Shipping agreement Diana shipping/Cargill

Diana Shipping, with head office in Athens, Greece, has
signed an agreement with an unaffiliated third party for the purchase of a Capesize dry bulk carrier of 180,235 dwt, built in 2005 by Imabari Shipbuilding Co., Ltd., for
the price of $110 million.

The vessel, to be renamed Aliki, is expected
to be delivered to Diana Shipping on or about April 30, 2007.

Diana has
entered into a time charter contract with Cargill International S.A. for the
Aliki for a minimum 46 to maximum 49 month period at an average rate of $48,500
per day with one year extension at the charterer’s option at the same
rate.

During the first two years of the charter the gross daily charter
hire rate will be $52,000 and during the third and fourth years of the charter
$45,000.

The charterer has the option to employ the vessel for a further
11-13 month period at a daily charter rate of $48,500. The time charter contract
is expected to commence immediately after the delivery of the vessel to
Diana.

Gross revenues
During the initial two years, this
employment is expected to generate gross revenues of approximately $37 million
and is expected to generate gross revenues of $32 million during the third and
fourth years, amounting to a total of $69 million.

If the charterer
exercises its option for the fifth year, the charter is expected to generate
aggregate gross revenues of approximately $86 million over the entire
period.

Diana Shipping Inc. is a global
provider of shipping transportation services. The company specializes in
transporting dry bulk cargoes, including such commodities as iron ore, coal,
grain and other materials along worldwide shipping routes.

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