The Port of Galveston has been notified by its financial advisor, BMO Capital Markets, that the initial proposal presented to the Board of Trustees of the Galveston Wharves on February 14, 2011 by Hutchinson Port Holdings and the Carlyle Group has been formally withdrawn. Hutchinson Port Holdings has also withdrawn from the joint venture with The Carlyle Group. The Port was not given the reason for the withdrawal.

The Hutchinson Port Holdings and Carlyle Group joint venture was viewed as a unique opportunity for overall business growth for the Galveston Bay region and the Port was surprised to learn that the proposal was withdrawn so suddenly. Over the past month, the Port of Galveston had been busy in preparation of the commencement of negotiations to finalize an agreement.

BMO Capital Markets has already has been in contact with several entities that had indicated their initial interest to examine this public private partnership opportunity. Based on these conversations, it is anticipated that this will result in one or more alternatives for the Board of Trustees of the Galveston Wharves to consider in moving forward.