NEW ORLEANS, LOUISIANA -- Avondale Industries, Inc. (NASDAQ/NMS-AVDL) announced today that it has signed a contract with a member of the Primorsk Shipping Group of Nakhodka, Russia for the construction of seven 42,000 DWT Product Carriers. The value of the contract is undisclosed at this time. The Primorsk Shipping Group is the second largest Russian tanker company and has 4,300 employees. The contract is subject to the receipt of a Title XI financing guarantee from the U.S. Maritime Administration ( MARAD ) and subject to the satisfaction of certain other conditions. These Primorsk Class double hull vessels will be non-U.S. flag and will comply with all of the requirements of the Oil Pollution Act of 1990. Delivery of all seven vessels is scheduled prior to the end of 1998. At peak manning this project will employ 1,550 people at the shipyard. Mr. Albert L. Bossier, Jr., Avondale s Chief Executive Officer, said This is a significant event in our strategic plan for increasing our commercial activities. Our current shipyard modernization effort which is financed primarily using the Marad Title XI program played an important role in our ability to compete effectively in both the domestic and the international commercial market. The Avondale modernization effort involves a $20 million facility upgrade that will provide efficient steel fabrication under cover. The area of the new steel processing factory is approximately 570,000 square feet. Principals from Primorsk visited Avondale and Washington, D.C. this past week to negotiate with Avondale officials. Marad met with representatives of both companies to begin discussions associated with the project. This represents the third major commercial contract that Avondale has received this year. The Title XI program was instrumental in allowing Avondale to secure this new business. Avondale Industries, Inc., headquartered in metro New Orleans, is one of the nation's leading marine fabricators. In addition to its shipbuilding operations, the Company specializes in boat construction and is a major repair contractor for commercial and Navy ships. It is also involved in the modular construction of plants and components for a variety of land-based industries.