Liberty Shipping Proposes to Acquire International Shipholding for $25.75 Per Share...

Liberty Shipping Proposes to Acquire International Shipholding for $25.75 Per Share in Cash

LAKE SUCCESS, N.Y.--(Business Wire)--
Liberty Shipping Group LLC ("Liberty"), through its wholly-owned
subsidiary, Projection LLC, announced today that it has sent a letter
to the International Shipholding Corporation (NYSE: ISH)
("International Shipholding") Board of Directors proposing to acquire
all of the outstanding shares of International Shipholding common
stock for $25.75 per share in cash. Liberty's all-cash proposal
represents a 27% premium over the closing price of International
Shipholding on August 29, 2008, the last trading day prior to public
disclosure of Liberty's proposal.

"We believe a combination of Liberty and International Shipholding
is compelling and delivers significant value to the International
Shipholding stockholders," said Philip J. Shapiro, President and Chief
Executive Officer of Liberty. "We are confident that combining our two
companies would create a stronger and more competitive entity that is
better positioned for future growth. We look forward to working with
International Shipholding to consummate a transaction quickly."

Jefferies & Company, Inc. is acting as financial advisor to
Liberty and Gibson, Dunn & Crutcher LLP is acting as legal counsel.

Below is the text of the letter that was sent to the International
Shipholding Board of Directors:

-0-
*T
September 2, 2008

The Board of Directors of International Shipholding Corporation
11 North Water Street, Suite 18290
Mobile, AL 36602
*T

Gentlemen:

On behalf of Projection LLC, a wholly owned subsidiary of Liberty
Shipping Group LLC, I am pleased to submit our proposal to acquire all
of the outstanding common stock of International Shipholding
Corporation (the "Company") at a purchase price of $25.75 per share,
payable in cash, which represents a total enterprise value of
approximately $308 million. Our proposal represents a 27% premium over
the Company common stock's closing price of $20.25 per share on August
29, 2008.

We believe that our proposal will deliver significant value to and
be enthusiastically supported by your stockholders. While our proposal
is based on a review of publicly available information, we would be
pleased to meet with you to consider any non-public information that
may support an improvement to our proposal. We are also prepared to
discuss with members of the Johnsen family the possibility of allowing
them to rollover part of their existing interest in the Company into
equity of the combined company in a tax efficient manner.

Our proposal is subject to confirmatory due diligence, which we
are prepared to commence immediately. Assuming we are granted access
to complete information promptly, we believe we would be in a position
to finalize the confirmatory due diligence quickly given our
understanding of your business and our industry expertise. Our
proposal is also subject to the negotiation of a mutually satisfactory
definitive merger agreement and the receipt of all necessary
regulatory approvals - all of which we intend to work towards
simultaneously with our due diligence efforts. We do not anticipate
any antitrust or other issues that would delay our ability to
consummate the transaction on an accelerated basis. We do not
anticipate that the transaction will be subject to any financing
condition.

We have already dedicated considerable time and resources to an
analysis of a potential transaction. We have retained Jefferies &
Company, Inc. as our financial advisor and Gibson, Dunn & Crutcher LLP
as our legal advisor. Our team is prepared to devote the additional
time and resources necessary to ensure a smooth and expedited process.

Our preference is to work together with you and your advisors to
negotiate and announce a definitive agreement between our companies in
the near term. Our proposal to acquire the Company represents a unique
and compelling opportunity to create a stronger combined company that
will be well positioned to succeed in the vital U.S. seaborne
transportation sector.

Our leadership team and advisors remain prepared to meet with you
and your advisors at your earliest convenience to conduct the
necessary due diligence and negotiate a merger agreement. In light of
the importance of this proposal to your stockholders, we reserve the
right to make a tender offer for some or all of the outstanding shares
of common stock of the Company, seek representation on the Board of
Directors of the Company or pursue other available courses of action
to bring our proposal directly to your stockholders.

As always, you can reach me in my office or on my cell phone. We
look forward to hearing from you soon.

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*T
Very truly yours,

/s/ Philip J. Shapiro
Philip J. Shapiro
Chairman of the Board, President and Chief Executive Officer
*T

About Liberty Shipping Group LLC

Liberty Shipping Group LLC and its affiliates, headquartered in
Lake Success, New York, have owned and operated U.S.-flag and
foreign-flag vessels since 1988. Liberty Shipping Group currently owns
and operates six U.S.-flag dry bulk vessels. Liberty Shipping Group
also operates a 2005-built Pure Car Truck Carrier (PCTC), which is
enrolled in the U.S. Government's Maritime Security Program, through
Liberty Global Logistics LLC, its logistics subsidiary. Liberty
Shipping Group also has two PCTC's on order to be constructed in Korea
for delivery in 2009 and 2010.

Joele Frank, Wilkinson Brimmer Katcher
Joele Frank/Jamie Moser, 212-355-4449

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