is diversified and consists of 22 vessels, including 13 drybulk vessels, five of which are ice-class, five ocean-going ice-class
barges, and four ice-class tugs. Ice-class vessels are those that have been specifically constructed and certified for transportation in icy conditions, which are a particular
feature of the Baltic region for approximately half of each year. Based on our market knowledge, there are currently fewer than 10 ice-class Panamax drybulk vessels which are less than
10 years old.

To
complement our owned fleet, we actively charter-in a significant number of vessels to increase our overall dwt capacity and enhance our service to our customers. As at
December 31, 2007, the number of chartered-in drybulk vessels under our control was 44, nine of which were ice-class. These chartered-in vessels added dwt
capacity of 2,064,155, significantly increasing our total fleet of controlled vessels. Revenues from our chartered-in tonnage have grown significantly in the last year as we have expanded
our fleet, broker network and customer base. Further, this growth has been aided by a stronger overall demand in the drybulk shipping market, coupled with strong freight rates and increased trade for
the commodities we transport. The combination of owning and chartering-in our fleet provides us with the flexibility to capitalize on profitable opportunities.

In
addition to vessel operation and chartering, we also provide maritime logistics services for our customers. These logistics services include port modification, fendering (the
provision of materials used to prevent damage to vessels when docking), lightening, dredging of berths to accommodate larger vessels, maximizing vessel throughput in ports, provision of floating
cranes and self-discharging equipment. We believe our maritime logistics services enhance our profitability, add value and depth to the services we can provide and result in stronger
relationships with our customers, which in turn enhance our customer retention and create new and repeat business opportunities.

Our
managed drybulk vessels serve a wide variety of ports and carry multiple cargoes, while our tug and barge vessels provide the flexibility for us to serve ports that are too small or
otherwise unable to accommodate traditional drybulk vessels. We derive a significant portion of our revenue from the short-haul transportation of coal, fertilizers, scrap metals,
iron-ore, grain and other bulk cargoes from ports in the Baltic region, to countries in northern and western Europe, including the United Kingdom, Denmark and Germany. In addition, we
transport these bulk cargoes from the Baltic region along

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global
trade routes to India, Brazil and Argentina, and across South East Asia trade routes, from India to China, and from Australia to India. A typical long-haul trade route for us would
involve the transportation of Baltic-sourced fertilizers to Brazil and Argentina, and the transportation of South American-sourced grain back to Europe.

We
generate revenue by charging customers for the transportation of their products utilizing our fleet of owned and chartered-in vessels. These services are generally
provided under the following three basic types of contractual relationships: (i) time charters, (ii) COAs and (iii) spot charters.

We
manage the size and composition of our fleet by owning and chartering vessels to adjust to anticipated changes in demand for our fleet and market rates. We aim to achieve an
appropriate balance between owned vessels and chartered-in vessels, both on long and short term contracts.

Principal Types of Shipping Contracts



Charter Rates

Charter rates fluctuate by varying degrees amongst the drybulk carrier size categories. Because the volume and pattern of trade in a small number of commodities
(major bulks) affect demand for larger vessels, charter rates (and vessel values) of larger ships tend to be more volatile. Conversely, trade in a greater number of commodities (minor bulks) drives
demand for smaller drybulk carriers. Accordingly, charter rates and vessel values for those vessels are subject to less volatility. Charter rates paid for drybulk carriers are primarily a function of
the underlying balance between vessel supply and demand, although at times other factors, such as sentiment may play a role. Furthermore, the pattern seen in charter rates is broadly mirrored across
the different charter types and between the different drybulk carrier categories.

Lack of Historical Operating Data for Secondhand Vessels before Their Acquisition

Consistent with shipping industry practice, other than inspection of the physical condition of the vessels and examinations of classification society records,
there is no historical financial due diligence process performed when we acquire secondhand vessels. We do not obtain the historical operating data for the vessels from the sellers as that information
is rarely material to our decision to acquire the vessel, nor do we believe it would be helpful to our shareholders in assessing our business or prospects.

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Most
secondhand vessels are sold under a standardized agreement, which, among other things, provides the buyer with the right to inspect the vessel and the vessel's classification society records. The
standard agreement does not give the buyer the right to inspect, or receive copies of, the historical operating data of the vessel. Prior to the delivery of a purchased vessel, the seller typically
removes from the vessel all records, including past financial records and accounts related to the vessel. In addition, any technical management agreement between the seller's technical manager and the
seller is or will be automatically terminated and the vessel's trading certificates are revoked by its flag state following a change in ownership.

In
purchasing each secondhand vessel, we are required to take the following steps before the vessel can commence operations:



Factors Affecting Our Results of Operations

Our operating results depend upon a number of factors, including, among other things, demand for our services, voyage revenues and expenses, and vessel operating
expenses. In addition, our results of operations are impacted by certain factors as described under "Cautionary Note Regarding Forward-Looking Statements" and "Item 3.D. Risk Factors" included
elsewhere in this prospectus.

Components of Revenue and Expense





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Operational Metrics

We believe the following operational metric is an important measure for analyzing trends in our results of operations as it relates to both our owned and
chartered-in fleet:

Time-Charter Equivalent (TCE) Rates.We define TCE rates as our revenues (net of voyage expenses and commissions)
divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily
earnings generated by vessels on time charters with daily earnings generated by vessels on spot charters and COAs, because charter rates for vessels on spot charters and COAs are generally not
expressed in per-day amounts. Because the amount of voyage expenses we incur for a particular charter depends upon the form of the charter, we use
TCE rates to improve the comparability between periods of reported revenues that are generated by the different forms of charter.

We
believe the following operational metrics are important measures for analyzing trends in our results of operations as they relate only to our owned fleet:

Available days.We define available days as the total number of days in a period during which each vessel in our owned fleet
was in our possession, excluding scheduled off-hire days associated with major repairs, drydockings or special or intermediate surveys. The shipping industry uses "available days" to
measure the number of days in a period during which vessels are available to generate revenues.

Operating days.We define operating days as the total number of days in a period during which each vessel in our owned and
chartered-in fleet was earning revenue.

Fleet utilization.We calculate fleet utilization by dividing the number of our operating days during a period by the number
of available days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the amount of days
that its vessels are off-hire for reasons other than scheduled repairs, vessel upgrades, drydockings or special or intermediate surveys.

Daily vessel operating expenses.We define daily vessel operating expenses to include crew wages and related costs, the cost
of insurance expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating
expenses are calculated by dividing vessel operating expenses by the operating days for the relevant period.

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The
following table reflects our fleet utilization, TCE rates and daily vessel operating expenses for our owned fleet for the period indicated.

Vessel Name

Fleet Utilization

TCE Rates

Daily Vessel Operating Expenses($ per day)

($)Year ended December 31, 2004Explorer II(1)

100
%
21,867

4,739Challenger II(1)

100
%
24,178

5,839Adventure II

100
%
16,974

4,870Voyager II

100
%
21,845

9,986Year ended December 31, 2005Explorer II

100
%
21,581

4,381Challenger II

100
%
19,850

4,246Adventure II

100
%
17,952

4,888Voyager II

100
%
16,885

6,372Discovery II

100
%
12,722

8,211Year ended December 31, 2006Explorer II

100
%
13,748

5,759Challenger II

100
%
12,074

5,102Adventure II

100
%
12,263

4,450Voyager II

100
%
15,484

6,449Discovery II

100
%
13,724

4,924Tugs & Barges (in aggregate)

100
%
30,345
(2)
10,317
(2)Year ended December 31, 2007Explorer II

100
%
11,982

4,937Challenger II

100
%
11,841

4,630Adventure II

100
%
19,699

4,827Voyager II

87
%
20,552

6,486Discovery II

94
%
18,045

6,814Navigator II(3)

93
%
22,067

6,410
(8)Endurance II(4)

91
%
19,667

8,302
(8)Commander II(5)

100
%
15,091

4,977
(8)Endeavour II(6)

92
%
24,906

6,718
(8)Enforcer II(7)

100
%
14,913

5,253
(8)Tugs & Barges (in aggregate)

100
%
28,636
(2)
19,191
(2)


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Trend Information

We have grown significantly in 2007 during which time our business profile has diversified. During 2007, of our cargoes transported, no single customer
represented more than 10% of revenue (compared to 30% in 2006). We also transport a broad range of cargoes using a variety of vessel sizes across a number of trade routes. In particular, during 2007
our Panamax business grew significantly by 656% to represent 44% of our overall business in terms of revenues. Our next largest vessels, Handymax and Handysize, represented 38% and 18%, respectively,
of our business in 2007 by revenues. This change in our vessel mix was the result of both substantial vessel acquisitions made in 2007 as well as a significant increase in our chartered-in
capacity.

This
underlying growth is also reflected in our broader geographic spread of trade routes we are now undertaking for our customers. We have grown our South American, Asian and Australian
trade routes to 18%, 16% and 12% of our 2007 business in terms of revenues, compared to 9%, 3% and 0%, respectively, in 2006. While coal still represented about 30% of the cargo we transported in 2007
in terms of revenues (81% in 2006), we significantly increased our shipments of fertilizers, agricultural products (such as grain) and scrap, among other commodities. Time charters accounted for about
24% of our revenues in 2007, representing the second largest use of our total owned and chartered-in capacity after shipments of coal.

Results of Operations



Revenues.Total revenues increased by $375.1 million, or 196%, to $566.6 million in the year ended
December 31, 2007 compared to $191.5 million in the year ended December 31, 2006. The increase in revenues was primarily due to a significant increase in revenues from our
chartered-in tonnage, an increase in total available days of our owned fleet, a stronger charter rate environment, and additional revenues generated by the acquisition of vessels, all as
more fully described below.

Revenues
generated from our chartered-in tonnage significantly increased during this period. The average number of vessels we chartered in for the year ended
December 31, 2007 was 31, compared to 16 in the year ended December 31, 2006. The number of days in which we operated vessels to satisfy the growing demand for chartered-in
tonnage increased to 11,194 days in the year ended December 31, 2007 from 5,824 days in the year ended December 31, 2006. We believe this increase in revenues from our
chartered-in tonnage is a result of stronger overall demand in the drybulk shipping market, coupled with strong freight rates, and expansion in trades with growth in fertilizer, scrap
metals and grain commodities.

Tonnes
of cargo shipped increased modestly during this period. For the year ended December 31, 2007, tonnes of cargo shipped increased to 11,811 compared with 10,737 tonnes of
cargo shipped for the year ended December 31, 2006. This modest increase in tonnes of cargo shipped relative to our revenues in the same period and during a period in which operating days for
chartered-in vessels significantly increased is due to the significant expansion of our time chartered business, an increase in rates per quantity of shipped cargo and increased shipments
of lighter fertilizers and grain commodities.

The
total available days for our owned fleet increased to 3,345 days for the year ended December 31, 2007 compared with 2,021 days for the year ended
December 31, 2006. This increase was primarily due to the acquisition of an additional five vessels.

In
2007 we also experienced a stronger charter rate environment. Average daily TCE rates on our owned vessels increased to $18,854 in the year ended December 31, 2007 compared to
$16,273 in the year ended December 31, 2006. Average daily TCE rates on our chartered-in vessels for the same periods were $34,878 compared to $13,932, respectively. The stronger
charter environment was driven

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by
improvements in the market environment on the back of stronger than expected economic growth, particularly in China. Significant commodities purchased by Asian countries, especially China and
India, combined with limited new drybulk capacity, caused by constraints on available shipyard vessel construction berths and port congestion, contributed to the historically high charter rate
environment. TCE rates on our owned vessels increased less than TCE rates on our chartered-in vessels during this period because our owned fleet was used to fulfill COAs that were entered
into in 2006 when charter rates were lower than charter rates in 2007.

In
2007 we acquired three additional Panamax vessels (delivered on February 27, 2007, April 10, 2007 and May 8, 2007, respectively), one Handymax vessel (delivered
on May 2, 2007) and one Handysize vessel (delivered on July 11, 2007). The acquisition of these vessels generated $24.4 million of revenue during this period.

Revenues
from COAs and voyage revenues increased to $401.1 million in the year ended December 31, 2007 compared to $172.2 million in the year ended
December 31, 2006. This increase was principally due to an increase in charter rates and the increase in our chartered-in tonnage.

Time
charter revenues significantly increased to $133.3 million in the year ended December 31, 2007 compared to $12.9 million in the year ended December 31,
2006, principally due to the requirements of the indenture relating to the senior secured notes due 2011 which oblige us to time charter out vessels acquired with the proceeds thereof for a minimum
two-year period.

Demurrage
and other revenues increased to $33.5 million compared to $6.4 million during this period, principally due to increased port congestion.

Voyage Expenses, Charter Hire Expense, and Commissions.Total voyage expenses in the year ended December 31, 2007 were
$104.1 million compared with $71.8 million in the year ended December 31, 2006. This increase is due to the larger number of vessels in our owned fleet and the larger number of
chartered-in vessels operated as a result of increased demand for our services.

Charter
hire expenses in the year ended December 31, 2007 were $309.7 million compared with $75.7 million in the year ended December 31, 2006. This is an
increase of $234.0 million and is a result of the increase in our chartered-in fleet and higher day rates.

Commissions
increased to $21.2 million in the year ended December 31, 2007 compared with $4.3 million in the year ended December 31, 2006. This is due to the
increased volume of business we are conducting.

Vessel Operating Expenses.Total vessel operating expenses in the year ended December 31, 2007 were
$24.1 million compared with $12.9 million in the year ended December 31, 2006, an increase of $11.2 million or approximately 87%. This increase was primarily attributable
to the costs associated with operating a larger owned fleet. Excluding our tugs and barges and recently acquired vessels (Navigator II, Endurance II, Endeavour II, Commander II, and Enforcer II), our
average daily operating expenses per vessel in the year ended December 31, 2007 were $5,539 compared with $5,337 in the year ended December 31, 2006, reflecting an increase of $202 or
4%, per vessel. This is due to the increased maintenance costs associated with our fleet, and off hire periods, mainly relating to the breakdown of the cranes on Discovery II. The daily operating
expenses in the year ended December 31, 2007 for the Navigator II, Endurance II, Endeavour II, Commander II and Enforcer II were $6,410, $8,302, $6,718,
$4,977 and $5,253, respectively. The higher daily operating expenses for these recently acquired vessels are attributable to the acquisition of additional spare parts during each vessel's first months
in our fleet.

Total
daily operating expenses, in the aggregate, for our tugs and barges in the year ended December 31, 2007 were $19,191 as compared to $10,317 in the year ended
December 31, 2006. This

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overall
increase in daily operating expenses is a result of the additional tugs and barges that we operate following the acquisition of a barge and a tug on October 2, 2006 and
February 9, 2007, respectively.

Depreciation and Amortization.Depreciation and amortization in the year ended December 31, 2007 was
$22.6 million compared with $10.9 million in the year ended December 31, 2006, an increase of $11.7 million or 107%. This increase is a result of the higher amounts of
depreciation as a result of additional vessels, tugs and barges we own and related capitalized drydocking costs.

General and Administrative Expenses.General and administrative expenses in the year ended December 31, 2007 were
$18.1 million compared to $9.4 million in the year ended December 31, 2006, an increase of $8.7 million or 93%. This is largely a result of a substantial increase in
compensation and office costs due to the expansion in headcount from 43 employees to 55 employees. Compensation costs increased during the year ended December 31, 2007 by approximately
$6.8 million. Office costs also rose by approximately $0.5 million in the year ended December 31, 2007, as compared to the year ended December 31, 2006, as a result of
increased office rents in London and Denmark and costs incurred in connection with the relocations of our London and Denmark offices in January 2007. In addition, we also experienced increased costs
associated with business development expenses, and legal and accounting fees.

Interest and Finance Costs.Interest and finance costs were $23.3 million in the year ended December 31, 2007
compared to $5.1 million in the year ended December 31, 2006, an increase of $18.2 million. The substantial increase in these costs was a result of the interest costs associated
with the senior secured notes due 2011 issued in November 2006.

Interest Income.Interest income in the year ended December 31, 2007 was $4.1 million compared to
$1.1 million in the year ended December 31, 2006, an increase of $3.0 million or 273%. This increase was a result of interest earned on the unused portion of proceeds from the
sale of the senior secured notes due 2011 as well as additional interest income as a result of our increase in cash available from operations.

Taxation.Taxation in the year ended December 31, 2007 was $1.5 million compared with $0.2 million for
the year ended December 31, 2006, an increase of $1.3 million. The tonnage tax liability has increased by
$0.3 million due to the increase in tonnage. An additional provision of $1.0 million was made in respect of liabilities relating to the UK tonnage tax commitment.



Revenues.Total revenues for the year ended December 31, 2006 were $191.5 million compared with
$184.6 million for the year ended December 31, 2005, an increase of $6.9 million or 4%. The increase in revenues was largely due to an increase in our total transported
chartered-in tonnage, and an increase in total available days of our owned fleet, offset by a weakening charter rate market from 2005 to 2006.

Revenues
from our chartered-in tonnage increased during this period. The average number of vessels we chartered in for the year ended December 31, 2006 was 16 compared
to 15 for the year ended December 31, 2005.

Our
chartered-in tonnage increased from 5,630 days to 5,824 days during this period resulting from an increase in overall demand in the drybulk shipping market.

The
total available days for our owned fleet increased to 2,021 days for the year ended December 31, 2006 compared with 1,609 days for the year ended
December 31, 2005. This increase was primarily due to the purchase of our tugs and barges at the end of December 2005, as well as having Discovery II, purchased in April 2005, reflected in our
results of operations for a full year in 2006. The

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increase
in available days was partially offset as a result of three of our vessels incurring 169 days of scheduled drydocking time during the year ended December 31, 2006.

In
2006, the charter rate market saw a weakening due to the aftermath of the Java Tsunami coupled with iron ore price negotiations causing further uncertainty in the charter market.

Revenues
from COAs and voyage revenues increased to $172.2 million in the year ended December 31, 2006 compared to $144.3 million in the year ended
December 31, 2005. This increase was principally due to the increase in tonnes shipped under COAs from 4.4 million in 2005 to 5.6 million in 2006.

Time
charter revenues significantly decreased from $12.9 million in the year ended December 31, 2006 compared to $33.3 million in the year ended December 31,
2005. This decrease was due to the weakening charter rate environment described above.

Demurrage
and other revenues decreased slightly to $6.4 million in 2006 from $6.9 million in 2005.

Voyage Expenses, Charter Hire Expense, and Commissions.Voyage expenses for the year ended December 31, 2006 were
$71.8 million compared with $49.3 million for the year ended December 31, 2005, an increase of $22.5 million or 46%. This increase is primarily a result of an increase in
bunker and port costs, and the total number of voyages performed. Specifically, bunker costs increased by $11.5 million for 2006 as compared to 2005 due to rising oil prices and port costs rose
by $7.6 million in 2006 as a result of a substantial rise in port charges. It also reflects a higher share of revenues from COAs and spot charters where we generally bear voyage expenses, and a
lower revenue contribution from time charters, where these expenses are generally borne by the charterer.

Charter
hire expenses for the year ended December 31, 2006 were $75.7 million compared with $95.9 million for the year ended December 31, 2005. This decrease
of $20.2 million was due to the weakening charter rate market, which was partially offset by an increase in our chartered-in tonnage in 2006 compared with 2005.

Commission
payments remained the same at $4.3 million for the year ended December 31, 2006 compared to 2005. This was due to revenues increasing by a marginal amount in
2006 compared to 2005.

Vessel Operating Expenses.Total vessel operating expenses for the year ended December 31, 2006 were
$12.9 million compared with $12.1 million for the year ended December 31, 2005, an increase of $0.8 million or 7%. This overall increase was primarily attributable to the
expansion in fleet size. Daily vessel operating expenses per owned vessel (excluding tugs and barges) for the year ended December 31, 2006 were $5,337 compared with $5,620 for the year ended
December 31, 2005, a decrease of $283 or 5%. This decrease is largely a result of the implementation of stronger cost control measures. Average daily operating expenses for the tugs and barges
for 2006, in the aggregate, were $10,317 and no comparable information for 2005 is available as the tugs and barges were acquired in December 2005.

Depreciation and Amortization.Depreciation and amortization for the year ended December 31, 2006 was
$10.9 million compared with $9.3 million for the year ended December 31, 2005, an increase of $1.6 million or 17%. This increase in depreciation and amortization is a
result of the impact of the acquisition of tugs and barges in December 2005, as well as the sale and issuance of the senior secured notes and the capitalization of the associated fees and expenses.

General and Administrative Expenses.General and administrative expenses for the year ended December 31, 2006 were
$9.4 million compared to $3.7 million for the year ended December 31, 2005, an increase of $5.7 million or 154%. This increase is largely a result of a substantial increase
in payroll and office costs, including the expansion or our technical management team and the addition of

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11 employees
in connection with the acquisition of our majority equity interest in Svendborg Ship Management A/S. We had 43 employees as at December 31, 2006 compared to 26 employees as
at December 31, 2005. Salary costs increased during 2006 by approximately $2.9 million due to our increasing number of employees and office costs rose by approximately
$1.0 million for the same period as a result of a higher employee headcount and operating an additional office in Svendborg, Denmark. In addition, we also experienced increased costs associated
with travel, and legal and accounting fees and expenses.

Interest and Finance Costs.Interest and finance costs were $5.1 million for the year ended December 31, 2006
compared to $1.4 million for the year ended December 31, 2005, an increase of $3.7 million or 264%. The increase in these costs was a result of costs associated with financing the
acquisition of tugs and barges in December 2005 and the issuance of the senior secured notes in November 2006.

Interest Income.Interest income for the year ended December 31, 2006 was $1.1 million compared to
$0.3 million during the year ended December 31, 2005, an increase of $0.8 million or 267%. This increase was due to higher levels of liquidity and cash available resulting in
interest earned from our deposits.

Liquidity and Capital Resources

Our sources of liquidity include cash balances, cash flow from operations and other debt and equity issuances. Our primary sources of funds for our
short-term liquidity needs will be cash flow from operations and available cash balances. Our long-term sources of funds will also be cash from operations, and other debt or
equity financings. Our liquidity needs fluctuate depending on a number of factors, including the amount of capacity that we charter-in; demand for our services; and costs associated with
fuel and port fees. To date, our principal use of funds has been expenditures to establish and expand our owned fleet, maintain the quality of our vessels, comply with international shipping standards
and environmental laws and regulations and fund working capital requirements. Our management believes that its current cash balance and anticipated cash flow from operations will be adequate to meet
our liquidity requirements for the next year. Our ability to meet our long-term liquidity requirements will depend in large part on our future performance, which is subject to many factors
beyond our control, and our acquisition strategy which may involve the sale and purchase of additional vessels to strengthen our competitive position and maximize our profitability. See
"Item 3.D. Risk FactorsRisks Related to Our Business."

We
acquired two 1995 built ice-class Handymax vessels, Ice Trader II and Ice Power II, for approximately $71 million in the aggregate in February 2008. We financed
these acquisitions through cash available from operations and borrowings under our secured bridge facility entered into with Lloyds TSB Bank Plc in February 2008. Pursuant to novation
agreements with respect to the Ice Trader II and Ice Power II, we assumed existing time charters for these two vessels, each at a rate of $25,000 per day each for a specified period of time.
These vessels are required to be delivered to the charterer in June 2008 and September 2008, respectively. The time charters expire on January 15, 2009 and 2010, respectively.

We
acquired a specialist self-loading, self-unloading ice-class Handysize vessel, the Holmön, for $5.7 million in January 2008.
We funded the acquisition of this vessel with proceeds held in the vessel acquisition account, as described below.

At
present, our liquidity requirements have not necessitated an additional source of funding and, as such, we have not entered into any such arrangement with a commercial bank. We will
continue to monitor not only our performance and liquidity needs, but also the commercial banking market, to determine whether a working capital facility would be advantageous or helpful as we seek to
execute our business strategy and growth plans.

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On
November 16, 2006, we completed a private placement of $185 million in aggregate principal amount of 11% senior secured notes due 2011 that yielded an effective interest
rate of 13.8%. The senior secured notes were issued at a price of 93.622% of the principal amount of such notes, resulting in net proceeds of $173.2 million. The senior secured notes will
mature on December 1, 2011 and interest is payable on the senior secured notes on each June 1 and December 1. Our senior secured notes are guaranteed on a senior secured basis by
all of the existing subsidiaries and certain of its future subsidiaries. We may consider refinancing these notes depending on market conditions.

Concurrently
with the issuance of the senior secured notes, we deposited into a vessel acquisition account the sum of $140 million. The vessel acquisition account is a secured
collateral account administered by Wilmington Trust Company for the benefit of the holders of the senior secured notes. These funds are released for the purpose of purchasing vessels, subject to
certain conditions, including that each vessel acquired with such funds becomes additional collateral for the senior secured notes. Amounts in the vessel acquisition account may also be released to
make certain interest payments, to make certain capital expenditures and redeem, or at maturity, repay the senior secured notes. The proceeds deposited into the vessel acquisition account are invested
in temporary cash investments as permitted under the indenture. This investment generates interest income for us. Due to the nature and restrictions on the use of cash in the vessel acquisition
account, such cash is not considered cash for the purposes of our financial statements, and accordingly is not reflected on our cash flow statements. As of December 31, 2007, we had made
payments totalling $122.5 million related to vessel
acquisitions funded from the proceeds held in the vessel acquisition account. We took delivery of the Navigator II on February 27, 2007 for a purchase price of $28.5 million, the
Endurance II on April 10, 2007 for $36.7 million, the Endeavour II on May 8, 2007 for $36.7 million, the Commander II on May 2, 2007 for $10.8 million and the
Enforcer II on July 11, 2007 for $6.2 million. On August 7, 2007 we paid deposits totalling $3.6 million for the Ice Power II and Ice Trader II. We took delivery of the
Holmön on January 16, 2008 for $5.7 million. In accordance with the terms of the indenture interest payments of $10.2 million and $11.0 million were made on
November 30, 2007 and May 30, 2007, respectively, relating to the period from November 16, 2006 to December 1, 2007. The remaining balance in the vessel acquisition account
as of December 31, 2007 was $0.5 million.

On
February 13, 2008, in connection with financing the purchase price for the acquisition of the Ice Trader II and the Ice Power II, we entered into a loan agreement relating to a
secured bridge facility with Lloyds TSB Bank Plc as original lender, agent and security trustee. As conditions precedent to making the secured bridge facility available to us, two of our
wholly-owned subsidiaries, Enterprise Bulk Services S.A. and Oceanic Bulk S.A., entered into, among other documents, guarantee agreements regarding the facility in favor of the security
trustee. The secured bridge facility consists of a $30.0 million term loan facility currently fully drawn and bearing interest at a rate equal to LIBOR, plus a margin of 2.0% per annum.

On
February 29, 2008, in accordance with the indenture governing the senior secured notes, we commenced an excess cash flow offer to purchase up to $52.6 million in
aggregate principal amount of the senior secured notes at a purchase price for each $1,000 principal amount of senior secured notes tendered equal to $961.15, plus accrued and unpaid interest. The
excess cash flow offer expires at 4:00 p.m., London time, on May 23, 2008, unless extended. If the excess cash flow offer is consummated, the settlement date will be on a date promptly
following our acceptance of any tendered senior secured notes and is currently expected to be May 29, 2008. A press release announcing the commencement of the excess cash flow offer was
provided to the trustee for the senior secured notes and was issued on our website and the website of the Luxembourg Stock Exchange on February 29, 2008.

46

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Cash Flows from Operating, Investing and Financing Activities



Our cash and cash equivalents increased to $55.2 million as of December 31, 2007 as compared to $17.2 million as of December 31, 2006.
We define working capital as current assets minus current liabilities, including the current portion of long-term debt. Our working capital surplus was $85.5 million as of
December 31, 2007 compared with a surplus of $151.7 million as of December 31, 2006. This change in our working capital balance is largely a result of the sale and issuance of the
senior secured notes due 2011 and operating activities. As of December 31, 2007, $0.5 million remained in the vessel acquisition account for the purchase of additional vessels.

Our
net cash provided by operating activities during 2007 was $51.6 million compared to $13.0 million during 2006. The increase was a result of the additional revenues and
associated costs generated by the additional owned fleet, and the increase in chartered-in vessels in operation during the period, as well as interest received on the vessel acquisition
account. This has been partially offset by the resulting increase in ship inventories and prepaid expenses at December 31, 2007. Drydocking expenditures in the year ended December 31,
2007 were $6.8 million compared with $5.2 million in the year 2006. The expenditures in 2007 mainly relate to the drydocking of Voyager II, Endeavour II, Discovery II, Explorer II,
Endurance II, and various tugs and barges. The 2006 expenditures relate to the drydocking of Challenger II, Explorer II, one tug and two barges.

Our
net cash used in investing activities for the year ended December 31, 2007 was $3.7 million in comparison to $142.3 million for the year ended
December 31, 2006. In 2006, net cash used in investing activities represented mainly our issuance of the senior secured notes due 2011.

Our
net cash used in financing activities was $9.8 million for the year ended December 31, 2007 compared to net cash provided by financing activities of
$140.1 million during the year ended December 31, 2006. In 2007, this related to the repurchase of shares held by North Western Neva Ltd for $7.6 million and
$1.7 million due from Britannia Bulk Holdings Plc and Britannia Bulk Finance Ltd in respect of legal and professional fees we paid on their behalf. In 2006, this related to the
sale and issuance of the senior secured notes due 2011.



Our cash and cash equivalents increased to $17.2 million as of December 31, 2006, compared to $6.4 million as of December 31, 2005 and
to $9.3 million as of December 31, 2004. Our working capital surplus was $151.7 million as of December 31, 2006 as a result of the sale and issuance of the senior secured
notes due 2011. As of December 31, 2006, $138.1 million remained in the vessel acquisition account for the purchase of additional vessels.

Our
net cash provided by operating activities during 2006 was $13.0 million compared to $14.4 million during 2005. This decrease was primarily due to a weakened drybulk
charter rate environment during 2006. In addition, we incurred $5.2 million in drydocking costs related to Explorer II, Challenger II and Voyager II which adversely affected our
overall net cash from operating activities for the year ended December 31, 2006.

Our
net cash used in investing activities substantially increased in 2006 to $142.3 million which reflects the funding of the vessel acquisition account of $140.0 million
from the proceeds of the sale and issuance of the senior secured notes and a prepayment in connection with the acquisition of one of our vessels. In comparison and for the year ended
December 31, 2005, our net cash used in investing activities was $27.9 million, which amounts are associated with the acquisition of certain vessels and our tugs and barges.

47

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Our net cash provided by financing activities was $140.1 million for the year ended December 31, 2006 compared to $10.5 million during the year ended
December 31, 2005. The change in cash provided by financing activities relates to (i) net proceeds of $173.2 million from the sale and issuance of the senior secured notes due
2011, (ii) capitalizing $6.8 million in fees and expenses associated with the sale and issuance of the senior secured notes, and (iii) repayment of long-term
indebtedness totaling $26.2 million.



As of December 31, 2005, we had a cash balance of $6.4 million. Our working capital deficit was $4.6 million as of December 31, 2005
due to the current portion of long-term debt from indebtedness incurred to finance the acquisition of certain vessels in our fleet.

Our
net cash provided by operating activities during 2005 was $14.4 million compared to $2.9 million during 2004. This increase was primarily due to the increase in the
number of operating days and chartered-in activities during the period, which more than offset the effects of an overall weakening in the spot market and resulted in increased revenues. We
incurred $2.1 million in drydocking costs related to Adventure II in 2005.

Our
net cash used in investing activities was $27.9 million for the year ended December 31, 2005 compared with $24.9 million for the year ended December 31,
2004. This increase reflects the rise in costs associated with the purchase price of Discovery II, certain of our tug and barge vessels and a majority equity interest in Svendborg Ship Management A/S
as compared with the acquisition of the vessels Explorer II, Challenger II, Adventure II and Voyager II in 2004.

Our
net cash provided by financing activities was $10.5 million for the year ended December 31, 2005 compared with $31.3 million during the year ended
December 31, 2004. This decrease is largely due to fewer borrowings to finance vessel acquisitions in 2005 as compared with 2004. In 2005, we borrowed $19.5 million to partially finance
the acquisition of the tug and barge vessels and the purchase of Discovery II, whereas we borrowed $31.8 million in 2004 to partially finance the acquisition of the vessels Explorer II,
Challenger II, Adventure II and Voyager II. These cash inflows from financing
activities in 2005 were partially offset by loan repayments of $9.3 million that we made in the same period.

Contractual Obligations

The following table sets forth our contractual obligations and their maturity dates as of December 31, 2007:

|                                     |  | Less than One Year |       | One to Three Years |   | Three to Five Years |  | More than Five Years |       | Total
|------------------------------------ |  | ------------------ | ----- | ------------------ | - | ------------------- |  | -------------------- | ----- | -----
|
|Long-term debt obligations           |  | $                  |      |                    | $ |                    |  | $                    | 185.0 |      
|Short-term debt obligations          |  |                    | 30.0  |                    |   |                    |  |                      |      |      
|Interest payments on long-term debt  |  |                    | 20.4  |                    |   | 40.7                |  |                      | 20.4  |      
|Interest payments on short-term debt |  |                    | 1.7   |                    |   |                    |  |                      |      |      
|Operating lease commitments(1)       |  |                    | 0.3   |                    |   | 0.5                 |  |                      | 0.5   |      
|Charter hire payments                |  |                    | 285.4 |                    |   | 281.2               |  |                      | 236.7 |      
|Purchase Obligations                 |  |                    |      |                    |   |                    |  |                      |      |      
|                                     |  |                    |       |                    |   |                     |  |                      |       |      
|                                     |  | $                  | 337.8 |                    | $ | 322.4               |  | $                    | 442.6 |      
|                                     |  |                    |       |                    |   |                     |  |                      |       |      
|                                     |  |                    |       |                    |   |                     |  |                      |       |      

---

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We
charter-in a significant majority of our operated fleet and rely on COAs, time charters and the spot charter market to fill demand for these vessels. The rates we pay to
charter-in vessels are fixed until the termination of the charter-in contract, which may be more than five years after the date we enter into the contract. In contrast, the
competitive COA, time charter and spot charter markets are characterized by highly volatile rates which may fall below the rates we pay to charter-in vessels, making operation of such
vessels unprofitable. In addition, general volatility in the demand for drybulk shipping services may impact our ability to keep our chartered-in vessels fully employed for the duration of
their charters. We base our chartering-in decisions on our expectations of vessel supply and demand and how the COA, time charter and spot charter markets will perform, but cannot
guarantee that these expectations will prove accurate. We are therefore exposed to a significant decrease in charter rates or our inability to fully employ our chartered-in vessels through
COAs, time charters or spot charters. While we currently do not have a general policy of hedging these exposures, we may from time to time attempt to hedge these exposures through forward freight
agreements, or FFAs, or through other derivative instruments. See "Item 5. Operating and Financial Review and ProspectsQualitative and Quantitative Disclosures About Market
RiskForward Freight Agreements."

With
respect to our charter hire payments, as of December 31, 2007 we had charter-in contracts for a total of 67 vessels for an average remaining term of
491 days and at an average daily charter-in rate of $34,379. The following table provides a breakdown of the average remaining terms and average daily charter-in rate by
vessel type as of December 31, 2007:

Vessel Type

Number of Chartered-in Vessels

Average Remaining Term

Average Daily Charter-in Rate(days)

($)Panamax

32

797

38,592Handymax

22

246

34,055Handysize

13

152

24,556Total

67

491

34,379


44
of these charters have already commenced as of December 31, 2007, while others will not commence (and the relevant chartered-in vessels will not be delivered) for
several more months or years. For a maturity breakdown of our payment obligations under our charter-in contracts as of December 31, 2007, see the first table under "Item 5.
Operating and Financial Review and ProspectsContractual Obligations" above.

See
note 11 to our historical consolidated financial statements included elsewhere in this annual report. For further detail in regard to our chartered-in fleet please
see "Item 4.B. Business OverviewOur Fleet and OperationsChartered-in Fleet."

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On February 13, 2008, we entered into a secured bridge facility with Lloyds TSB Bank Plc for $30.0 million. This facility has been drawn on in full and to date has
borne interest at LIBOR, plus a margin of 2.0%.

Capital Expenditures

We make capital expenditures from time to time in connection with our vessel acquisitions. Since the beginning of 2007, we have taken delivery of three Panamax
vessels, three Handymax vessels, two Handysize vessel and one tug. Excluding the purchase price of the tug, which was acquired using cash available from operations, we have expended
$195.6 million to acquire these eight drybulk vessels. These drybulk vessel acquisitions were financed with a substantial portion of the net proceeds from our offering of the senior secured
notes due 2011. In addition, we intend to expand our fleet with cash available from operations and debt or equity financings.

In
addition to acquisitions that we may undertake in future periods, we will incur additional capital expenditures due to special surveys and drydockings. We estimate our drydocking
costs through 2011 for our current fleet and our fleet to be delivered to be:

Year

Estimated Drydocking Costs($ in millions)2008

9.12009

9.02010

9.32011

14.5


The
estimated capital expenditures set forth above include approximate costs for 2008 and subsequent years due to delivery of new vessel acquisitions. We believe that the funding of
these costs will be met with cash we generate from operations.

Qualitative and Quantitative Disclosures About Market Risk

Forward Freight Agreements.We are exposed to decreases in charter rates or our inability to fully employ our
chartered-in vessels through COAs, time charters or spot charters. We may from time to time enter into drybulk forward freight agreements, or FFAs, as economic hedges relating to
identifiable ship or cargo positions and as economic hedges of transactions we expect to carry out in the normal course of our shipping business. By utilizing certain derivate instruments, including
drybulk shipping FFAs, we will attempt to manage our financial risk associated with fluctuating market conditions. When entering into FFAs, we assume the risk that counterparties may fail to meet the
terms of their contracts. The only FFA we have entered into to date was recorded in our statement of operations under "Loss on Forward Freight Agreements." The net loss from FFAs amounted to
$1.2 million in the year ended December 31, 2007. As of December 31, 2007, we had no open FFA positions.

Interest Rates.Historically, we have been subject to limited market risks relating to changes in interest rates, because we
did not have significant amounts of floating rate debt outstanding. Following the completion of the offering of the senior secured notes and subsequent repayment of all our outstanding debt in 2006,
our only significant exposure to interest rate changes results from our $30 million senior secured bridge facility which currently bears interest at LIBOR plus 2%. See
"Item 10.C.Material ContractsSecured Bridge Facility."

Foreign Exchange Rates.In the year ended December 31, 2007, we generated 99% of our revenues in U.S. dollars, and
incurred 99% of our operating expenses in U.S. dollars and 1% in

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currencies
other than the U.S. dollar, primarily the British Pound, Euro and Danish Kroner. We are therefore not exposed to significant foreign currency rate risk. For accounting purposes, expenses
included in these non-U.S. dollar currencies are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction.

Inflation.We do not believe that inflation has a material impact on our operations, although certain of our operating
expenses (including crewing, insurance and drydocking costs) are subject to fluctuations as a result of market forces. Inflationary pressures on bunker (fuel and oil) costs are not expected to have a
material effect on our future operations. In the case of our vessels, which are time chartered to third parties, it is the charterers who pay for the fuel. If our vessels are employed under COAs or
spot charters, freight rates are generally sensitive to the price of fuel. However, a sharp rise in bunker prices may have a temporary negative effect on our results since freight rates generally
adjust only after prices settle at a higher level.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in
accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments that
affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements. Actual
results may differ from these estimates under different assumptions or conditions.

Critical
accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and
conditions. We have described below what we believe are our most critical accounting policies that involve a high degree of judgment and the methods of their application. For a description of all of
our significant accounting policies, see note 2 to our consolidated financial statements.

Revenue Recognition.Revenues are generated from COAs, time charter and spot charters. Revenues from time charters are
recognized rateably over the periods of such charters. COAs and spot charter revenues are recognized on a pro-rata basis over the duration of the voyage. A voyage is deemed to commence
upon the completion of discharge of the vessel's previous cargo and is deemed to end upon the completion of discharge of the current cargo. Losses on voyages are provided for in full at the time such
losses can be estimated. Demurrage income represents payments by the customer to
the vessel owner when loading or discharging time exceeded the stipulated time in the spot charter. Demurrage income is recognized rateably over the duration of the spot charter.

Impairment of long-lived assets.We evaluate the carrying amounts of vessels to determine if events have occurred
which would require modification to their carrying values. In evaluating carrying values of vessels, we review certain indicators of potential impairment, such as undiscounted projected operating cash
flows, vessel sales and purchases, business plans and overall market conditions. We determine undiscounted projected net operating cash flows for each vessel and compare it to the vessel's carrying
value. If our estimate of undiscounted future cash flows for any vessel is lower than the vessel's carrying value plus any unamortized drydocking costs, the carrying value is written down, by
recording a charge to operations, to the vessel's fair market value if the fair market value is lower than the vessel's carrying value. We estimate fair market value primarily through the use of third
party valuations performed on an individual vessel basis.

Depreciation and Amortisation.We record the value of our vessels at their cost (which includes acquisition costs directly
attributable to the vessel and expenditures made to prepare the vessel for its initial voyage) less accumulated depreciation. We depreciate our vessels on a straight-line basis over

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their
estimated useful lives, estimated to be 25 years. We believe that a 25-year depreciable life is consistent with that used by other ship owners. Depreciation is based on cost
less the estimated residual scrap value. A decrease in the useful life of a drybulk vessel or in its residual value would have the effect of increasing the annual depreciation charge. When regulations
place limitations on the ability of a vessel to trade on a worldwide basis, the vessel's useful life is adjusted at the date such regulations are adopted.

Deferred drydocking costs.Our vessels are required to be drydocked approximately every 30 months for major repairs
and maintenance that cannot be performed while the vessel is operating. We capitalize the costs associated with the drydocks as they occur and amortize these costs on a straight line basis over the
period between drydocks. Costs capitalized as part of the drydock include actual costs incurred at the drydock yard, and the cost of hiring a third party to oversee a drydock.

Allowance for doubtful accounts.Revenue is based on contracted charter parties and COAs, and although our business is with
customers who we believe to be of the highest standard, there is always the possibility of dispute over terms and payment of freight. In such circumstances, we assess the recoverability of amounts
outstanding and we estimate a provision if there is a possibility of non-recoverability. Although we believe our provisions to be based on fair judgment at the time of their creation, it
is possible that an amount under dispute is not recovered and the estimated provision for doubtful recoverability is inadequate.

Fair value of financial instruments.Financial instruments carried on the balance sheet include cash and cash equivalents,
trade accounts receivable and payable, derivative assets and liabilities, long-term debt and other receivables and payables. In determining the fair value of our financial instruments, we
use a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. For the majority of financial instruments including long-term
debt, standard market conventions and techniques are used to determine fair value. All methods of assessing fair value result in a general approximation of value, and such value may never actually be
realized. The fair value of these financial instruments approximates their individual carrying amounts as of December 31, 2007, 2006 and 2005.

Derivative Instruments.We may from time to time enter into drybulk FFAs as economic hedges relating to identifiable ship
and/or cargo positions and as economic hedges of transactions we expect to carry out in the normal course of our shipping business. None of our derivative financial instruments qualify for hedge
accounting; therefore, the net changes in derivative assets and liabilities are reflected in current period operations. Realized gains or losses from FFAs are recognized monthly concurrent with cash
settlements. Trading of FFAs could lead to material fluctuations in our reported net income on a period-to-period basis. We classify cash flows related to derivative financial
instruments within cash provided by operating activities in the consolidated statements of cash flows. The FFAs are recorded in the consolidated statements of operations under "Loss on forward freight
agreement."

Off-Balance Sheet Arrangements

As at December 31, 2007, we did not have any off-balance sheet arrangements, and we currently do not have any off-balance sheet
arrangements.

Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities. SFAS 159 provides companies with an option to report selected financial
assets and liabilities at fair value. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement
attributes for similar

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types
of assets and liabilities. SFAS 159 does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements
included in SFAS 157 and SFAS 107, Disclosures about Fair Value of Financial Instruments. We are required to adopt SFAS 159 effective January 1, 2009 and are currently
evaluating the impact of SFAS 159 on our consolidated financial statements.

The
FASB issued SFAS No. 157 ("SFAS 157") on September 15, 2006. SFAS 157 enhances existing guidance for measuring assets and liabilities using fair value.
Previously, guidance for applying fair value was incorporated in several accounting pronouncements. The new statement provides a single definition of fair value, together with a framework for
measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. While the statement does not add any new fair value measurements, it does change current
practice. One such change is a requirement to adjust the value of non-vested stock for the effect of the restriction even if the restriction lapses within one year. SFAS 157 is
effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The adoption of SFAS 157 on January 1,
2008, is not expected to have a material impact on our consolidated financial statements.

In
September 2006, the SEC ("SEC") issued SAB No. 108 "Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year
Financial Statements," which provides interpretive guidance on how registrants should quantify financial statement misstatements. Under SAB 108 registrants are required
to consider both a "rollover" method, which focuses primarily on the income statement impact of misstatements, and the "iron curtain" method, which focuses primarily on the balance sheet impact of
misstatements. The effects of prior year uncorrected errors include the potential accumulation of improper amounts that may result in a material misstatement on the balance sheet or the reversal of
prior period errors in the current period that result in a material misstatement of the current period income statement amounts. Adjustments to current or prior period financial statements would be
required in the event that after application of various approaches for assessing materiality of a misstatement in current period financial statements and consideration of all relevant quantitative and
qualitative factors, a misstatement is determined to be material. We adopted the provisions of SAB 108 as of December 31, 2006. The adoption of SAB 108 did not have an effect on
our results of financial operations or financial position.

ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.    DIRECTORS AND SENIOR MANAGEMENT

Overview

Our management is vested in our board of directors and senior management. Our board of directors is responsible for, among other things, supervising the general
and day-to-day management of our business, ensuring proper organization of our business, preparing plans and budgets for our activities and ensuring that our activities,
accounts and vessel management are subject to adequate controls. Our senior management is responsible for the day-to-day management of our operations in accordance with the
instructions set out by our board of directors.

The
business address of each of our directors and senior management is Dexter House, 2 Royal Mint Court, London EC3N 4QN, United Kingdom.

Biographical
information with respect to each of our directors and senior management is set forth below.

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Board of Directors

Our board of directors is elected annually, and each director holds office for a one year term. Set forth below are the names, ages and positions of our
directors:

|Name                   |  | Age |  | Position                                                   
|---------------------- |  | --- |  | -----------------------------------------------------------
|Arvid Tage             |  | 41  |  | Chairman of the Board, Chief Executive Officer and Director
|Fariyal Khanbabi       |  | 40  |  | Chief Financial Officer and Director                       
|Cliff Hanson           |  | 56  |  | Chief Operating Officer, Managing Director and Director    
|John Sinders           |  | 54  |  | Non-Executive Director                                     
|Jens Fehrn-Christensen |  | 56  |  | Non-Executive Director                                     
|Soren Halsted          |  | 56  |  | Non-Executive Director                                     

Arvid Tagehas served as our chief executive officer and chairman since 2003. Mr. Tage is part of our management team that is
responsible for our day-to-day management. From 1996 to 2003, Mr. Tage was a founder and served as a director at Rainbow Shipping and Trading (London) Limited.
Cumulatively, he has 17 years of experience in the drybulk shipping industry. Mr. Tage is our founding shareholder, and is also a principal member of the Baltic Exchange.

Fariyal Khanbabihas served as a director and our chief financial officer since August 2006. Ms. Khanbabi has 18 years of
experience in finance and accounting. Prior to joining us, Ms. Khanbabi served as the European operations director and vice president of international finance for the marketing agency MIVA.COM
since August 2003; prior thereto, she was finance director for East Ltd., a retail chain from April 2001 to July 2003; and group finance director for KB Maritime Services Ltd., an
international shipping group from 1996 to March 2001. Ms. Khanbabi is a member of the Institute of Chartered Accountants of England and Wales.

Cliff Hansonhas served as a director since July 2006, and as our chief operating officer and managing director since September 2006.
Prior to that time, he was chartering manager for Narvic London Ltd., a
branch agency office for Narvic Maritime S.A. since September 2005; Operator and Freight Trader for Belmont Shipping Ltd., a company specializing in sea transportation of steel and bulk
cargoes from October 2002 to September 2005; and broker, operator, freight trader for Curzon Maritime Ltd., a representative office for a ship owning and operating company from January 2001 to
July 2002 and was previously with ED & F Man Shipping Ltd for 11 years, of which eight years serving as director/managing director. Mr. Hanson has approximately
30 years of experience in the shipping industry as well as vast industry contacts. He is a lead and principal member of the Baltic Exchange.

John Sindershas served as a director since June 1, 2007. Mr. Sinders was previously a managing director of
Jefferies & Company, Inc., an investment banking firm, from 2001 to 2007. He served as managing director of RBC Dominion Securities Corporation, an investment banking firm, from
August 1999 to November 2001. From 1993 until 1999, Mr. Sinders served as an executive vice president of Jefferies & Company, Inc. Mr. Sinders also served as a managing
director of Howard Weil Labouisse Friedrichs Incorporated, an investment banking firm, from 1987 until 1993. He was a member of the board of directors of Howard Weil from 1990 until 1993. Prior to
joining Howard Weil, he was a partner with the McGlinchey, Stafford law firm in New Orleans, Louisiana. Mr. Sinders currently serves on the board of The Shaw Group Inc., a Louisiana
based publicly-traded company.

Jens Fehrn-Christensenhas served as a director since January 25, 2008. Mr. Fehrn-Christensen previously served as
chief financial officer of Norden A/S from 1992 to 2007. Prior to that he was chief executive officer of Skou International A/S from 1989 to 1992, and has held a variety of financial and
control positions in Danish companies from 1978. He is currently a member of the boards of directors of Sun-Air of Scandinavia A/S and the Hansi & Janus Family Foundation,
respectively, and chairman of the boards of directors of NCS Holding A/S and Meyer & Bukdahl A/S, respectively. Mr. Fehrn-Christensen holds bachelor and masters degrees from Copenhagen Business
School.

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Soren Halstedhas served as a director since January 25, 2008. Mr. Halsted previously served as managing director of
Clipper Group A/S from 2000 to 2006, where he was also a member of its international executive board. From 1993 he held a number of positions at Clipper Group with primary responsibility for sales,
purchasing and contracting. From 1988 to 1992, he was a deputy director at Commercial Trading A/S, with primary responsibility for ship-financing. Prior to that, he held a number of
positions at various companies with responsibility for sales, purchasing and contracting. Mr. Halsted is currently chairman of the boards of directors of CS & Partners A/S, CS &
Partners Skibe A/S, CS & Partners Property A/S, HH2 A/S, Clipper Group A/S and Sundkrog Property Company A/S. He is currently a member of the boards of directors of Nordic Tankers A/S,
Harbour House A/S, Courtney Fynn Shipping Limited and Argonaut Shipping (Marshall Islands).

Senior Management

Our senior management serves at the will of our board of directors. Set forth below are the names, ages and positions of our senior management:

Name

Age

PositionArvid Tage

41

Chief Executive OfficerFariyal Khanbabi

40

Chief Financial OfficerCliff Hanson

56

Chief Operating OfficerPeter Wilkinson

58

Director of OperationsSerguei Zoudov

39

Director of CharteringDavid Znak

40

Director of Chartering


Arvid Tage.See "Board of Directors" above for details regarding Mr. Tage.

Fariyal Khanbabi.See "Board of Directors" above for details regarding Ms. Khanbabi.

Cliff Hanson.See "Board of Directors" above for details regarding Mr. Hanson.

Peter Wilkinsoncurrently serves as director of operations. Mr. Wilkinson is part of our management team that is responsible for
our day-to-day ship operations. Prior to joining us, Mr. Wilkinson was operations manager with Noble Europe Ltd, from 2002 to 2007. Prior to this, from 1989 to
2002 Mr. Wilkinson worked for Intercontinental Fuels Ltd as an international coal trader and operations coordinator. From 1969 to 1989 Mr. Wilkinson worked in various shipping
departments and subsidiaries of Ocean Transport and Trading Ltd. Mr. Wilkinson brings to us over 30 years' experience in the shipping industry.

Serguei Zoudovcurrently serves as a joint director of chartering. Mr. Zoudov is part of our management team that is responsible
for our day-to-day operations. Prior to joining us, he served as a co-director at Rainbow Shipping and Trading (London) Limited from 1996 to 2004. Mr. Zoudov
has 15 years of experience in the shipping industry. Mr. Zoudov graduated from Admiral Makarov Nautical Academy, the leading Russian maritime academy.

David Znakcurrently serves as a joint director of chartering. Mr. Znak is part of our management team that is responsible for our
day-to-day operations. Prior to joining us, he was chartering manager at Rainbow Shipping and Trading (London) Limited from 1998 to 2004. Mr. Znak has 20 years of
experience in the shipping industry. He is a member of the Institute of Chartered Shipbrokers.

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B.    COMPENSATION

Directors and Senior Management Compensation

Non-executive directors receive annual fees in the amount of $32,000 per individual plus reimbursement for their out-of-pocket
costs for the year ended December 31, 2007. These fees may be increased from time to time at the discretion of the board of directors.

The
aggregate base salary and bonus compensation paid (or accrued and contingent or deferred) to all our directors and senior management as a group was $5,875,000 for the year ended
December 31, 2007.

The
compensation for each member of senior management is principally comprised of base salary, bonus and contributions to pensions on their behalf. The compensation that we pay to our
senior management is evaluated on an annual basis considering the following primary factors: individual performance during the prior year, market rates and movements, and the individual's anticipated
contribution to us and our growth. We believe that the compensation awarded to our senior management is consistent with that of our peers and similarly situated companies in the industry in which we
operate.

We
have entered into service contracts with Mr. Arvid Tage, as chief executive officer and chairman, Mr. Clifford Hanson, as chief operating officer and managing director,
and Mr. Znak, Mr. Serguei Zoudov and Mr. Wilkinson as directors of chartering.

The
contracts are each for a fixed period of three years. On the anniversary of the contract, the term is automatically extended by one year, unless either party has given six months'
notice of non-renewal.

Under
the service contracts with our senior management we have reserved the right to terminate the contracts without any notice or on notice less than the notice period provided for in
the service contract, but in such case will pay each employee a sum equal to, but no more than the salary in respect of that part of the period of notice we have not given. The statutory minimum
notice period is governed by the United Kingdom Employment Rights Act 1996, whereby we have to give a minimum notice of not less than one week for each year of continuous employment.

We
can terminate each service contract immediately if, amongst other reasons, the employee: (i) commits any serious breach of his service agreement or is guilty of any gross
misconduct or willful neglect in the discharge of his duties; (ii) is guilty of any fraud or dishonesty or conduct tending to bring himself, us or any group company into disrepute;
(iii) shall commit any act of bankruptcy or shall take advantage of any statute for the time being in force offering relief for insolvent debtors; (iv) is convicted of any criminal
offence; or (v) is disqualified from holding office in us or in any other company by reason of any order made under the United Kingdom Company Directors Disqualification Act 1986.

If
at any time the employee is unable to perform his duties properly because of ill health, accident or otherwise for a period or periods totaling at least 260 working days in any period
of 12 calendar months, or becomes incapable by reason of mental disorder of managing and administering his property and affairs, then we may terminate his employment by giving not less than
12 months' written notice.

We
currently have no service contract between us and Ms. Fariyal Khanbabi.

C.    BOARD PRACTICES

Board of Directors

Our board of directors is currently comprised of three executive directors and three independent non-executive directors. Each of our elected
directors holds office for a one-year term until a successor

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is
elected or until his earlier death, resignation or removal. Our directors are elected by shareholders at general meeting, subject to certain procedural requirements set out in our articles of
association. Further, the board of directors may appoint new directors, either to fill a vacancy or to appoint an additional director. Our articles of association provide that our board of directors
shall consist of a minimum of two directors and that there shall be no maximum number unless otherwise determined by the shareholders. Shareholders may change the minimum and maximum number of
directors that may sit on our board only by passing an ordinary shareholder resolution.

Committees

We have established an audit committee which is presently comprised of three directors. The audit committee is chaired by Mr. Fehrn-Christensen, with the
other members being Mr. Sinders and Mr. Halsted. Our board of directors has determined that Mr. Sinders is an "audit committee financial expert," as such term is defined in
Item 16A of Form 20-F.

Our
board of directors and audit committee has adopted a charter which sets forth such committee's primary roles and responsibilities. These principal responsibilities include, among
others: managing the relationship between us and our independent auditing firm; monitoring the integrity of our financial statements; reviewing our internal financial controls and risk management
systems; monitoring and reviewing our internal audit functions. The audit committee will regularly report to the board of directors.

We
have not established, nor do we intend to establish, a remuneration committee responsible for establishing our senior management compensation and benefits, although we do intend to
establish a nomination committee, responsible for proposing candidates for election to the board in due course.

D.    EMPLOYEES

As of December 31, 2007, we had a team of 55 shore-based employees, including 22 in Svendborg and four consultants. Our personnel have substantial shipping
experience and together speaks over 10 languages. In addition, we currently employ approximately 305 seafaring personnel and utilize four consultants.

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E.    SHARE OWNERSHIP

The table below sets forth certain information regarding the current ownership of our outstanding voting securities as of December 31, 2007 by all of our
directors and senior management, individually and as a group.

Name

Number of Shares

Percentage of Shares OutstandingArvid Tage(1)

5,349,337

65
%Serguei Zoudov(2)

2,189,589

27
%David Znak(3)

657,492

8
%Cliff Hanson

0

0
%Fariyal Khanbabi

0

0
%Peter Wilkinson

0

0
%John Sinders

0

0
%Jehns Fehrn-Christensen

0

0
%Soren Halsted

0

0
%All directors and senior management as a group (nine persons)

8,196,418

100
%


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ITEM 7    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.    MAJOR SHAREHOLDERS

The following table sets forth certain information regarding the current ownership of our outstanding voting securities as of December 31, 2007 by each
person known to us to be the beneficial owner of more than 5% of our securities and all of our directors and senior management as a group.

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All
of our shareholders, including the shareholders included in this table, are entitled to one vote for each ordinary share held by such shareholder:

Name

Number of Shares

Percentage of Shares OutstandingLusca Holdings Ltd(1)

5,349,337

65
%Balcare Holdings Limited(2)

2,189,589

27
%Cliffgrove Limited(3)

657,492

8
%All directors and senior management as a group (nine persons)

8,196,418

100
%


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B.    RELATED PARTY TRANSACTIONS

Shareholders Agreement

We and our shareholders are party to a shareholders' agreement under which we and they have agreed (for the benefit of our shareholders and us) to subject us and
themselves to certain restrictive covenants, restrictions on the disposal of ordinary shares by them, obligations to promote our interests
and restrictions on entering into arrangements with us and our subsidiaries on non-arm's length terms.

Repurchase of Shares by Our Subsidiary and Our Shareholders

In April 2007, we entered into an agreement with, among others, North Western Neva Limited to repurchase 434,168 of its ordinary shares. The total consideration
was to be $7.5 million and payable in three tranches. The first tranche was for 159,681 ordinary shares and closed on April 16, 2007 for a consideration of $2.8 million in cash.
The second tranche was for 159,681 ordinary shares and was scheduled to close on April 15, 2008 for a consideration of $2.8 million in cash. The third and final tranche was for 114,806
ordinary shares and was scheduled to close on April 15, 2009 for a consideration of $2.0 million in cash. The purchase agreement also included a provision whereby our shareholders had
the option to purchase the remaining 44,875 shares held by North Western Neva Limited for $775.

In
November 2007, this agreement was amended enabling us to complete the repurchase of the outstanding second and third tranche of ordinary shares immediately. As a result of the
amendment, on November 14, 2007, we repurchased 274,487 ordinary shares for $4,742.

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Simultaneous
with the execution of the amendment agreement, Arvid Tage, our chief executive officer, repurchased 44,875 ordinary shares held by North Western Neva Limited and covenanted
to perform North Western Neva Limited's obligation to sell the additional 44,875 ordinary shares back to us, in each case, pursuant to a plan approved by our board of directors.

As
a result of the simultaneous amendment agreement and assignment agreement, we completed the repurchase of all ordinary shares held by North Western Neva Limited on November 8,
2007.

Transactions with Shareholders

During the year ended December 31, 2007, Robson Shipping & Trading (Dublin) Limited, a company controlled by Gary Peter Robson, who holds 1,000 of
our ordinary shares, provided ship brokering
services to us under a consultancy agreement. For the year ended December 31, 2007, these expenses aggregated approximately $248,000.

C.    INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

ITEM 8.    FINANCIAL INFORMATION

A.    CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See Item 18: Financial Statements.

Legal or Arbitration Proceedings

We have not been involved in any legal proceedings that we believe are likely to have, or have had a significant effect on our business, financial position,
results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened that we believe are likely to have a significant effect on our business, financial position,
results of operations or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims.
Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.

Dividend Policy

For the year ended December 31, 2007, we did not make any dividend payments to our shareholders. Pursuant to the terms of the indenture governing the
senior secured notes, we do not intend to declare or pay dividends on our ordinary shares in the foreseeable future. Instead, we intend to invest any future earnings in our operations and servicing
our outstanding indebtedness.

B.    SIGNIFICANT CHANGES

Except as disclosed in this Form 20-F and the audited financial statements included herein, there has been no significant change in our
financial position since December 31, 2007.

ITEM 9.    THE OFFER AND LISTING

A.    OFFER AND LISTING DETAILS

Not applicable.

B.    PLAN OF DISTRIBUTION

Not applicable.

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C.    MARKETS

Not applicable.

D.    SELLING SHAREHOLDERS

Not applicable.

E.    DILUTION

Not applicable.

F.     EXPENSES OF THE ISSUE

Not applicable.

ITEM 10.    ADDITIONAL INFORMATION

A.    SHARE CAPITAL

Not applicable.

B.    MEMORANDUM AND ARTICLES OF ASSOCIATION

Registration, Objects and Purpose

We are a public limited company and are incorporated and registered in England and Wales, under registered number 03842976. Clause 4 of our
memorandum incorporates a wide-ranging objects clause which entitles us to carry on business as a general commercial company and grants us power to do all such things as are incidental or
conducive to the carrying on of any trade or business by us; including the right to borrow and raise money in any manner and the right to sell, deal with and dispose of debentures and debenture
stocks.

Directors

Our articles of association provide for a board of directors consisting (unless otherwise determined from time to time by ordinary resolution of the shareholders)
of no fewer than two directors, who shall manage our business and exercise all our powers (subject to the provisions of the Companies Act 1985 and the Companies Act 2006, our memorandum and articles
and any special resolution of our shareholders).

Two
directors present shall constitute a quorum necessary for the transaction of business by the board of directors. Both the directors, and the shareholders by ordinary resolution, have
the authority to appoint a person who is willing to act as a director.

Under
our articles, a director may vote at any meeting of the board of directors or meeting of a committee of the board of directors, notwithstanding that it in any way relates to or
concerns a matter in which he has, directly or indirectly, any kind of interest, including a material interest. Such director's vote on the resolution shall be counted and he shall be counted as part
of the quorum present at such meeting. However, a director with an interest, either direct or indirect, in a contract or proposed contract with us must declare the nature of his interest in accordance
with section 317 of the Companies Act 1985.

Under
our articles, remuneration awarded to directors shall be determined by ordinary resolution of our shareholders. By powers conferred in our articles, the directors may exercise our
powers in relation
to the payment of pensions, gratuities and other benefits and shall be entitled to retain any benefits received by them by reason of the exercise of any such powers.

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The
directors are empowered to exercise all powers of the company to borrow money without limit and upon such terms and in such manner as they think fit. The directors have wide powers
to grant security such as mortgages, charges and to issue debentures and other securities whether outright or as security for any debt, liability or obligation of the company or of any third party and
subject to section 80 of the Companies Act 1985, the directors may grant security convertible into ordinary shares following an ordinary resolution of our shareholders. The borrowing powers of
the directors can be varied provided the shareholders amend the articles by passing a special resolution with a majority of 75% or more of the shareholders.

Our
articles do not require that the directors retire at a specific age or not retire before reaching a specific age. The directors are not required to retire by rotation.

Directors
are not required to hold any shares in us as a qualification to act as a director.

Dividend Rights

We may, by ordinary resolution, declare dividends, but may not declare dividends in excess of the amount recommended by the directors. The directors may also pay
interim dividends where they are justified by the distributable profits of the company. All dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is
paid, unless the rights attached to the shares provide otherwise. All dividends shall be apportioned according to the length of the period for which the dividend is paid, unless a share is issued on
different terms.

Our
articles permit satisfaction of a dividend, in whole or in part, by distribution of assets. However, such dividends must be declared by the shareholders at a general meeting upon the
recommendation of the directors.

If
a dividend remains unclaimed for 12 years from the date when it became due for payment, it will be forfeited and cease to remain owing by the company, if the directors so
resolve.

Voting Rights

Voting at any general meeting of shareholders is by a show of hands, unless a poll is duly demanded. On a show of hands, every shareholder who is present in
person, or being a corporation is present by a duly authorised representative, at a general meeting, and every proxy appointed by one or more shareholders and present at a general meeting, has one
vote regardless of the number of shares held by the shareholder (or represented by the proxy, although the proxy has as many votes as the number of members for whom he is proxy). On a poll, every
shareholder who is present in person or by proxy has one vote for every share held by that shareholder. A poll may be demanded by any of the following:



No
shareholder may vote at a general meeting or at a meeting of the holders of a particular class of shares (either in person or by proxy) in respect of any share held by him, unless all
moneys presently payable by him have been paid.

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Matters
are transacted at general meetings of Britannia Bulk Plc by the proposing and passing of three kinds of resolutions:



In
order to be passed, an ordinary resolution requires the affirmative vote of a simple majority of the votes cast at a meeting at which there is a quorum, and special and extraordinary
resolutions require the affirmative vote of not less than three-quarters of the votes cast at a meeting at which there is a quorum. The necessary quorum for a meeting of the company is a minimum of
two persons entitled to vote upon the business to be transacted, each being a shareholder, a proxy or a duly authorized representative of a corporation.

Where
there is an equality of votes, either by poll or on a show of hands, the chairman shall be entitled to a casting vote, in addition to any other votes he may have.

Capital Calls

Under English law and pursuant to our articles, to the extent that the share premium is not paid up on issued shares, we have a first and paramount lien on every
share not being fully paid up. Subject to the terms of the allotment, directors may call upon the shareholders in respect of the unpaid moneys and each shareholder shall pay to the company the amount
called up. All of our issued shares are fully paid up.

Liquidation Rights

In the event of the liquidation of Britannia Bulk Plc, after payment of all liabilities and deductions taking priority in accordance with English law, the
balance of assets available for distribution will be distributed among the holders of ordinary shares according to the amounts paid up on the shares held by them. A liquidator may, with the sanction
of an extraordinary resolution of the shareholders and any other sanctions required by English company law, divide among the shareholders the whole or any part of the company's assets. Alternatively,
upon the adoption of an extraordinary resolution of the shareholders, a liquidator may vest the assets in whole or in part in trustees upon trust for the benefit of the shareholders, although no
shareholder shall be compelled to accept any assets upon which there is a liability.

Pre-emptive Rights and New Issues of Shares

While our shareholders have no pre-emptive rights under the articles, the directors' powers to allot shares, securities convertible into shares and
grant rights to subscribe for shares in the company is restricted. Under section 80 of the Companies Act 1985, directors of a company are generally unable to allot equity securities without
express authorisation, such authorisation may be given in the company's articles or by shareholders in general meeting, but in neither case may the authorisation last longer than five years. The
articles initially provided our directors with a general power to allot authorised but unissued share capital. Such power to allot may, however, be revoked or varied by ordinary resolution of our
shareholders.

The
requirements of section 89 of the Companies Act 1985, that a company may not allot shares other than for cash without first making an offer to existing shareholders to allot
the shares to them on

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the
same or more favorable terms in proportion to their respective shareholdings, can be disapplied with express authorization either specified in our articles or by special resolution by the
shareholders for a period not exceeding five years. The articles have initially disapplied section 89 for a period of five years from October 17, 2007.

Disclosure of Interest in Britannia Bulk Plc's Shares

The articles do not contain provisions whereby those acquiring or disposing of a certain percentage of our shares are required to make disclosure of their
ownership percentage.

Under
section 793 of the Companies Act 2006, the company may by notice in writing, including in electronic form, require a person whom the company knows or has reasonable cause to
believe to be or, who at any time during the three years preceding the issue date of the notice to have been, interested in the company's issued and voting shares to confirm or indicate whether or not
that is the case and, if that person does or did hold an interest in such shares, to confirm the information as set out in section 793 within a reasonable time. Sections 794 and 795
specify penalties for failure to provide information within the specified time when served with a notice. These include criminal penalties.

The
City Code on Takeovers and Mergers also contains strict disclosure requirements with regard to dealings in the securities of an offeror or offeree company on all parties to a
takeover and also to their respective associates during the course of an offer period.

General Meetings

General meetings may be called by directors or on the requisition of members, pursuant to the Companies Act 1985.

For
an annual general meeting, at least 21 clear days' written notice is required, although such meeting can be held on short notice if all the shareholders entitled to attend and vote
at the meeting agree. For an extraordinary general meeting called for passing a special resolution or a resolution appointing a person as a director, at least 21 clear days' written notice is
required. All other extraordinary general meetings shall be called on 14 clear days' written notice. However, extraordinary general meetings can be held on short notice if a majority in number of the
shareholders entitled to attend and vote, together holding not less than 95% of the nominal value of the shares, agree. All notices of general meetings must contain a statement allowing a member to
appoint a proxy.

The
notice must set out the time and place of the meeting, the business to be transacted and if the meeting is an annual general meeting, this fact must also be specified.

Variation of Class Rights

If, at any time, our share capital is divided into shares of different classes, rights attached to each class may be varied in accordance with the Companies Act
1985. Rights may be varied if the holders of three-quarters of the nominal value of the issued shares of that class consent in writing to the variation or an extraordinary resolution passed at a
separate general meeting of the holders of that class sanctions the variation.

At
every such separate meeting, the provisions of the articles in respect of general meetings apply, except that:



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Any
alteration of a provision contained in the articles for the variation of rights attached to a particular class of shares, or the insertion of such provision into the articles, shall
be treated as a variation of those class rights.

Repurchase of Shares

Subject to authorisation by shareholder resolution, we may purchase our own shares in accordance with English company law. Any shares which have been bought back
must be cancelled immediately upon completion of the purchase thus reducing our issued share capital, unless they can be held as treasury shares. Subject to the provisions of the Companies Act 1985
and the Companies Act 2006, shares may be issued which are to be redeemed or which may be redeemed at the option of the company or the holder. We have no redeemable shares in issue.

C.    MATERIAL CONTRACTS

Acquisition Agreements



On February 27, 2007, the Company took delivery of the Navigator II pursuant to a Memorandum of Agreement entered into on August 30, 2006. The
Navigator II is a 1998 built 69,146 DWT Panamax type vessel and was purchased for $28.5 million. The Company has entered into a charter for the Navigator II at a rate of $25,000 per day. This
time charter commenced in January 2007 and will expire on or about January 2009.



On April 10, 2007, the Company took delivery of the Endurance II pursuant to a Memorandum of Agreement entered into on February 9, 2007. The
Endurance II is a 1994 built 70,029 DWT Panamax type vessel and was purchased for $36.7 million. The Company has entered into a charter for the Endurance II at a rate of $25,000 per day. This
time charter commenced in September 2007 and will expire in September 2009.



On May 8, 2007, the Company took delivery of the Endeavour II pursuant to a Memorandum of Agreement dated January 16, 2007. The Endeavour II is a
1994 built 70,003 DWT Panamax type vessel, and was purchased for $36.7 million. The Company has entered into a charter for the Endeavour II at a rate of $25,000 per day. This time charter
commenced in May 2007 and will expire in May 2009.



On May 2, 2007, the Company took delivery of the Commander II pursuant to a Memorandum of Agreement entered into on March 12, 2007. The Commander II
is a 1983 built 31,431 DWT Panamax type vessel and was purchased for $10.75 million. The Company has entered into a charter for the Commander II at a rate of $15,000 per day. This time charter
commenced in June 2007 and will expire in June 2009.



On July 11, 2007, the Company took delivery of the Enforcer II pursuant to a Memorandum of Agreement dated June 21, 2007. The Enforcer II is a 1981
built 23,794 DWT Handysize vessel and was purchased for $6.25 million. The Company has entered into a charter for the Enforcer II at a rate of $15,000 per day. This time charter commenced in
May 2007 and will expire in July 2009. The Enforcer II is currently subject to an option to purchase, granted by us in favor of the current charterer

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of
such vessel. The charterer has until September 2008 to exercise such option to purchase at a price of $9.5 million.



On January 16, 2008, the Company took delivery of the Defiant II pursuant to a Memorandum of Agreement dated October 24, 2007. The Defiant II is a
1978 built 10,800 DWT Handysize specialist self-loading/self-unloading vessel and was purchased for $5.7 million. The Company has entered into a charter for the Holmon
at a rate of $8,000 per day. This time charter commenced on or about January 16, 2008 and will expire on or about January 2010.



On February 14, 2008, the Company took delivery of the Enforcer II pursuant to a Memorandum of Agreement and addendum dated January 22, 2008. The
Ice Trader II is a 1995 built 43,705 DWT Handymax vessel and was purchased for $35.5 million. The Company has entered into a charter for the Ice Trader II at a rate of $25,000 per day. This
time charter requires delivery of the vessel to the charterer in June 2008 and will expire in January 2009.



On February 18, 2007, the Company took delivery of the Ice Power II pursuant to a Memorandum of Agreement and addendum dated January 22, 2008. The
Ice Power II is a 1995 built 43,705 DWT Handymax vessel and was purchased for $35.5 million. The Company has entered into a charter for the Ice Power II at a rate of $25,000 per day. This time
charter requires delivery of the vessel to the charterer in June 2008 and will expire in January 2009.



During 2005 and 2006, the Company acquired five barges and three tugs pursuant to separate purchase agreements. The aggregate purchase price paid for the tugs and
barges acquired during 2005 and 2006 totalled $14.7 million. During 2007, the Company acquired one tug for a purchase price of $1.0 million.

Indenture

We are party to an Indenture dated November 16, 2006, as supplemented by the First Supplemental Indenture dated February 6, 2007 and the Second
Supplemental Indenture dated February 9, 2007, by and among the Company, the guarantor parties thereto and Wilmington Trust Company, as trustee, pursuant to which the Company issued
$185 million aggregate principal amount of 11% Senior Secured Notes with a maturity date of December 1, 2011. The Indenture sets forth the terms, rights and obligations of the senior
secured notes, the Company and the Noteholders.

Registration Rights Agreement

We are party to a Registration Rights Agreement dated as of November 16, 2006, pursuant to which the Company and its subsidiaries filed an exchange offer
registration statement on Form F-4 with the SEC with respect to an offer to exchange the senior secured notes for substantially identical notes that are registered under the
Securities Act. The exchange offer registration statement on Form F-4 was declared effective on March 9, 2007.

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Security Documents



Each vessel acquired with the net proceeds of the offering of the senior secured notes is, or shall be, subject to a first preferred ship mortgage granted in
favour of Wilmington Trust Company, as trustee for the several Noteholders, pursuant to which the Company mortgages the vessel so acquired in order to secure the payment and performance of its
obligations under the Indenture.



Each vessel acquired with the net proceeds of the offering of the senior secured notes is, or shall be, subject to an Assignment of Earnings in favour of
Wilmington Trust Company, as trustee for the several Noteholders, pursuant to which the Company assigns any and all earnings arising in connection with the vessel so acquired in order to secure the
payment and performance of its obligations under the Indenture.



Each vessel acquired with the net proceeds of the offering of the senior secured notes is, or shall be, subject to an Assignment of Insurances in favour of
Wilmington Trust Company, as trustee for the several Noteholders, pursuant to which the Company assigns all policies and contracts of insurance in
respect of the vessel so acquired in order to secure the payment and performance of its obligations under the Indenture.

Secured Bridge Facility

In connection with financing a portion of the purchase price for the acquisition of the Ice Trader II and the Ice Power II, we entered into a loan
agreement dated February 13, 2008, with Lloyds TSB Bank Plc as original lender, agent and security trustee (the "Loan Agreement"). The facility provided under the Loan Agreement consists
of a US$30,000,000 term loan facility (the "Facility"). We loaned the proceeds of the Facility to two of our wholly-owned subsidiaries, Enterprise Bulk Services S.A. ("Enterprise") and Oceanic
Bulk Services S.A. ("Oceanic", and together with Enterprise, the "Guarantors"). Oceanic used its intercompany loan proceeds to acquire Ice Trader II, and Enterprise used its intercompany loan
proceeds to acquire Ice Power II.

The
Facility is due in full on November 27, 2008. We are not obligated to amortize the principal amount of the Facility prior to such maturity date, but we are required to
transfer US$600,000 per month from the earnings of Ice Trader II and Ice Power II into a collateral account maintained with and under the sole control of Lloyds TSB Bank Plc which amount may,
at our option, be applied as a prepayment of principal. We are required to mandatorily prepay an allocated amount of the Facility if either the Ice Trader II or the Ice Power II is sold or becomes a
total loss. If both the Ice Trader II and the Ice Power II are sold or become a total loss, we are required to prepay the entire Facility. The Facility may be voluntarily prepaid in whole or in part
without premium or penalty.

The
Facility bears interest at LIBOR (plus the Mandatory Cost Rate (if applicable and as described in the Loan Agreement)) plus a margin equal to (i) 2.00 percent per annum
for the period starting on the drawdown date and continuing until the date that is six months following the drawdown date or (ii) 3.50 percent per annum thereafter. Default interest is
payable at 2.00 percent per annum above the then applicable rate.



The Facility is guaranteed by the Guarantors pursuant to separate guarantee agreements dated February 13, 2008, in favor of the security trustee (the
"Guarantees"). In connection with the

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Guarantees,
each Guarantor entered into the following security documents in favor of the security trustee: (i) an accounts security deed regarding its deposit accounts; (ii) a first
preferred ship mortgage regarding the Ice Trader II and the Ice Power II (as applicable); and (iii) a general assignment regarding its earnings, insurances, charters and requisition
compensation.



The Loan Agreement and the Guarantees contain covenants which include (i) provisions regarding insurance and the operation of the Ice Trader II and the Ice
Power II and (ii) limitations on:





The Loan Agreement, the Guarantees and other loan documents contain various events of default customary for ship financings, the occurrence of which would allow
the lender to cancel its commitment, accelerate the outstanding loan and enforce its security.

D.    EXCHANGE CONTROLS

There is currently no United Kingdom legislation restricting the import or export of capital or affecting the remittance of dividends or other payments to holders
of our ordinary shares who are non-residents of the United Kingdom. In addition, there are no limitations relating only to non-residents of the United Kingdom under English law
or Britannia's Memorandum and Articles of Association on the right to be a holder of, and to vote, Britannia's ordinary shares.

E.    TAXATION

United Kingdom Tax Considerations

The following is a general description of certain United Kingdom tax considerations relating to the notes based on current law and
practice in the United Kingdom. It does not purport to be a complete analysis of all United Kingdom tax considerations relating to the notes. It relates to the position of persons who are the absolute
beneficial owners of the notes and some aspects do not apply to certain classes of taxpayer (such as dealers and/or investment funds and/or holders of the notes who are connected or associates with
the Issuer for relevant tax purposes). Prospective holders of the notes who may be subject to tax in a jurisdiction other than the United Kingdom or who may be unsure as to their tax position should
seek their own professional advice.

Interest on the Notes



The notes will constitute "quoted Eurobonds" within the meaning of section 882 Income Tax Act 2007 ("ITA") as long as they are and continue to be listed on
a "recognised stock exchange" within the meaning of section 1005 ITA. The Luxemburg Stock Exchange is a recognised exchange for these purposes. Payments of interest on quoted Eurobonds may be
made without withholding on account of United Kingdom income tax; however, noteholders who are individuals or residual entities (as defined

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in
EC Council Directive 2003/48/EC) are referred to the information below in the sections in respect of the "European Savings Directive" and "Withholding TaxLuxembourg
non-resident individuals."

If
the notes cease to be quoted Eurobonds, interest must be paid under deduction of United Kingdom income tax, at the lower rate (currently 20%) unless any of the following apply: a
direction by H.M. Revenue & Customs under an applicable double taxation treaty; or (unless H.M. Revenue & Customs directs otherwise) the Issuer reasonably believes that the noteholder in
question is either a United Kingdom resident company or a non-United Kingdom resident company carrying on a trade in the United Kingdom through a United Kingdom permanent establishment
within the charge to United Kingdom corporation tax; or (unless H.M. Revenue & Customs directs otherwise) the Issuer reasonably believes that the noteholder in question falls within a category
enjoying a special tax status under the relevant United Kingdom legislation which would include certain charities and pension funds or partnerships of such persons.



Interest on the notes constitutes United Kingdom source income for tax purposes and, as such, may be subject to United Kingdom income tax by direct assessment
even where paid without withholding.

However,
interest from a United Kingdom source from which no United Kingdom tax has been deducted or withheld will not be chargeable to United Kingdom tax in the hands of a noteholder
who is not resident for tax purposes in the United Kingdom unless that noteholder carries on a trade, profession or vocation in the United Kingdom through a United Kingdom branch, agency or permanent
establishment in connection with which the Interest is received or to which the notes are attributable. The provisions of any applicable double taxation treaty may also be relevant for such holders of
the notes.



Noteholders who are individuals may wish to note that HM Revenue & Customs has power to obtain information (including the name and address of the
beneficial owner of the interest) from any person in the United Kingdom who either pays interest to or receives interest for the benefit of an individual. Information so obtained may, in certain
circumstances, be exchanged by H.M. Revenue & Customs with the tax authorities of other jurisdictions.

Under
EC Council Directive 2003/48/BC on the taxation of savings income, Member States are required to provide to the tax authorities of another Member State details of payments of
interest (or other dollar income) paid by a person within its jurisdiction to or for an individual in that other Member State. However, for a transitional period, Belgium, Luxembourg and Austria are
permitted to operate a withholding system in relation to such payments instead. A number of non-EU countries have agreed to adopt similar measures.

United Kingdom corporation taxpayers

In general, noteholders within the charge to United Kingdom corporation tax will bring into account for tax purposes as revenue items all debits and credits
(including those arising from exchange differences) in respect of the notes broadly in accordance with their statutory accounting treatment.

Other United Kingdom taxpayers

The notes will constitute "deeply discounted securities" within the meaning of Section 430 of Income Tax (Trading and other income) Act 2005. Any profit
made by an individual or trustee resident for tax purposes in the United Kingdom on the "transfer" (including redemption and conversion) of

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the
notes may be taxed as income. No relief is available for losses. In calculating any gain or loss on disposal of a note, sterling values are compared at acquisition and transfer. Accordingly, a
taxable profit may arise even where the foreign currency amount received on a disposal is less than or the same as the amount paid for the note.

Exchange Offer

For the purposes of the taxation of chargeable gains, the exchange of notes for registered notes pursuant to the exchange offer was not treated as involving any
disposal of the original notes or any acquisition of registered notes but the original notes and the registered notes were treated as the same asset acquired as the original notes were acquired.

Stamp Duty and SDRT

No United Kingdom stamp duty or stamp duty reserve tax should be payable on the issue or transfer of the notes.

Certain U.S. Federal Income Tax Considerations

General

The following is a summary of the principal United States federal income tax consequences of the purchase, beneficial ownership and disposition of the notes. For
purposes of this summary, (1) the United States Internal Revenue Code of 1986, as amended, is referred to as "the Code," and (2) the Internal Revenue Service is referred to as "the IRS."

This
summary:



Except
as indicated under "Tax Treatment of Non-U.S. Holders" below, this summary applies only to holders that are (1) individuals who are citizens or residents of the
United States as defined in Section 7701(b) of the Code, (2) corporations, or other entities that are taxable as corporations, created

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or
organized in or under the laws of the United States or any state or political subdivision thereof (including the District of Columbia), (3) estates, the income of which is subject to United
States federal income taxation regardless of its source, and (4) trusts, if a United States court can exercise primary supervision over the administration of such trust and one or more United
States persons has the authority to control all substantial decisions of the trust or if the trust has a valid election in effect under applicable Treasury Regulations to be treated as a United States
person (each, a "U.S. Holder"). A "Non-U.S. Holder" is a beneficial owner of the notes that is not a U.S. Holder. If a partnership (or an entity treated as a partnership for U.S. federal
income tax purposes) acquires or holds the notes, the tax treatment of a partner will depend upon the status of the partner and the activities of the partnership. A holder that is treated as a
partnership for U.S. federal income tax purposes, and partners of such partnership, should consult their own tax advisors regarding the tax consequences of the purchase, ownership, and disposition of
the notes.

We
have not sought any ruling from the IRS with respect to the statements made or the conclusions reached in the following summary, and the IRS may not agree with such statements and
conclusions. In addition, the IRS is not precluded from adopting a contrary position. This summary does not consider the effect of any applicable foreign, state, local or other tax laws.

YOU ARE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISORS AS TO THE UNITED STATES FEDERAL, STATE, LOCAL AND OTHER TAX CONSEQUENCES TO YOU OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE NOTES.

Tax Treatment of U.S. Holders

Contingent Payments.In certain circumstances, we may be obligated to pay amounts in excess of the stated interest and
principal on the notes. We intend to take the position that the possibility that any such payment will be made is remote so that such possibility will not affect the timing or amount of interest
income that you recognize unless and until any such payment is made. Our determination that these contingencies are remote is binding on you unless you disclose your contrary position to the IRS in
the manner that is required by applicable Treasury regulations. Our determination is not, however, binding on the IRS. It is possible that the IRS might take a different position from that described
above, in which case the timing, character and amount of taxable income in respect of the notes may be different from that described herein.

Stated Interest.The stated interest on a note generally will be includable in your income as ordinary income at the time
such interest is received or accrued, in accordance with your regular method of accounting for United States federal income tax purposes. Interest generally will be treated as foreign source income
for purposes of calculating your foreign tax credit limitation. The foreign tax credit rules are complex and their application depends on your particular circumstances. You should consult your own tax
advisor regarding the availability of foreign tax credits and the treatment of additional amounts.

Original Issue Discount.We issued the notes at a substantial discount from their principal amount at maturity. For United
States federal income tax purposes, the difference between the issue price and the stated redemption price at maturity of each note constitutes original issue discount ("OID"). You will be required to
include OID in your gross income periodically over the term of the notes before receipt of the cash or other payment attributable to such income regardless of your method of accounting for U.S.
federal income tax purposes.

The
amount of OID you must include in gross income as it accrues is the sum of the daily portions of OID with respect to the note for each day during the taxable year or portion of a
taxable year on which you hold the note. The daily portion is determined by allocating to each day of an accrual period apro rataportion of an amount
equal to the adjusted issue price of the note at the beginning of the accrual period multiplied by the yield to maturity of the note. The accrual period of a

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note
may be of any length you choose and may vary in length over the term of the note, provided that each accrual period is no longer than one year and each scheduled payment of principal or interest
occurs either on the final day of an accrual period or on the first day of an accrual period.

The
issue price of a note for OID purposes is the first price at which a substantial amount of notes are sold to investors (excluding sales to bond houses, brokers, or similar persons or
organizations acting in the capacity of underwriters, placement agents, or wholesalers). The adjusted issue price of the note at the start of any accrual period is the issue price of the note
increased by the accrued original issue discount for each prior accrual period.

Under
these rules, you will be required to include in gross income increasingly greater amounts of OID in each successive accrual period. Any amount included in income as OID will
increase your tax basis in the note.

Market Discount.If you purchase a note for an amount that is less than its "revised issue price," subject to a de minimis
exception you will be treated as having purchased the note at a "market discount." A note's revised issue price at the time of purchase will equal the note's issue price, increased by all accruals of
OID and decreased by all payments on the note other than qualified stated interest. In such case, you will be required to treat any payment on, or any gain realized on the sale, exchange or other
disposition of, the note as ordinary income to the extent of the lesser of (i) the amount of such payment or realized gain or (ii) the market discount accrued on the note while held by
you and not previously included in income. You also may be required to defer the deduction of all or a portion of any interest paid or accrued on indebtedness incurred or maintained to purchase or
carry the note. Alternatively, you may elect (with respect to the note and all your other market discount obligations) to include market discount in income currently as it accrues. Market discount is
considered to accrue ratably during the period from the date of acquisition to the maturity date of the note, unless you elect to accrue market discount on the basis of a constant interest rate.
Amounts includible in income as market discount are generally treated as ordinary interest income and will increase your adjusted tax basis in the note.

Acquisition Premium.If you purchase a note for an amount in excess of its adjusted issue price at the time of purchase, but
less than its stated redemption price at maturity, you will be considered to have purchased a note with "acquisition premium." A note's adjusted issue price at the time of purchase will equal the
note's issue price, increased by all accruals of OID and decreased by all payments on the note other than stated interest payments. You may use acquisition premium to reduce the OID that would
otherwise accrue during a period. The amount of the reduction is the product of the amount of OID accrued during the period and a fraction, the numerator of which is the amount of acquisition premium
and the denominator of which is the amount of remaining OID at the time of purchase. Alternatively, you may make the election described below under "Election to Treat all Interest as Original Issue
Discount." The effect of the election will be to reduce the amount of OID by the amount of the acquisition premium.

Amortizable Bond Premium.If you purchase a note for an amount in excess of its stated redemption price at maturity, you will
be treated as having purchased the note with "amortizable bond premium" equal in amount to such excess. You may elect (with respect to the note and all your other obligations with amortizable bond
premium) to amortize such premium using a constant yield method over the remaining term of the note and may offset interest income otherwise required to be included in respect of the note during any
taxable year by the amortized amount of such excess for the taxable year. Your adjusted basis in the note will be reduced by the amount amortized each year. If you do not make the election to amortize
the premium, your basis will not be reduced and you will realize a smaller gain or a larger loss on a taxable disposition of the note than you would have realized had the election been made. An
election to amortize bond premium applies to all taxable debt obligations then owned and thereafter acquired by the holder and may be revoked only with the consent of the IRS. If

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you
do not elect to amortize bond premium, that premium will decrease the gain or increase the loss you would otherwise recognize on the disposition of the note.

Election to Treat All Interest as Original Issue Discount.In lieu of accounting for market discount and amortizable bond
premium separately, you may elect to treat all interest on a note as OID and
calculate the amount includible in gross income using a constant yield method under which the note would be treated as if issued on your purchase date for an amount equal to your adjusted basis in the
note immediately after your purchase of the note. For purposes of this election, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market
discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. If you make this election for a note with market discount or amortizable bond premium, the election
is treated as an election under the market discount or amortizable bond premium provisions, as the case may be. The election is to be made for the taxable year in which you acquire the note and cannot
be revoked without the consent of the IRS.You should consult your tax advisor about this election as well as the elections described above under "Market Discount" and
"Amortizable Bond Premium."

Sale, Exchange and Retirement of the notes.In general, your tax basis in such notes will be equal to (x) the cost of
such notes (y) increased by the amount of OID or market discount accrued on the notes and included in your income (z) reduced by any amortizable bond premium deductions and payments of
principal on such notes. Except as described under "Tax Treatment of U.S. HoldersMarket Discount," upon a sale, exchange, or retirement of the notes, you will generally recognize gain or
loss equal to the difference between the amount realized on the sale, exchange or retirement and your tax basis in such notes. The amount realized will not include amounts attributable to accrued OID
(which is taken into income as described above) or accrued but unpaid stated interest, which is taxed as ordinary income in accordance with your method of accounting for U.S. federal income tax
purposes. Such gain or loss will be long-term capital gain or loss if you held the notes for more than one year at the time of disposition. The net long-term capital gains
derived by U.S. Holders that are individuals, estates or trusts currently are entitled to a preferential tax rate; however, the ability of U.S. Holders to offset capital losses against ordinary income
is limited.

Gain
or loss recognized by you on the sale, exchange or retirement of the notes generally will be treated as U.S.-source gain or loss for foreign tax credit purposes unless it is
attributable to an office or other fixed place of business outside the United States and certain other conditions are met. You should consult your tax advisers as to the foreign tax credit
implications of the sale or retirement of notes.

Tax Treatment of Non-U.S. Holders

In general, payments of interest on the notes to you, OID and gain realized by you on the sale, exchange or retirement of the notes will not be subject to United
States federal income or withholding tax, unless:



Except
as may otherwise be provided in an applicable income tax treaty between the United States and a foreign country, you will generally be subject to tax in the same manner as a U.S.
Holder with respect to interest, including OID, if such interest is effectively connected with your conduct of a trade

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or
business in the United States. You will not be considered to be engaged in a trade or business within the United States for federal income tax purposes solely by reason of holding the notes.

Information Reporting and Backup Withholding

Under certain circumstances, the Code requires "information reporting" annually to the IRS and to each U.S. Holder and Non-U.S. Holder (collectively,
a "Holder"), and "backup withholding" with respect to certain payments made on or with respect to the notes. Certain U.S. Holders are exempt from backup withholding, including corporations,
tax-exempt organizations, qualified pension and profit sharing trusts, and individual retirement accounts that provide a properly completed IRS Form W-9. Backup
withholding will apply to a non-exempt U.S. Holder if such U.S. Holder (1) fails to furnish its Taxpayer Identification Number, or TIN, which, for an individual would be his or her
Social Security Number, (2) furnishes an incorrect TIN, (3) is notified by the IRS that it has failed to properly report payments of interest and dividends, or (4) under certain
circumstances, fails to certify, under penalties of perjury, that it has furnished a correct TIN and has not been notified by the IRS that it is subject to backup withholding for failure to report
interest and dividend payments.

If
a Non-U.S. Holder receives payments made on or with respect to the notes through the United States office of a broker, such payments generally will be subject to
information reporting and backup withholding unless the non-U.S. Holder provides either IRS Form W-8BEN or W-8IMY, as applicable, together with all
appropriate attachments, signed under penalties of perjury, identifying the Non-U.S. Holder and stating that the Non-U.S. Holder is not a United States person.

The
payment of the proceeds of the disposition of the notes to or through the United States office of a broker generally will be subject to information reporting and backup withholding
unless the Holder
provides the certification described above or otherwise establishes an exemption from such reporting and withholding requirements.

Information
reporting requirements and backup withholding generally will not apply to any payment of the proceeds of the sale of a Note effected outside the United States by a foreign
office of a broker. However, unless such a broker has documentary evidence in its records that a Holder is a non-U.S. holder and certain other conditions are met, or the Holder otherwise
establishes an exemption, information reporting will apply to a payment of the proceeds of the sale of a Note effected outside the United States by such a broker if the broker:



Backup
withholding is not an additional tax. Rather, the federal income tax liability of persons subject to backup withholding will be offset by the amount of tax withheld. If backup
withholding results in an overpayment of United States federal income tax, a refund or credit may be obtained from the IRS, provided that certain required information is furnished. Copies of the
information returns reporting such interest and withholding may be made available to the tax authorities in the country in which a Non-U.S. Holder is a resident under the provisions of an
applicable income tax treaty or agreement.

THE PRECEDING DISCUSSION IS ONLY A SUMMARY OF CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND

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DISPOSITION OF THE NOTES. PROSPECTIVE INVESTORS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS TO DETERMINE THE TAX CONSEQUENCES OF SUCH INVESTMENT IN LIGHT OF EACH SUCH INVESTOR'S PARTICULAR
CIRCUMSTANCES.

F.     DIVIDENDS AND PAYING AGENTS

Not applicable.

G.    STATEMENT BY EXPERTS

Not applicable.

H.    DOCUMENTS ON DISPLAY

The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended. In accordance with these requirements the Company
files reports and other information with the Securities and Exchange Commission. These materials, including this annual report and the accompanying exhibits, may be inspected and copied at the public
reference facilities maintained by the Commission in Room 1024, 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials are also available by mail from the Public Reference
Section of the SEC, at 100 F Street, N.E., Washington D.C. 20549, at prescribed rates. The SEC maintains a website (http://www.sec.gov.) that
contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The telephone number for public document requests at the SEC is
+1-202-551-8090. In addition, documents referred to in this annual report may be inspected at the Company's principal place of business; 2nd Floor Dexter
House, 2 Royal Mint Court, London EC3N 4XX, United Kingdom.

I.     SUBSIDIARY INFORMATION

Great Belt Shipping Company, S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship
owning and operating. Great Belt Shipping Company, S.A.'s registered office is at c/o Vives y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5,
Republic of Panama.

Flagship Maritime, S.A. MV,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating. Flagship
Maritime, S.A.'s registered office is at c/o Vives y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Baltic Navigation Company, S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating.
Baltic Navigation Co., S.A.'s registered office is at c/o Vives y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Northern Star Navigation, S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating.
Northern Star Navigation, S.A.'s registered office is at c/o Vives y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Britannia Bulk, S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating. Britannia
Bulk, S.A.'s registered office is at c/o Vives y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Channel Bulk Services S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating. Channel
Bulk Services S.A.'s registered office is at c/o Vives Y Asociados,

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Edificio
Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Navigator Bulk Services S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating.
Navigator Bulk Services S.A.'s registered office is at c/o Vives Y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Atlantic Bulk Services S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating. Atlantic
Bulk Services S.A.'s registered office is at c/o Vives Y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Western Bulk Services S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating. Western
Bulk Services S.A.'s registered office is at c/o Vives Y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

International Bulk Services S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating.
International Bulk Services S.A.'s registered office is at c/o Vives Y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Unity Bulk Services S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating. Unity Bulk
Services S.A.'s registered office is at c/o Vives Y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

BBL Denmark Holdings A/S,a wholly owned subsidiary of the Company, is primarily engaged in ownership of tugs and barges marine and
surveys. BBL Denmark Holding A/S's registered office is at Jessens Mole 11, Svendborg 5700, Denmark.

Danmar Shipping, S.A.,a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating. Danmar
Shipping, S.A.'s registered office is at c/o Vives y Asociados, Edificio Banco Aliado, Octavo Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Britannia Bulkers plc,a subsidiary of which the Company owns 99.99% of its outstanding common stock, is primarily engaged in ship
operating. Britannia Bulkers plc's registered office is at Dukes House, 32-38 Dukes Place, London EC3A 7LP.

Svendborg Ship Management A/S,a majority owned subsidiary of the Company, is primarily engaged in the technical management of our fleet.
Svendborg Ship Management A/S's registered office is at Jessens Mole 11, Svendborg 5700, Denmark.

Britannia Bulker A/S,a wholly owned subsidiary of the Company, is primarily engaged in operation of time charter vessels. Britannia
Bulker A/S started trading in February 2006. Britannia Bulker A/S's registered office is at Jessens Mole 11, Svendborg 5700, Denmark.

Svendborg Marine Surveyors A/S,a wholly owned subsidiary of the Company, is primarily engaged in ship inspection and surveys. Svendborg
Marine Surveyors A/S's registered office is at Jessens Mole 11, Svendborg 5700, Denmark.

Britannia Bulk DK A/S,a wholly owned subsidiary of the Company, is primarily engaged in shipping operations. Britannia Bulk DK A/S's
registered office is at Jessens Mole 11, Svendborg 5700, Denmark.

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Oceanic Bulk Services S.A., a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating. Oceanic
Bulk Services S.A.'s registered office is at c/o Vives Y Asociados, Edificio Banco Aliado, Octavio Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Enterprise Bulk Services S.A., a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating.
Enterprise Bulk Services S.A.'s registered office is at c/o Vives Y Asociados, Edificio Banco Aliado, Octavio Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Ice Bulk Services S.A., a wholly owned subsidiary of the Company, is primarily engaged in ship owning and operating. Ice Bulk
Services S.A.'s registered office is at c/o Vives Y Asociados, Edificio Banco Aliado, Octavio Piso, Calle Beatrix M. de Cabal, Guidad Panama, Panama 5, Republic of Panama.

Inspecciones Maritimas De Costa Rica S.A., a wholly owned subsidiary of the Company, is primarily engaged in inspection and
surveys. Inspecciones Maritimas De Costa Rica S.A.'s registered office is at Suite #9, First Floor, Galerias de Rohrmosser, San Jose, Costa Rica.

ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Forward Freight Agreements.We are exposed to decreases in charter rates or our inability to fully employ our
chartered-in vessels through COAs, time charters or spot charters. We may from time to time enter into drybulk forward freight agreements, or FFAs, as economic hedges relating to
identifiable ship or cargo positions and as economic hedges of transactions we expect to carry out in the normal course of our shipping business. By utilizing certain derivate instruments, including
drybulk shipping FFAs, we will attempt to manage our financial risk associated with fluctuating market conditions. When entering into FFAs, we assume the risk that counterparties may fail to meet the
terms of their contracts. The only FFA we have entered into to date was recorded in our statement of operations under "Loss on Forward Freight Agreements." The net loss from FFAs amounted to
$1.2 million in the year ended December 31, 2007. As of December 31, 2007, we had no open FFA positions.

Interest Rates.Historically, we have been subject to limited market risks relating to changes in interest rates, because we
did not have significant amounts of floating rate debt outstanding. Following the completion of the offering of the senior secured notes and subsequent repayment of all our outstanding debt in 2006,
our only significant exposure to interest rate changes results from our $30 million senior secured bridge facility which currently bears interest at LIBOR plus 2%. See
"Item 10.C.Material ContractsSecured Bridge Facility."

Foreign Exchange Rates.In the year ended December 31, 2007, we generated 99% of our revenues in U.S. dollars, and
incurred 99% of our operating expenses in U.S. dollars and 1% in currencies other than the U.S. dollar, primarily the British Pound, Euro and Danish Kroner. We are therefore not exposed to significant
foreign currency rate risk. For accounting purposes, expenses incurred in these non-U.S. dollar currencies are converted into U.S. dollars at the exchange rate prevailing on the date of
each transaction.

Inflation.We do not believe that inflation has a material impact on our operations, although certain of our operating
expenses (including crewing, insurance and drydocking costs) are subject to fluctuations as a result of market forces. Inflationary pressures on bunker (fuel and oil) costs are not expected to have a
material effect on our future operations. In the case of our vessels, which are time chartered to third parties, it is the charterers who pay for the fuel. If our vessels are employed under COAs or
spot charters, freight rates are generally sensitive to the price of fuel. However, a sharp rise

77

---



in
bunker prices may have a temporary negative effect on our results since freight rates generally adjust only after prices settle at a higher level.

ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A.    DEBT SECURITIES

Not applicable.

B.    WARRANTS AND RIGHTS

Not applicable.

C.    OTHER SECURITIES

Not applicable.

D.    AMERICAN DEPOSITARY SHARES

Not applicable.

78

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PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

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

Not applicable.

ITEM 15.    CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures.Our Chief Executive Officer and our Chief Financial Officer, after
evaluating the effectiveness of our disclosure controls and procedures as of the end of the period
covered by this Form 20-F, have concluded that, as of such date, our disclosure controls and procedures were effective.



Management
assumes responsibility for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange
Act. Those rules define internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:



Because
of its inherent limitations, internal control over financial reporting cannot provide absolute assurance of the prevention or detection of misstatements. In addition, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Effective
for the year ending December 31, 2007, under Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX 404") and Item 308 of the SEC's
Regulation S-K, our management is required to assess the effectiveness of our internal control over financial reporting. Accordingly, under the supervision and with the
participation of our management, including our chief executive officer and
chief financial officer, we evaluated the effectiveness of our internal control over financial reporting based on the criteria established in Internal ControlIntegrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (the "COSO Criteria"). Based on the assessment, our management has concluded that our internal control over financial reporting
is effective as of December 31, 2007. The results of management's assessment were reviewed with the Audit Committee of our Board of Directors.

This
annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report
was not

79

---



subject
to attestation by our independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in
this annual report.

(c)Changes in Internal Control Over Financial Reporting.There were no changes in our internal control over financial
reporting that occurred during the year ended December 31, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERTS

We have established an audit committee which is presently comprised of three directors. The Audit Committee is chaired by Mr. Fehrn-Christensen, with the
other members being Mr. Sinders and Mr. Halsted. Our board of directors has determined that Mr. Sinders, an independent non-executive director, is an "audit committee
financial expert," as such term is defined in Item 16A. of Form 20-F.

ITEM 16B.    CODE OF ETHICS

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, controller and
persons performing similar functions, as well as to all of our other employees. This code of ethics is available without charge upon request at our principal place of business at Dexter House, 2 Royal
Mint Court, London, EC3N 4QN, United Kingdom.

ITEM 16C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

On December 13, 2007, our board of directors and audit committee appointed Grant Thornton LLP as our new independent registered public accounting
firm. The following table presents fees billed for professional audit services rendered by Grant Thornton LLP and Moore Stephens Hays LLP for the audit of our annual financial statements
and for other services for the years ended December 31, 2007 and 2006, respectively (in thousands):

For the year ended December 31,

2007

2006Audit fees(1)

$
161

$
57Audit-related fees(2)





Tax fees(3)


88


15All other fees(4)


118


98Total

$
367

$
170


---

80

---



Our
audit committee reviews and approves all audit and non-audit services provided to us by Grant Thornton LLP.

ITEM 16D.    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND THE AFFILIATED PURCHASERS

Not applicable.

81

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PART III

ITEM 17.    FINANCIAL STATEMENTS

See Item 18.

ITEM 18.    FINANCIAL STATEMENTS

|                                                                                                     |  | Page
|---------------------------------------------------------------------------------------------------- |  | ----
|Audited consolidated financial statements                                                            |  |     
|Reports of Independent Registered Public Accounting Firms                                            |  | F-1 
|Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005           |  | F-3 
|Consolidated Balance Sheets as of December 31, 2007 and 2006                                         |  | F-4 
|Consolidated Statements of Shareholders' Equity for the years ended December 31, 2005, 2006 and 2007 |  | F-5 
|Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005           |  | F-6 
|Notes to Consolidated Financial Statements                                                           |  | F-7 

82

---





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board
of Directors and Shareholders
Britannia Bulk Plc

We
have audited the accompanying consolidated balance sheet of Britannia Bulk Plc as of December 31, 2007, and the related consolidated statement of operations, changes in
shareholders' equity, and cash flows for the year ended December 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (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. The Company is not required to have, nor were we engaged to perform an audit of its internal
control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Britannia Bulk Plc as of December 31, 2007,
and the results of its operations and its cash flows for the year ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.

/s/
GRANT THORNTON LLP

New
York, New York
March 13, 2008

F-1

---



Board
of Directors and Shareholders
Britannia Bulk Plc

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying consolidated balance sheet of Britannia Bulk Plc and subsidiaries as of December 31, 2006 and the related consolidated
statements of operations, shareholders' equity, and cash flows for the years ended December 31, 2006 and 2005. 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 the standards of the Public Company Accounting Oversight Board (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. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 financial position of Britannia Bulk Plc and subsidiaries as of
December 31, 2006 and the results of their operations and their cash flows for the years ended December 31, 2006 and 2005, in conformity with accounting principles generally accepted in
the United States of America.

/s/
Moore Stephens Hays LLP

New
York, New York
April 11, 2007

F-2

---





BRITANNIA BULK PLC        CONSOLIDATED STATEMENTS OF OPERATIONS        (Dollars in thousands, except share and per share amounts)

|                    |                                                      | Years ended December 31, |       
|------------------- | ---------------------------------------------------- | ------------------------ | ------
|
|Revenues            |                                                      |                          |       
|                    | Contract of affreightment and voyage revenues        |                          | $     
|                    | Time charter revenues                                |                          |       
|                    | Demurrage and other revenues                         |                          |       
|                    | Loss on forward freight agreement                    |                          |       
|                    |                                                      |                          |       
|                    |                                                      | Total revenues           |       
|                    |                                                      |                          |       
|Operating expenses  |                                                      |                          |       
|                    | Voyage expenses                                      |                          |       
|                    | Charter hire expenses                                |                          |       
|                    | Commissions                                          |                          |       
|                    | Vessel operating expenses                            |                          |       
|                    | Depreciation and amortization                        |                          |       
|                    | General and administrative                           |                          |       
|                    | Expense to related parties                           |                          |       
|                    | Foreign currency transaction (gains) and losses, net |                          |       
|                    |                                                      |                          |       
|                    |                                                      | Total operating expenses |       
|                    |                                                      |                          |       
|Operating income    |                                                      |                          | 66,743
|                    | Minority interest expense                            |                          |       
|                    | Interest income                                      |                          |       
|                    | Interest expense                                     |                          |       
|                    |                                                      |                          |       
|Income before taxes |                                                      |                          | 47,517
|                    | Provision for taxes                                  |                          |       
|                    |                                                      |                          |       
|Net income          |                                                      | $                        | 46,017
|                    |                                                      |                          |       
|                    | Weighted average number of ordinary shares           |                          |       
|                    |                                                      |                          |       
|                    | Basic earnings per ordinary share                    |                          | $     
|                    |                                                      |                          |       

The
accompanying notes are an integral part of these statements.

F-3

---



BRITANNIA BULK PLC        CONSOLIDATED BALANCE SHEETS        (Dollars in thousands, except share and per share amounts)

|                                     |                                        | December 31,                                                                                                                                                                    
|------------------------------------ | -------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|ASSETS                               |                                        |                                                                                                                                                                                 
|Current assets                       |                                        |                                                                                                                                                                                 
|                                     | Cash and cash equivalents              |                                                                                                                                                                                 
|                                     | Vessel acquisition account             |                                                                                                                                                                                 
|                                     | Due from charters, net                 |                                                                                                                                                                                 
|                                     | Inventories                            |                                                                                                                                                                                 
|                                     | Deposits from charterers               |                                                                                                                                                                                 
|                                     | Prepaid expenses                       |                                                                                                                                                                                 
|                                     | Deferred lease costs                   |                                                                                                                                                                                 
|                                     | Amounts due from related parties       |                                                                                                                                                                                 
|                                     | Other current assets                   |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        | Total current assets                                                                                                                                                            
|                                     |                                        |                                                                                                                                                                                 
|Vessels and other fixed assets, net  |                                        |                                                                                                                                                                                 
|Deferred dry docking costs, net      |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|Other assets                         |                                        |                                                                                                                                                                                 
|                                     | Deposits on vessel                     |                                                                                                                                                                                 
|                                     | Deferred financing costs, net          |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        | Total assets                                                                                                                                                                    
|                                     |                                        |                                                                                                                                                                                 
|LIABILITIES AND SHAREHOLDERS' EQUITY |                                        |                                                                                                                                                                                 
|Liabilities                          |                                        |                                                                                                                                                                                 
|                                     | Current liabilities                    |                                                                                                                                                                                 
|                                     |                                        | Accounts payable                                                                                                                                                                
|                                     |                                        | Accrued expenses and other liabilities                                                                                                                                          
|                                     |                                        | Deferred revenue                                                                                                                                                                
|                                     |                                        | Lease termination liability                                                                                                                                                     
|                                     |                                        | Taxes payable                                                                                                                                                                   
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     | Long-term debt, net of current portion |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     | Minority interest                      |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     | Commitments and contingencies          |                                                                                                                                                                                 
|                                     | Shareholders' equity                   |                                                                                                                                                                                 
|                                     |                                        | Ordinary shares (£1 par value, stated at $1.79; 10,000,000 shares authorized; 8,204,314 and 8,683,357 shares issued and outstanding at December 31, 2007 and 2006, respectively)
|                                     |                                        | Additional paid-in capital                                                                                                                                                      
|                                     |                                        | Retained earnings                                                                                                                                                               
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 
|                                     |                                        |                                                                                                                                                                                 

The accompanying notes are an integral part of these statements.

F-4

---





BRITANNIA BULK PLC    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY    (Dollars in thousands, except share amounts)

|                              |  | Common Stock |   |   |        |   |   |     | 
|----------------------------- |  | ------------ | - | - | ------ | - | - | --- | 
|
|
|Balance at December 31, 2004  |  | 2,767,519    |   | $ | 4,594  |   | $ | 11  | 
|Net income                    |  |             |   |   |       |   |   |    | 
|Issuance of common stock      |  | 5,914,838    |   |   | 10,587 |   |   | 626 | 
|                              |  |              |   |   |        |   |   |     | 
|Balance at December 31, 2005  |  | 8,682,357    |   |   | 15,541 |   |   | 637 | 
|Net income                    |  |             |   |   |       |   |   |    | 
|Issuance of ordinary shares   |  | 1,000        |   |   | 2      |   |   | 11  | 
|                              |  |              |   |   |        |   |   |     | 
|Balance at December 31, 2006  |  | 8,683,357    |   |   | 15,543 |   |   | 648 | 
|Net income                    |  |             |   |   |       |   |   |    | 
|Repurchase of ordinary shares |  | (479,043     | ) |   | (858   | ) |   |    | 
|                              |  |              |   |   |        |   |   |     | 
|Balance at December 31, 2007  |  | 8,204,314    |   | $ | 14,685 |   | $ | 648 | 
|                              |  |              |   |   |        |   |   |     | 

The
accompanying notes are an integral part of this statement.

F-5

---



BRITANNIA BULK PLC    CONSOLIDATED STATEMENTS OF CASH FLOWS    (Dollars in thousands, except share and per share amounts)

|                                                     |                                                                                  | Year ended December 31,                               |                                                         
|---------------------------------------------------- | -------------------------------------------------------------------------------- | ----------------------------------------------------- | --------------------------------------------------------
|
|Cash flows from operating activities                 |                                                                                  |                                                       |                                                         
|                                                     | Net income                                                                       |                                                       | $                                                       
|                                                     | Adjustments to reconcile net income to net cash provided by operating activities |                                                       |                                                         
|                                                     |                                                                                  | Depreciation and amortization                         |                                                         
|                                                     |                                                                                  | Amortization of note discount and debt issuance costs |                                                         
|                                                     |                                                                                  | Minority interest                                     |                                                         
|                                                     |                                                                                  | Changes in operating assets                           |                                                         
|                                                     |                                                                                  |                                                       | Due from charters                                       
|                                                     |                                                                                  |                                                       | Vessel acquisition account                              
|                                                     |                                                                                  |                                                       | Inventories                                             
|                                                     |                                                                                  |                                                       | Deposits from customers                                 
|                                                     |                                                                                  |                                                       | Prepaid expenses                                        
|                                                     |                                                                                  |                                                       | Other current assets                                    
|                                                     |                                                                                  |                                                       | Payments for drydockings                                
|                                                     |                                                                                  |                                                       | Accounts payable, accrued expenses and other liabilities
|                                                     |                                                                                  |                                                       | Deferred revenue                                        
|                                                     |                                                                                  |                                                       | Deferred lease costs                                    
|                                                     |                                                                                  |                                                       | Lease termination liability                             
|                                                     |                                                                                  |                                                       | Taxes payable                                           
|                                                     |                                                                                  |                                                       | Other                                                   
|                                                     |                                                                                  |                                                       |                                                         
|                                                     |                                                                                  |                                                       | Net cash provided by operating activities               
|                                                     |                                                                                  |                                                       |                                                         
|Cash flows from investing activities                 |                                                                                  |                                                       |                                                         
|                                                     | Payments and deposits for vessels and other fixed assets                         |                                                       |                                                         
|                                                     | Payments for acquisitions, net of cash acquired                                  |                                                       |                                                         
|                                                     | Purchase of minority interest                                                    |                                                       |                                                         
|                                                     | Funding of the vessel acquisition account                                        |                                                       |                                                         
|                                                     |                                                                                  |                                                       |                                                         
|                                                     |                                                                                  | Net cash used in investing activities                 |                                                         
|                                                     |                                                                                  |                                                       |                                                         
|Cash flows from financing activities                 |                                                                                  |                                                       |                                                         
|                                                     | Amounts (paid to) received from related parties                                  |                                                       | $                                                       
|                                                     | Proceeds from borrowings                                                         |                                                       |                                                         
|                                                     | Payments of deferred financing costs                                             |                                                       |                                                         
|                                                     | Repayment of borrowings                                                          |                                                       |                                                         
|                                                     | Repurchase of shares                                                             |                                                       |                                                         
|                                                     | Issuance of ordinary shares                                                      |                                                       |                                                         
|                                                     |                                                                                  |                                                       |                                                         
|                                                     |                                                                                  | Net cash provided by financing activities             |                                                         
|                                                     |                                                                                  |                                                       |                                                         
|Net increase (decrease) in cash and cash equivalents |                                                                                  |                                                       | 38,037                                                  
|Cash and cash equivalents at beginning of year       |                                                                                  |                                                       | 17,170                                                  
|                                                     |                                                                                  |                                                       |                                                         
|Cash and cash equivalents at end of year             |                                                                                  | $                                                     | 55,207                                                  
|                                                     |                                                                                  |                                                       |                                                         
|Supplementary disclosures of cash flow information   |                                                                                  |                                                       |                                                         
|                                                     | Cash paid for interest                                                           |                                                       | $                                                       
|                                                     |                                                                                  |                                                       |                                                         
|                                                     | Cash paid for taxes                                                              |                                                       | $                                                       
|                                                     |                                                                                  |                                                       |                                                         

The
accompanying notes are an integral part of these statements.

F-6

---





BRITANNIA BULK PLC        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        DECEMBER 31, 2007, 2006 and 2005        (Dollars in thousands, except share and per share amounts)

1.    Basis of presentation and general information

The accompanying consolidated financial statements include the accounts of Britannia Bulk Plc and its wholly-owned or controlled subsidiaries
(collectively, the "Company"). The Company is a provider of drybulk transportation services with a focus on transporting coal exports from the Baltic region to Northern and Western Europe. The
Company's customers are primarily power companies, coal producers and commodity trading houses, primarily in Northern and Western Europe.

The
Company's initial fleet consisted of five vessels which were acquired in 2004 and 2005, and in December 2005 the Company acquired three tugs, and four barge vessels. In 2006, the
Company acquired one barge. In 2007 five vessels and one tug were added to the fleet. In addition to operating owned vessels, the Company has increased its capacity by chartering-in
additional tonnage both to fulfill its contracts of affreightment and to take advantage of profit opportunities.

The
Company became a 100% owned subsidiary of Britannia Bulk Holdings Plc ("Holdings") pursuant to a reorganization plan completed during November of 2007. Refer to Note 4
for a discussion of the reorganization.

The
principal activities of Britannia Bulk Plc's subsidiaries are as follows:

|Name                             |  | Owned   |  | Country of incorporation |  | Principal activity     
|-------------------------------- |  | ------- |  | ------------------------ |  | -----------------------
|Britannia Bulkers Plc            |  | 99.99%  |  | England and Wales        |  | Ship operator          
|BBL Denmark Holding A/S          |  | 100.00% |  | Denmark                  |  | Holding company        
|Britannia Bulk S.A.              |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Flagship Maritime S.A.           |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Baltic Navigation Company S.A.   |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Danmar Shipping S.A.             |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Northern Star Navigation S.A.    |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Navigator Bulk Services S.A.     |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Channel Bulk Services S.A.       |  | 100.00% |  | Panama                   |  | Tug owner and operator 
|Great Belt Shipping Company      |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Atlantic Bulk Services S.A.      |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Western Bulk Services S.A.       |  | 100.00% |  | Panama                   |  | Ship owner and operator
|International Bulk Services S.A. |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Unity Bulk Services S.A.         |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Eastern Bulk Services S.A.       |  | 100.00% |  | Panama                   |  | Dormant                
|Southern Bulk Services S.A.      |  | 100.00% |  | Panama                   |  | Dormant                
|Oceanic Bulk Services S.A.       |  | 100.00% |  | Panama                   |  | Ship owner and operator
|Enterprise Bulk Services S.A.    |  | 100.00% |  | Panama                   |  | Ship owner and operator
|British Bulk Transport S.A.      |  | 100.00% |  | Panama                   |  | Dormant                
|British Bulk Services S.A.       |  | 100.00% |  | Panama                   |  | Dormant                
|British Bulk Carriers S.A.       |  | 100.00% |  | Panama                   |  | Dormant                
|Britannia Bulk Services S.A.     |  | 100.00% |  | Panama                   |  | Dormant                
|Britanic Bulk Services S.A.      |  | 100.00% |  | Panama                   |  | Dormant                
|Nordel Bulk Services S.A.        |  | 100.00% |  | Panama                   |  | Dormant                
|Maden Bulk Services S.A.         |  | 100.00% |  | Panama                   |  | Dormant                

F-7

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

1.    Basis of presentation and general information (Continued)

|Name                                      |  | Owned   |  | Country of incorporation |  | Principal activity              
|----------------------------------------- |  | ------- |  | ------------------------ |  | --------------------------------
|Seamoon Bulk Transport S.A.               |  | 100.00% |  | Panama                   |  | Dormant                         
|Inmotion SEA Transport S.A.               |  | 100.00% |  | Panama                   |  | Dormant                         
|Orion Bulk Services S.A.                  |  | 100.00% |  | Panama                   |  | Dormant                         
|Force Bulk Services S.A.                  |  | 100.00% |  | Panama                   |  | Dormant                         
|Ice Bulk Services S.A.                    |  | 100.00% |  | Panama                   |  | Dormant                         
|Britannia Bulk DK A/S                     |  | 100.00% |  | Denmark                  |  | Tug and barge owner and operator
|Britannia Bulker A/S                      |  | 100.00% |  | Denmark                  |  | Ship operator                   
|Svendborg Ship Management A/S             |  | 100.00% |  | Denmark                  |  | Ship management                 
|Svendborg Marine Surveyors A/S            |  | 100.00% |  | Denmark                  |  | Marine surveyor                 
|Inspecciones Maritimas de Costa Rica S.A. |  | 100.00% |  | Costa Rica               |  | Marine surveyor                 

Fleet

As of December 31, 2007, the Company owns and operates a fleet of ten drybulk vessels, five barges and four tugs.

|Vessel Name     |               | dwt |        | Year built |      | Delivery date |                    | Price
|--------------- | ------------- | --- | ------ | ---------- | ---- | ------------- | ------------------ | -----
|Drybulk Vessels |               |     |        |            |      |               |                    |      
|                | Explorer II   |     | 39,814 |            | 1977 |               | November 30, 2004  |      
|                | Challenger II |     | 39,814 |            | 1977 |               | September 30, 2004 |      
|                | Adventure II  |     | 38,871 |            | 1980 |               | May 27, 2004       |      
|                | Voyager II    |     | 33,288 |            | 1986 |               | November 26, 2004  |      
|                | Discovery II  |     | 32,813 |            | 1984 |               | April 8, 2005      |      
|                | Navigator II  |     | 69,146 |            | 1998 |               | February 27, 2007  |      
|                | Endurance II  |     | 70,029 |            | 1994 |               | April 10, 2007     |      
|                | Endeavour II  |     | 70,003 |            | 1994 |               | May 8, 2007        |      
|                | Commander II  |     | 31,431 |            | 1983 |               | May 2, 2007        |      
|                | Enforcer II   |     | 23,794 |            | 1981 |               | July 11, 2007      |      
|Barges          |               |     |        |            |      |               |                    |      
|                | Drejoe II     |     | 15,820 |            | 1991 |               | December 1, 2005   |      
|                | Hjortoe II    |     | 15,820 |            | 1992 |               | December 1, 2005   |      
|                | Sioe II       |     | 15,820 |            | 1991 |               | December 1, 2005   |      
|                | Skaroe II     |     | 15,820 |            | 1992 |               | December 1, 2005   |      
|                | Iholm II      |     | 9,330  |            | 1979 |               | October 2, 2006    |      
|Tugs            |               |     |        |            |      |               |                    |      
|                | Vregninge II  |     |       |            | 1984 |               | December 1, 2005   |      
|                | Troense II    |     |       |            | 1983 |               | December 1, 2005   |      
|                | Vindeby II    |     |       |            | 1981 |               | December 1, 2005   |      
|                | Vornaes I     |     |       |            | 1970 |               | February 9, 2007   |      

F-8

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

1.    Basis of presentation and general information (Continued)

Customers
individually accounting for more than 10% of the Company's revenues during the years ended December 31, 2007, 2006 and 2005 are as follows:

Year ended December 31,2007

2006

2005CustomerA

*

21%

22
%B

*

*

15C

*

*

*


---

The
amounts due from charters from customer A are $329 at December 31, 2006 and $259 at December 31, 2005.

2.    Significant accounting policies

(a)    Principles of consolidation:The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America, which include the accounts of Britannia Bulk and its wholly-owned or controlled subsidiaries. All intercompany accounts and
transactions have been eliminated in consolidation.

(b)    Reclassifications:Certain prior year amounts have been reclassified to conform to the current year
presentation.

(c)    Use of estimates:The preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America 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 consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these
estimates.

(d)    Concentrations:Financial instruments that potentially subject the Company to concentrations of credit risk
are amounts due from charterers. With respect to amounts due from charterers, the Company attempts to limit its credit risk by performing ongoing credit evaluations and, when necessary, requiring
letters of credit, guarantees or collateral.

All
cash balances are held by large financial institutions in order to minimize financial risk.

(e)    Reporting currency:The functional currency of the Company's vessel operating subsidiaries is the United
States ("US") dollar because the Company's vessels operate in international shipping markets that utilize the US dollar as the functional currency. The accounting records of the Company are maintained
in US dollars. Transactions involving other currencies during the year are converted into US dollars using the exchange rates in effect at the time of the transactions. Monetary assets and liabilities
that are denominated in currencies other than the US dollar are translated into the functional

F-9

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

2.    Significant accounting policies (Continued)

currency
using the exchange rate at the balance sheet date. Gains or losses resulting from foreign currency transactions are included in the accompanying consolidated statements of operations as
foreign currency gains and losses, net.

The
par value of the Company's ordinary shares is £1 and is stated at $1.79. Foreign exchange differences related to ordinary share issuances are recorded as an adjustment to
additional paid in capital on the date the transaction is completed.

(f)    Revenue recognition:Revenues are generated from contracts of affreightment, time charter and voyage
agreements. Revenues from time charters are accounted for as operating leases and are thus recognized ratably over the periods of such charters. Contracts of affreightment and voyage charter revenues
are recognized on a pro-rata basis over the duration of the voyage. A voyage is deemed to commence upon the completion of discharge of the vessel's previous cargo and is deemed to end upon
the completion of discharge of the current cargo. Losses on voyages are provided for in full at the time such losses can be estimated. Demurrage income represents payments by the customer to the
vessel owner when loading or discharging time exceeded the stipulated time in the voyage charter. Demurrage income is recognized when earned.

The
consolidated balance sheets reflect the deferred portion of revenues and expenses, which will be earned in subsequent periods.

(g)    Cash and cash equivalents:The Company considers highly liquid investments, such as a time deposits and
certificates of deposit, with an original maturity of three months or less when purchased to be cash equivalents.

(h)    Fair value of financial instruments:The estimated fair values of the Company's current financial
instruments approximate their individual carrying amounts as of December 31, 2007 and 2006.

(i)    Derivatives:Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" ("FAS 133") requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are
not effective hedges must be adjusted to fair value through earnings. If the derivative is an effective hedge, depending on the nature of the hedge, a change in the fair value of the derivative is
either offset against the change in fair value of the hedged item (fair value hedge), or recognized in other comprehensive income/(loss) and is reclassified into earnings in the same period or periods
during which the hedge transaction affects earnings (cash flow hedge). The ineffective portion (that is, the change in fair value of the derivative that does not offset the change in fair value of the
hedged item) of an effective hedge and the full amount of derivative instruments that do not qualify for hedge accounting are immediately recognized in earnings.

The
Company may from time to time utilize forward freight agreements to reduce its exposure to the variability in the cash flows inherent in the spot charter market. The forward freight
agreements involved contracts to provide a fixed number of theoretical voyages at fixed rates, which contracts generally range from one month to one year and settle monthly based on a published index.
Forward freight agreements that meet the effectiveness threshold required by FAS 133 are accounted for as effective cash flow hedges.

F-10

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

2.    Significant accounting policies (Continued)

(j)    Due from charterers:The majority of the Company's accounts receivable are due from companies in the coal
industry. Credit is extended based on evaluation of a customers' financial condition and, generally, collateral is not required. Accounts receivable are due upon commencement of the voyage and are
stated at amounts due from charterers net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its
allowance by considering a number of factors, including the length of time accounts receivable are past due, the Company's previous loss history, the customer's current ability to pay its obligation
to the Company, and the condition of the general economy and the industry as a whole. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently
received on such receivables are credited to the allowance for doubtful accounts. An allowance for doubtful accounts has been recorded at December 31, 2007, 2006 and 2005, of $974, $324 and $0,
respectively. The Company wrote off accounts receivable of $19, $144 and $0 for the years ended December 31, 2007, 2006 and 2005, respectively.

(k)    Inventory:Inventory consists of consumable bunkers (if any), lubricants and victualing stores, which are
stated at the lower of cost or market. Cost is determined by the first-in, first-out method.

(l)    Vessel acquisitions:When the Company enters into an acquisition transaction, it determines whether the
acquisition transaction was the purchase of an asset or a business based on the facts and circumstances of the transaction. As is customary in the shipping industry the purchase of a vessel is
normally treated as a purchase of an asset as the historical operating data for the vessel is not available.

(m)    Vessels and other fixed assets:Vessels and other fixed assets, net are stated at cost less accumulated
depreciation. Vessels and other fixed assets are depreciated when the asset is ready for its intended use.

Depreciation
is calculated, based on cost, less estimated residual value, using the straight-line method, over the remaining economic life of each asset. The costs of
significant replacements, renewals and betterments are capitalized and depreciated over the shorter of the asset's remaining estimated useful life or the estimated life of the renewal or betterment.
Expenditures for routine maintenance and repairs are expensed as incurred.

Following
are the estimated useful lives of vessels and other fixed assets:



F-11

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

2.    Significant accounting policies (Continued)



(n)    Deferred revenue:Deferred revenue primarily relates to cash received from customers prior to it being
earned. These amounts are recognized as income when earned.

(o)    Voyage expenses:Voyage expenses are expenses unique to a particular voyage, including bunker fuel expenses,
port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Voyage expenses are recognized as incurred.

(p)    Vessel operating expenses:Vessel operating expenses include crew wages and related costs, the cost of
insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, and other miscellaneous expenses. Vessel operating expenses are recognized as incurred.

(q)    Taxes collected from customers and remitted to governmental authorities:On January 1, 2007, the
Company adopted EITF No. 06-3,How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That
Is, Gross versus Net Presentation)("EITF 06-3"). EITF 06-3 provides guidance regarding accounting for certain taxes assessed by a
governmental authority that are imposed on and concurrent with specific revenue-producing transactions between a seller and a customer. The Company currently records value added tax charges and other
taxes and surcharges that are billed to customers on a net basis in its results of operations.

(r)    Impairment of long-lived assets, intangible assets and goodwill:The Company follows SFAS
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets," which addresses financial accounting and reporting for the impairment or disposal of long-lived
assets. The standard requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be recoverable. When the estimates of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is
less than its carrying amount, the asset is considered impaired. Measurement of the impairment loss is based on the difference between the net book value of the asset and its fair value. In this
respect, management regularly reviews the carrying value of each vessel in comparison with its fair value as provided by third parties. Goodwill is not amortized, but reviewed for impairment annually
or more frequently if impairment indicators arise. Intangible assets with finite lives are amortized over their estimated useful lives. For the year ended December 31, 2006 goodwill of $33 was
written off. For the years ended December 31, 2007 and 2006 there was no goodwill recorded in the Company's Balance Sheet.

(s)    Deferred drydocking costs:The Company's vessels are required to be drydocked approximately every 30 to
60 months for major repairs and maintenance that cannot be performed while the vessels are operating. The Company capitalizes the costs associated with the drydockings as they occur and
amortizes these costs on a straight-line basis over the period between drydockings. Costs capitalized as part of a vessel's drydocking include actual costs incurred at the drydocking yard;
cost of

F-12

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

2.    Significant accounting policies (Continued)

parts
that are reasonably made in anticipation of reducing the duration or cost of the drydocking; cost of travel, lodging and subsistence of personnel sent to the drydocking site to supervise; and
the cost of hiring a third party to oversee the drydocking. On acquisition an estimate is made of drydock costs included in the purchase price of a vessel and allocated accordingly.

(t)    Deferred financing costs:Deferred financing costs, included in other assets, consist of fees and legal
expenses associated with the bond issue in November 2006. These costs are amortized over the life of the related debt using the effective interest method with amortization charges included in interest
expense.

(u)    Earnings per Ordinary Share:Basic earnings per ordinary share are computed by dividing net income available
to ordinary shareholders by the weighted average number of shares outstanding during the year. For the years ended December 31, 2007, 2006 and 2005, the Company had no dilutive securities.

(v)    Taxes:The Company is not liable for the payment of any income tax on its income, except for management
operations in Denmark, which is insignificant. Instead, a tax is levied based on the tonnage tax regime of the United Kingdom ("UK"). Under the UK tonnage tax regime, shipping profits, as defined
under the applicable law, are subject to corporation tax by reference to the net tonnage of qualifying vessels. Income not considered to be shipping profits under tonnage tax rules is taxable under
the normal UK income tax rules. Management believes that substantially all of the income attributable to the Company's operations constitutes shipping profits and, accordingly, UK income tax expenses
for these operations has been and is expected to be minimal under the current tax regime. Pursuant to various tax treaties, the Company's shipping operations are not subject to foreign
income Taxes. Therefore, no provision for income taxes for income generated from shipping operations is required. The Company records interest and penalties related to its tax liabilities as part of
its taxes.

(w)    Segment reporting:The Company reports financial information and evaluates its operations by charter
revenues and not by the length of ship employment for its customers, i.e. spot or time charters. The Company does not have discrete financial information to evaluate the operating results for
each such type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these
charters. As a result, management, including the chief operating decision makers, reviews operating results solely by revenue per day and operating results of the fleet and thus the Company has
determined that it operates as one reportable segment. Furthermore, when the Company charters a vessel to a customer, the customer is free to trade the vessel worldwide and, as a result, the
disclosure of geographic information is impracticable.

(x)    New accounting pronouncements:In February 2007, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 159,The Fair Value Option for Financial Assets and Financial Liabilities. SFAS
No. 159 provides companies with an option to report selected financial assets and liabilities at fair value. SFAS No. 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 does not eliminate disclosure
requirements included in other accounting standards, including requirements

F-13

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

2.    Significant accounting policies (Continued)

for
disclosures about fair value measurements included in SFAS No. 157 and SFAS No. 107, Disclosures about Fair Value of Financial Instruments. The Company is required to adopt SFAS
No. 159 effective January 1, 2009 and is currently evaluating the impact of SFAS No. 159 on its consolidated financial statements.

The
FASB issued SFAS No. 157 ("SFAS 157") on September 15, 2006. SFAS No. 157 enhances existing guidance for measuring assets and liabilities using fair
value. Previously, guidance for applying fair value was incorporated in several accounting pronouncements. The new statement provides a single definition of fair value, together with a framework for
measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. While the statement does not add any new fair value measurements, it does change current
practice. One such change is a requirement to adjust the value of non-vested stock for the effect of the restriction even if the restriction lapses within one year. SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The adoption of SFAS No. 157 on
January 1, 2008, is not expected to have a material impact on the consolidated financial statements of the Company.

In
September 2006, the SEC ("SEC") issued SAB No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements,
which provides interpretive guidance on how registrants should quantify financial statement misstatements. Under SAB No. 108 registrants are required to consider both a "rollover" method, which
focuses primarily on the
income statement impact of misstatements, and the "iron curtain" method, which focuses primarily on the balance sheet impact of misstatements. The effects of prior year uncorrected errors include the
potential accumulation of improper amounts that may result in a material misstatement on the balance sheet or the reversal of prior period errors in the current period that result in a material
misstatement of the current period income statement amounts. Adjustments to current or prior period financial statements would be required in the event that after application of various approaches for
assessing materiality of a misstatement in current period financial statements and consideration of all relevant quantitative and qualitative factors, a misstatement is determined to be material. The
Company adopted the provisions of SAB No. 108 as of December 31, 2006. The adoption of SAB No. 108 did not have an effect on the Company's results of financial operations or
financial position.

3.    Acquisitions

Acquisition of Svendborg Ship Management A/S and Svendborg Marine Surveyors A/S

On July 1, 2005, the Company completed the purchase of Svendborg Ship Management A/S and Svendborg Marine Surveyors A/S (collectively "Svendborg") by
acquiring 68% of the outstanding capital stock of Svendborg. Svendborg Ship Management A/S offers professional technical management of tonnage on behalf of owners; services offered include
ISM & ISPS issuance, implementation of manuals and technical auditing as well as manning, maintenance, technical upgrading, drydocking, stores/provisions purchase, consultancy and accounting
service. Svendborg Marine Surveyors A/S offers and provides for independent marine inspections/surveys and survey of cargo including draft surveys as well as acting as port captains/supercargoes on
behalf of ship-owners.

F-14

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

3.    Acquisitions (Continued)

The
Company acquired Svendborg to expand its portfolio of shipping services offered to its customers to include ship maintenance and management services. The acquisition also provides
established relationships in international markets and provides shipping services to a wider customer base.

The
aggregate purchase price paid by the Company for Svendborg was $407 in cash. The purchase price was allocated to tangible and identifiable intangible assets acquired and liabilities
assumed based on their estimated fair values at the acquisition date. The purchase price was allocated as follows:

Cash

$
305Accounts receivable


51Inventory


221Property and equipment


298Investments


63Accounts payable


(557
)Minority interest


(7
)374Goodwill


33Net purchase price

$
407


The
allocation of the purchase price was based on the fair value of identifiable intangible assets, and certain property, plant and equipment.

The
results of Svendborg have been included in the consolidated financial statements since the date of acquisition of July 1, 2005.

This
acquisition has not been presented on a pro forma basis because it is not deemed to be material. On May 1, 2007, Britannia completed the repurchase of the remaining minority
interest holding of 32% of the shares in Svendborg Ship Management for a total of $160.

4.    Reorganization

In November 2007, the Company effectuated a corporate reorganization whereby the Company became the wholly owned subsidiary of Holdings, a public limited company
incorporated in England and Wales. As a result of the reorganization, the former shareholders of the Company are now the shareholders of Holdings.

Shortly
after the reorganization, Holdings incorporated a new wholly-owned subsidiary, Britannia Bulk Finance Limited ("BBF"), a sister company to the Company. BBF and Holdings entered
into memoranda of agreement to acquire six new-built ice-class Panamax bulk carriers, which are expected to be delivered between March 2009 and June 2010. In connection with
the acquisition of these six vessels, BBF, as borrower, and Holdings, as guarantor, entered into a $75.9 million credit agreement to fund the deposit for the vessels. The Company was party to
neither the memoranda of agreement, nor the credit agreement. The financing is non-recourse to the Company and its subsidiaries.

F-15

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

5.    Transactions with related parties

The following are related party transactions not disclosed elsewhere in these consolidated financial statements:

Transactions with related companies

The Company is related to Rainbow Shipping Group Limited (formerly Rainbow Shipping Group plc) ("Rainbow"). As of December 31, 2007 and 2006, three
of the Company's directors hold a 34% minority interest in Rainbow. During the year ended December 31, 2005, Rainbow provided administrative and sales support to the Company and provided office
space for the Company's administrative staff. Staff costs and overheads incurred by Rainbow on behalf of the Company during the years ended December 31, 2007, 2006 and 2005 were $0, $0 and
$131, respectively. As of December 31, 2007 and 2006, there was no amount outstanding to Rainbow. No further staff costs and overheads will be incurred by Rainbow on behalf of the Company in
the future.

The
Company incurred expenses on behalf of Holdings and BBF of $1,416 and $325, respectively, during the year ended December 31, 2007.

Transactions with shareholders

During the years ended December 31, 2007 and 2006 a company controlled by one of the shareholders provided ship brokering services to the Company under a
consultancy agreement. Expenses aggregated approximately $248 and $189 for the years ended December 31, 2007 and 2006, respectively. No ship brokering services were provided under this
agreement in prior years.

The
Company was initially capitalized primarily with consideration provided by three of the Company's employees and an outside investor valued at $15,018. The consideration was primarily
in the form of vessels (collectively, the "Contributed Property") by the employees and the outside investor. The contributions were made during the period from the Company's formation through
June 16, 2004.

During
the year ended December 31, 2004, the Company issued shareholder loans to three of its employees and an outside investor valued at approximately $14,828 in consideration
for the Contributed Property. The shareholder loans were unsecured, interest free and repayable on demand. On December 10, 2004, the Company extinguished $4,775 of the shareholder loans through
the exchange of 2,667,519 ordinary shares. The value of the ordinary shares issued was based on the price of the portion of the shareholder loans extinguished. The Company assessed that the fair value
of the extinguished shareholder loans approximated the fair value of the ordinary shares issued. In consideration of the stage of the Company's growth, management believed that the value of the
shareholder loans was more clearly evident and more objectively determinable than the value of the ordinary shares issued at the time of the exchange. The Company did not recognize any gain or loss on
the extinguishment of the shareholder loans. As of December 31, 2004, there was a balance of $10,053 remaining on the original shareholder loans.

On
April 6, 2005 and September 1, 2005 the Company exchanged $5,121 and $4,932, respectively of the shareholder loans into 2,667,119 and 2,735,523 ordinary shares,
respectively. Similar to the exchange that took place on December 10, 2004 the value of the ordinary shares issued was based on the price for the extinguished shareholder loans.

F-16

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

5.    Transactions with related parties (Continued)

On
November 18, 2005 in an effort to raise additional capital, the Company issued 487,369 ordinary shares for cash consideration of $849. On December 28, 2005, the Company
issued 24,827 shares of common stock for cash consideration of $311.

6.    Inventories

Inventories shown in the accompanying consolidated balance sheets are analyzed as follows:

2007

2006Bunker fuel

$
12,252

$
350Ship store


466


333$
12,718

$
683


Bunker
fuel includes fuel on vessels that are operating under the control of the Company. As of December 31, 2007 and 2006, the Company's fleet included 63 and 33 owned and
chartered-in vessels, respectively.

7.    Vessels and other fixed assets and deferred drydocking costs

Vessels and other fixed assets and deferred drydocking costs shown in the accompanying consolidated balance sheets consist of the following:

2007

2006Vessels

$
172,685

$
54,268Furniture and fixtures


692


487Building


661


229174,038


54,984Less accumulated depreciation


(30,634
)

(12,302
)$
143,404

$
42,682


|
|

2007

2006Deferred drydocking costs

$
15,911

$
7,566Less accumulated amortization


(6,841
)

(2,667
)$
9,070

$
4,899


Depreciation
and amortization expense for the years ended December 31, 2007, 2006 and 2005 was $22,564, $10,894 and $9,341 respectively. For the years ended December 31,
2007 and 2006, fully depreciated drydocking costs and other assets of $57 and $6,380, respectively, have been written off.

F-17

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

8.    Accrued expenses and other liabilities

Accrued expenses consist of the following:

2007

2006Bunker fuel accruals

$
4,440

$
Port cost accruals


3,045


1,285Ship accruals


817


131Voyage expense accruals


8,555


1,599Deposits from charterers


8,162


430Bond interest accruals


1,696


2,544Compensation related tax accruals


1,434


381Holiday accruals


590


361Office rent accruals


303


Other accruals


376


220$
29,418

$
6,951


As
of December 31, 2007 and 2006, there were 59 and 30 voyages in progress as at year end, respectively.

9.    Long-term debt

On November 16, 2006, Britannia Bulk Plc raised $185,000 through a private placement bond issue of 11% Senior Secured Notes (the "Notes"). The Notes
are subject to an Indenture dated November 16, 2006 between Britannia Bulk and Wilmington Trust Company, as trustee for the Note holders (the "Indenture"). The Notes will mature on
December 1, 2011. The Notes were issued at a discount rate of 93.622%, resulting in net proceeds of $173,201 to Britannia Bulk. The Notes accrue interest at a rate of 11% of the principal
amount per annum. Interest on the Notes will be payable semi-annually in arrears on December 1 and June 1 of each year, commencing June 1, 2007.

The
discount of $11,799 is being amortized to interest expense over the term of the Notes. The unamortized balance at December 31, 2007 was $9,710.

Fees
incurred in connection with the Notes totaled $7,238 and are being amortized to interest expense over the terms of the Notes. The unamortized balance at December 31, 2007 was
$5,955.

The
net proceeds to Britannia Bulk, after payment of fees incurred in connection with the issuance of the Notes, of $166,374 were used to repay all other then outstanding
long-term debt of $20,724, fund working capital requirements of $5,650 and to fund the Vessel Acquisition Account.

Concurrently
with the issuance of the Notes, Britannia Bulk deposited into a Vessel Acquisition Account the sum of $140,000. The Vessel Acquisition Account is a secured collateral
account administered by the Wilmington Trust Company, for the benefit of the Note holders. These funds will be released for the purpose of purchasing vessels, subject to certain conditions, including
that each acquired vessel becomes additional collateral for the Notes. Amounts in the Vessel Acquisition Account may also be released to make certain interest payments, to make certain capital
expenditures and at maturity to repay the Notes or redeem the Notes. Any such offered funds that are not used to

F-18

---



BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

9.    Long-term debt (Continued)

repurchase
Notes in such offer will remain in the Vessel Acquisition Account. The proceeds deposited into the Vessel Acquisition Account were invested temporary cash investments as permitted under the
Indenture, which generated interest income of $2,690 and $252 through December 31, 2007 and 2006, respectively. As of December 31, 2007, Britannia Bulk has made payments totaling
$122,514 related to vessel acquisitions funded from the proceeds held in the Vessel Acquisition Account. The Company took delivery of the Navigator II on February 27, 2007 for a purchase price
of $28,500, the Endurance II on April 10, 2007 for $36,735, the Endeavour II on May 8, 2007 for $36,735, the Commander II on May 2, 2007 for $10,750, and the
Enforcer II on July 11, 2007 for $6,244. On August 7, 2007, Britannia Bulk paid deposits totaling $3,550 for the Ice Power II and the Ice Trader II. In accordance with the terms of the
indenture, interest payments of $10,175 and $11,023 were made on November 30, 2007 and May 30, 2007, respectively, relating to the period from November 16, 2006 to
December 1, 2007. The balance remaining in the Vessel Acquisition Account as of December 31, 2007 and December 31, 2006 was $544 and $138,133, respectively.

The
bonds are secured by a first priority lien for the benefit of the holders of the Notes by (i) Britannia Bulk's existing vessels, including five drybulk vessels, five barges
and three tugs, (ii) vessels acquired with the net proceeds of the original offering and (iii) related collateral including the Vessel Acquisition Account.

Britannia
Bulk may redeem some or all of the Notes, at its option, in whole or in part at any time after December 1, 2009 at specified redemption prices as defined in the
Indenture, with accrued and unpaid interest, if any, to the date of redemption.

Prior
to December 1, 2009, Britannia Bulk, at its option, may redeem up to 35% of the aggregate principal amount of the Notes with the net proceeds of certain equity offerings at
a redemption price of 112.75% of the accreted value of the Notes, plus accrued and unpaid interest to the date of redemption.

If
a change of control occurs, subject to certain conditions, Britannia Bulk must offer the Note holders an opportunity to sell to Britannia Bulk their exchange Notes at a purchase price
of 101% of the accreted value of the Notes, plus accrued and unpaid interest to the date of the purchase.

Within
60 days after December 31, 2007 and each subsequent fiscal year, Britannia Bulk will be required to use a specified percentage of its excess cash flow, as defined in
the Indenture, if such excess cash flow exceeds $5,000, to make a pro rata offer to purchase the bonds at a price equal to 101% of the accreted value thereof plus accrued and unpaid interest to the
date of purchase. The percentage of excess cash flow required to be used to offer to repurchase Notes will be 100% with respect to the initial period ending December 31, 2007 and fiscal year
2008, and thereafter will be 50% for each subsequent fiscal year. If the amount of the Notes tendered pursuant to such offer is less than the offered excess cash flow amount, such remaining amounts
shall be deposited in the Vessel Acquisition Account. If the Note holders were to accept Britannia Bulk's pro rata offer to purchase the Notes, based on the excess cash flow calculation at
December 31, 2007, Britannia Bulk would be required to make an offer equal to $52,560. To the extent that this offer is not accepted the excess cash flow will be deposited in the Vessel
Acquisition Account.

F-19

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BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

9.    Long-term debt (Continued)

The
terms of the Notes contain certain covenants that limit Britannia Bulk's ability and that of certain of its subsidiaries to, among other things:



These
covenants are subject to certain exceptions and qualifications as described in the Indenture. As of December 31, 2007 and 2006, Britannia Bulk was in compliance with all of
the covenants contained in the Indenture.

In
accordance with the Indenture, on March 9, 2007, Britannia Bulk filed a registration statement in order to register Exchange Notes for the purpose of offering to exchange the
Notes for the Exchange Notes. The Exchange Notes will be identical to the Notes except that the Exchange Notes will be registered under the United States Securities Act of 1933 and will not have
restrictions on transfer, registration rights or provisions for special interest and will contain different administrative terms. The Exchange Notes evidence the same debt as the Notes, and the same
Indenture governs the Exchange Notes and the Notes.

10.    Fair value of financial instruments

The principal financial assets of the Company consist of cash on hand and at banks, the vessel acquisition account and accounts receivable due from charters. The
principal financial liabilities of the Company consist of long-term debt and accounts payable and accrued expenses and other liabilities.

The
carrying values of cash and cash equivalents, vessel acquisition account, due from charters, accounts payable and accrued expenses and other liabilities are reasonable estimates of
their fair value due to the short-term nature of these financial instruments.

The
estimated fair values of the Company's long-term debt instruments are as follows:

|                |  | December 31, 2007 |         | December 31, 2006
|--------------- |  | ----------------- | ------- | -----------------
|
|Fixed rate debt |  | $                 | 175,290 |                  

F-20

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BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

10.    Fair value of financial instruments (Continued)

The
fair value of the fixed-rate debt is based on the current quoted market rates for the Company's securities.

11.    Revenue from time charters

The Company's vessels are available for hire. Total revenue earned on time charters for the years ended December 31, 2007, 2006 and 2005 were $133,329,
$12,909 and $33,295, respectively.

Future
minimum time charter revenue based on vessels committed to noncancelable time charter contracts is as follows:

For the years ending December 31,2008

$
119,6682009


42,2712010





12.    Commitments

The Company entered into a new lease agreement for office space in London, United Kingdom during the year ended December 31, 2006. Rent expense for the
years ended December 31, 2007 and 2006, was $274 and $96, respectively. The length of the lease on the new office occupied from January 2007 is 8 years.

Future
minimum lease payments in respect of office space are as follows:

Year ending December 31,2008

$
2882009


2692010


2692011


2692012


269Thereafter


397


The
Company has also entered into time charters with various expiration dates through September 2013. Minimum charter hire payments due for the next five years, including time charters
entered into through May 2015, are as follows:

Year ending December 31,2008

$
285,3502009


142,4082010


138,7982011


127,3972012


109,295Thereafter


123,634


F-21

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BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

12.    Commitments (Continued)

The
Company entered into a two year time charter out agreement to lease out one of its owned vessels on February 27, 2007 at a rate of $25 per day and subsequently leased back the
vessel on October 26, 2007 at a rate of $65 per day for the remainder of the hire term ending on March 30, 2009. The Company has accounted for the time charter in arrangement as a
modification of the time charter out lease agreement that was in substance a termination of the time charter out arrangement. The net remaining excess payments of the time charter in over the time
charter out payments of $20,840 has been accounted for as a direct cost of obtaining the necessary resources to service one of the Company's COA that commenced in January 2008. These direct costs have
been reflected as an asset that will be recognized as an expense over the term of the new COA. This asset will be amortized over the expected term of the new COA commencing in January 2008 and ending
in December 2008, and the corresponding lease termination liability will be reduced until the remaining hire term expires on March 30, 2009.

Memorandum of Agreement

The Company entered into a Memorandum of Agreement, dated August 3, 2007, for the acquisition of two Handymax vessels, Ice Trader II and Ice Power II.
Pursuant to the terms of the Memorandum of Agreement, the Company acquired two 1995-built Handymax vessels for approximately $71,000. The Company took delivery of these vessels on
February 14, and February 18, 2008 and financed these acquisitions through cash available from operations and additional debt financings.

Forward Freight Agreements ("FFAs")

The Company may from time to time enter into drybulk forward freight agreements ("FFAs") as economic hedges relating to identifiable ship and/or cargo positions
and as economic hedges of transactions the Company expects to carry out in the normal course of its shipping business. By utilizing certain derivative instruments, including drybulk shipping FFAs, the
Company may attempt to manage its financial risk associated with fluctuating market conditions. In entering into these contracts, the Company has assumed the risk that counterparties may fail to meet
the terms of their contracts. None of the Company's FFAs qualify for hedge accounting; therefore, the net changes in derivative assets and liabilities are reflected in current period operations. The
Company marks its FFAs to market and recognises gains or losses as incurred. Trading of FFAs could lead to material fluctuations in the Company's reported net income on a
period-to-period basis. The Company classifies cash flows related to the FFAs within cash provided by operating activities in the consolidated statements of cash flows.

The
FFAs are recorded in the consolidated statements of operations under "Loss on forward freight agreement." The net loss from FFAs amounted to $1,247 for the year ended
December 31, 2007.

13.    Pension schemes

The Company maintains individual employee pension schemes set up for individual employees. The contributions made by the Company will be charged to expense as
incurred. The Company has

F-22

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BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

13.    Pension schemes (Continued)

made
no contributions nor recognized any pension scheme expense for the years ended December 31, 2007, 2006 and 2005.

14.    Shareholders' Equity

Earnings per Ordinary Share

Basic earnings per ordinary share are computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per
ordinary share reflect the potential dilution that could occur if securities or other contracts to issue ordinary stock were exercised. For the years ended December 31, 2007 and 2006, the
Company had no dilutive securities.

Antidilution

The Company shall not issue any share capital without first offering it to existing shareholders, on identical terms, in proportion to their then shareholdings in
the Company unless the Company shall be authorized at a shareholders' meeting to do so by members holding not less than 60% in nominal value of the shares issued by the Company.

Share transfers

No shareholder shall assign, transfer, exchange, pledge, mortgage, charge or otherwise encumber or dispose of any interest in any of the shares held by it except
as authorized by more than 50% of the shareholders unless the transfer is a compulsory transfer. A compulsory transfer of shares occurs if a shareholder resigns as a director or employee; or on a
corporate winding up; or fails to remedy a material breach, as defined in the agreement, within 30 days of notification.

Share repurchase

In April 2007, Britannia Bulk entered into a purchase agreement with North Western Neva Limited ("Neva"), a shareholder, to repurchase 434,168 shares of Britannia
Bulk's ordinary shares in three separate tranches. The purchase agreement with Neva was initiated at Neva's request and was not part of any previously existing agreement with the Company. The purchase
of the first tranche was completed on April 16, 2007 for 159,681 shares for a total consideration of $2,758. The purchase of the second tranche was scheduled for April 15, 2008 for
159,681 shares for a total consideration of $2,758. The purchase of the third tranche was scheduled for April 15, 2009 for 114,806 shares for a total consideration of $1,984. The purchase
agreement also included a provision whereby the Company's shareholders had the option to purchase the remaining shares of 44,875 held by Neva for $775.

In
November 2007, this agreement was amended enabling Britannia Bulk to complete the repurchase of the outstanding second and third tranches of ordinary shares immediately. As a result
of the amendment, on November 14, 2007, Britannia Bulk repurchased 274,487 ordinary shares for $4,742.

Simultaneous
with the execution of the amended agreement, the Company's chief executive officer repurchased 44,875 ordinary shares held by Neva and who in turn sold those shares to
Britannia Bulk for $150 pursuant to a plan approved by the Company's board. Neva agreed to the discounted sale

F-23

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BRITANNIA BULK PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2007, 2006 and 2005

(Dollars in thousands, except share and per share amounts)

14.    Shareholders' Equity (Continued)

price
for the remaining 44,875 shares on the basis that Neva would be able to sell its shares for cash approximately two years in advance of the previously agreed repurchase date.

The
Indenture Agreement governing the Notes includes a provision limiting the aggregate expenditures the Company can make for share repurchases from outside shareholders to $7,500, but
permits the Company to make incremental share purchases from employees of up to $500.

Share issue

In February 2006, the Company sold 1,000 shares to outside shipping broker, Robson Shipping and Trading (Dublin) Limited ("Robson") for $13. The Company offered
Robson the opportunity to purchase the shares to strengthen the relationship between Robson and the Company. The share price was equal to the price offered to employees in the Company during the
previous year which was determined by the board of directors.

15.    Contingencies

From time to time the Company may be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property
casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Company is not aware of any legal proceedings or claims that
it believes will have, individually or in the aggregate, a material adverse effect on the Company, its financial condition, results of operations or cash flows.

In
the normal course of business the Company enters into contracts that contain a variety of indemnifications with its customers, suppliers and service providers. Further, the Company
indemnifies
its directors and officers who are, or were, serving at the Company's request in such capacities. The Company's maximum exposure under these arrangements is unknown as of December 31, 2007. The
Company does not anticipate recognizing any significant losses relating to these arrangements.

16.    Subsequent Events

On February 13, 2008, in connection with financing the purchase price for the acquisition of the Ice Trader II and the Ice Power II, Britannia
Bulk Plc, as borrower, entered into a loan agreement relating to a secured bridge term loan facility with Lloyds TSB Bank Plc as original lender, agent and security trustee. Pursuant to
the terms of the loan agreement, two of our wholly-owned subsidiaries, Enterprise Bulk Services S.A. and Oceanic Bulk S.A., entered into guarantee agreements with the security trustee.
The senior secured bridge facility consists of a $30,000 term bridge loan facility expiring on November 27, 2008 and currently bears interest at a rate equal to the London Interbank Offered
Rate, or LIBOR, plus 2%.

F-24

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ITEM 19.    EXHIBITS

The following instruments and documents are included as exhibits to this annual report.

|1.1*   |  | Memorandum of Association of Britannia Bulk Plc.                                                                                                                                                                
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.2*   |  | Articles of Association of Britannia Bulk Plc.                                                                                                                                                                  
|2.1*   |  | Registration Rights Agreement dated as of November 16, 2006 by and among Britannia Bulk Plc, the Guarantors party thereto and Jefferies & Company, Inc., ABN AMRO, Incorporated and DAVY, as Initial Purchasers.
|2.2*   |  | Indenture dated as of November 16, 2006 by and among Britannia Bulk Plc, the Guarantors party thereto and Wilmington Trust Company, as trustee.                                                                 
|2.3*   |  | Form of 11% Senior Secured Note Due 2011.                                                                                                                                                                       
|2.4*   |  | First Supplemental Indenture dated as of February 6, 2007 by and among Britannia Bulk Plc, the Guarantors party thereto and Wilmington Trust Company, as trustee.                                               
|2.5*   |  | Second Supplemental Indenture dated as of February 9, 2007 by and among Britannia Bulk Plc, the Guarantors party thereto and Wilmington Trust Company, as trustee.                                              
|2.6   |  | Third Supplemental Indenture dated as of August 9, 2007 by and among Britannia Bulk Plc, the Guarantors party thereto and Wilmington Trust Company, as Trustee.                                                 
|4.1*   |  | Form of First Preferred Ship Mortgage dated as of November 16, 2006 by the mortgagor.**                                                                                                                         
|4.2*   |  | Form of Assignment of Insurances dated as of November 16, 2006 by and between the mortgagor and Wilmington Trust Company, as trustee.**                                                                         
|4.3*   |  | Form of Assignment of Earnings dated as of November 16, 2006 by and between the mortgagor and Wilmington Trust Company, as trustee.**                                                                           
|4.4*** |  | Memorandum of Agreement dated as of March 30, 2005 by and between Britannia Bulk S.A., a company fully guaranteed by Britannia Bulk Plc and Dermaga Shipping Co. Ltd.                                           
|4.5*** |  | Memorandum of Agreement dated as of August 30, 2006 by and between Britannia Bulk Plc and Pan Shipping L.P.                                                                                                     
|4.6*** |  | Memorandum of Agreement dated as of February 9, 2007 by and between Britannia Bulk Plc and Human Owning Company Limited.                                                                                        
|4.7*** |  | Memorandum of Agreement dated as of January 16, 2007 by and between Britannia Bulk Plc and Classical Owning Company Limited.                                                                                    
|4.8*** |  | Memorandum of Agreement dated as of March 12, 2007 by and between Britannia Bulk Plc and Argo Shipholding Inc.                                                                                                  
|4.9   |  | Memorandum of Agreement dated as of October 24, 2007 by and between Britannia Bulk Plc (or a guaranteed nominee thereof) and Erik Thun AB and B&N Rederi AB.                                                    
|4.10  |  | Memorandum of Agreement dated as of July 27, 2007 by and between Britannia Bulk Plc (or a guaranteed nominee thereof) and Franklin GmbH and Co. KG.                                                             
|4.11  |  | Memorandum of Agreement dated as of July 27, 2007 by and between Britannia Bulk Plc (or a guaranteed nominee thereof) and Baffin GmbH and Co. KG.                                                               
|4.12  |  | $30,000,000 Loan Agreement dated February 13, 2007 by and among Britannia Bulk Plc, the Lenders listed thereto and Lloyds TSB Bank Plc as lender, agent and security trustee.                                   
|7.1   |  | Computation of Ratio of Earnings to Fixed Charges.                                                                                                                                                              
|11.1  |  | Code of Ethics.                                                                                                                                                                                                 

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|12.1 |  | Certification of Principal Executive Officer.                                                        
|----- |  | -----------------------------------------------------------------------------------------------------
|12.2 |  | Certification of Principal Financial Officer.                                                        
|13.1 |  | Certification under Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer.
|13.2 |  | Certification under Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer.

---

Notes:

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant hereby certifies that it meets all of the requirements for filing on
Form 20-F and that it has duly caused and authorised the undersigned to sign this annual report on its behalf.

| |  | BRITANNIA BULK PLC
| |  | ------------------
| |  | By:               

Date:
March 26, 2008

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