<PAGE>

   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 12, 1999
 
                                                      REGISTRATION NO. 333-
================================================================================
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------
                          STATIA TERMINALS GROUP N.V.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                   <C>                                   <C>
        NETHERLANDS ANTILLES                          4226                               52-2003016
  (STATE OR OTHER JURISDICTION OF         (PRIMARY STANDARD INDUSTRIAL                (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)         CLASSIFICATION CODE NUMBER)               IDENTIFICATION NO.)
</TABLE>

                            ------------------------
 
                              TUMBLEDOWN DICK BAY
                      ST. EUSTATIUS, NETHERLANDS ANTILLES
                                (011) 5993-82300
              (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
       INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

                            ------------------------
 
                             CT CORPORATION SYSTEM
                                 1633 BROADWAY
                            NEW YORK, NEW YORK 10019
                                 (212) 664-1666
           (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                   INCLUDING AREA CODE, OF AGENT FOR SERVICE)

                            ------------------------
 
                                   Copies to:
 
<TABLE>
<S>                                   <C>                                   <C>
         JACK R. PINE, ESQ.                  JOHN W. ERICKSON, ESQ.              MICHAEL ROSENWASSER, ESQ.
       STATIA TERMINALS, INC.                  WHITE & CASE LLP                    ANDREWS & KURTH L.L.P.
  801 WARRENVILLE ROAD, SUITE 200         1155 AVENUE OF THE AMERICAS           805 THIRD AVENUE, 7TH FLOOR
     LISLE, ILLINOIS 60532-1376          NEW YORK, NEW YORK 10036-2787            NEW YORK, NEW YORK 10022
          (630) 435-9540                        (212) 819-8200                        (212) 850-2816
</TABLE>
 
                            ------------------------
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
 
    If any of the shares being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
 
    If this Form is filed to register additional shares for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
 
    If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
                                                    PROPOSED
        TITLE OF EACH CLASS                    MAXIMUM AGGREGATE                         AMOUNT OF
     OF SHARES TO BE REGISTERED                OFFERING PRICE(1)                    REGISTRATION FEE(2)
------------------------------------  ------------------------------------  ----------------------------------
<S>                                   <C>                                   <C>
Common Shares, par value $0.01 per
share...............................              $152,000,000                            $42,256
</TABLE>
 
(1) Estimated solely for the purpose of computing the amount of the registration
    fee pursuant to Rule 457(o).
 
(2) Calculated pursuant to Rule 457(a) based on an estimate of the proposed
    maximum aggregate offering price.

                            ------------------------
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================
<PAGE>

The information in this prospectus is not complete and may be changed.  These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective.  This prospectus is not an
offer to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.
 
PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED FEBRUARY [    ], 1999
 
                                7,600,000 SHARES

                                    [LOGO]
 
                          STATIA TERMINALS GROUP N.V.
                                 COMMON SHARES
                            ------------------------
 
STATIA TERMINALS GROUP N.V. IS OFFERING 7,600,000 COMMON SHARES. THIS IS OUR
INITIAL PUBLIC OFFERING AND NO PUBLIC MARKET CURRENTLY EXISTS FOR OUR COMMON
   SHARES. WE ANTICIPATE THAT THE INITIAL PUBLIC            OFFERING PRICE
              WILL BE BETWEEN $19.50 AND $20.50 PER COMMON SHARE.
 
WE INTEND, TO THE EXTENT WE HAVE SUFFICIENT AVAILABLE CASH, TO PAY TO EACH
HOLDER OF COMMON SHARES A DIVIDEND OF AT LEAST $0.45 PER COMMON SHARE PER
   QUARTER (REFERRED TO IN THIS PROSPECTUS AS THE MINIMUM QUARTERLY
     DIVIDEND) OR $1.80 PER COMMON SHARE ON A YEARLY BASIS. OUR BOARD OF
       DIRECTORS HAS DISCRETION IN PAYING CASH DIVIDENDS AND ESTABLISHING
       RESERVES. DURING A SUBORDINATION PERIOD, WHICH GENERALLY WILL
         NOT END PRIOR TO JUNE 30, 2004, WE WILL PAY THE MINIMUM
           QUARTERLY DIVIDEND TO HOLDERS OF COMMON SHARES BEFORE ANY
                     DIVIDENDS WILL BE PAID TO HOLDERS OF
                              SUBORDINATED SHARES.

                            ------------------------
 
 WE HAVE APPLIED TO LIST THE COMMON SHARES ON THE NEW YORK STOCK EXCHANGE UNDER
                               THE SYMBOL "STV".
                            ------------------------
 
                 INVESTING IN THE COMMON SHARES INVOLVES RISKS.
                    SEE "RISK FACTORS" BEGINNING ON PAGE 10.
 
                            ------------------------
 
                             PRICE $       A SHARE
                            ------------------------
 
<TABLE>
<CAPTION>
                                                                   UNDERWRITING
                                                 PRICE TO         DISCOUNTS AND     PROCEEDS TO
                                                  PUBLIC           COMMISSIONS        COMPANY
                                              --------------      --------------    ------------
<S>                                           <C>                 <C>               <C>
Per Common Share...................              $                   $                $
Total..............................           $                   $                $
</TABLE>
 
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
 
Statia Terminals Group N.V. has granted the underwriters the right to purchase
up to an additional 760,000 common shares to cover over-allotments. The
underwriters expect the common shares will be ready for delivery in New York,
New York on or about        , 1999.
 
                            ------------------------
 
                           JOINT BOOKRUNNING MANAGERS
 
BEAR, STEARNS & CO. INC.                              MORGAN STANLEY DEAN WITTER
 
                            ------------------------
 
PRUDENTIAL SECURITIES                                      DAIN RAUSCHER WESSELS
                                        A DIVISION OF DAIN RAUSCHER INCORPORATED
 
             , 1999
<PAGE>

                                    [LOGO]

                                [MAP GRAPHIC]

 
     You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, common shares only in jurisdictions where offers and sales are permitted.
The information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or of any
sale of the common shares.
 
     Until        , 1999 (25 days after the date of this prospectus), all
dealers that buy, sell or trade in our common shares, whether or not
participating in this offering, may be required to deliver a prospectus. This
delivery requirement is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
<PAGE>
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                            ------
<S>                                                                                                         <C>
Guide to Reading This Prospectus.........................................................................      iii
Forward-Looking Statements...............................................................................      iii
Enforcement of Certain Civil Liabilities.................................................................      iii
Prospectus Summary.......................................................................................        1
  The Company............................................................................................        1
  Industry...............................................................................................        2
  Business Strategy......................................................................................        3
  The Offering...........................................................................................        4
  Summary Historical and Pro Forma Combined Financial Data...............................................        8
Risk Factors.............................................................................................       10
  Risks Inherent in the Common Shares....................................................................       10
  Risks Inherent in Our Business.........................................................................       14
The Restructuring........................................................................................       17
Use of Proceeds..........................................................................................       19
Capitalization...........................................................................................       20
Dilution.................................................................................................       21
Cash Dividend Policy.....................................................................................       22
  General................................................................................................       22
  Quarterly Dividends of Available Cash..................................................................       23
  Dividends from Operating Surplus During Subordination Period...........................................       23
  Dividends from Operating Surplus After Subordination Period............................................       25
  Incentive Dividends--Hypothetical Annualized Yield.....................................................       25
  Dividends from Interim Capital Transactions............................................................       26
  Adjustment of Minimum Quarterly Dividend and Target Dividend Levels....................................       27
  Distribution of Cash upon Liquidation..................................................................       27
Cash Available for Payment of Dividends..................................................................       29
  Available Cash from Operating Surplus..................................................................       29
  Restrictions Imposed by Netherlands Antilles Law.......................................................       30
  Restrictions Imposed by Indenture......................................................................       30
Unaudited Pro Forma Consolidated Condensed Financial Statements..........................................       32
Selected Consolidated Financial Data.....................................................................       36
Management's Discussion and Analysis of Financial Condition and Results of Operations....................       37
  Overview of Operations.................................................................................       37
  Results of Operations..................................................................................       39
  Liquidity and Capital Resources--Subsequent to the Castle Harlan Acquisition...........................       43
  Liquidity and Capital Resources--Prior to the Castle Harlan Acquisition................................       44
  Capital Expenditures...................................................................................       44
  Environmental, Health and Safety Matters...............................................................       45
  Information Technology and the Year 2000...............................................................       47
  Political, Inflation, Currency and Interest Rate Risks.................................................       47
  Tax Matters............................................................................................       48
  Legal Proceedings......................................................................................       48
  Insurance..............................................................................................       49
  Accounting Standards and Policies......................................................................       49
  Other Matters..........................................................................................       49
  Quantitative and Qualitative Disclosures About Market Risk.............................................       49
Industry.................................................................................................       51
  Terminaling............................................................................................       51
  Bulk Cargo Movement....................................................................................       52
  Blending...............................................................................................       53
  Processing.............................................................................................       53
</TABLE>
 
                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                            ------
<S>                                                                                                         <C>
  Seasonal and Opportunity Storage.......................................................................       53
  Bunker Sales...........................................................................................       54
Business.................................................................................................       56
  Introduction and History...............................................................................       56
  Competitive Strengths..................................................................................       57
  Business Strategy......................................................................................       58
  Services and Products..................................................................................       59
  Pricing................................................................................................       60
  Information by Location................................................................................       61
  Competition............................................................................................       63
  Customers..............................................................................................       65
  Suppliers..............................................................................................       65
  Environmental, Health and Safety Matters...............................................................       65
  Employees..............................................................................................       67
  Legal Proceedings......................................................................................       68
  Insurance..............................................................................................       68
Management...............................................................................................       69
  Directors and Executive Officers.......................................................................       69
  Executive Compensation.................................................................................       72
  Stock Option Plan......................................................................................       75
  Stockholder Loans......................................................................................       75
  Employment Agreements..................................................................................       75
Security Ownership.......................................................................................       76
Certain Relationships and Related Transactions...........................................................       77
  Sale of Brownsville Terminal...........................................................................       77
  Management Agreement...................................................................................       77
  Consulting Agreement...................................................................................       77
  Stockholders Agreements................................................................................       77
  Loans to Management....................................................................................       77
  Board of Directors.....................................................................................       77
Description of Common Shares.............................................................................       79
  General................................................................................................       79
  Dividends; Distributions Upon Liquidation..............................................................       79
  Voting Rights..........................................................................................       79
  Issuance of Additional Shares..........................................................................       80
  Transfer Agent and Registrar...........................................................................       80
  Restrictions on Ownership and Transfer.................................................................       80
Description of the Subordinated Shares...................................................................       84
  Conversion of Subordinated Shares......................................................................       84
  Distributions upon Liquidation.........................................................................       84
Shares Eligible for Future Sale..........................................................................       85
Taxation.................................................................................................       86
  Netherlands Antilles Taxation..........................................................................       86
  U.S. Federal Income Taxation...........................................................................       86
Plan of Distribution.....................................................................................       90
Experts..................................................................................................       92
Legal Matters............................................................................................       92
Available Information....................................................................................       92
Glossary of Offering Terms...............................................................................      A-1
Pro Forma Available Cash from Operating Surplus..........................................................      B-1
Index to Financial Statements............................................................................      F-1
</TABLE>
 
                                       ii
<PAGE>
                        GUIDE TO READING THIS PROSPECTUS
 
     The following should help you understand some of the conventions and
defined terms used in this prospectus:
 
     o Frequently in this prospectus, we refer to ourselves, Statia Terminals
       Group N.V., as "we," "us," or the "issuer." Generally we refer to
       ourselves as "we" or "us" when discussing our operations. As the context
       requires, references to "we" and "us" include all of our subsidiaries,
       including Statia Terminals International N.V. Generally, we refer to
       ourselves as "the issuer" when discussing our legal entity which will
       issue the common shares, its structure or other matters which require us
       to differentiate such legal entity from the group of companies we use to
       conduct our business.
 
     o For ease of reference, a glossary of certain terms used in this
       prospectus and useful in understanding the common shares we are offering
       in this prospectus is included as Appendix A to this prospectus.
 
     o Unless we state otherwise, the information in this prospectus assumes
       that the underwriters' over-allotment option is not exercised.
 
     o Unless we state otherwise, all references in this prospectus to "$" or
       "dollars" are to United States dollars.
 
                           FORWARD-LOOKING STATEMENTS
 
     Some of the information in this prospectus includes forward-looking
statements. The statements about our plans, strategies, and prospects under the
headings "Prospectus Summary," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" are
forward-looking statements. Additional forward-looking statements can be
identified by the use of forward-looking terminology such as "may," "will,"
"believe," "anticipate," "expect" and "estimate."
 
     All forward-looking statements involve risks and uncertainties. Although we
believe that our plans, intentions and expectations reflected in or suggested by
forward-looking statements are reasonable, we may not achieve them. Important
factors that could cause actual results to differ materially from our forward-
looking statements are included in "Risk Factors" and elsewhere in this
prospectus. These factors include, but are not limited to, fluctuations in the
supply of and demand for crude oil and other petroleum products, changes in the
petroleum terminaling industry, changes in government regulations affecting the
petroleum industry, the financial condition of our customers, adverse weather
conditions, the condition of the U.S. economy, risks associated with our efforts
to comply with year 2000 requirements, and other factors included in this
prospectus.
 
                  ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
 
     Our Netherlands Antilles counsel, Smeets Thesseling van Bokhorst Spigt,
Curacao, has advised us as to risks relating to the enforceability of certain
civil liabilities under the U.S. federal securities laws and related foreign
judgments by courts of the Netherlands Antilles. Our Canadian counsel, Stewart
McKelvey Stirling Scales, has advised us as to risks relating to the
enforceability of such civil liabilities and foreign judgments by courts of the
Province of Nova Scotia. See "Risk Factors--You may not be able to sue us
effectively in the Netherlands Antilles or Canada."
 
     The issuer has appointed CT Corporation System, 1633 Broadway, New York
10019 as its agent for service of process in the United States.
 
                                      iii
<PAGE>
                               PROSPECTUS SUMMARY
 
     This summary highlights information contained elsewhere in this prospectus.
It is not complete and does not contain all of the information that you should
consider before investing in the common shares. You should read the entire
prospectus carefully, including the "Risk Factors" section which begins on
page 10 and the financial statements and the notes to those statements.
 
                                  THE COMPANY
 
     We believe we are one of the five largest independent marine terminaling
companies in the world as measured in terms of storage capacity. We believe we
are the largest independent marine terminal operator handling crude oil imported
into the Eastern United States. Our two terminals are strategically located at
points of minimal deviation from major petroleum shipping routes. We provide
services to many of the world's largest producers of crude oil, integrated oil
companies, oil traders, refiners, petrochemical companies and ship owners. These
customers include Saudi Aramco and Tosco. Our customers transfer their products
to our facilities for subsequent transfer to vessels destined for the Americas
and Europe in a process known as "transshipment".
 
     We own and operate a facility on the island of St. Eustatius, Netherlands
Antilles, and a facility at Point Tupper, Nova Scotia, Canada. At Point Tupper,
we operate the deepest independent ice-free marine terminal on the North
American Atlantic coast. Both of our facilities can accommodate substantially
all of the world's largest fully-laden very-large and ultra-large crude
carriers. Our facilities are qualified to allow us and our customers to
transship products to other destinations with minimal Netherlands Antilles or
Canadian tax effects. In addition to storage, we also provide related services,
including bunkering (the supply of fuel to marine vessels for their own
engines), crude oil and petroleum product blending and processing, and emergency
and spill response.
 
     We have built or renovated 80% of our tank capacity and related facilities
over the last eight years. Since 1990, we have tripled our storage capacity at
St. Eustatius and added an offshore single point mooring buoy with loading and
unloading capabilities. During the period from 1992 through 1994, we converted
and renovated a former refinery site into an independent storage terminal at
Point Tupper. At the end of 1998, our tank capacity was 18.7 million barrels.
 
     Our earnings before interest, income taxes, depreciation and amortization
(EBITDA) have increased from $23.3 million in 1996 to $32.1 million in 1998.
EBITDA is presented to provide additional information related to our ability to
service debts and is not an alternative measure of operating results or cash
flow from operations.
 
     Since November 1996, Castle Harlan Partners II L.P. and certain of its
affiliates have owned the majority of our outstanding voting shares.
 
     Our principal executive offices are located at Tumbledown Dick Bay, St.
Eustatius, Netherlands Antilles, and our telephone number is (011) 5993-82300.
 
                                       1
<PAGE>
                                    INDUSTRY
 
     The marine petroleum terminaling industry is primarily engaged in bulk
storage and transshipment of crude oil and petroleum products. Many terminals in
the world are "captive," i.e., they are owned by producers, refiners and
pipeline operators and used almost exclusively for their own operations. The
industry segment in which we compete, and which is described in this prospectus,
excludes these captive terminals. Captive terminal storage is only occasionally
made available to the general market and lacks certain competitive advantages of
independent operations.
 
     Demand for terminaling services depends on the amount of crude oil and
petroleum products imported into the U.S. According to the U.S. Department of
Energy, crude oil and petroleum products imports into the U.S. have increased at
an annual compounded rate of 3.4% from 1993 to 1998. In addition, in 1998 the
average U.S. refinery utilization was near peak capacity at 96% according to the
U.S. Department of Energy. The U.S. Department of Energy projects that the
import requirements of crude oil and refined petroleum products into the U.S.
will increase at an annual compounded rate of 4.3% from 1998 through 2003.
 
     Due to significant economies of scale, crude oil is shipped from the Middle
East, North Sea and West Africa in very-large and ultra-large crude carriers.
These vessels, however, are too large to deliver their cargo directly to many
ports, including virtually all U.S. ports. Therefore, most petroleum companies
shipping by these vessels "lighter" their cargo (the process by which liquid
cargo is transferred to smaller vessels, usually while at sea) or transship
their cargo through a terminal to other smaller vessels. While the direct costs
of transshippment service provided by terminals is typically more expensive than
lightering, terminals offer several advantages over lightering, such as:
 
o reduced risk of environmental damage,
o less dependence on weather conditions,
o increased scheduling certainty,
o ability to access value-added terminal services, and
o ability to store products close to the market.
 
                                       2
[D<PAGE>
                               BUSINESS STRATEGY
 
     Our business strategy is to manage our operations so we can generate stable
cash flow and pay the minimum quarterly dividend on all of the common and
subordinated shares and to increase our asset values. We intend to pursue this
strategy by:
 
     o Developing Strategic Relationships.  To maximize recurring revenues
generated by charges for storage and throughput (flow of product), we generally
target customers who have a continuing need to store crude oil and petroleum
products to supply a specific demand, such as a refinery or other downstream
distribution to consumers. We seek to understand the long term needs of our
principal customers and potential customers and to modify our facilities and
operations to meet those needs. In this manner, we try to provide long term
logistical solutions for these customers at our strategically located facilities
and thereby become their preferred provider of storage and other terminaling
services.
 
     o Generating Stable Cash Flow Through Long Term Contracts.   We have
generally entered into long term storage contracts with the customers with whom
we have established strategic relationships. These contracts generally have
terms of one to five years plus, in most cases, renewal options. These contracts
provide us with minimum monthly payments and generate a stable cash flow from
both the storage services contracted for and the provision of
terminaling-related services to these customers and the vessels that transport
their products (such as dock charges and standby emergency response fees).
Approximately 71% of our 1998 tank capacity and approximately 64% of our 1998
revenues from storage and throughput (excluding related ancillary services) were
from long term contracts.
 
     o Emphasizing Customer Confidentiality.  In contrast to many of our
competitors, we do not compete with our customers in the business of trading
crude oil and petroleum products. We believe that, in general, our customers
prefer to do business with providers of services who are not competitors in
order to maintain the confidentiality of important business data.
 
     o Capitalizing on a Wide Range of Value-Added Services.  We seek to further
differentiate ourselves from our competitors and to increase revenues through
our comprehensive range of terminaling-related services which include:
 
     o bunkering,
     o crude oil and petroleum product blending and processing,
     o bulk product sales, and
     o various ship services.
 
     o Developing Opportunities at our Point Tupper Facility.  We believe that
there is no competitor in the region that can provide the combination of
services we offer at Point Tupper. We are seeking to attract additional business
from customers in the North Sea and from the emerging production areas located
in Eastern Canada. Due to this initiative, we plan to build new storage
facilities at Point Tupper as the demand increases.
 
     o Expanding Our Bunkering Operations.  We seek to expand our business in
Eastern Canada by capitalizing on our reputation for consistently maintaining a
supply of quality marine fuels and lubricants for delivery to bunkering
customers. In addition, we plan to pursue opportunities to supply bunkers at
additional locations in the Caribbean from our St. Eustatius facility.
 
     o Strategic Acquisitions.  From time to time we will consider opportunities
to acquire other marine terminals and related businesses.
 
                                       3
<PAGE>
                                  THE OFFERING
 

<TABLE>
<S>                                         <C>
Securities Offered........................  7,600,000 common shares (8,360,000 common shares if the underwriters
                                            exercise their over-allotment option in full).
 
Shares to be Outstanding After This
  Offering................................  7,600,000 common shares (8,360,000 common shares if the underwriters
                                            exercise their over-allotment option in full) and 3,800,000
                                            subordinated shares. In addition, 38,000 incentive rights will be
                                            outstanding.
 
Dividends.................................  o We intend to pay, to the extent there is sufficient available cash,
                                              at least a minimum quarterly dividend of $0.45 per share ($1.80 per
                                              share on a yearly basis). This dividend is subject to adjustment in
                                              certain circumstances.
 
                                            o "Available cash" for any quarter will consist generally of all cash
                                              on hand at the end of such quarter, as adjusted for reserves. We
                                              have discretion in establishing reserves. Further, Netherlands
                                              Antilles law as well as our debt instruments may limit the amount
                                              of available cash.
 
                                            o In general, available cash will be paid as dividends approximately
                                              45 days after each March 31, June 30, September 30 and December 31
                                              to the holders of common and subordinated shares and incentive
                                              rights on the applicable record date. Dividends will be paid in the
                                              following priorities:
 
                                                 First, to the common shares until each has received $0.45 per
                                                 quarter plus any arrearages from prior quarters.
 
                                                 Second, to the subordinated shares until each has received $0.45
                                                 per quarter. Subordinated shares do not accrue dividend
                                                 arrearages.
 
                                            o If dividends of available cash paid to the holders of common and
                                              subordinated shares exceed a target level of $0.45 per share per
                                              quarter, the holders of incentive rights will receive incentive
                                              dividends as described under "Incentive Dividends" below.
 
                                            o The minimum quarterly dividend for the period from the closing of
                                              this offering through June 30, 1999 will be adjusted based on the
                                              actual length of such period.
 
                                            See "Cash Dividend Policy."
 
Deferral of Dividends on Subordinated
  Shares..................................  Payment of the first $6.8 million of dividends (an amount equal to
                                            one year of minimum quarterly dividends on the subordinated shares)
                                            that would have otherwise been paid on the subordinated shares will
                                            be deferred (but deemed paid) until we meet certain financial tests.
 
Incentive Dividends.......................  If quarterly dividends of available cash paid to the common and
                                            subordinated shares exceed specified target dividend levels, the
                                            holders of incentive rights will receive dividends which represent an
                                            increasing percentage of the total dividends we distribute in excess
                                            of the target dividend levels. The dividends to the holders of
                                            incentive rights described above are referred to as the
</TABLE>
 
                                       4
<PAGE>
 
<TABLE>
<S>                                         <C>
                                            "incentive dividends." See "Cash Dividend Policy--Incentive
                                            Dividends--Hypothetical Annualized Yield."
 
Subordination Period......................  o The subordination period will generally end once we meet certain
                                              financial tests, but it cannot end prior to June 30, 2004.
                                              Generally, these tests will be satisfied when we have earned and
                                              paid the minimum quarterly dividend on all shares for each of the
                                              three preceding four-quarter periods.
 
                                            o When the subordination period ends, all subordinated shares will
                                              convert into common shares on a one-for-one basis and will then
                                              participate equally with the other common shares (subject to the
                                              dividend rights of incentive rights) in future dividends of
                                              available cash. The common shares will then no longer accrue
                                              dividend arrearages.
 
                                            See "Cash Dividend Policy--Dividends from Operating Surplus During
                                            Subordination Period."
 
Early Conversion of Subordinated Shares...  o If the tests set forth above for ending the subordination period
                                              have been met for any quarter ending on or after March 31, 2002,
                                              one-quarter of the subordinated shares will convert into common
                                              shares.
 
                                            o If these tests have been met for any quarter ending on or after
                                              March 31, 2003, an additional one-quarter of the subordinated
                                              shares will convert into common shares. The early conversion of
                                              this second one-quarter of the subordinated shares may not occur
                                              until at least one year following the early conversion of the first
                                              one-quarter of the subordinated shares.
 
                                            Upon early conversion, any unpaid deferred dividends allocable to the
                                            subordinated shares so converted shall be re-allocated pro rata to
                                            the remaining unconverted subordinated shares.
 
                                            See "Cash Dividend Policy--Dividends from Operating Surplus During
                                            Subordination Period."
 
Ability to Issue Additional Shares........  We can issue an additional 12,400,000 common shares (11,640,000 if
                                            the underwriters exercise their over-allotment option in full;
                                            8,600,000 if all of the initially outstanding subordinated shares are
                                            converted into common shares and the underwriters have not exercised
                                            their over-allotment option, 7,840,000 if they have exercised such
                                            option in full) and 4,000,000 subordinated shares without the
                                            approval of the holders of common and subordinated shares. During the
                                            subordination period, however, we cannot, without the approval of the
                                            holders of a majority of the common shares and the holders of a
                                            majority of the subordinated shares, issue:
 
                                            o equity securities ranking prior or senior to the common shares on
                                              dividends or upon a dissolution and liquidation of the issuer; or
 
                                            o more than 4,000,000 common shares (excluding common shares issued
                                              upon exercise of the underwriters' over-allotment option, upon
                                              conversion of subordinated shares, pursuant to employee benefit
                                              plans, upon a combination or subdivision of the common
</TABLE>
 
                                       5
<PAGE>
 
<TABLE>
<S>                                         <C>
                                              shares, or in connection with the making of certain
                                              acquisitions or capital improvements that result on a pro forma
                                              basis in increased available cash on a per common and subordinated
                                              share basis) or an equivalent number of securities ranking on a
                                              parity with the common shares.
 
                                            See "Description of Common Shares--Issuance of Additional Shares."
 
Restrictions on Ownership
  and Transfer............................  Any sale, transfer, assignment or other disposition of any legal
                                            interest in or right to the common shares or any other event relating
                                            to the common shares (other than the conversion of subordinated
                                            shares into common shares, any subsequent transfer of the common
                                            shares resulting from such conversion or any pledge, encumbrance,
                                            transfer by operation of law, gift, inheritance or marital law of any
                                            legal or beneficial interest in or right to the common shares, as
                                            well as any other sale, transfer, assignment or other disposition of
                                            any beneficial, but not legal, interest in or right to the common
                                            shares) that would result in any person or group owning or being
                                            considered to own more than 9.9% of the total combined voting power
                                            of all classes of stock entitled to vote of the issuer will be null
                                            and void. In addition, any pledge, encumbrance, transfer by operation
                                            of law, gift, inheritance or marital law of any legal or beneficial
                                            interest in or right to the common shares and any other sale,
                                            transfer, assignment or other disposition of any beneficial, but not
                                            legal, interest in or right to the common shares (other than the
                                            conversion of subordinated shares into common shares or any
                                            subsequent transfer of the common shares resulting from such
                                            conversion) that would result in such ownership is prohibited. See
                                            "Description of Common Shares--Restrictions on Ownership and
                                            Transfer."
 
Distributions Upon Liquidation............  If we liquidate during the subordination period, the outstanding
                                            common shares will receive a distribution of our net assets from
                                            liquidation (after satisfaction of our creditors) up to the price
                                            paid for such common shares in this offering plus dividend arrearages
                                            prior to any distributions being made to the subordinated shares or
                                            to the holders of incentive rights (whose distributions will be
                                            allocated as set forth in the issuer's articles). See "Cash Dividend
                                            Policy--Distribution of Cash Upon Liquidation."
 
Use of Proceeds...........................  We estimate that the net proceeds the issuer will receive from the
                                            sale of common shares offered through this prospectus will be
                                            approximately $142.1 million (or $156.3 million if the underwriters
                                            exercise their over-allotment option in full), after deducting
                                            underwriting discounts and commissions, but before deducting fees and
                                            expenses incurred in connection with this offering. The issuer
                                            anticipates using the net proceeds of this offering and other cash on
                                            hand to:
 
                                            o redeem all of the issuer's Series A Preferred Stock, Series B
                                              Preferred Stock, Series C Preferred Stock, Series D Preferred Stock
                                              and Series E Preferred Stock; and
</TABLE>
 
                                       6
<PAGE>
 
<TABLE>
<S>                                         <C>
                                            o purchase additional capital stock of Statia Terminals International
                                              which will use the proceeds to redeem 25% of its First Mortgage
                                              Notes (35% if the underwriters exercise their over-allotment option
                                              in full).
 
                                            See "Use of Proceeds" and "The Restructuring."
 
Listing...................................  We intend to apply to list the common shares on the New York Stock
                                            Exchange.
 
NYSE Symbol...............................  "STV"
</TABLE>
 
                                       7
<PAGE>
          SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA
 
     The following table sets forth summary financial data for the periods and
as of the dates indicated. In January 1996, our former parent, CBI Industries,
Inc., was acquired by Praxair, Inc. The statement of operations data for each of
(i) the period from January 1, 1996 through November 27, 1996, (ii) the period
from November 27, 1996 through December 31, 1996, and (iii) the years ended
December 31, 1997 and 1998 have been derived from, and are qualified by
reference to, our audited consolidated financial statements included elsewhere
in this prospectus. The summary unaudited pro forma financial information is
presented for illustrative purposes only and is not necessarily indicative of
the operating results or financial position that would have occurred had
(i) the disposition of Statia Terminals Southwest, Inc., (ii) this offering and
(iii) the restructuring been consummated as of the dates indicated, nor is the
summary unaudited pro forma financial information necessarily indicative of
future operating results or financial position. The summary historical
consolidated financial data set forth below should be read in conjunction with,
and is qualified by reference to, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Unaudited Pro Forma
Consolidated Condensed Financial Statements" and our consolidated financial
statements and accompanying notes thereto and other financial information
included elsewhere in this prospectus.
 
<TABLE>
<CAPTION>
                                                            (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                     PRE-CASTLE HARLAN
                                        ACQUISITION                          POST-CASTLE HARLAN ACQUISITION
                                     ------------------   --------------------------------------------------------------------
                                     JANUARY 1, 1996      NOVEMBER 27, 1996
                                        THROUGH             THROUGH                      YEAR ENDED DECEMBER 31,
                                     NOVEMBER 27,            DECEMBER 31,    -------------------------------------------------- 
                                        1996(7)               1996(7)                1997                1998(8)       1998(9)
                                     ------------------   -----------------  -----------------------  -----------  ------------
                                                                                                                   (UNAUDITED)
STATEMENT OF OPERATIONS DATA:
<S>                                  <C>                  <C>                <C>                      <C>          <C>
  Revenues.........................       $140,998             $14,956              $ 142,499          $ 136,762   $   135,149
  Cost of services and products
    sold...........................        129,915              12,803                122,939            106,688       105,014
  Gross profit.....................         11,083               2,153                 19,560             30,074        30,135
  Administrative expenses..........          8,282                 664                  7,735              9,500         8,150
  Operating income.................          2,801               1,489                 11,825             20,574        21,985
  Loss (gain) on disposition of
    property and equipment.........            (68)                 --                   (109)             1,652            --
  Interest expense.................          4,187               1,613                 16,874             16,851        12,651
  Provision for income taxes.......            629                 132                    780                320           320
  Net income (loss) available to
    holders of common equity.......         (2,682)               (522)                (8,361)            (1,503)        9,698
  Pro forma diluted earnings per
    common and subordinated share
    and incentive rights(1)........            N/A                 N/A                    N/A                N/A          0.85
  Weighted average shares
    outstanding in computing pro
    forma diluted earnings per
    share(1).......................            N/A                 N/A                    N/A                N/A    11,438,000
 
BALANCE SHEET DATA:
  Total assets.....................                                                                      245,610       241,471
  Long-term debt...................                                                                      135,000       101,250
  Redeemable Preferred Stock Series
    A through C....................                                                                       40,000            --
  Preferred Stock Series D and E...                                                                       54,824            --
  Total stockholders' equity.......                                                                       43,331       119,704
 
OPERATING DATA:
  EBITDA(2)........................         20,822               2,452                 22,489             32,092        33,206
  Maintenance capital
    expenditures...................         12,887               1,203                  4,401              9,000         8,906
  Capacity (in thousands of
    barrels)(3)....................         20,387              20,387                 20,387             19,556
  Percentage capacity leased(4)....             68%                 74%                    70%                91%
  Throughput (in thousands of
    barrels)(5)....................         81,994              13,223                118,275            119,502
  Vessel calls(6)..................            922                 108                  1,030              1,027
</TABLE>
 
                                       8
<PAGE>
 
N/A - Not applicable

------------------
 
(1) Earnings per share data including shares outstanding are not included on an
    historical basis as such information would not be representative of the
    capital structure of the issuer before this offering. Shares outstanding
    include incentive rights.
 
(2) EBITDA is defined as the sum of (i) income before income tax provision
    (benefit), (ii) interest expense, (iii) depreciation and amortization of
    certain intangible assets, (iv) certain non-cash charges, and (v) the
    portion of the First Salute Leasing, L.P. lease payments that represents
    interest expense for the periods prior to the November 27, 1996 purchase
    transaction. The amount of the First Salute related interest expense
    excluded from EBITDA was $5,600 for the period ended November 27, 1996.
    EBITDA is presented not as an alternative measure of operating results or
    cash flow from operations (as determined in accordance with generally
    accepted accounting principles), but rather to provide additional
    information related to our debt servicing ability.
 
(3) Computed as average capacity available for lease for the periods indicated.
    One barrel equals forty-two U.S. gallons.
 
(4) Represents the storage capacity leased to third parties weighted for the
    number of days leased in the month divided by the capacity available for
    lease.
 
(5) Throughput volume is the total number of inbound barrels discharged from a
    vessel, tank, rail car or tanker truck, not including across-the-dock or
    tank-to-tank transfers.
 
(6) A vessel call occurs when a vessel docks or anchors at one of our terminal
    locations in order to load and/or discharge cargo and/or to take on bunker
    fuel. Such dockage or anchorage is counted as one vessel call regardless of
    the number of activities carried on by the vessel. A vessel call also occurs
    when we sell and deliver bunker fuel to a vessel not calling at our
    terminals for the above purposes.
 
(7) Prior to January 12, 1996, we were a wholly owned subsidiary of CBI
    Industries. On January 12, 1996, pursuant to the merger agreement dated
    December 22, 1995, CBI Industries became a wholly owned subsidiary of
    Praxair. This transaction was reflected in our consolidated financial
    statements as a purchase, effective January 1, 1996. On November 27, 1996,
    Castle Harlan, members of our management and others acquired us from
    Praxair. This transaction is reflected in our consolidated financial
    statements effective November 27, 1996 as a purchase. The application of
    purchase accounting at each acquisition date resulted in changes to the
    historical cost basis of accounting for certain assets. Accordingly, the
    information provided for periods before and after each of these transactions
    is not comparable.
 
(8) Includes the operations of Statia Terminals Southwest, Inc. through
    June 30, 1998.
 
(9) Gives pro forma effect to (i) the disposition of Statia Terminals Southwest,
    (ii) elimination of the Castle Harlan management fee, (iii) this offering,
    (iv) the restructuring, (v) the use of the net proceeds from this offering
    as described under "Use of Proceeds" and (vi) the transfer of all of the
    shares of Petroterminal de Panama, S.A. currently owned by the issuer to a
    newly-formed corporation owned by our current owners other than Praxair
    (collectively, the "pro forma transactions"), as if the pro forma
    transactions had occurred on January 1, 1998. For balance sheet data, gives
    pro forma balance sheet effect to the pro forma transactions as if they
    occurred on December 31, 1998.
 
                                       9
<PAGE>
                                  RISK FACTORS
 
     You should carefully consider the following factors and other information
in this prospectus before deciding to invest in common shares. The risks and
uncertainties described below are not the only ones facing us. Additional risks
and uncertainties not presently known to us or that we currently deem immaterial
may also impair our business operations.
 
     If any of the following risks actually occur, our business, financial
condition, results of operations or ability to pay the minimum quarterly
dividend could be materially adversely affected. In such case the trading prices
of the common shares could decline, and you may lose all or part of your
investment.
 
                      RISKS INHERENT IN THE COMMON SHARES
 
    WE MAY NOT BE ABLE TO PAY AS MUCH IN DIVIDENDS TO YOU AS WE CURRENTLY
    INTEND.
 
     Although the issuer will pay dividends equal to all of its available cash,
we can give no assurances regarding the amounts of available cash that we will
generate. Therefore, we cannot guarantee that the issuer will pay the minimum
quarterly dividend. The actual amounts of cash dividends may fluctuate and will
depend upon numerous factors relating to our business which may be beyond our
control, including:
 
     o cash flow generated by operations,
     o required principal and interest payments on our debt,
     o restrictions contained in our debt instruments,
     o issuances of debt and equity securities by us,
     o fluctuations in working capital,
     o capital expenditures,
     o adjustments in reserves (including the expenditure of unfunded previously
       reserved amounts),
     o prevailing economic conditions, and
     o financial, business and other factors.
 
     Cash dividends are dependent primarily on our operating cash flow, draws
from our cash on hand and working capital borrowings, and not solely on our
profitability, which is affected by non-cash items. Therefore, cash dividends
might be paid during periods when we record losses and might not be paid during
periods when we record profits. The issuer's articles give it discretion in
establishing reserves for the proper conduct of our business, and the exercise
of that discretion will affect the amount of available cash.
 
     We will need approximately $20.5 million of available cash from our
operating surplus to pay the minimum quarterly dividend for four quarters on the
common and subordinated shares to be outstanding immediately after this offering
($13.7 million for the common shares and $6.8 million for the subordinated
shares). The amount of pro forma available cash from our operating surplus
generated during the year ended December 31, 1998 was approximately
$12.1 million. This amount would not have been sufficient to allow the issuer to
pay the minimum quarterly dividend on all of the common and subordinated shares
with respect to such period. For the calculation of pro forma available cash
from our operating surplus had the restructuring to be consummated at the
closing of this offering been completed on January 1, 1998, see "Cash Available
for Payment of Dividends" and Appendix B.
 
     Because our terminaling activities are cyclical, it is likely that we will
make additions to reserves during certain quarters in order to fund operating
expenses, capital expenditures, interest and principal payments, and cash
dividends to holders of common and subordinated shares in future quarters. The
effect of the establishment of such reserves will be to increase the likelihood
that the issuer will pay the minimum quarterly dividend in any given quarter but
to decrease the likelihood that the issuer will pay any amount in excess of the
minimum quarterly dividend in such quarter. As a result of these and other
factors, we can give no assurances regarding the actual levels of cash dividends
the issuer will pay to holders of common and subordinated shares.
 
    THE INDENTURE MAY LIMIT THE AMOUNT OF DIVIDENDS WE CAN PAY TO YOU.
 
     The issuer depends entirely on dividends from Statia Terminals
International to pay you. Statia Terminals International's ability to pay
dividends is restricted by the indenture relating to its First Mortgage Notes
which generally requires, among other things, that it pay dividends:
 
     o only out of a pool equal to (i) 50% of its accrued consolidated net
       income (less 100% of accrued consolidated net loss) since November 27,
       1996 plus (ii) the net cash proceeds of any sale of its capital stock;
       and
 
                                       10
<PAGE>
     o only when its consolidated fixed charge coverage ratio is at least 2
       to 1.
 
     We will redeem 25% of the First Mortgage Notes (35% if the underwriters
exercise their over-allotment option in full) with the proceeds of this
offering. We currently intend to redeem the remainder of the First Mortgage
Notes on or around November 15, 2000. We expect that we will not be able to
redeem the First Mortgage Notes at November 15, 2000 or even at maturity on
November 15, 2003 based on our projected operating cash flow. Therefore, we will
need to refinance the First Mortgage Notes. We can give no assurances that we
will be able to refinance the First Mortgage Notes on terms acceptable to us, if
at all. The terms of the debt incurred in connection with any refinancing may
also include terms which will, under certain circumstances, limit the issuer's
ability to pay dividends.
 
     Although we can give no assurances, we believe that, at least through
November 15, 2000, the indenture restrictions will permit Statia Terminals
International to pay sufficient dividends to the issuer to cover at least the
minimum quarterly dividend that the issuer would be required to pay on the
common and subordinated shares out of available cash from operating surplus. See
"Cash Available For Payment of Dividends--Indenture Restrictions."
 
    OUR LEVEL OF INDEBTEDNESS MAY LIMIT THE AMOUNT OF DIVIDENDS WE CAN PAY TO
    YOU.
 
     As of December 31, 1998, our total long-term indebtedness on a pro forma
basis, assuming that the restructuring and the issuance of the common and
subordinated shares had already occurred, was $101.3 million. Subject to the
restrictions in Statia Terminals International's indenture relating to the First
Mortgage Notes and our $17.5 million revolving credit facility, we may incur
additional indebtedness from time to time to provide working capital, to finance
acquisitions or capital expenditures or for other corporate purposes.
 
     Our level of indebtedness could have important consequences to holders of
the common shares, because of the following:
 
     o a substantial portion of our cash flow from operations must be dedicated
       to debt service and will not be available for other purposes;
 
     o our ability to obtain additional debt financing in the future for working
       capital, capital expenditures or acquisitions may be limited; and
 
     o our level of indebtedness could limit our flexibility in reacting to
       changes in the industry and economic conditions generally.
 
     The issuer's ability to pay dividends on the common shares and our ability
to satisfy our other debt obligations will depend upon our future operating
performance, which will be affected by prevailing economic conditions and
financial, business and other factors, most of which are beyond our control. If
we have an unexpected downturn in our operations, we could be forced to adopt an
alternative strategy that may include reducing or eliminating dividends,
reducing or delaying capital expenditures, selling assets, restructuring or
refinancing our indebtedness or seeking additional equity capital. We can give
no assurances that we could effect any of these strategies on satisfactory
terms, if at all. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources--Subsequent
to the Castle Harlan Acquisition."
 
    NETHERLANDS ANTILLES LAW MAY LIMIT THE AMOUNT OF DIVIDENDS WE CAN PAY TO
    YOU.
 
     The issuer must comply with certain Netherlands Antilles laws governing
when we may pay dividends to the holders of common and subordinated shares and
incentive rights. Generally, we may not pay you unless our equity exceeds the
nominal value of our issued and outstanding capital. See "Cash Available for
Payment of Dividends--Restrictions Imposed by Netherlands Antilles Law."
 
    WE MAY NOT DO AS WELL AS WE PROJECT AND, THEREFORE, YOU MAY NOT RECEIVE
    DIVIDENDS.
 
     We have relied on certain assumptions concerning our future operations in
establishing the terms of this offering, including the number and initial public
offering price of the common shares, the amount of subordinated shares and
incentive rights to be received by the current holders of the issuer's equity
securities and the minimum quarterly dividend. See "Cash Available for Payment
of Dividends--Available Cash from Operating Surplus."
 
     Whether our assumptions are realized, in many cases, is not within our
control and cannot be predicted with any degree of certainty. In the event that
our assumptions are not realized, the actual amount of available cash from
operating surplus that we generate could be substantially less than that
currently expected and may be less in any quarter than that required to pay the
minimum
 
                                       11
<PAGE>
quarterly dividend. See "Cash Available for Payment of Dividends."
 
    YOU MAY EXPERIENCE DILUTION OF YOUR COMMON SHARES.
 
     Based on the circumstances of each case, the issuance of additional common
shares or securities ranking senior to the common shares may:
 
     o dilute the value of the interests of the then-existing holders of common
       shares in our net assets;
 
     o dilute the interests of holders of common shares in dividends and other
       distributions by us; and
 
     o modify the preference of holders of common shares upon dissolution and
       liquidation of the issuer.
 
     During the subordination period, we are authorized, in our discretion, to
issue up to 4,000,000 additional common shares (in addition to common shares
issued upon the exercise of the underwriters' over-allotment option, upon
conversion of subordinated shares, pursuant to employee benefit plans, upon
combination or subdivision of common shares or in connection with certain
combinations and capital improvements). After the end of the subordination
period, we may issue the authorized but unissued common shares, without the
approval of the holders of the common shares.
 
    ISSUANCE OF ADDITIONAL COMMON SHARES MAY REDUCE THE DIVIDENDS ON YOUR
    SHARES.
 
     Our ability to pay the full minimum quarterly dividend on all the common
shares may be reduced by any increase in the number of outstanding common
shares, whether as a result of the conversion of subordinated shares or as a
result of future issuances of common shares. Any of these actions will increase
the percentage of the aggregate minimum quarterly dividend payable to the
holders of common shares and decrease the percentage of the aggregate minimum
quarterly dividends payable to the holders of subordinated shares, which will in
turn have the effect of:
 
     o reducing the amount of support provided by the subordination feature of
       the subordinated shares; and
 
     o increasing the risk that we will be unable to pay the minimum quarterly
       dividend in full on all the common shares.
 
    OUR BOARD OF DIRECTORS MAY HAVE CONFLICTS OF INTEREST WITH YOU.
 
     Some of the issuer's directors may hold, directly or indirectly,
subordinated shares and/or incentive rights. Decisions of the board of directors
with respect to the amount and timing of asset purchases and sales, cash
expenditures, borrowings, issuances of additional common shares and the
creation, reduction, cancellation or increase of reserves in any quarter will
affect whether, or the extent to which, there is sufficient available cash from
our operating surplus to meet the minimum quarterly dividend and target dividend
levels on all common and subordinated shares in a given quarter or in subsequent
quarters. In addition, actions by the board of directors may have the effect of
enabling the holders of subordinated shares or incentive rights to receive
dividends on subordinated shares or incentive dividends or hastening the
expiration of the subordination period or the conversion of subordinated shares
into common shares.
 
     Netherlands Antilles law protecting the interests of minority shareholders
may not be as protective in all circumstances as the law protecting minority
shareholders in U.S. jurisdictions. In addition, under Netherlands Antilles law,
liability of corporate directors is basically limited to cases of willful
malfeasance and gross negligence. The issuer's articles permit it to indemnify
its directors except in cases where the director acted in bad faith or in a
manner in which he did not reasonably believe to be in, or not opposed to, the
best interests of the issuer.
 
    YOU WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION OF YOUR COMMON
    SHARES.
 
     The assumed initial public offering price of $20.00 per common share
exceeds the pro forma tangible net book value of $10.15 per common share. You
will incur immediate and substantial dilution of tangible net book value of
$9.85 per common share. See "Dilution."
 
    YOU MAY NOT BE ABLE TO SUE US EFFECTIVELY IN THE NETHERLANDS ANTILLES OR
    CANADA.
 
     Netherlands Antilles
 
     The issuer is incorporated under the laws of the Netherlands Antilles, and
all of its operating assets are located outside the U.S. Accordingly, it may not
be possible to effect service of process on the issuer within the U.S. other
than through its appointed agent for service of process. In addition, it may be
difficult for holders of common shares to
 
                                       12
<PAGE>
realize in the Netherlands Antilles upon a judgment rendered against the issuer
in a U.S. court.
 
     We have been advised by our Netherlands Antilles counsel, Smeets Thesseling
van Bokhorst Spigt as follows. Legal actions may be instituted directly against
the issuer in the Netherlands Antilles. However, to enforce in the Netherlands
Antilles a judgment for the payment of money obtained against the issuer in U.S.
courts, an enforcement action must be brought before a competent Netherlands
Antilles court. A Netherlands Antilles court will generally recognize a U.S.
judgment if:
 
     o certain procedural protections provided in the Netherlands Antilles have
       been observed; and
 
     o the judgment obtained in the U.S. and the proceedings related to it are
       not contrary to natural justice or public policy in the Netherlands
       Antilles.
 
If a U.S. judgment is not recognized by a Netherlands Antilles court,
relitigation of the merits will be required in order to obtain enforcement of
the judgment in the Netherlands Antilles. In addition, it is unlikely that:
 
     o the courts of the Netherlands Antilles would enforce judgments entered by
       U.S. courts predicated upon the civil liability provisions of the U.S.
       federal securities laws; or
 
     o actions can be brought in the Netherlands Antilles in relation to civil
       liabilities predicated upon the U.S. federal securities laws.
 
     Canada
 
     Our subsidiary, Statia Terminals Canada, Incorporated is incorporated under
the laws of Nova Scotia, Canada, and all of its assets are located outside the
U.S., primarily in the Province of Nova Scotia, Canada. Accordingly, it may not
be possible to effect service of process on Statia Terminals Canada within the
U.S. other than through its appointed service of process agent. In addition, it
may be difficult for holders of common shares to realize in the U.S. upon a
judgment obtained against Statia Terminals Canada in a U.S. court.
 
     We have been advised by our Nova Scotia counsel, Stewart McKelvey Stirling
Scales as follows. Legal actions may be instituted directly against Statia
Terminals Canada in the Province of Nova Scotia and a Nova Scotia court would
recognize and enforce a final judgment obtained against Statia Terminals Canada
in a U.S. court provided that:
 
     o the U.S. court validly took jurisdiction under Nova Scotia law;
 
     o the judgment was not obtained by fraud, or in a manner contrary to
       natural justice and its enforcement would not be inconsistent with public
       policy, as applied by a Nova Scotia court; and
 
     o the enforcement of such judgment in Nova Scotia does not constitute
       directly or indirectly the enforcement of U.S. penal law.
 
Such Nova Scotia counsel has also advised that there is some doubt that:
 
     o the courts of the Province of Nova Scotia would enforce judgments entered
       by U.S. courts predicated upon the civil liability provisions of the U.S.
       federal securities laws; and
 
     o actions can be brought in the Province of Nova Scotia in relation to
       civil liabilities predicated upon the U.S. federal securities laws.
 
    CASTLE HARLAN AND OUR MANAGEMENT HAVE PRACTICAL CONTROL OF US.
 
     Upon the closing of the offering, all of the subordinated shares and
incentive rights will be transferred to [Newco], a [Netherlands Antilles]
corporation which will be controlled by Castle Harlan, the directors and
executive officers of the issuer and their affiliates. As a result, [Newco] will
own approximately 33% of the outstanding shares entitled to vote. As a result of
this ownership, restrictions on transfer and certain provisions of Netherlands
Antilles law, [Newco] will be able to exercise practical control over most
matters requiring shareholder approval, including the election of directors. See
"Management", "Security Ownership" and "Description of Common Shares."
 
    A NON-NEGOTIATED CHANGE OF CONTROL IS UNLIKELY.
 
     Certain provisions of Netherlands Antilles law and the issuer's articles
would make it more difficult for a third party to acquire control of the issuer
without the cooperation of [Newco], even if such change in control would be
beneficial to shareholders. See "Description of Common Shares." 
 
    THERE IS NO PRIOR MARKET FOR OUR SHARES.
 
     We do not know the extent to which investor interest in us will lead to
development of a trading 

                                       13
<PAGE>

market or how quickly you can sell your shares. Prior to the offering, there has
been no public market for the common shares. We have applied to list the common
shares on the New York Stock Exchange. See also "Description of Common
Shares--Restrictions on Ownership and Transfer" and "Plan of Distribution."
 
                         RISKS INHERENT IN OUR BUSINESS
 
    CHANGE IN DEMAND FOR U.S. CRUDE OIL AND PETROLEUM PRODUCT IMPORTS AFFECTS
    OUR FINANCIAL RESULTS.
 
     Our operations are largely dependent on the demand for crude oil and
petroleum products imported into the U.S. The demand for imported crude oil and
petroleum products in the U.S. is influenced by a number of factors, including
weather conditions, economic growth, pricing of petroleum products and
substitute products, government policy, transportation costs, domestic
production and refining capacity and utilization. Changes in government
regulation that affect the petroleum industry, including the imposition of a
surcharge on imported oil or an increase in taxes on crude oil and oil products,
could adversely affect our business. These factors are beyond our control, and
we can give no assurances that conditions affecting supply and demand of crude
oil and petroleum products favorable to our business and financial condition and
our ability to pay the minimum quarterly dividend will exist.
 
    THE FORWARD PRICING STRUCTURE FOR CRUDE OIL AND PETROLEUM PRODUCTS AND THE
    WORLD TANKER MARKET AFFECTS OUR FINANCIAL RESULTS.
 
     When the forward prices for crude oil and petroleum products that we store
fall below spot prices for any length of time, customers using our storage
facilities are less likely to store such product, thereby reducing storage
utilization levels. This market condition is referred to as "backwardation."
When forward prices exceed spot prices for any length of time the market is said
to be in "contango." When the crude oil and petroleum products market is in
contango for a specific product by an amount exceeding storage costs, time value
of money, cost of a second vessel and the cost of loading and unloading at the
terminal, the demand for storage capacity at our terminals for such product
usually increases. Thus, our operations are also dependent on the availability
of and the reasonableness of charter rates of very-large and ultra-large crude
carriers to transfer products to our facilities and of smaller vessels to
subsequently transfer products from our facilities to downstream users.
 
     Historically, heating oil has been in contango during the summer months and
gasoline has been in contango during the winter months. We can give no
assurances that the market will follow this pattern in the future. For example,
from the beginning of 1995 to late 1997, all segments of the crude oil and
petroleum products markets were generally in backwardation. As a result, we
believe that utilization of our facilities was adversely impacted during that
period. Since late 1997 all segments of the crude oil and petroleum products
markets have generally been in contango, and consequently we are currently
experiencing an increase in the utilization of our facilities. However, we can
give no assurances that such market conditions will continue.
 
    CERTAIN CUSTOMERS AND CERTAIN LONG TERM CONTRACTS ARE IMPORTANT TO OUR
    FINANCIAL RESULTS.
 
     Revenues from Bolanter Corporation N.V. (an affiliate of Saudi Aramco)
constituted approximately 8.9% (plus an additional 7.7% generated by the
movement of Bolanter's products through our St. Eustatius terminal) of our total
1998 revenues. Revenues from Tosco Corporation constituted approximately 7.1%
(plus an additional 1.9% generated by the movement of Tosco's products through
our Point Tupper terminal) of our total 1998 revenues. We can give no assurances
that these long-term contracts will be renewed at the end of their terms,
January 31, 2000 and July 31, 1999, respectively. If these contracts were not
renewed or replaced or we otherwise lost any significant portion of our revenues
from these two customers, such non-renewal/replacement or loss could have a
material adverse effect on our business, financial condition and ability to pay
the minimum quarterly dividend. We also have long-term contracts with other key
customers, and there can be no assurance that these contracts will be renewed at
the end of their terms or that we will be able to enter into other long-term
contracts on terms favorable to us, or at all. See "Business--Customers."
 
                                       14
<PAGE>
 
    THE BENEFICIAL TAX STATUS OF OUR FACILITIES MAY END.
 
     Our St. Eustatius facility has qualified for designation as a free trade
zone and our Point Tupper facility has qualified for designation as a customs
bonded warehouse. Such status allows customers and us to transship commodities
to other destinations with minimal Netherlands Antilles or Canadian tax effects.
 
     Pursuant to a Free Zone and Profit Tax Agreement with the island government
of St. Eustatius which is scheduled to expire on December 31, 2000, we are
subject to a minimum annual tax of 500,000 Netherlands Antilles guilders
(approximately $282,000). This agreement provides that any amounts paid to meet
the minimum annual payment will be available to offset future tax liabilities
under the agreement to the extent that the minimum annual payment is greater
than 2% of taxable income. We can give no assurances that this agreement will be
extended on terms favorable to us, or at all.
 
     In Canada, the customs bonded warehouse designation expires annually. We
routinely renew this designation through compliance with regulations, including
providing evidence of bonding arrangements and fee payments. It is possible that
we could lose our customs bonded warehouse designation in Canada through non-
compliance, inability to obtain the necessary bonding arrangements or as a
result of significant changes in regulations.
 
     Should these free trade zone or custom bonded warehouse designations
terminate, our business, financial condition and ability to pay the minimum
quarterly dividend may be adversely impacted.
 
    CANADIAN INCOME TAXES COULD INCREASE.
 
     Certain net operating loss and investment tax credit carryforwards of
Statia Terminals Canada are scheduled to expire at various times through the
year 2002. We expect that in 1999, these carryforwards will reduce our Canadian
income tax expense by approximately $2.3 million. Therefore, if the operations
of Statia Terminals Canada do not produce increasing after-tax cash flow
sufficient to offset any increase in taxes resulting from such expirations, or
if we do not otherwise offset any shortfall in available cash required to pay
the minimum quarterly dividend, the issuer may not be able to pay the full
amount of the minimum quarterly dividend on all of the common and subordinated
shares.
 
    ADVERSE WEATHER CAN NEGATIVELY AFFECT OUR OPERATIONS.
 
     Our operations are disrupted from time to time by adverse weather
conditions. Since its construction in 1982, our St. Eustatius facility has been
adversely impacted by six hurricanes. The three that most seriously affected us
occurred in the third and fourth quarters of 1995. Operations at the St.
Eustatius facility ceased for varying lengths of time from August 28, 1995 to
October 3, 1995, and during September 1995, vessel calls at the St. Eustatius
facility decreased substantially. Through December 31, 1997, we spent
$20.6 million on repairs and improvements related to the 1995 hurricanes of
which $12.6 million was covered by insurance. Hurricane Georges in September
1998 caused approximately $5.8 million in damage of which all but $0.5 million
was covered by insurance. We have no business interruption insurance. See
"Business --Insurance" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
 
    WE HAVE SEVERAL TYPES OF COMPETITORS.
 
     Our principal competition with respect to transshipment is from lightering.
Under current market conditions, lightering is generally less expensive than
terminaling, and it is possible that an increasing percentage of transshipment
could be handled through lightering. In addition, because the independent marine
terminaling industry is fragmented, we compete both with large, well-financed
companies that own many terminal locations and with small companies that may own
a single terminal location. Certain companies offering marine terminaling
facilities have more storage capacity and greater financial and other resources
than we do. We believe that most of our principal competitors are less
highly-leveraged than we are and may therefore have greater financing and
operating flexibility than we do. We can give no assurances that we will not
encounter increased competition in the future, which could have a material
adverse effect on our business, financial condition and our ability to pay the
minimum quarterly dividend.
 
    ENVIRONMENTAL RISKS AND NEW GOVERNMENTAL REGULATION MAY NEGATIVELY AFFECT
    US.
 
     Our operations and properties are subject to laws and regulations in our
geographic areas of operation relating to environmental, health and safety
matters. The nature of our operations and previous operations by others at our
facilities exposes us to the risk of claims with respect to environmental,
health and safety matters, and we 
 
                                       15
<PAGE>

can give no assurances that we will not incur material costs or liabilities in
connection with such claims. The costs associated with our planned environmental
investigation, remediation and upgrading at the Point Tupper terminal could be
substantial, although we believe most of such costs are the responsibility of
Praxair under an indemnity given in connection with the Castle Harlan
acquisition. We believe that the remainder are covered by accruals. As of
December 31, 1998, our environmental accruals were approximately $1.5 million.
We do not have cash reserves set aside equal to such accruals. In addition,
future events, such as the discovery of environmental conditions, changes in
existing laws and regulations or their interpretation, the issuance of penalties
for regulatory violations, or more vigorous enforcement policies of regulatory
agencies, may give rise to unexpected expenditures or liabilities that could be
material to our business, financial condition and our ability to pay the minimum
quarterly dividend. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Environmental, Health and Safety Matters"
and "Business--Environmental, Health and Safety Matters."
 
    PRAXAIR MAY DISPUTE OR DELAY PAYMENTS WITH RESPECT TO ITS INDEMNITY
    OBLIGATIONS TO US.
 
     When Castle Harlan acquired us from Praxair, Praxair agreed to indemnify us
from the costs of certain matters, including certain environmental, tax and
legal matters. Any dispute or delay in payment under Praxair's indemnification
obligations to us could affect our ability to pay the minimum quarterly dividend
during a particular quarter or quarters.
 
    WE MAY NOT BE READY FOR YEAR 2000 PROBLEMS.
 
     We can give no assurance that our programs designed to minimize the impact
of the transition to the year 2000 on our electronic date-sensitive equipment
will be completely successful. If they are not, the date change from 1999 to
2000 could materially affect our results of operations, financial condition or
our ability to pay the minimum quarterly dividend. Our operations may also be
negatively affected by the inability of third parties with whom we deal to
manage this problem in a timely manner. The full extent of any adverse impact is
impossible to determine. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Information Technology and the Year 2000."
 
                                       16
<PAGE>
                               THE RESTRUCTURING
 
     In November 1996 Castle Harlan, our management and others acquired control
of us from Praxair. As part of this acquisition:
 
     o the issuer issued $40 million of preferred stock to Praxair;
 
     o the issuer issued $55 million of preferred stock and common stock to
       Castle Harlan and its affiliates;
 
     o the issuer issued $4.5 million of preferred stock and common stock to
       certain members of our management;
 
     o the issuer issued $1.5 million of preferred stock and common stock to a
       consultant of ours;
 
     o Statia Terminals International received a capital contribution of
       $98.5 million from the issuer, consisting of $55.5 million of cash and
       $43.0 million of equity in certain of our subsidiaries; and
 
     o Statia Terminals International and Statia Terminals Canada, Incorporated
       issued $135.0 million of First Mortgage Notes, Series A (which were
       subsequently exchanged for the First Mortgage Notes).
 
We used a portion of the contributed capital and proceeds from the issuance of
the First Mortgage Notes, Series A (i) to pay the cash portion of the purchase
price of approximately $174.1 million to Praxair, and (ii) to pay $16.0 million
of commissions, fees and expenses. In connection with but prior to the
acquisition, Praxair repaid all of our third-party indebtedness, including an
off-balance sheet lease obligation, bank debts, preferred stock from a former
affiliate and related party advances.
 
     All of the currently outstanding stock of the issuer is owned as follows:
 
     o Praxair holds 20,000 shares of Series A Preferred Stock, 10,000 shares of
       Series B Preferred Stock and 10,000 shares of Series C Preferred Stock;
 
     o Castle Harlan and its affiliates hold 13,850 shares of Series D Preferred
       Stock, 33,750 shares of Series E Preferred Stock and 33,750 shares of
       common stock;
 
     o certain directors and members of our management hold 4,724 shares of
       Series E Preferred Stock and 4,724 shares of common stock and options to
       acquire an additional 6,145 shares of common stock; and
 
     o other shareholders hold 2,500 shares of Series E Preferred Stock and
       2,500 shares of common stock.
 
There are no subordinated shares or incentive rights outstanding, and the
issuer's currently outstanding common stock, all of which will be reclassified
by the issuer at the closing of this offering (as described in the next
paragraph), does not have the same rights and provisions as the common shares
offered through this prospectus.
 
     Upon the issuance of the common shares at the closing of this offering the
issuer will redeem or reclassify all of its currently outstanding capital stock
and issue the subordinated shares and incentive rights as follows:
 
     o using the net proceeds of this offering, the issuer will redeem all of
       its Series A Preferred Stock, Series B Preferred Stock, Series C
       Preferred Stock, Series D Preferred Stock and Series E Preferred Stock at
       their respective liquidation preferences plus all cumulative unpaid
       dividends on such preferred stock;
 
     o the issuer will reclassify the 47,119 shares of its outstanding common
       stock (which will include 6,145 shares of common stock to be issued upon
       exercise of options at or by the closing) as 471,190 subordinated shares;
 
     o the issuer will issue an additional 3,328,810 subordinated shares plus
       38,000 incentive rights to the holders of the remaining outstanding
       common stock; and
 
     o all of the subordinated shares and incentive rights will be transferred
       to [Newco] by the holders thereof.
 
                                       17
<PAGE>
 
<TABLE>
<CAPTION>
   SHARES ISSUED AND OUTSTANDING                                             SHARES AND INCENTIVE RIGHTS TO BE
   PRIOR TO THE RESTRUCTURING AND        ACTION TO BE TAKEN PURSUANT TO       ISSUED AND OUTSTANDING AFTER THE
              OFFERING                   THE RESTRUCTURING AND OFFERING          RESTRUCTURING AND OFFERING
------------------------------------  ------------------------------------  ------------------------------------
 
<S>                                   <C>                                   <C>
20,000 Series A ....................  Redeemed                              None
  Preferred Shares
 
10,000 Series B ....................  Redeemed                              None
  Preferred Shares
 
10,000 Series C ....................  Redeemed                              None
  Preferred Shares
 
13,850 Series D ....................  Redeemed                              None
  Preferred Shares
 
40,974 Series E ....................  Redeemed                              None
  Preferred Shares
 
47,119 shares of common stock
  (after exercise of options) ......  Reclassified                          471,190 subordinated shares
 
                                      Additional issuance to holders of     3,328,810 subordinated shares
                                      outstanding common stock              38,000 incentive rights
 
                                      Public offering                       7,600,000 common shares
</TABLE>
 
                                       18
<PAGE>
                                USE OF PROCEEDS
 
     We estimate that the net proceeds we will receive from the sale of the
common shares offered through this prospectus will be approximately $142.1
million (or $156.3 million if the underwriters exercise their over-allotment
option in full), after deducting underwriting discounts and commissions but
before deducting fees and expenses incurred in connection with this offering. We
anticipate using the net proceeds of this offering and other cash on hand to:
 
     o redeem all of the issuer's Series A Preferred Stock, Series B Preferred
       Stock, and Series C Preferred Stock for $40.0 million;
 
     o pay $9.2 million in accrued dividends [assuming this offering closes on
       March 31, 1999] with respect to the issuer's Series A Preferred Stock,
       Series B Preferred Stock, and Series C Preferred Stock;
 
     o redeem all of the issuer's Series D Preferred Stock and Series E
       Preferred Stock for approximately $54.8 million;
 
     o purchase additional capital stock of Statia Terminals International for
       approximately $37.7 million ($52.8 million if the underwriters exercise
       their over-allotment option in full), all of which Statia Terminals
       International will use to redeem 25% (35% if the underwriters exercise
       their over-allotment option in full) of its 11 3/4% First Mortgage Notes
       due 2003, Series B (including a $4.0 million premium over par
       ($5.6 million if the underwriters exercise their over-allotment option in
       full); and
 
     o pay approximately $5.1 million representing the fees and expenses
       incurred in connection with this offering.
 
                                       19
<PAGE>
                                 CAPITALIZATION
 
     The following table sets forth (i) the historical capitalization of the
issuer as of December 31, 1998, (ii) the pro forma transaction adjustments
required to reflect the pro forma transactions, including the sale of the common
shares offered in this prospectus, the application of the net proceeds from such
sale as described in "Use of Proceeds" and the restructuring, and (iii) the pro
forma capitalization of the issuer as of December 31, 1998. The table is derived
from, should be read in conjunction with, and is qualified in its entirety by
reference to the historical and pro forma financial statements and notes thereto
included elsewhere in this prospectus.
 
<TABLE>
<CAPTION>
                                                                               AS OF DECEMBER 31, 1998 (UNAUDITED)
                                                                           -------------------------------------------
                                                                                     (DOLLARS IN THOUSANDS)
                                                                                         TRANSACTION       PRO FORMA
                                                                           HISTORICAL    ADJUSTMENTS(1)    AS ADJUSTED
                                                                           ----------    --------------    -----------
<S>                                                                        <C>           <C>               <C>
Cash and cash equivalents...............................................   $   14,061       $ (2,013)       $  12,048
                                                                           ----------       --------        ---------
Long-term debt..........................................................      135,000        (33,750)         101,250
Redeemable Preferred Stock Series A through C...........................       40,000        (40,000)              --
 
Stockholders' equity:
  Preferred Stock Series D and E........................................       54,824        (54,824)              --
  Notes receivable from stockholders....................................       (1,474)         1,474               --
  Common stock..........................................................            4             (4)              --
  Common shares.........................................................           --             76               76
  Subordinated shares...................................................           --             38               38
  Additional paid-in-capital............................................          363        135,709          136,072
  Accumulated deficit...................................................      (10,386)        (6,096)         (16,482)
                                                                           ----------       --------        ---------
     Total stockholders' equity.........................................       43,331         76,373          119,704
                                                                           ----------       --------        ---------
 
     Total capitalization...............................................   $  218,331       $  2,623        $ 220,954
                                                                           ----------       --------        ---------
                                                                           ----------       --------        ---------
</TABLE>
 
------------------
 
(1) See notes to unaudited pro forma consolidated condensed financial statements
    for a discussion of the pro forma transaction adjustments.
 
                                       20
<PAGE>
                                    DILUTION
 
     On a pro forma basis as of December 31, 1998 after giving effect to the
restructuring and the issuance of the common and subordinated shares and
incentive rights, the tangible net book value of the issuer's assets would have
been approximately $116.1 million or $10.15 per common share (assuming an
initial public offering price of $20.00 per common share). Purchasers of common
shares in the offering will experience substantial and immediate dilution in
tangible net book value per common share for financial accounting purposes, as
illustrated in the following table:
 
<TABLE>
<S>                                                                                     <C>       <C>
Assumed initial public offering price per common share...............................             $20.00
  Net tangible book value (deficit) per common share before the offering(1)..........   $(3.83)
  Increase in net tangible book value per common share attributable to new
     investors.......................................................................    13.98
                                                                                        ------
Less: Pro forma tangible net book value per common share after the offering(2)(3)....              10.15
                                                                                                  ------
Immediate dilution in tangible net book value per common share to new investors......             $ 9.85
                                                                                                  ------
                                                                                                  ------
</TABLE>
 
------------------
 
(1) The net tangible book value does not include intangible assets with a book
    value of $4.5 million.
 
(2) Determined by dividing the total number of shares (7,600,000 common shares,
    3,800,000 subordinated shares and 38,000 incentive rights) to be outstanding
    after the offering made hereby into the pro forma tangible net book value of
    the issuer, after giving effect to the application of the estimated net
    proceeds of the offering before deducting expenses incurred in connection
    with this offering.
 
(3) The net tangible book value does not include intangible assets with a book
    value of $3.6 million.
 
     There could be additional future dilution if options are granted under any
new stock option plan.
     The following table sets forth the number of shares that will be issued by
the issuer and the total consideration to the issuer contributed by the
purchasers of common shares in this offering upon the consummation of the
restructuring and the issuance of the common and subordinated shares and
incentive rights:
 
<TABLE>
<CAPTION>
                                                     COMMON AND/OR
                                                  SUBORDINATED SHARES
                                                    AND/OR INCENTIVE
                                                     RIGHTS ISSUED                 CONSIDERATION
                                                 ----------------------      --------------------------
                                                   NUMBER       PERCENT         AMOUNT          PERCENT
                                                 -----------    -------      -------------      -------
<S>                                              <C>            <C>          <C>                <C>
Existing shareholders.........................     3,838,000      33.55%     $      38,380(2)      0.03%
New investors(1) .............................     7,600,000      66.45        152,000,000        99.97
                                                 -----------    -------      -------------      -------
Total.........................................    11,438,000     100.00%     $ 152,038,380       100.00%
                                                 -----------    -------      -------------      -------
                                                 -----------    -------      -------------      -------
</TABLE>
 
------------------
 
(1) Assumes that the underwriters' over-allotment option is not exercised.
 
(2) A nominal value has been attributed to the incentive rights ($0.01 per
    incentive right).
 
                                       21
<PAGE>
                              CASH DIVIDEND POLICY
 
GENERAL
 
     AVAILABLE CASH
 
     We will pay as dividends, subject to Netherlands Antilles law and our
indenture as described in "Cash Available for Payment of Dividends," from
legally available funds, on a quarterly basis, all of our available cash as
described in this prospectus.
 
     Available cash is defined in the glossary and generally means, for any of
our fiscal quarters, all cash on hand at the end of the quarter less the amount
of cash reserves that is necessary or appropriate in the reasonable discretion
of our board of directors to:
 
     o provide for the proper conduct of our business, such as capital and
       operating expenditures and payment of taxes and levies;
 
     o comply with applicable law or any of our debt instruments or other
       agreements; or
 
     o provide funds for dividends to holders of common and subordinated shares
       and incentive rights for any one or more of the next four fiscal
       quarters.
 
     It is important to note that the reserves established by our board of
directors are not limited to reserves under generally accepted accounting
principles.
 
     OPERATING SURPLUS AND INTERIM CAPITAL TRANSACTIONS
 
     Cash dividends will be characterized as dividends from either operating
surplus or interim capital transactions. This distinction affects the amounts
distributed to holders of common and subordinated shares relative to the holders
of incentive rights, and under certain circumstances it determines whether
holders of subordinated shares receive any dividends. See "--Quarterly Dividends
of Available Cash."
 
     Operating surplus means generally, for any period prior to liquidation on a
cumulative basis, the sum of:
 
     (1) $7.5 million,
 
     (2) any net positive working capital on hand as of the close of business on
         the closing of this offering, and
 
     (3) all cash receipts for the period beginning at the closing of this
         offering and ending with the last day of that period, other than cash
         receipts from interim capital transactions;
 
        less
 
     (4) all of our operating expenses for the period beginning at the closing
         of this offering and ending with the last day of that period and the
         amount of cash reserves that is necessary or advisable in the
         discretion of our board of directors to provide funds for future
         operating expenditures.
 
     Interim capital transactions are:
 
     o borrowings and sales of debt securities (other than for working capital
       purposes and other than for items purchased on open account in the
       ordinary course of business);
 
     o sales of equity securities; and
 
     o sales or other dispositions of assets for cash (other than inventory,
       accounts receivable and other assets all as disposed of in the ordinary
       course of business).
 
     To avoid the difficulty of trying to determine whether available cash paid
as a dividend by us is from operating surplus or from interim capital
transactions, all available cash paid as a dividend from any source will be
treated as a dividend from operating surplus until the sum of all available cash
paid as a dividend since the closing of this offering equals the operating
surplus as of the end of the quarter prior to that dividend. Any available cash
in excess of that amount (regardless of its source) will be deemed to be from
interim capital transactions and paid accordingly.
 
     If available cash from interim capital transactions is paid as a dividend
for each common share in an aggregate amount per common share equal to the
initial price of that common share, plus any common share arrearages, the
distinction between operating surplus and interim capital transactions will
cease, and all dividends of available cash will be treated as if they were from
 
                                       22
<PAGE>
operating surplus. We do not anticipate that there will be significant dividends
from interim capital transactions.
 
     SUBORDINATED SHARES
 
     The subordinated shares are entitled to receive the minimum quarterly
dividend only after the common shares have received the minimum quarterly
dividend plus any arrearages thereon. Payment of the first $6.8 million of
dividends on the subordinated shares will be deferred as described in
"--Deferral of Dividends on Subordinated Shares." The subordinated shares are
not entitled to arrearages but will be entitled to payment of deferred dividends
no later than the end of the subordination period.
 
     Upon expiration of the subordination period, which will generally not occur
prior to             , 2004, the subordinated shares will convert into common
shares on a one-for-one basis and will thereafter participate pro rata with the
other common shares in dividends of available cash. The subordinated shares are
also subordinated to the common shares upon liquidation.
 
     INCENTIVE DIVIDENDS
 
     The incentive rights are non-voting shares which represent the right to
receive an increasing percentage of quarterly dividends of available cash from
operating surplus after the minimum quarterly dividend and the target dividend
levels have been achieved. The target dividend levels are based on the amounts
of available cash from operating surplus paid as dividends in excess of the
payments made for the minimum quarterly dividend and common share arrearages, if
any.
 
     EFFECT OF ISSUANCE OF ADDITIONAL SHARES
 
     Subject to the limitations described under "Description of Common
Shares--Issuance of Additional Shares," we have the authority to issue
additional common shares or other equity securities for the consideration and on
the terms and conditions as are established by our board of directors in its
sole discretion and without the approval of the holders of the common or
subordinated shares or the holders of the incentive rights. It is possible that
we will fund acquisitions through the issuance of additional common shares or
other equity securities. Holders of any additional common shares issued will be
entitled to share equally with the then-existing holders of common shares in
dividends of available cash. In addition, the issuance of additional securities
may dilute the value of the interests of the then-existing holders of common
shares in our net assets.
 
QUARTERLY DIVIDENDS OF AVAILABLE CASH
 
     We will pay dividends to our shareholders for each of our fiscal quarters
prior to the issuer's liquidation in an amount equal to 100% of our available
cash for that quarter. We expect to pay dividends of all available cash within
approximately 45 days after the end of each quarter, commencing with the quarter
ending June 30, 1999, to holders of record on the applicable record date. The
minimum quarterly dividend and the target dividend levels for the period from
the closing of this offering through June 30, 1999 will be adjusted downward
based on the actual length of that period. The minimum quarterly dividend and
the target dividend levels are also subject to certain other adjustments as
described below under "--Dividends from Interim Capital Transactions" and
"--Adjustment of Minimum Quarterly Dividend and Target Dividend Levels."
 
     For each quarter during the subordination period, to the extent there is
sufficient available cash, a holder of common shares will have the right to
receive the minimum quarterly dividend, plus any common share arrearages, prior
to any dividend of available cash to the holders of subordinated shares. This
subordination feature will enhance our ability to pay the minimum quarterly
dividend on the common shares during the subordination period. There is no
guarantee, however, that the minimum quarterly dividend will be paid on the
common shares.
 
     Upon expiration of the subordination period, all subordinated shares will
be converted on a one-for-one basis into common shares and will participate pro
rata with all other common shares in future dividends of available cash. Under
certain circumstances, up to 50% of the subordinated shares may convert into
common shares prior to the expiration of the subordination period. Common shares
will not accrue arrearages for dividends for any quarter after the end of the
subordination period and subordinated shares will not accrue any arrearages for
dividends for any quarter but will be entitled to payment of deferred dividends.
 
                                       23
<PAGE>
DIVIDENDS FROM OPERATING SURPLUS DURING SUBORDINATION PERIOD
 
     The subordination period will generally extend from the closing of this
offering until the first day of any quarter beginning after March 31, 2004 for
which:
 
     o dividends of available cash from operating surplus on the common and
       subordinated shares for each of the three consecutive four-quarter
       periods immediately preceding that day equaled or exceeded the sum of the
       minimum quarterly dividend on all of the outstanding shares during those
       periods;
 
     o the adjusted operating surplus generated during each of the three
       consecutive four-quarter periods immediately preceding that day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis during those periods; and
 
     o there are no outstanding common share arrearages.
 
     Prior to the end of the subordination period, a portion of the subordinated
shares will convert into common shares on a one-for-one basis on the first day
after the record date established for the dividend for any quarter ending on or
after (a) March 31, 2002 for one-quarter of the subordinated shares (950,000
subordinated shares) and (b) March 31, 2003 for one-quarter of the subordinated
shares (950,000 subordinated shares) for which:
 
     o dividends of available cash from operating surplus on the common and
       subordinated shares for each of the three consecutive four-quarter
       periods immediately preceding that date equaled or exceeded the sum of
       the minimum quarterly dividend on all of the outstanding shares during
       those periods;
 
     o the adjusted operating surplus generated during each of the three
       consecutive four-quarter periods immediately preceding that date equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis during those periods; and
 
     o there are no outstanding common share arrearages;
 
provided, however, that the early conversion of the second one-quarter of
subordinated shares may not occur until at least one year following the early
conversion of the first one-quarter of subordinated shares.
 
     Upon expiration of the subordination period, all remaining subordinated
shares will convert into common shares on a one-for-one basis and will
thereafter participate, pro rata, with the other common shares in dividends of
available cash.
 
     "Adjusted operating surplus" for any period generally means:
 
     (1) the operating surplus generated during that period;
 
     less
 
     (2) any net increase in working capital borrowings during that period, and
 
     (3) any net reduction in cash reserves for operating expenditures during
         that period not relating to an operating expenditure made during that
         period;
 
   plus
 
     (4) any net decrease in working capital borrowings during that period, and
 
     (5) any net increase in cash reserves for operating expenditures during
         that period required by any debt instrument for the repayment of
         principal, interest or premium.
 
     Operating surplus generated during a period is equal to the difference
between:
 
     (1) the operating surplus determined at the end of that period; and
 
     (2) the operating surplus determined at the beginning of the period.
 
     Dividends paid by us of available cash from operating surplus for any
quarter during the subordination period will be paid in the following manner:
 
     o First, 100% to the common shares, pro rata, until each outstanding common
       share has been paid an amount equal to the minimum quarterly dividend for
       that quarter;
 
     o Second, 100% to the common shares, pro rata, until each outstanding
       common share has been paid an amount equal to any
 
                                       24
<PAGE>
       common share arrearages accrued and unpaid for any prior quarters during
       the subordination period;
 
     o Third, 100% to the subordinated shares, pro rata, until each outstanding
       subordinated share has been paid an amount equal to the minimum quarterly
       dividend for that quarter; and
 
     o Thereafter, as described in "--Incentive Dividends--Hypothetical
       Annualized Yield" below.
 
     For common shares, the term "common share arrearages" means the amount by
which the minimum quarterly dividend in any quarter during the subordination
period exceeds the dividend of available cash from operating surplus actually
paid for that quarter on a common share issued in this offering, cumulative for
that quarter and all prior quarters during the subordination period. Common
share arrearages will not accrue interest.
 
DIVIDENDS FROM OPERATING SURPLUS AFTER SUBORDINATION PERIOD
 
     Dividends paid by us of available cash from operating surplus for any
quarter after the subordination period will be paid in the following manner:
 
     o First, 100% to all common and subordinated shares, pro rata, until each
       share has been paid an amount equal to the minimum quarterly dividend for
       that quarter; and
 
     o Thereafter, in the manner described in "--Incentive
       Dividends--Hypothetical Annualized Yield" below.
 
DEFERRAL OF DIVIDENDS ON SUBORDINATED SHARES
 
     All matters discussed in this "Cash Dividend Policy" section are subject to
the following:
 
     Payment of the first $6.8 million of dividends that would have otherwise
been paid on the subordinated shares will be deferred until the end of the
deferral period. Except as set forth in the next paragraph, such deferred
dividends will be deemed to have been paid for the purposes of determining
available cash, operating surplus, adjusted operating surplus, target dividend
levels, early conversion rights and the expiration of the subordination period.
The deferred amounts may be used by us during the deferral period for any
business purpose other than to pay dividends on the subordinated shares.
 
     After the deferral period all available cash from operating surplus
(including, for this purpose, the amount thereof allocated to the deferred
dividends) remaining after the minimum quarterly dividend (other than the
deferred dividends) is paid on all common and subordinated shares shall be paid
to the subordinated shares until the deferred dividends have been paid in full.
 
     The deferral period will generally extend from the closing of this offering
until the first day of any quarter beginning after March 31, 2001 for which:
 
     o dividends of available cash from operating surplus on the common and
       subordinated shares (including deferred dividends) for each of the two
       consecutive four-quarter periods immediately preceding that day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       outstanding shares during those periods;
 
     o the adjusted operating surplus generated during each of the two
       consecutive four-quarter periods immediately preceding that day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis during those periods; and
 
     o there are no outstanding common share arrearages.
 
     Upon early conversion any unpaid deferred dividends allocable to the
subordinated shares so converted shall be re-allocated pro rata to the remaining
unconverted subordinated shares.
 
     Any deferred dividends remaining unpaid at the end of the subordination
period shall be paid on the subordinated shares at that time regardless of
whether there is any available cash at that time.
 
INCENTIVE DIVIDENDS--HYPOTHETICAL ANNUALIZED YIELD
 
     For any quarter for which available cash from operating surplus is
distributed to the holders of common and subordinated shares in an amount equal
to the minimum quarterly dividend on all common and subordinated shares and to
the holders of common shares in an amount equal to any unpaid common share
arrearages, then any available cash from operating surplus for that quarter will
be
 
                                       25
<PAGE>
paid as dividends among the holders of common shares and subordinated shares and
the holders of incentive rights in the following manner:
 
     o First, 85% to all common and subordinated shares, pro rata, and 15% to
       the incentive rights, until the common and subordinated shares have
       received (including the minimum quarterly dividend) a total of $0.495 for
       that quarter to each outstanding common and subordinated share (the
       "first target dividend");
 
     o Second, 75% to all common and subordinated shares, pro rata, and 25% to
       the incentive rights, until the common and subordinated shares have
       received (including the minimum quarterly dividend) a total of $0.675 for
       such quarter in respect of each outstanding common or subordinated share
       (the "second target dividend"); and
 
     o Thereafter, 50% to all common and subordinated shares, pro rata, and 50%
       to the incentive rights.
 
     The dividends to the holders of incentive rights set forth above (other
than in their capacity as holders of common and subordinated shares) represent
the incentive dividends.
 
     The following table illustrates the percentage allocation of the additional
available cash from operating surplus between the common shares, subordinated
shares and incentive rights up to the various target dividend levels and a
hypothetical annualized percentage yield to be realized by a holder of common or
subordinated shares or incentive rights at each target dividend level. For a
discussion of the tax consequences of ownership of common shares, see
"Taxation." For purposes of the following table, the annualized percentage yield
is calculated on a pretax basis by dividing each level of dividend by an initial
public offering price of $20.00 per common share. To the extent that the trading
price of the common shares is greater than $20.00 per share, the calculated
dividend yield will decrease. The calculations are also based on the assumption
that the quarterly dividend amounts shown do not include any common share
arrearages. The amounts set forth under "Marginal Percentage Interest in
Dividends" are the percentage interests of the holders of incentive rights and
the holders of common and subordinated shares in the amount by which any
available cash from operating surplus paid as dividends exceeds the minimum
quarterly dividend up to and including the corresponding amount in the column
"Quarterly Dividend Amount." The percentage interests shown for the holders of
common and subordinated shares and the holders of incentive rights for the
minimum quarterly dividend are also applicable to quarterly dividend amounts
that are less than the minimum quarterly dividend.
 
<TABLE>
<CAPTION>
                                                                                             MARGINAL PERCENTAGE
                                                                                            INTEREST IN DIVIDENDS
                                                                                           ------------------------
                                                                                           HOLDERS OF
                                                       QUARTERLY                           COMMON AND    HOLDERS OF
                                                        DIVIDEND        HYPOTHETICAL       SUBORDINATED  INCENTIVE
                                                         AMOUNT        ANNUALIZED YIELD    SHARES        RIGHTS
                                                     --------------    ----------------    ----------    ----------
<S>                                                  <C>               <C>                 <C>           <C>
Minimum quarterly dividend........................   $         0.45               9.0%         100%           0%
First target dividend.............................   $        0.495               9.9%          85%          15%
Second target dividend............................   $        0.675              13.5%          75%          25%
Thereafter........................................   above $  0.675        above 13.5%          50%          50%
</TABLE>
 
DIVIDENDS FROM INTERIM CAPITAL TRANSACTIONS
 
     Dividends paid by us of available cash from interim capital transactions
will be paid in the following manner:
 
     o First, 100% to all common and subordinated shares, pro rata, until each
       outstanding common share has been paid available cash from interim
       capital transactions in an aggregate amount per common share equal to the
       initial price;
 
     o Second, 100% to the common shares until each outstanding common share has
       been paid available cash from interim capital transactions in an
       aggregate amount equal to any unpaid common share arrearages for all
       common shares; and
 
     o Thereafter, all dividends of available cash from interim capital
       transactions will be paid as if they were from operating surplus.
 
                                       26
<PAGE>

     As a dividend of available cash from interim capital transactions is paid
the minimum quarterly dividend and the target dividend levels will be adjusted
downward by multiplying each such amount by a number equal to:
 
     (1) the initial price of the common shares reduced by that dividend (and
         all prior dividends) of available cash from interim capital
         transactions (the "unrecovered initial price");
 
   divided by
 
     (2) the initial price, or the unrecovered initial price, as the case may
         be, of the common shares immediately prior to that dividend of
         available cash from interim capital transactions.
 
     This adjustment to the minimum quarterly dividend may make it more likely
that subordinated shares will be converted into common shares (whether pursuant
to the termination of the subordination period or to the provisions permitting
early conversion of some subordinated shares) and may accelerate the dates at
which those conversions occur.
 
     When "payback" of the initial price has occurred, i.e., when the
unrecovered initial price of the common shares is zero (and any accrued common
share arrearages have been paid), then in effect the minimum quarterly dividend
and each of the target dividend levels will have been reduced to zero for
subsequent quarters. Thereafter, all dividends of available cash from all
sources will be treated as if they were paid from operating surplus. Because the
minimum quarterly dividend and the target dividend levels will have been reduced
to zero, the holders of incentive rights will be entitled thereafter to receive
50% of all dividends of available cash (in addition to any dividends to which
they may be entitled as holders of common and subordinated shares).
 
     Dividends of available cash from interim capital transactions will not
reduce the minimum quarterly dividend or target dividend levels for the quarter
for which they are paid as dividends.
 
ADJUSTMENT OF MINIMUM QUARTERLY DIVIDEND AND TARGET DIVIDEND LEVELS
 
     The minimum quarterly dividend and target dividend levels will be reduced
upon a dividend of available cash from interim capital transactions.
Additionally, in the event of any combination or subdivision of common shares
(whether effected by a dividend payable in common shares or otherwise), but not
by reason of the issuance of additional common shares for cash or property, the
following amounts will be proportionately adjusted upward or downward, as
appropriate:
 
     o the minimum quarterly dividend;
 
     o the target dividend levels;
 
     o the unrecovered initial price;
 
     o the amount of additional common shares issuable during the subordination
       period without a shareholder vote;
 
     o the amount of common shares issuable upon conversion of the subordinated
       shares; and
 
     o other amounts calculated on a per common and/or subordinated share basis.
 
     For example, in the event of a two-for-one split of the common shares
(assuming no prior adjustments), the minimum quarterly dividend, each of the
target dividend levels and the initial price of the common shares would each be
reduced to 50% of its initial level.
 
DISTRIBUTION OF CASH UPON LIQUIDATION
 
     Following the commencement of the dissolution and liquidation of the
issuer, assets will be sold or otherwise disposed of from time to time. The
proceeds of such liquidation will, first, be applied to the payment of our
creditors in the order of priority provided in the issuer's articles and by law
and, thereafter, be distributed to the holders of common and subordinated shares
and the holders of incentive rights in accordance with their respective
priorities as described below.
 
     The allocations upon liquidation are intended, to the extent possible, to
entitle the holders of outstanding common shares to a preference over the
holders of outstanding subordinated shares upon liquidation, to the extent
required to permit holders of common shares to receive their unrecovered initial
price and the minimum quarterly dividend due on such common shares plus any
unpaid common share arrearages.
 
     If the issuer liquidates before the end of the subordination period, any
distribution will be allocated as follows:
 
     o First, 100% to the common shares, pro rata, until each common share
       receives an amount equal to the sum of:
 
       (1) the unrecovered initial price of such common share,
 
                                       27
<PAGE>
       (2) the amount of the minimum quarterly dividend for the quarter during
           which the issuer's liquidation occurs, and
 
       (3) any unpaid common share arrearages on such common share;
 
     o Second, 100% to the subordinated shares, pro rata, until each
       subordinated share receives an amount equal to the sum of:
 
       (1) the unrecovered initial price of such subordinated share,
 
       (2) the amount of the minimum quarterly dividend for the quarter during
           which the issuer's liquidation occurs, and
 
       (3) any unpaid deferred dividends on such subordinated share;
 
     o Third, 85% to the common and subordinated shares, pro rata, and 15% to
       the incentive rights, until there has been allocated under this paragraph
       third an amount equal to:
 
       (1) the aggregate cumulative sum of the excess of the first target
           dividend over the minimum quarterly dividend for all common and
           subordinated shares for each quarter of the issuer's existence,
 
       less
 
       (2) the aggregate cumulative amount of any dividends of available cash
           from operating surplus in excess of the minimum quarterly dividend
           that were paid 85% to the common and subordinated shares, pro rata,
           and 15% to the incentive rights for each quarter of the issuer's
           existence;
 
     o Fourth, 75% to all common and subordinated shares, pro rata, and 25% to
       the incentive rights, until there has been allocated under this paragraph
       fourth an amount equal to:
 
       (1) the aggregate cumulative sum of the excess of the second target
           dividend over the first target dividend for all common and
           subordinated shares for each quarter of the issuer's existence,
 
       less
 
       (2) the aggregate cumulative amount of any dividends of available cash
           from operating surplus in excess of the first target dividend that
           were paid 75% to the common and subordinated shares, pro rata, and
           25% to the incentive rights for each quarter of the issuer's
           existence; and
 
     o Thereafter, 50% to all common and subordinated shares, pro rata, and 50%
       to the incentive rights.
 
     If liquidation occurs after the subordination period, the distinction
between common shares and subordinated shares will disappear, so that
clauses (2) and (3) of paragraph first above and all of paragraph second above
will no longer be applicable.
 
                                       28
<PAGE>
                       CASH AVAILABLE FOR PAYMENT OF DIVIDENDS
 
AVAILABLE CASH FROM OPERATING SURPLUS
 
     Based on the amount of working capital that we expect to have at the time
of the closing of this offering and our ability to make working capital
borrowings under our credit facility, we believe that we should have sufficient
available cash from our operating surplus to enable us to pay the minimum
quarterly dividend on the common and subordinated shares to be outstanding
immediately after the consummation of this offering with respect to each quarter
at least through the quarter ending June 30, 2000. Available cash for any
quarter will consist generally of all cash on hand at the end of such quarter,
as adjusted for reserves. Operating surplus generally consists of cash generated
from operations, after deducting related expenditures and other items, plus our
net positive working capital at the closing of this offering plus $7.5 million.
The definitions of available cash and operating surplus are set forth in the
glossary. There is significant uncertainty associated with our belief because
our belief is based on a number of assumptions, including the assumptions that:
 
     o the demand for terminaling services, for crude oil and petroleum products
       and sales of bunker and other bulk products will not decline from current
       levels;
 
     o the aggregate gross margins will continue at not less than the levels
       experienced during the quarter ended December 31, 1998 on an annualized
       basis;
 
     o no material accidents or other force majeure events will occur that
       disrupt our terminaling facilities; and
 
     o market, regulatory and overall economic conditions will not change
       substantially.
 
     Although we believe such assumptions are within a range of reasonableness,
whether the assumptions are realized is not, in a number of cases, within our
control and cannot be predicted with any degree of certainty. In the event that
our assumptions are not realized, the actual available cash from operating
surplus that we generate could be substantially less than that currently
expected and could, therefore, be insufficient to permit us to pay dividends at
the levels described above. See "Risk Factors--Risks Inherent in the Common
Shares--We may not be able to pay as much in dividends to you as we currently
intend." In addition, the terms of our indebtedness will restrict the ability of
the issuer to distribute cash to holders of common and subordinated shares and
incentive rights under certain circumstances, including in the event of a
default under the terms of such indebtedness. Accordingly, we can give no
assurances that payment of the minimum quarterly dividend or any other amounts
will be made. See "Cash Dividend Policy" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." We do not intend to
update the expression of belief set forth above.
 
     We need $20.5 million of available cash from our operating surplus to pay
the minimum quarterly dividend for four quarters on the common and subordinated
shares to be outstanding immediately after this offering ($13.7 million for the
common shares and $6.8 million for the subordinated shares). The amount of pro
forma available cash from our operating surplus generated during the year ended
December 31, 1998 was approximately $12.1 million. Assuming normalized
maintenance capital expenditures of $7.0 million per year, the amount of pro
forma available cash from operating surplus generated during the fourth quarter
of 1998 would have been approximately equal to $5.1 million, the amount needed
to pay the minimum quarterly dividend on all common and subordinated shares. We
expect that our level of operations in the fourth quarter of 1998 will continue
throughout 1999. We can give no assurances, however, that our expectations will
in fact be realized. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Appendix B--Pro Forma Available Cash
from Operating Surplus."
 
     We derived the amounts of pro forma available cash from operating surplus
set forth above from our pro forma and historical financial statements in the
manner set forth in Appendix B. The pro forma adjustments are based upon
currently available information and certain estimates and assumptions. The pro
forma financial statements do not purport to present our results of operations
had the restructuring actually been completed as of the dates indicated.
Furthermore, available cash from operating surplus is a cash accounting concept,
while our historical and pro forma financial statements have been prepared on an
accrual basis. As a consequence, the amount of pro forma available cash from
operating surplus
 
                                       29
<PAGE>
shown above should only be viewed as a general indication of the amount of
available cash from operating surplus that we might have generated had this
offering occurred on January 1, 1998.
 
RESTRICTIONS IMPOSED BY NETHERLANDS ANTILLES LAW
 
     Under Netherlands Antilles law, we may make one or more distributions to
our shareholders out of legally available funds. Such distributions can be made
out of our profits or reserves. Profits are established at our annual general
meeting of shareholders after we prepare and submit the balance sheet and profit
and loss account to our shareholders. Upon adoption of these financial
statements at the annual general meeting of shareholders, the profit, if any, is
set as the positive balance of the profit and loss account, after allocation of
amounts to reserves or creation of one or more provisions. The issuer's articles
provide that we may distribute such profit, as we deem fit. In addition, the
issuer's articles provide that we may allocate, in whole or in part, any profit
amounts to reserves (the profit reserves) and make distributions therefrom, as
well as to distribute out of reserves.
 
     Notwithstanding the above, we may declare and distribute one or more
interim-dividends, as an advance payment of expected profits. Such declaration
can only occur if we have, at the time of such declaration, the reasonable
expectation that we will make sufficient profits for the relevant financial year
to justify the interim-dividend. However, at the time of the declaration of the
interim dividend, we may further determine that any amounts not covered by the
profits, as set by the annual general meeting of shareholders for the relevant
financial year, shall be qualified as distribution out of freely distributable
reserves, if any, such as the capital surplus, being the aggregate amounts paid
in excess of the par value per share by each holder of common or subordinated
share.
 
     The distribution out of profits and/or reserves generally may be made to
shareholders insofar as our equity exceeds the nominal value of the issued and
outstanding capital. In addition, in the event that the profits and loss account
shows a loss for any given year, which loss cannot be covered by the reserves or
compensated in another manner, no profit can be distributed in any subsequent
year until such loss has been recovered or has been offset by reserves.
 
RESTRICTIONS IMPOSED BY INDENTURE
 
     The issuer is a holding company and depends entirely on dividends from
Statia Terminals International for its cash flow. Statia Terminals
International's ability to pay dividends to the issuer is subject to certain
restrictions contained in the indenture relating to its First Mortgage Notes.
Under the terms of the indenture the payment by Statia Terminals International
of any dividend to the issuer may not be made if at the time of declaration:
 
     o First, a default or event of default under the indenture shall have
       occurred and be continuing or shall occur as a consequence thereof;
 
     o Second, Statia Terminals International's consolidated fixed charge
       coverage ratio (as defined in the indenture) for the prior four full
       fiscal quarters is less than 2.0 to 1; or
 
     o Third, the amount of such dividend, when added to the aggregate amount of
       all other dividends and certain other restricted payments made by Statia
       Terminals International after November 27, 1996 and not covered by other
       exceptions in the indenture, exceeds the sum of:
 
          (A) 50% of Statia Terminals International's consolidated net income
              (as defined in the indenture) (taken as one accounting period)
              from November 27, 1996 to the end of Statia Terminals
              International's most recently ended fiscal quarter for which
              internal financial statements are available at the time of such
              dividend (or, if such aggregate consolidated net income is a
              deficit, minus 100% of such aggregate deficit), plus
 
          (B) the net cash proceeds from the issuance and sale (other than to a
              subsidiary of Statia Terminals International) after November 27,
              1996 of Statia Terminals International's capital stock.
 
     Certain other dividends, generally unrelated to operating cash flow, are
permitted notwithstanding the second and third clauses above.
 
     With respect to the first clause above, there is no default or event of
default under the indenture.
 
                                       30
<PAGE>
     With respect to the second clause above, for the four fiscal quarters ended
December 31, 1998, Statia Terminals International's consolidated fixed charge
coverage ratio was 2.0 to 1 on an historical basis and 2.7 to 1 on a pro forma
basis which assumes that this offering had closed at the beginning of such
period.
 
     With respect to the third clause above:
 
     o for the period from November 27, 1996 through December 31, 1998 Statia
       Terminals International's consolidated net income (as defined in the
       indenture) was $0.6 million; and
 
     o we expect to use $37.7 million of the net proceeds of this offering
       ($52.8 if the underwriters exercise their over-allotment option in full)
       to purchase additional capital stock of Statia Terminals International.
 
During such period Statia Terminals International has not paid any dividends and
has not made any other restricted payments which would be required to be
included in the calculation pursuant to the third clause above and has not sold
any of its capital stock.
 
     The redemption of approximately $33.8 million principal amount (plus a
redemption premium of $4.0 million) of the First Mortgage Notes at 111.75% of
the principal amount from the proceeds of this offering ($47.3 million principal
amount (plus a redemption premium of $5.6 million) if the underwriters exercise
their over-allotment option in full) will have a favorable impact on Statia
Terminals International's consolidated fixed charge coverage ratio. We currently
intend to redeem the remainder of the First Mortgage Notes on approximately
November 15, 2000 at 105.875% of the principal amount and, therefore, eliminate
at such time the restrictions imposed by the indenture. We expect to fund such
redemption principally from the issuance of new debt. We can give no assurances
that we will be able to issue such debt at the time or, if we are able to, how
favorable the terms of such issuance will be. It is likely that such new debt
would also contain restrictions on payment of dividends under certain
circumstances.
 
     Based on the foregoing and if our net income were to continue at the level
we project for 1999 we believe that, at least through November 15, 2000, the
foregoing indenture restrictions will permit Statia Terminals International to
pay sufficient dividends to the issuer to cover at least the minimum quarterly
dividend that would be required to be paid on the common and subordinated shares
out of available cash from operating surplus.
 
                                       31
<PAGE>
        UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 
     The following unaudited pro forma consolidated condensed balance sheet as
of December 31, 1998 was prepared to illustrate the estimated effects of:
 
     o the disposition of Statia Terminals Southwest,
     o elimination of the Castle Harlan management fee,
     o this offering,
     o the use of the net proceeds from this offering as described under "Use of
       Proceeds",
     o the restructuring, and
     o the transfer of the shares of Petroterminal de Panama, currently owned by
       us, to a newly-formed corporation owned by our current owners other than
       Praxair,
 
(collectively, the "pro forma transactions") as if such transactions had
occurred on December 31, 1998. The following unaudited pro forma statement of
operations for the year ended December 31, 1998 was prepared to illustrate the
estimated effects of the pro forma transactions as if they had occurred as of
January 1, 1998.
 
     The unaudited pro forma consolidated condensed financial statements should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations," our financial statements and the notes
thereto, and the other financial information included elsewhere or incorporated
by reference in this prospectus. This pro forma financial information is
provided for informational purposes only and does not purport to be indicative
of the results of operations or financial position which would have been
obtained had the pro forma transactions been completed on the dates indicated or
the financial condition or results of operations for any future date or period.
 
                                       32
<PAGE>
            UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                             AS OF DECEMBER 31, 1998
                                                                    -----------------------------------------
                                                                                  PRO FORMA
                                                                    HISTORICAL    ADJUSTMENTS       PRO FORMA
                                                                    ----------    -----------       ---------
<S>                                                                 <C>           <C>               <C>
ASSETS:
Current assets:
  Cash and cash equivalents......................................    $ 14,061      $ 137,000 (a)    $  12,048
                                                                                    (102,264)(b)
                                                                                       1,474 (c)
                                                                                     (33,750)(d)
                                                                                        (507)(e)
                                                                                      (3,966)(f)
  Accounts receivable............................................
    Trade, net...................................................       7,562             --            7,562
    Other........................................................       2,328             --            2,328
  Inventory, net.................................................       4,528             --            4,528
  Prepaid expenses...............................................       1,417         (1,181)(g)          236
                                                                     --------      ---------        ---------
    Total current assets.........................................      29,896         (3,194)          26,702
Property and equipment, net......................................     209,970             --          209,970
Other noncurrent assets, net.....................................       5,744         (1,130)(h)        3,614
                                                                                      (1,000)(i)
                                                                     --------      ---------        ---------
                                                                     $245,610      $  (5,324)       $ 240,286
                                                                     --------      ---------        ---------
                                                                     --------      ---------        ---------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Accounts payable...............................................    $  9,306      $      --        $   9,306
  Accrued interest payable.......................................       2,027           (507)(e)        1,520
  Other accrued expenses.........................................      15,946         (7,440)(b)        8,506
                                                                     --------      ---------        ---------
    Total current liabilities....................................      27,279         (7,947)          19,332
Long-term debt...................................................     135,000        (33,750)(d)      101,250
                                                                     --------      ---------        ---------
    Total liabilities............................................     162,279        (41,697)         120,582
                                                                     --------      ---------        ---------
Redeemable Preferred Stock Series A through C....................      40,000        (40,000)(b)           --
Preferred stock:
  Preferred Stock Series D and E.................................      54,824        (54,824)(b)           --
  Notes receivable from stockholders.............................      (1,474)         1,474 (c)           --
Common stock.....................................................           4             (4)(a)           --
Common shares....................................................          --             76 (a)           76
Subordinated shares..............................................          --             38 (a)           38
Additional paid-in-capital.......................................         363        136,890 (a)      136,072
                                                                                      (1,181)(g)
Accumulated deficit..............................................     (10,386)        (3,966)(f)      (16,482)
                                                                                      (1,000)(i)
                                                                                      (1,130)(h)
                                                                     --------      ---------        ---------
    Total stockholders' equity...................................      43,331         76,373          119,704
                                                                     --------      ---------        ---------
                                                                     $245,610      $  (5,324)       $ 240,286
                                                                     --------      ---------        ---------
                                                                     --------      ---------        ---------
</TABLE>
 
                                       33
<PAGE>
       UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31, 1998
                                                   ---------------------------------------------------------------------
                                                                                              DISPOSITION
                                                   HISTORICAL    ADJUSTMENTS      SUBTOTAL    OF STSW(N)     PRO FORMA
                                                   ----------    -----------      --------    ----------    ------------
<S>                                                <C>           <C>              <C>         <C>           <C>
Revenues........................................    $136,762       $    --        $136,762     $ (1,613)    $    135,149
Costs of services and products sold.............     106,688            --         106,688       (1,674)         105,014
                                                    --------       -------        --------     --------     ------------
  Gross profit..................................      30,074            --          30,074           61           30,135
Administrative expense..........................       9,500        (1,350)(k)       8,150           --            8,150
                                                    --------       -------        --------     --------     ------------
  Operating income..............................      20,574         1,350          21,924           61           21,985
  Loss on sale of property and equipment........       1,652            --           1,652       (1,652)              --
Interest expense................................      16,851        (4,193)(l)      12,658           (7)          12,651
Interest income.................................         684            --             684           --              684
                                                    --------       -------        --------     --------     ------------
  Income (loss) before income taxes.............       2,755         5,543           8,298        1,720           10,018
Provision for income taxes......................         320            --             320           --              320
                                                    --------       -------        --------     --------     ------------
  Net income (loss).............................       2,435         5,543           7,978        1,720            9,698
Preferred dividends.............................       3,938        (3,938)(m)          --           --               --
                                                    --------       -------        --------     --------     ------------
  Net income (loss) available to holders of
    common equity...............................    $ (1,503)      $ 9,481        $  7,978     $  1,720     $      9,698
                                                    --------       -------        --------     --------     ------------
                                                    --------       -------        --------     --------     ------------
Pro forma diluted earnings per common and
  subordinated share and incentive right (j):...                                                            $       0.85
                                                                                                            ------------
                                                                                                            ------------
Common and subordinated shares and incentive
  rights outstanding in computing pro forma
  diluted earnings per share:...................                                                              11,438,000
                                                                                                            ------------
                                                                                                            ------------
Depreciation....................................    $ 10,510       $    --        $ 10,510     $   (297)    $     10,213
EBITDA(1).......................................    $ 32,092       $ 1,350(k)     $ 33,442     $   (236)    $     33,206
</TABLE>
 
------------------
(1) EBITDA is defined as the sum of (i) income (loss) before income provision
    (benefit), (ii) loss on sale of property and equipment, (iii) interest
    expense less interest income, (iv) depreciation, amortization of certain
    intangible assets and (v) certain non-cash charges.
 
                                       34
<PAGE>
    NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
(a) Reflects the issuance of 7,600,000 common shares, $0.01 par value, 3,800,000
    subordinated shares, $0.01 par value, and 38,000 incentive rights, $0.01 par
    value, in connection with this offering at an assumed initial public
    offering price of $20 per common share. The estimated costs of this
    offering, including the underwriting discount and estimated offering
    expenses and fees, totaling $15 million have been reflected as an offset to
    additional paid-in capital. The resulting net cash proceeds of this offering
    total $137 million.
 
(b) Represents the retirement of the issuer's Preferred Stock Series A through E
    and accrued preferred stock dividends as of December 31, 1998.
 
(c) Represents the repayment of notes receivable from stockholders in connection
    with this offering.
 
(d) Reflects the redemption of 25% of Statia Terminals International's 11 3/4%
    First Mortgage Notes.
 
(e) Represents the payment of accrued interest on 25% of Statia Terminals
    International's 11 3/4% First Mortgage Notes.
 
(f) Represents a cash charge related to the early retirement of 25% of Statia
    Terminals International's 11 3/4% First Mortgage Notes. This charge
    represents an extraordinary loss on early retirement of debt; accordingly,
    this is not reflected in the pro forma combined statements of operations.
 
(g) Represents the write-off of the balance of the prepaid Castle Harlan
    management fee as of December 31, 1998.
 
(h) Represents the write-off of 25% of total capitalized bond issuance costs as
    of December 31, 1998 related to Statia Terminals International's 11 3/4%
    First Mortgage Notes. This charge represents an extraordinary loss on early
    retirement of debt; accordingly, this is not reflected in the pro forma
    combined statements of operations.
 
(i) Represents the transfer of the shares of Petroterminal de Panama to a
    newly-formed corporation owned by the current owners of the issuer other
    than Praxair.
 
(j) Earnings per share data is not included on an historical basis as such
    information would not be representative of the capital structure of the
    issuer after this offering.
 
(k) Represents the elimination of the Castle Harlan management fee payable by
    the issuer. The management fee will be eliminated in connection with this
    offering (exclusive of certain expenses).
 
(l) Represents the reduction in interest expense and amortization of bond
    issuance costs resulting from the redemption of 25% of Statia Terminals
    International's 11 3/4% First Mortgage Notes.
 
(m) Represents the elimination of preferred stock dividends resulting from the
    retirement of the issuer's Preferred Stock Series A through E.
 
(n) Reflects the exclusion of the operating results of Statia Terminals
    Southwest.
 
                                       35
<PAGE>
                      SELECTED CONSOLIDATED FINANCIAL DATA
 
     The following table sets forth selected financial data for the periods and
as of the dates indicated. In January 1996, our former parent, CBI Industries,
was acquired by Praxair. The statement of operations data for each of (i) the
period from January 1, 1996 through November 27, 1996, (ii) the period from
November 27, 1996 through December 31, 1996, and (iii) the years ended
December 31, 1997 and 1998 have been derived from and are qualified by reference
to, our audited consolidated financial statements included elsewhere in this
prospectus. The Statement of Operations Data for the years ended December 31,
1993, 1994 and 1995 have been derived from the Audited Combined Financial
Statements of Statia Terminals, Inc. and its Subsidiaries and Affiliates not
included in this prospectus. The summary historical consolidated financial data
set forth below should be read in conjunction with, and is qualified by
reference to, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Unaudited Pro Forma Consolidated Condensed Financial
Statements" and our consolidated financial statements and accompanying notes
thereto and other financial information included elsewhere in this prospectus.
 
<TABLE>
<CAPTION>
                                                             (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                               PRE-CASTLE HARLAN ACQUISITION               POST-CASTLE HARLAN ACQUISITION
                                        -------------------------------------------  ----------------------------------------
                                          PRE-PRAXAIR ACQUISITION      JANUARY 1,     NOVEMBER 27,
                                        ----------------------------      1996           1996
                                          YEAR ENDED DECEMBER 31,       THROUGH        THROUGH       YEAR ENDED DECEMBER 31,
                                        ----------------------------   NOVEMBER 27,   DECEMBER 31,  --------------------------
                                          1993      1994    1995(2)     1996(2)        1996(2)         1997        1998(3)
                                        --------  --------  --------   ------------   ------------  ------------  ------------
STATEMENT OF OPERATIONS DATA:
<S>                                     <C>       <C>       <C>        <C>            <C>           <C>           <C>
  Revenues............................. $112,076  $132,666  $135,541     $140,998       $ 14,956      $142,499      $136,762
  Cost of services and products sold...   95,028   110,185   117,722      129,915         12,803       122,939       106,688
  Gross profit.........................   17,048    22,481    17,819       11,083          2,153        19,560        30,074
  Administrative expenses..............    4,395     5,345     6,957        8,282            664         7,735         9,500
  Operating income.....................   12,653    17,136    10,862        2,801          1,489        11,825        20,574
  Loss (gain) on disposition of
    property and equipment.............        7       (34)       59          (68)            --          (109)        1,652
  Interest expense.....................      726     3,114     4,478        4,187          1,613        16,874        16,851
  Provision for income taxes...........    1,873     1,219       390          629            132           780           320
  Net income (loss) available to common
    stockholders.......................   10,046    10,944     4,569       (2,682)          (522)       (8,361)       (1,503)
BALANCE SHEET DATA:
  Total assets.........................                                                                              245,610
  Long-term debt.......................                                                                              135,000
  Redeemable Preferred Stock Series A
    through C..........................                                                                               40,000
  Preferred Stock Series D and E.......                                                                               54,824
  Total stockholders' equity...........                                                                               43,331
OPERATING DATA:
  EBITDA(1)............................   19,438    27,921    28,720       20,822          2,452        22,489        32,092
  Maintenance capital expenditures.....    7,791     6,867     9,975       12,887          1,203         4,401         9,000
  Capacity (in thousands of barrels)...   11,590    15,387    20,387       20,387         20,387        20,387        19,566
  Percentage capacity leased...........       79%       87%       76%          68%            74%           70%           91%
  Throughput (in thousands of
    barrels)...........................   37,591    60,630   109,805       81,994         13,223       118,275       119,502
  Vessel calls.........................      967     1,063       973          922            108         1,030         1,027
</TABLE>
 
------------------
(1) EBITDA is defined as the sum of (i) income (loss) before income tax
    provision (benefit), (ii) interest expense, less interest income
    (iii) depreciation and amortization of certain intangible assets,
    (iv) certain non-cash charges, and (v) the portion of the First Salute lease
    payments that represents interest expense for the periods prior to the
    November 27, 1996 purchase transaction. The amount of the First Salute
    related interest expense excluded from EBITDA was $5,741 for the year ended
    December 31, 1995 and $5,600 for the period ended November 27, 1996. EBITDA
    is presented not as an alternative measure of operating results or cash flow
    from operations (as determined in accordance with generally accepted
    accounting principles), but rather to provide additional information related
    to our debt servicing ability.
 
(2) Prior to January 12, 1996, we were a wholly owned subsidiary of
    CBI Industries. On January 12, 1996, pursuant to the merger agreement dated
    December 22, 1995, CBI Industries became a wholly owned subsidiary of
    Praxair. This transaction was reflected in our consolidated financial
    statements as a purchase, effective January 1, 1996. On November 27, 1996,
    Castle Harlan, members of our management and others acquired us from
    Praxair. This transaction is reflected in our consolidated financial
    statements effective November 27, 1996 as a purchase. The application of
    purchase accounting at each acquisition date resulted in changes to the
    historical cost basis of accounting for certain assets. Accordingly, the
    information provided for periods before and after each of these transactions
    is not comparable.
 
(3) Includes the operations of Statia Terminals Southwest through June 30, 1998.
 
                                       36
<PAGE>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
     For purposes of the discussion below, reference is made to our consolidated
balance sheet as of December 31, 1997 and 1998, and our consolidated income and
cash flow statements for the period January 1, 1996 through November 27, 1996
(after our acquisition by Praxair), for the period November 27, 1996 through
December 31, 1996 (after the acquisition by Castle Harlan, our management and
others), and the years ended December 31, 1997 and 1998. We prepare our
financial statements in accordance with U.S. generally accepted accounting
principles.
 
     To facilitate a meaningful discussion of our comparative operating
performance for the years ended December 31, 1996, 1997 and 1998, this
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" presents financial information on a traditional comparative basis
for all periods unless otherwise indicated. Consequently, the information
presented below for the year ended December 31, 1996 does not necessarily comply
with the accounting requirements for companies subject to major acquisitions.
Generally accepted accounting principles in the U.S. call for the separate
reporting of our new company (after the Castle Harlan acquisition) and our
predecessor company (both before and after the Praxair acquisition). A solid
black line in certain tables separates financial information that may not be
comparable across periods.
 
     Substantially all of our transactions are denominated in U.S. dollars. All
figures are in U.S. dollars unless otherwise indicated.
 
OVERVIEW OF OPERATIONS
 
     We began our operations in 1982 as Statia Terminals N.V., a Netherlands
Antilles corporation, operating an oil products terminal located on the island
of St. Eustatius. In 1984, CBI Industries, an industrial gases and contracting
services (including storage tank construction) company, acquired a controlling
interest in Statia Terminals N.V. In 1986, Statia Terminals N.V. purchased
Statia Terminals Southwest, with its facility at Brownsville, Texas. In 1990,
CBI Industries became the sole owner of Statia Terminals N.V. and Statia
Terminals Southwest. In 1993, we acquired full control of Statia Terminals Point
Tupper, Incorporated, located at Point Tupper, Nova Scotia.
 
     In January 1996, Praxair acquired CBI Industries. In November 1996, Castle
Harlan, our management and others acquired from Praxair all of the outstanding
capital stock of Statia Terminals N.V., Statia Terminals, Inc., their
subsidiaries and certain of their affiliates. Castle Harlan is a private equity
investment fund managed by Castle Harlan, Inc., a private merchant bank. At the
same time, Statia Terminals Point Tupper was amalgamated into Statia Terminals
Canada. Statia Terminals Canada and Statia Terminals International were
organized for purposes of facilitating the Castle Harlan acquisition. In July
1998, we sold Statia Terminals Southwest to an unaffiliated third party
purchaser.
 
     During 1992, we invested in additional terminal facilities located at Point
Tupper, Nova Scotia. We completed refurbishment of this 7.4 million barrel
facility during 1994. The total capital investment was $74.1 million. At St.
Eustatius during the fourth quarter of 1993, we commenced construction of five
million barrels of crude oil storage and a single point mooring buoy, which was
completed and leased during the first quarter of 1995, with a total capital
investment of $107.5 million. Over the three-year period from 1993 to 1995, we
added crude oil storage and related services to our established fuel oil,
petroleum products, and other services. In addition to blending and other
ancillary services, we added marine emergency response services at each of our
facilities and added limited refining capability through our atmospheric
distillation unit at St. Eustatius during 1995. Finally, during the fourth
quarter of 1995 and the first quarter of 1996, we made investments in a heating
system and butane sphere at Point Tupper. These additions to capacity have led
to more throughput and, therefore, higher revenues from storage, throughput and
ancillary services. We did not make significant investments to expand our
operating capacity during 1997 and 1998.
 
     The operations at St. Eustatius suffered damages from Hurricanes Iris, Luis
and Marilyn, causing closure of the terminal for approximately three weeks at
the end of the third quarter of 1995. Repair of damages caused by these
hurricanes and installation of certain improvements were substantially completed
by the end of the third quarter of 1996. We spent $20.6 million on repairs and
improvements related to the hurricanes, $6.8 million of which was capitalized as
property and equipment. Claims related to the hurricanes were filed with
insurance carriers and ultimately settled for $12.6 million.
 
     During September 1998, Hurricane Georges damaged the St. Eustatius
facility. Hurricane Georges did not significantly impact operations of the
facility which returned to normal within days of the storm. The preliminary
estimate of the damage to the facility is $5.8 million. Insulation on certain
 
                                       37
<PAGE>
storage tanks, electrical transmission systems and roofs of several buildings
sustained damage. In advance of the storm, on September 19, 1998, the facility
ceased terminal operations and instituted its hurricane preparation and damage
prevention plan. The terminal returned to full operations by September 29, 1998.
During the third quarter of 1998, we recorded a charge of $0.8 million
representing an insurance deductible of $0.5 million related to the hurricane
damage and certain other costs resulting from the hurricane which we anticipate
will not be recovered through our insurance policies.
 
     The following table sets forth for the periods indicated certain key
statistics for each of our operating locations.
 
       CAPACITY, CAPACITY LEASED, THROUGHPUT AND VESSEL CALLS BY LOCATION
               (CAPACITY AND THROUGHPUT IN THOUSANDS OF BARRELS)
 
<TABLE>
<CAPTION>
                                                                                         FOR THE YEAR ENDED
                                                                                            DECEMBER 31,
                                                                                    -----------------------------
                                                                                     1996       1997       1998
                                                                                    -------    -------    -------
<S>                                                                                 <C>        <C>        <C>
Netherlands Antilles and the Caribbean
  Total capacity.................................................................    11,334     11,334     11,334
  Capacity leased................................................................        80%        76%        92%
  Throughput.....................................................................    69,395     62,944     74,158
  Vessel calls...................................................................       880        792        864
Canada
  Total capacity.................................................................     7,404      7,404      7,404
  Capacity leased................................................................        55%        70%        93%
  Throughput.....................................................................    23,350     53,011     43,468
  Vessel calls...................................................................        62        125        104
Texas
  Total capacity.................................................................     1,649      1,649        N/M
  Capacity leased................................................................        52%        31%       N/M
  Throughput.....................................................................     2,472      2,320        N/M
  Vessel calls...................................................................        88        113        N/M
All locations (1)
  Total capacity.................................................................    20,387     20,387     19,556
  Capacity leased................................................................        69%        70%        91%
  Throughput.....................................................................    95,217    118,275    119,502
  Vessel calls...................................................................     1,030      1,030      1,027
</TABLE>
 
------------------
 
(1) The Brownsville, Texas facility was sold on July 29, 1998. The statistics
    above include the operations of the Brownsville facility through June 30,
    1998.
 
N/M: Not meaningful
 
     A majority of our revenues are generated by bunker and bulk product sales
which fluctuate with global oil prices. As a result, we experience volatility in
our revenue stream, which is not necessarily indicative of our profitability.
 
     Gross profits from terminaling services are higher than gross profits from
bunker and bulk product sales. Our operating costs for terminaling services are
relatively fixed and generally do not change significantly with changes in
capacity leased. Additions or reductions in storage, throughput and ancillary
service revenues directly impact our operating income. Costs for the procurement
of bunker fuels and bulk petroleum products are variable and linked to global
oil prices. Our bunker and bulk product costs are also impacted by market supply
conditions, types of products sold and volumes delivered.
 
     In addition, our operating costs are impacted by inflationary cost
increases, cost increases due to additional storage capacity and costs of
providing certain additional ancillary services.
 
RESULTS OF OPERATIONS
 
     The following table sets forth, for the periods indicated, the percentage
of revenues represented by certain items in our consolidated income statements.
 
                                       38
<PAGE>
                             RESULTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                   FOR THE YEARS ENDED DECEMBER 31,
                                                                     -------------------------------------------------------------
                                                                            1996                  1997                 1998
                                                                     -------------------   ------------------   ------------------
                                                                                 % OF                 % OF                 % OF
                                                                     DOLLARS    REVENUES   DOLLARS   REVENUES   DOLLARS   REVENUES
                                                                     --------   --------   --------  --------   --------  --------
<S>                                                                  <C>        <C>        <C>       <C>        <C>       <C>
Revenues:
Terminaling services...............................................  $ 49,812      31.9%   $ 53,165     37.3%   $ 66,625     48.7%
Bunker and bulk product sales......................................   106,142      68.1%     89,334     62.7%     70,137     51.3%
                                                                     --------    ------    --------   ------    --------   ------
  Total revenues...................................................   155,954     100.0%    142,499    100.0%    136,762    100.0%
Cost of services and products sold.................................   142,718      91.5%    122,939     86.3%    106,688     78.0%
                                                                     --------    ------    --------   ------    --------   ------
  Gross profit.....................................................    13,236       8.5%     19,560     13.7%     30,074     22.0%
Administrative expenses............................................     8,946       5.7%      7,735      5.4%      9,500      6.9%
                                                                     --------    ------    --------   ------    --------   ------
  Operating income.................................................     4,290       2.8%     11,825      8.3%     20,574     15.0%
Loss (gain) on dispositions of property and equipment..............      (68)        --       (109)     (0.1)%     1,652      1.2%
Interest expense...................................................     5,800       3.7%     16,874     11.8%     16,851     12.3%
Interest income....................................................        97       0.1%        555      0.4%        684      0.5%
                                                                     --------    ------    --------   ------    --------   ------
Income (loss) before income taxes..................................    (1,345)     (0.8)%    (4,385)    (3.0)%     2,755      2.0%
Provision for income taxes.........................................       761       0.5%        780      0.5%        320      0.2%
Preferred stock dividends..........................................     1,098       0.7%      3,196      2.2%      3,938      2.9%
                                                                     --------    ------    --------   ------    --------   ------
  Net income (loss) available to common stockholders...............  $ (3,204)     (2.0)%  $ (8,361)    (5.7)%  $ (1,503)    (1.1)%
                                                                     --------    ------    --------   ------    --------   ------
                                                                     --------    ------    --------   ------    --------   ------
</TABLE>
 
     The following tables set forth for the periods indicated (i) the total
revenues and total operating income (loss), after allocation of administrative
expenses, at each of our operating locations and (ii) the percentage such
revenue and operating income (loss) relate to our total revenue and operating
income.
 
                              REVENUES BY LOCATION
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                       FOR THE YEARS ENDED DECEMBER 31,
                                                                            ------------------------------------------------------
                                                                                 1996                1997               1998
                                                                            ---------------    ----------------    ---------------
                                                                                      % OF                % OF               % OF
                                                                            DOLLARS   TOTAL    DOLLARS    TOTAL    DOLLARS   TOTAL
                                                                            --------  -----    --------   -----    --------  -----
<S>                                                                         <C>       <C>      <C>        <C>      <C>       <C>
Netherlands Antilles and the Caribbean...................................   $139,751   89.6%   $122,042    85.6%   $114,091   83.4%
Canada...................................................................     13,355    8.6%     18,586    13.0%     21,058   15.4%
Brownsville, Texas facility(1)...........................................      2,848    1.8%      1,871     1.4%      1,613    1.2%
                                                                            --------  -----    --------   -----    --------  -----
  Total..................................................................   $155,954  100.0%   $142,499   100.0%   $136,762  100.0%
                                                                            --------  -----    --------   -----    --------  -----
                                                                            --------  -----    --------   -----    --------  -----
</TABLE>
 
------------------
 
(1) We sold our Brownsville, Texas facility on July 29, 1998. The figures above
    and our consolidated financial statements include the Brownsville facility
    through June 30, 1998.
                        OPERATING INCOME (LOSS) BY LOCATION
                              (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                  FOR THE YEARS ENDED DECEMBER 31,
                                                                      --------------------------------------------------------
                                                                            1996                1997                1998
                                                                      ----------------    ----------------    ----------------
                                                                                 % OF                % OF                % OF
                                                                      DOLLARS    TOTAL    DOLLARS    TOTAL    DOLLARS    TOTAL
                                                                      --------   -----    --------   -----    --------   -----
<S>                                                                   <C>        <C>      <C>        <C>      <C>        <C>
   Netherlands Antilles and the Caribbean..........................   $  6,826   159.1 %  $ 10,301    87.1 %  $ 14,442    70.2 %
   Canada..........................................................     (1,177)  (27.4)%     3,539    29.9 %     6,625    32.2 %
   Brownsville, Texas facility(1)..................................     (1,359)  (31.7)%    (2,015)  (17.0)%      (493)   (2.4)%
                                                                      --------   -----    --------   -----    --------   -----
   Total...........................................................   $  4,290   100.0 %  $ 11,825   100.0 %  $ 20,574   100.0 %
                                                                      --------   -----    --------   -----    --------   -----
                                                                      --------   -----    --------   -----    --------   -----
</TABLE>
 
   ---------------------
 
    (1) We sold our Brownsville, Texas facility on July 29, 1998. The figures
        above and our consolidated financial statements include the Brownsville
        facility through June 30, 1998.
 
                                       39
<PAGE>
YEAR ENDED DECEMBER 31, 1998 COMPARED WITH YEAR ENDED DECEMBER 31, 1997
 
  Comparability
 
     On July 29, 1998, we sold Statia Terminals Southwest to an unrelated
third-party. Our consolidated financial statements include the operations of
Statia Terminals Southwest through June 30, 1998. Therefore, the year ended
December 31, 1997 includes the operations of Statia Terminals Southwest for six
months more than the same period in 1998. Certain pro forma information related
to the sale of Statia Terminals Southwest is presented in the unaudited pro
forma consolidated condensed financial statements included elsewhere in this
prospectus.
 
  Revenues
 
     Total revenues for the year ended December 31, 1998 were $136.8 million
compared to $142.5 million for the year ended December 31, 1997, a decrease of
$5.7 million, or 4.0%.
 
     Revenues from terminaling services (consisting of storage, throughput, dock
charges, emergency response fees and other terminal charges) for the year ended
December 31, 1998 were $66.6 million compared to $53.2 million for the previous
year, an increase of $13.4 million, or 25.3%. The improvement in terminaling
services revenue for the year ended December 31, 1998 compared to the previous
year was principally due to:
 
     o our ability to attract additional long term customers who use our
       facilities as part of their strategic distribution networks;
 
     o additional vessel calls at St. Eustatius resulting in higher dock charges
       and emergency response fees; and
 
     o the recent contango conditions in the international petroleum markets.
 
     Revenues from terminaling services at St. Eustatius increased approximately
$8.7 million, or 24.2%, during the year ended December 31, 1998 as compared to
the year ended December 31, 1997. Total throughput increased from 62.9 million
barrels during the year ended December 31, 1997 to 74.2 million barrels during
the same period of 1998 due primarily to higher throughput of fuel oil and
petroleum products, and was partially offset by reduced throughout of crude oil.
Seventy-two more vessels called at the St. Eustatius facility during the year
ended December 31, 1998 than during the same period of 1997 resulting in higher
revenues from dock charges and stand-by emergency response fees. For the year
ended December 31, 1998, the overall percentage of capacity leased at this
facility was 92% compared to 76% for the same period of 1997, reflecting
increases in the percentage of capacity leased for fuel oil tankage and
petroleum products.
 
     Revenues from terminaling services at Point Tupper increased $5.1 million,
or 32.6% during the year ended December 31, 1998 as compared to the year ended
December 31, 1997. The percentage of tank capacity leased at Point Tupper
increased from 70% for the year ended December 31, 1997 to 93% for the same
period of 1998. This increase was primarily the result of additional crude oil
and clean petroleum products tankage leased during the year ended December 31,
1998 as compared to the same period of 1997. Fewer vessel calls led to lower
port charge revenues at this facility during the year ended December 31, 1998 as
compared to the same period of 1997.
 
     Revenues from bunker and bulk product sales were $70.1 million for the year
ended December 31, 1998 compared to $89.3 million for the same period in 1997, a
decrease of $19.2 million, or 21.5%. The decrease was primarily due to lower
comparative selling prices for bunker fuels reflecting current market
conditions. Average selling prices decreased 30.2% when comparing the year ended
December 31, 1998 with the same period of 1997. However, metric tons of bunkers
and bulk product sold increased 13.6% during the year ended December 31, 1998 as
compared to the same period of 1997.
 
  Gross Profit
 
     Gross profit for the year ended December 31, 1998 was $30.1 million
compared to $19.6 million for the same period of 1997, representing an increase
of $10.5 million, or 53.3%. The increase in gross profit is primarily the result
of the increased terminaling services revenue produced at a small incremental
cost. Additionally, we realized higher gross margins on bunker sales during the
year ended December 31, 1998 as compared to the same period of 1997 due to
higher volumes of bunker fuels delivered.
 
Administrative Expenses
 
     Administrative expenses were $9.5 million for the year ended December 31,
1998 as compared to $7.7 million for the same period of 1997, representing an
increase of $1.8 million, or 22.8%. The increase during the year ended December
31, 1998 as compared to the same period of 1997 is primarily the result of
higher personnel costs and certain professional fees.
 
  Loss on Sale of Assets
 
     As more fully discussed in note 15 of notes to the consolidated financial
statements, we recognized a loss on the sale of Statia Terminals Southwest
  
                                       40
<PAGE>
during the year ended December 31, 1998 of $1.7 million.
 
  Interest Expense
 
     During the years ended December 31, 1997 and 1998, we incurred
$16.9 million of interest expense from interest accrued on our 11 3/4% First
Mortgage Notes due in 2003, amortization expense related to deferred financing
costs and certain bank charges.
 
  Preferred Stock Dividends
 
     Preferred stock dividends were $3.9 million for the year ended
December 31, 1998 as compared to $3.2 million for the same period of 1997,
representing an increase of $0.7 million, or 23.2%. Preferred stock dividends
have been computed and accrued but not paid on the issuer's Series A, B and C
Preferred Stock. The increase during the year ended December 31, 1998 as
compared to the same period of 1997 is the result of the increasing balance of
dividends payable and a rate increase.
 
  Net Income (Loss)
 
     Net loss available to common stockholders was $1.5 million for the year
ended December 31, 1998 as compared to a net loss of $8.4 million for the same
period of 1997, an improvement of $6.9 million. The decrease in the net loss is
attributable to the net effect of the factors discussed above.
 
YEAR ENDED DECEMBER 31, 1997 COMPARED WITH YEAR ENDED DECEMBER 31, 1996
 
  Comparability
 
     Gross profit, operating income and net income (loss) for the years ended
December 31, 1997 and 1996 are not comparable due to the effects of purchase
accounting applied as a result of the Castle Harlan acquisition and the effects
of the acquisition of the First Salute assets. Depreciation, amortization and
other operating expenses, which are components of gross profit, changed due to
revaluation of various assets to their fair values at the date of such
acquisition. Changes in components of our debt and equity accounts resulted in
changes to interest expense, dividends and costs of services and products sold.
 
  Revenues
 
     Total revenues for the year ended December 31, 1997 were $142.5 million
compared to $156.0 million for the year ended December 31, 1996, a decrease of
$13.5 million, or 8.6%.
 
     Revenues from terminaling services for the year ended December 31, 1997
were $53.2 million compared to $49.8 million for the previous year, an increase
of $3.4 million, or 6.7%. Increased revenues from terminaling services at Point
Tupper were partially offset by lower revenues from terminaling services at
St. Eustatius.
 
     Revenues from terminaling services at St. Eustatius decreased
$1.9 million, or 5.1%, during the year ended December 31, 1997 as compared to
the year ended December 31, 1996. Lower crude oil throughput and reductions in
the percentage of capacity leased for clean petroleum products resulted in lower
1997 revenues from storage, throughput and ancillary services. A customer
occupied all of the petroleum products storage for three-quarters of the 1996
year while the petroleum products tankage went essentially unleased for the 1997
year.
 
     Revenues from terminaling services at Point Tupper increased $6.6 million,
or 73.1% during the year ended December 31, 1997 as compared to the year ended
December 31, 1996. Incremental spot storage leases for crude oil from our
primary Canadian customer, Tosco, crude oil and petroleum products leases from
several new customers, plus 30 million barrels, or 127%, of increased throughput
from 1996 and additional ancillary services, contributed to the higher revenues
from terminaling services. Additionally, certain unleased tankage was converted
from petroleum product storage to crude oil storage to meet customer demand.
 
     Revenues from bunker and bulk product sales fell $16.8 million, or 15.8%,
to $89.3 million for the year ended December 31, 1997 from $106.1 million for
the same period in 1996. The drop is primarily attributable to increased
competition from elsewhere in the Caribbean, the U.S. Gulf coast and other ports
resulting in lower volumes of bunker fuel delivered and fewer bulk product
sales. At St. Eustatius, the volume of bunker fuels delivered fell 12.9%.
Comparative average selling prices year-to-year were virtually unchanged. At
Point Tupper, we were unable to expand our bunker sales business initiated in
1996 due to our inability to find an adequate source of supply.
 
     Our Brownsville, Texas facility, which we sold on July 29, 1998,
experienced a reduction in total revenues due to the loss of storage business
for gasoline and diesel fuels and vegetable oils primarily to competing
facilities in the region. Statia Terminal Southwest's revenues were
$1.9 million for the year ended December 31, 1997, down $0.9 million or 28.3%,
from $2.8 million for the same period in 1996.
 
  Gross Profit
 
     Gross profit for the year ended December 31, 1997 was $19.6 million
compared to $13.2 million for the year ended December 31, 1996 representing
 
                                       41
<PAGE>
an increase of $6.4 million, or 48.5%. During the period from January 1, 1996
through November 27, 1996, lease expenses related to First Salute of $5.6
million consisting primarily of interest were included in cost of services and
products sold. This lease was fully satisfied in connection with the Castle
Harlan acquisition. Additionally, the increased terminaling services revenue
positively impacted our gross profit.
 
  Administrative Expenses
 
     Administrative expenses were $7.7 million for the year ended December 31,
1997 as compared to $8.9 million for the year ended December 31, 1996,
representing a decrease of $1.2 million, or 13.5%. For the year ended
December 31, 1996, administrative expenses included $3.0 million of non-cash
stock based compensation awarded to certain of our managers in connection with
the Praxair and Castle Harlan acquisitions. Exclusive of the non-recurring stock
based compensation, selling and administrative expenses increased from year-to-
year primarily due to higher personnel costs.
 
  Interest Expense
 
     Since the Castle Harlan acquisition in November 1996, our interest expenses
have related to interest accrued on our 11 3/4% First Mortgage Notes due 2003,
amortization expense related to deferred financing costs and certain bank
charges. For the year ended December 31, 1997, interest expenses amounted to
$16.9 million. For the year ended December 31, 1996, interest expenses related
to the First Mortgage Notes due 2003, third party debt obligation, net of
amounts charged to capital projects and the effects of an interest rate swap,
amortization expense related to deferred financing costs and certain bank
charges, were $5.8 million.
 
  Preferred Stock Dividends
 
     Preferred stock dividends were $3.2 million for the year ended
December 31, 1997 as compared to $1.1 million for the year ended December 31,
1996. Preferred stock dividends subsequent to November 27, 1996 represent
amounts accrued but not paid on the issuer's Series A, B and C Preferred Stock
and related dividend payable balances. Preferred stock dividends for the year
ended December 31, 1996 are not comparable to those incurred for the year ended
December 31, 1997 due to changes in the issuer's capital structure resulting
from the Praxair and Castle Harlan acquisitions.
 
  Net Income (Loss)
 
     Net loss available to common stockholders was $8.4 million for the year
ended December 31, 1997 as compared to $3.2 million for the year ended
December 31, 1996, representing an increase of $5.2 million. The increase in the
net loss is attributable to the net effect of the factors discussed above.
 
SELECTED QUARTERLY FINANCIAL INFORMATION
 
     Our 1998 operating income and EBITDA increased quarter over quarter in 1998
and for each quarter of 1998 compared to the same quarters in 1997. This trend
is a result of our entering into additional long term contracts over the
two-year period resulting in higher capacity leased, increased volumes of bunker
fuel delivered due, in part, to reduced competition, and additional revenues
from ancillary services due to higher terminal activity.
 
     The following table sets forth certain selected unaudited quarterly
operating results for each of our last eight quarters. This information was
prepared by us on a basis consistent with our audited financial statements and
includes all adjustments (consisting of normal and recurring adjustments) that
we consider necessary for a fair presentation of the data. These quarterly
results are not necessarily indicative of future results of operations. This
information should be read in conjuction with our consolidated financial
statements and notes thereto included elsewhere in this prospectus.
 
<TABLE>
<CAPTION>
                                                                       QUARTERS ENDED                          TOTAL
                                                   -------------------------------------------------------    --------
                                                   MARCH 31     JUNE 30      SEPTEMBER 30     DECEMBER 31
                                                   ---------    ---------    -------------    ------------
<S>                                                <C>          <C>          <C>              <C>             <C>
                      1997
Total revenues..................................    $32,709      $33,148        $35,333         $ 41,309      $142,499
Operating income................................      2,394        2,508          2,439            4,484        11,825
EBITDA..........................................      4,986        5,115          4,896            7,492        22,489
                      1998
Total revenues..................................    $30,364      $36,472        $32,699         $ 37,227      $136,762
Operating income................................      2,999        5,231          5,635            6,709        20,574
EBITDA..........................................      5,804        8,082          8,336            9,870        32,092
</TABLE>
 
                                       42
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES--SUBSEQUENT TO THE CASTLE HARLAN ACQUISITION
 
  Cash Flow from Operating Activities
 
     Net cash provided by operating activities was $18.2 million and
$9.8 million for the years ended December 31, 1998 and 1997 and $2.2 million for
the period from November 27, 1996 through December 31, 1996, respectively. Cash
flow from operations has been our primary source of liquidity during the periods
subsequent to the Castle Harlan acquisition. Differences between net losses and
positive operating cash flow have resulted primarily from depreciation and
amortization burdens and changes in various asset and liability accounts.
Additionally, during the year ended December 31, 1998, we recognized a
$1.7 million non-cash loss on the sale of Statia Terminals Southwest (see
note 15 of notes to consolidated financial statements for more information).
 
     At December 31, 1997, we had cash and cash equivalents on hand of
$6.1 million compared to $14.1 million at December 31, 1998.
 
  Cash Flow from Investing Activities
 
     Net cash used in investing activities was $4.1 million and $12.9 million
for the years ended December 31, 1998 and 1997 and $178.0 million for the period
from November 27, 1996 through December 31, 1996, respectively. Investing
activities during 1998 and 1997 and the period ended December 31, 1996 included
purchases of property and equipment of $10.7 million, $5.3 million and
$1.2 million, respectively. Additionally, as more fully discussed in note 15 of
notes to consolidated financial statements, on July 29, 1998, we received
$6.5 million of cash proceeds from the sale of our Brownsville, Texas facility.
 
     During the year ended December 31, 1997 and the period ended December 31,
1996, we spent $7.7 million and $176.8 million, respectively, related to the
Castle Harlan acquisition. These amounts include (i) approximately
$175.1 million in cash paid to Praxair (of which $170.0 million was paid at
closing and $5.1 million was paid in February 1997) to satisfy the cash portion
of the purchase price, and (ii) $9.4 million of commissions, fees and expenses.
 
  Cash Flow from Financing Activities
 
     During the year ended December 31, 1998 we utilized the net proceeds from
the sale of the Brownsville, Texas facility to retire $6.15 million of the
issuer's Series D Preferred Stock.
 
     As part of the Castle Harlan acquisition, we issued $135.0 million of First
Mortgage Notes, received proceeds of $56.5 million from the issuance of
preferred and common stock and paid $6.4 million of debt costs. The net cash
proceeds from these transactions were substantially used as described above in
"--Cash Flow from Investing Activities".
 
     In connection with the Castle Harlan acquisition prior to November 27, 1996
all of our third-party indebtedness, including an off-balance sheet lease
obligation, bank debts, preferred stock from a former affiliate and advances
from Praxair, was repaid. In addition, on November 27, 1996, we entered into a
new $17.5 million revolving credit facility secured by our accounts receivable
and oil inventory. The revolving credit facility is available for working
capital needs and letter of credit financing, and it permits us to borrow in
accordance with our available borrowing base which was estimated at
$8.0 million as of December 31, 1998. No draws on the revolving credit facility
have occurred. The revolving credit facility bears interest at the prime rate
plus 0.50% per annum (8.25% at December 31, 1998) and will expire on
November 27, 1999.
 
     The debt service costs associated with the borrowings under the First
Mortgage Notes have significantly increased liquidity requirements. The First
Mortgage Notes accrue interest at 11 3/4% per annum payable semi-annually on
May 15 and November 15. The First Mortgage Notes will mature on November 15,
2003. The First Mortgage Notes are redeemable in whole or in part at the option
of Statia Terminals International at any time on or after November 15, 2000 at
redemption prices set forth in the indenture relating to the First Mortgage
Notes. The First Mortgage Notes may be redeemed or purchased prior to
November 15, 2000 in certain circumstances as defined in the indenture relating
to the First Mortgage Notes.
 
     The indenture generally limits the incurrence of additional debt by Statia
Terminals International, limits the ability of Statia Terminals International to
pay the issuer dividends or make any other distribution to the issuer, and
limits the ability of Statia Terminals International to sell its assets. We may
incur additional indebtedness as long as our fixed charge coverage ratio (as
defined in the indenture) is greater than 2.0 to 1. Under the terms of the
indenture, Statia Terminals International may not pay the issuer any dividend if
at the time of declaration:
 
     o a default or event of default under the indenture shall have occurred and
       be continuing or shall occur as a consequence thereof;
 
     o Statia Terminals International's consolidated fixed charge coverage ratio
       (as defined in
 
                                       43
<PAGE>
       the indenture) for the prior four full quarters is less than 2.0 to 1; or
 
     o the amount of such dividend, when added to the aggregate amount of all
       other dividends and certain other restricted payments made by Statia
       Terminals International after November 27, 1996 and not covered by other
       exceptions in the indenture, exceeds a certain sum. Such sum is:
 
          o 50% of Statia Terminals International's consolidated net income (as
            defined in the indenture) (taken as one accounting period) from
            November 27, 1996 to the end of Statia Terminals International's
            most recently ended fiscal quarter for which internal financial
            statements are available at the time of such dividend (or, if such
            aggregate consolidated net income is a deficit, minus 100% of such
            aggregate deficit),
 
          plus
 
          o the net cash proceeds from the issuance and sale (other than to a
            subsidiary of Statia Terminals International) after November 27,
            1996 of Statia Terminals International capital stock.
 
Certain other dividends, generally unrelated to operating cash flow, are
permitted notwithstanding the second and third items above.
 
     We believe that cash flow generated by operations and amounts available
under the revolving credit facility will be sufficient, until the maturity of
the First Mortgage Notes, to fund working capital needs, capital expenditures
and other operating requirements (including any expenditures required by
applicable environmental laws and regulations) and service debt. Our operating
performance and ability to service or refinance the First Mortgage Notes and to
extend or refinance the revolving credit facility will be subject to future
economic conditions and to financial, business and other factors, many of which
are beyond our control. We can give no assurances that our future operating
performance will be sufficient to service our indebtedness or that we will be
able to repay at maturity or refinance our indebtedness in whole or in part.
 
LIQUIDITY AND CAPITAL RESOURCES--PRIOR TO THE CASTLE HARLAN ACQUISITION
 
     Except for cash of our Canadian subsidiaries, prior to the Castle Harlan
acquisition we had been a participant in Praxair/CBI Industries' cash management
system whereby all cash receipts were swept into our predecessor company's
(prior to the Castle Harlan acquisition) investment program. Cash for operations
and capital expansion has been funded by our operations, our predecessor
company's operations (prior to the Castle Harlan acquisition) and debt
facilities available to us (guaranteed by our predecessor company). During 1996
prior to the Castle Harlan acquisition, cash provided by operations of
$9.1 million, proceeds from insurance claims related to hurricane damage
incurred in 1995 of $12.6 million and net advances from Praxair of approximately
$19.3 million (exclusive of advances related to repayment of existing
indebtedness) were used to finance the purchase of property and equipment of
$14.5 million and pay dividends to Praxair and its affiliates of $25.8 million.
 
CAPITAL EXPENDITURES
 
     We spent $15.7 million, $5.3 million and $10.7 million during the years
ended December 31, 1996, 1997 and 1998, respectively. These amounts include
$1.6 million, $0.9 million and $1.7 million, respectively, which was spent to
enhance our ability to generate incremental revenues. Capital expenditures for
1996 were primarily for improvements made in connection with hurricane damage
incurred in 1995. During 1997, capital expenditures were made primarily for
various piping and tank enhancements at each location and a new warehouse at St.
Eustatius. During 1998, a majority of capital expenditures were related to
maintenance capital expenditures including our terminal and marine maintenance
programs.
 
     Our preliminary capital expenditure budget for 1999 is $7.0 million for
maintenance capital expenditures and $2.4 million for producing incremental
revenues. Additional spending is contingent upon the addition of incremental
terminaling business.
 
     The following table sets forth capital expenditures by location and
separates such expenditures into those which produce, or have the potential to
produce, incremental revenue, and those which represent maintainance capital
expenditures.
 
                                       44
<PAGE>
                  SUMMARY OF CAPITAL EXPENDITURES BY LOCATION
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                           PRODUCE        MAINTENANCE
                                                          INCREMENTAL      CAPITAL
                                                          REVENUES        EXPENDITURES       TOTAL       % OF TOTAL
                                                          -----------     -------------     --------     ----------
<S>                                                       <C>             <C>               <C>          <C>
YEAR ENDED DECEMBER 31, 1996
  Netherlands Antilles................................      $89,344(1)       $11,969(2)     $101,313(1)(2)     97.2%
  Canada..............................................          751              451           1,202          1.2%
  Brownsville, Texas (3)..............................           19            1,226           1,245          1.2%
  All other United States.............................           --              444             444          0.4%
                                                            -------          -------        --------       ------
     Total............................................      $90,114          $14,090        $104,204        100.0%
                                                            -------          -------        --------       ------
                                                            -------          -------        --------       ------
YEAR ENDED DECEMBER 31, 1997
  Netherlands Antilles................................      $   696          $ 2,858        $  3,556         66.5%
  Canada..............................................          120              834             954         17.9%
  Brownsville, Texas (3)..............................          125              100             225          4.2%
  All other United States.............................           --              609             609         11.4%
                                                            -------          -------        --------       ------
     Total............................................      $   941          $ 4,401        $  5,344        100.0%
                                                            -------          -------        --------       ------
                                                            -------          -------        --------       ------
YEAR ENDED DECEMBER 31, 1998
  Netherlands Antilles................................      $   667          $ 5,990        $  6,657         62.1%
  Canada..............................................          829              476           1,305         12.2%
  Brownsville, Texas (3)..............................          218               94             312          2.9%
  All other United States.............................           --            2,440           2,440         22.8%
                                                            -------          -------        --------       ------
     Total............................................      $ 1,714          $ 9,000        $ 10,714        100.0%
                                                            -------          -------        --------       ------
                                                            -------          -------        --------       ------
</TABLE>
 
(1) Includes purchase of First Salute assets.
(2) Includes $6.8 million of capitalized enhancements related to the hurricanes
    of 1995.
(3) We sold our Brownsville, Texas facility on July 29, 1998.
 
     Prior to 1996, we financed the construction of certain crude oil
terminaling assets at St. Eustatius through a leveraged lease arrangement,
effectively removing $88.5 million of assets and liabilities from our balance
sheet (See note 9 to the consolidated financial statements). We leased land to a
special purpose financing entity, First Salute, upon which the crude tanks were
constructed. These crude oil facilities at St. Eustatius were leased back to us.
During the life of the lease, we accounted for monthly lease payments,
consisting primarily of interest on the underlying financing, and recognized an
accrual towards the residual guarantee value within the line item cost of
services and products sold. During 1996, we paid $5.6 million to First Salute
which consisted primarily of interest costs on the underlying debt. All
obligations under the lease were satisfied prior to the Castle Harlan
acquisition and the related assets were included on the balance sheet at that
time.
 
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
 
     We are subject to comprehensive and periodically changing environmental,
health and safety laws and regulations within the jurisdictions of our
operations, including those governing oil spills, emissions of air pollutants,
discharges of wastewater and storm waters, and the disposal of non-hazardous and
hazardous waste. In 1996, 1997, and 1998, our capital expenditures for
compliance with environmental, health and safety laws and regulations were
approximately $1.3 million, $1.3 million and $2.7 million, respectively. These
figures do not include routine operational compliance costs, such as the costs
for the disposal of hazardous and non-hazardous solid waste, which were
approximately $0.4 million, $0.2 million and $0.9 million in 1996, 1997 and
1998, respectively. We believe we are presently in substantial compliance with
applicable laws and regulations governing environmental, health and safety
matters. The Praxair agreement includes a covenant by Praxair to pay certain
environmental investigation, response and upgrade costs, subject in some cases
 
                                       45
<PAGE>
to monetary limitations. However, we cannot guarantee that Praxair will pay all
of the indemnified amounts without dispute or delay.
 
     Past uses of the Point Tupper facility, including its past operation by
others as an oil refinery, have resulted in certain on-site areas of known and
potential contamination, as described below. Under Canadian environmental,
health and safety laws, we, as the owner and operator of the facility, can be
held liable for mitigation or remediation of, and damages arising from, these or
other as yet unknown environmental, health and safety conditions at the
facility.
 
     In connection with the Castle Harlan acquisition in 1996, phase I and
limited phase II environmental site assessments were conducted at the Point
Tupper terminal to identify potential environmental, health and safety matters.
Certain environmental matters and conditions that were likely to require the
incurrence of costs were identified and Praxair agreed to pay the costs of
addressing certain of such matters, subject in some cases to monetary
limitations. Since then we have been undertaking, in accordance with
environmental, health and safety laws, investigations, remediation and upgrading
to address these and other more recently identified matters.
 
     Certain of such matters involve environmental contamination associated with
certain areas of the property (some of which result from the past operation of
the facility by others as a refinery). These include a former sludge and waste
disposal area (with respect to which a remediation plan is being developed), two
pump stations (with respect to which further delineation and remediation of
contaminated soil are underway), and the area surrounding an above-ground crude
oil storage tank (the investigation and delineation of which is at an early
stage, although the contamination appears to be contained within a fairly
limited area).
 
     Certain terminal facilities have also been identified as requiring
upgrading or remediation to meet the requirements of existing environmental,
health and safety laws. These include, among other matters, an oil-water
separator required to process facility run-off and to treat ballast water (with
respect to which the rebuilding of the separator is expected to be completed in
1999, a ballast reception line has been installed, and petroleum contamination
discovered beneath the separator is being addressed), upgrading of containment
areas for above-ground storage tanks (with respect to which survey work has been
completed and civil work is expected to commence during 1999), removal of
underground storage tanks (with respect to which the removal has been completed
and the remediation of associated contaminated soil is underway), and the
presence of friable asbestos that is being removed from certain areas of the
terminal (the removal and disposal of substantially all of which has been
completed and we are awaiting final inspection and the issuance of a certificate
of compliance).
 
     With respect to the foregoing environmental liabilities and costs, Praxair,
in connection with the Castle Harlan acquisition, to date has paid approximately
$2.3 million. We anticipate incurring additional costs of $0.7 million which are
not likely to be reimbursable from Praxair. Based on the investigation conducted
and information available to date, the potential cost of additional remediation
and compliance related to the foregoing matters is currently estimated to be
approximately $10 million, substantially all of which we believe is Praxair's
responsibility for under the Praxair agreement.
 
     We have also identified environmental, health and safety costs that are not
covered by the Praxair agreement (including the $0.7 million discussed above)
for which we accrued $1.5 million during 1996, $10,000 of which has been spent
through the end of 1998. We can give no assurances that such accrual is
sufficient to cover all such environmental, health and safety costs.
 
     We can give no assurances that additional liabilities (either presently
known or discovered in the future) under existing or future environmental,
health and safety laws and outside the scope of the Praxair agreement will not
be material. In addition, we can give no assurances that we will not have to
incur material expenses before Praxair pays amounts for which Praxair ultimately
would be responsible.
 
     We anticipate that we will incur additional capital and operating costs in
the future to comply with currently existing laws and regulations, amendments to
such laws and regulations, new regulatory requirements arising from recently
enacted statutes, and possibly new statutory enactments. As government
regulatory agencies have not yet promulgated the final standards for proposed
environmental, health and safety programs, we cannot at this time reasonably
 
                                       46
<PAGE>
estimate the cost for compliance with these additional requirements (some of
which will not take effect for several years) or the timing of any such costs.
However, we believe any such costs will not have a material adverse effect on
our business and financial condition or results of operations.
 
     See generally "Risk Factors--Environmental risks and new governmental
regulation may negatively affect us" and "Business--Environmental, Health and
Safety Matters."
 
INFORMATION TECHNOLOGY AND THE YEAR 2000
 
     Certain computer software and hardware applications and embedded
microprocessor, microcontroller or other processing technology applications and
systems use only two digits to refer to a year rather than four digits. As a
result, these applications could fail or create erroneous results in dealing
with certain dates and especially if the applications recognize "00" as the year
1900 rather than the year 2000. During 1997, we developed a Year 2000 plan to
upgrade our key information systems and simultaneously address the potential
disruption to both operating and accounting systems that might be caused by the
Year 2000 problem. The Year 2000 plan also provides for the evaluations of the
systems of customers, vendors, and other third-party service providers and
evaluations of our non-information technology systems, which include embedded
technologies such as microcontrollers (also referred to as non-traditional
information technology).
 
     We have substantially completed the assessment phase of the Year 2000 plan
as it relates to both traditional and non-traditional technology applications
and systems. We are currently in the process of testing new Year 2000 compliant
terminal operations softwareat our facilities. We anticipate that the Year 2000
compliant terminal operations systems will be fully implemented in the first
quarter of 1999. We recently selected a fully integrated Year 2000 compliant
finance, accounting, and human resources system and expect to have the new
system fully operational by the third quarter of 1999.
 
     We have identified certain of our significant existing non-traditional
information technology systems as not being Year 2000 compliant. We are
currently evaluating the best means to mitigate the possible adverse effects
resulting from the potential failure of these systems including repair or
replacement. However, we believe that in a worst case scenario, existing manual
overrides would prevent the failure of these systems from having a material
adverse effect on our operations.
 
     In accordance with our Year 2000 plan, we have initiated a formal
communications process with other companies with which our systems interface or
rely on to determine the extent to which those companies are addressing their
Year 2000 compliance. In connection with this process, we have sent numerous
letters and questionnaires to third parties and are evaluating those responses
as they are received. Where necessary, we will be working with those companies
that are not yet Year 2000 compliant to mitigate any material adverse effect
such non-compliance may have on us. Based upon information we have received and
reviewed of our possible existing relationships with third parties, we do not
currently anticipate that any third-party non-compliance would have a material
adverse effect on our business, results of operations, or financial condition.
 
     In 1998, we spent $1.1 million related to our Year 2000 remediation efforts
of which we have capitalized $1.0 million and expensed $0.1 million. In 1999, we
anticipate spending an additional $0.8 million to complete these efforts of
which we anticipate capitalizing $0.7 million and expensing $0.1 million.
However, we cannot guarantee that these estimates will be met and actual
expenditures could differ materially from these estimates.
 
     Based upon information currently available to us, we believe our efforts
will succeed in preventing the Year 2000 issue from having a material adverse
effect on us. However, the pervasive nature of the Year 2000 issue may prevent
us from fully assessing and rectifying all systems that could have an effect on
our business, results of operations, or financial condition.
 
POLITICAL, INFLATION, CURRENCY AND INTEREST RATE RISKS
 
     We periodically evaluate the political stability and economic environment
in the countries in which we operate. As a result of these evaluations, we are
not presently aware of any matters that may adversely impact our business,
results of operations or financial condition. The general rate of inflation in
the countries where we operate has been relatively low in recent years causing a
modest impact on operating costs. Typically, inflationary cost increases result
in adjustments to storage and
 
                                       47
<PAGE>
throughput charges because long term contracts generally contain price
escalation provisions. Bunker fuel and bulk product sales prices are based on
active markets, and we are generally able to pass any cost increases to
customers. Except for minor local operating expenses in Canadian dollars and
Netherlands Antilles guilders, all of our transactions are in U.S. dollars.
Therefore, we believe we are not significantly exposed to exchange rate
fluctuations.
 
     As all of our present debt obligations carry a fixed rate of interest
(except for the undrawn revolving credit facility which varies with changes in
the lender's prime lending rate), we believe our exposure to interest rate
fluctuations is minimal.
 
TAX MATTERS
 
     Our St. Eustatius facility has qualified for designation as a free trade
zone and our Point Tupper facility has qualified for designation as a customs
bonded warehouse. Such status allows customers and us to transship commodities
to other destinations with minimal Netherlands Antilles or Canadian tax effects.
 
     Pursuant to a Free Zone and Profit Tax Agreement with the island government
of St. Eustatius which is scheduled to expire on December 31, 2000, we are
subject to a minimum annual tax of 500,000 Netherlands Antilles guilders
(approximately $282,000). This agreement further provides that any amounts paid
to meet the minimum annual payment will be available to offset future tax
liabilities under such agreement to the extent that the minimum annual payment
is greater than 2% of taxable income. Discussions regarding modification and
extension of this agreement are in progress, and we believe that, although
certain terms and conditions could be modified and that the amounts payable to
these governments may be increased, extension of this agreement is likely.
However, it is possible that such amounts may be increased more than anticipated
and that government authorities may impose additional fees if this agreement is
not extended or is otherwise amended.
 
     Tax rates in the jurisdictions in which we operate did not change
significantly between 1996 and 1998. Certain income tax liabilities incurred
prior to November 27, 1996 were assumed by Praxair,and we retained net operating
loss carryforwards of $7.5 million in Canada. We also retained certain
investment tax credits in the Netherlands Antilles and Canada, which may be used
to offset future taxes payable. As a result of the Castle Harlan acquisition,
certain Canadian assets were revalued for tax purposes resulting in a loss of
$77.2 million during 1996.
 
     The combined net operating loss and investment tax credit carryforward
available to offset Canadian taxable income was $62.4 million as of
December 31, 1998 which expires in varying amounts through 2005.
 
     We have provided a full valuation allowance against these deferred tax
assets because it is not certain that any deferred tax assets will be utilized
in the future.
 
LEGAL PROCEEDINGS
 
     Global Petroleum Corp. and one of its affiliates sued us in December of
1993 seeking the release of certain petroleum products we were holding to secure
the payment of invoices. The Supreme Court of Nova Scotia ordered the release of
the products once Global posted a $2.0 million bond. Global claimed damages of
$1.2 million for breach of contract, and we counterclaimed for breach of
contract and payment of approximately $2.0 million of overdue invoices. In April
1996, Global, Scotia Synfuels Limited and their related companies sued CBI
Industries and us in the Supreme Court of Nova Scotia alleging $100 million in
damages resulting from misrepresentation, fraud and breach of fiduciary duty
associated with the reactivation of the Point Tupper facility and the sale of
their shares in the entity owning the Point Tupper facility to one of our
affiliates which was at that time a subsidiary of CBI Industries.
 
     In May 1994, the U.S. Department of Justice sued two of our subsidiaries
for $3.6 million of pollution clean-up costs in connection with the discharge of
oil into the territorial waters of the U.S. Virgin Islands and Puerto Rico by a
barge that had been loaded by one our subsidiaries at St. Eustatius but was not
affiliated with us. On April 16, 1998, the U.S. District Court ruled that it
lacked jurisdiction over such subsidiary and dismissed it from the case.
 
     We believe the allegations made in these proceedings are without merit and
intend to vigorously contest these claims. In connection with the Castle Harlan
acquisition, Praxair agreed to indemnify us against damages relating to the
 
                                       48
<PAGE>
proceedings described above. While we can not estimate any ultimate liability or
guaranty that Praxair will pay all of the indemnified damages without dispute or
delay, we believe these proceedings will not materially affect our business and
financial condition, results of operations or ability to pay the minimum
quarterly dividend.
 
     We are involved in various other claims and litigation related to the
ordinary conduct of our business. Based upon our analysis of legal matters and
our discussions with legal counsel, we believe that these matters will not
materially impact our business and financial condition, results of operations or
ability to pay the minimum quarterly dividend.
 
INSURANCE
 
     We maintain insurance policies on insurable risks at levels we consider
appropriate. At the present time, we do not carry business interruption
insurance (except with respect to the offshore single point mooring system) due
to, what we believe, are excessive premium costs for the coverage provided.
While we believe we are adequately insured, future losses could exceed insurance
policy limits, or under adverse interpretations, be excluded from coverage.
Future liability or costs, if any, incurred under such circumstances could
adversely impact cash flow. See "Business--Insurance."
 
ACCOUNTING STANDARDS AND POLICIES
 
     In 1998, we adopted Statement of Financial Accounting Standards ("SFAS")
No. 128--"Earnings Per Share." Pro forma diluted earnings per common and
subordinated share and incentive right calculations are determined by dividing
net income by the weighted average number of common and subordinated shares and
incentive rights outstanding. SFAS No. 128 had no impact on our reported
earnings per share.
 
     In 1998, we adopted SFAS No. 130--"Reporting Comprehensive Income" which
establishes standards for the reporting and display of comprehensive income and
its components. There were no material differences between net income and
comprehensive income.
 
     In 1998, we adopted SFAS No. 131--"Disclosures about Segments of an
Enterprise and Related Information" which establishes standards for the way that
public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports issued to
stockholders. It also establishes standards for related disclosures about
product and service, geographic areas, and major customers. The adoption of SFAS
No. 131 had no impact on results of operations, financial position or cash flow.
 
     In June 1998, the FASB issued SFAS No. 133--"Accounting for Derivative
Instruments and Hedging Activities" which establishes certain standards of
accounting for derivative instruments including specific hedge accounting
criteria. SFAS No. 133 is effective for fiscal years beginning after June 15,
1999 although earlier adoption is allowed. We have not yet quantified the
impacts of adopting SFAS No. 133 and have not determined when we will adopt SFAS
No. 133. However, as we do not presently have derivative instruments, we do not
expect SFAS No. 133 to have a material impact on us.
 
OTHER MATTERS
 
     We have reclassified our emergency spill response vessel M/V Statia
Responder (formerly known as the M/V Megan D. Gambarella) from its original
asset held for sale classification to property and equipment as we are no longer
actively seeking buyers for the vessel. Certain of the issuer's preferred stock
agreements would have required the issuer to utilize any net proceeds from the
sale of the vessel to redeem Series B Preferred Stock at the applicable
redemption price prior to November 28, 1998. As the Series B Preferred Stock was
not redeemed by the issuer prior to November 28, 1998, the dividend rates on the
issuer's Series A, B and C Preferred Stock increased from 8% to 14.75% effective
November 28, 1998, in accordance with the issuer's preferred stock agreements.
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
     We periodically purchase refined petroleum products from our customers and
others for resale as bunker fuel, for small volume sales to commercial interests
and to maintain an inventory of blend stocks for its customers. Petroleum
product inventories are held for short periods, generally not exceeding ninety
days. We do not presently have any derivative positions to hedge our inventory
of
 
                                       49
<PAGE>
petroleum products. The following table indicates the aggregate carrying value
of our petroleum products on hand at December 31, 1998 computed at average
costs, net of any lower of cost or market valuation provisions, and the
estimated fair value of such products.
 
                      ON BALANCE SHEET COMMODITY POSITION
                             (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                          AS OF DECEMBER 31, 1998
                                                                                       -----------------------------
                                                                                       CARRYING AMOUNT    FAIR VALUE
                                                                                       ---------------    ----------
<S>                                                                                    <C>                <C>
Petroleum inventory:
  Statia Terminals N.V. ............................................................       $ 4,205          $4,205
  Statia Terminals Canada...........................................................           323             338
                                                                                           -------          ------
Total...............................................................................       $ 4,528          $4,543
                                                                                           -------          ------
                                                                                           -------          ------
</TABLE>
 
                                       50
<PAGE>
                                    INDUSTRY
 
TERMINALING
 
     The petroleum terminaling industry consists of two market segments. One
segment is characterized by the ownership and management of terminals inland
along major crude oil or petroleum product pipelines. This segment is primarily
engaged in the distribution of crude oil to inland refineries or of petroleum
products via pipeline, rail or truck. The second segment of the industry is
marine terminaling. This segment is primarily engaged in bulk storage and
transshipment of crude oil and petroleum products of domestic and overseas
producers, integrated oil companies, traders, refiners and distributors.
"Transshipment" is the process whereby customers transfer their products either
from a vessel to storage tanks for subsequent transfer to other vessels for
delivery to other destinations or from one ship to another ship across the dock.
We are engaged only in marine terminaling.
 
     Demand for terminaling services depends on the supply of and demand for
crude oil and petroleum products in the U.S. The U.S. Department of Energy
reports that U.S. demand for crude oil and petroleum products increased at an
annual compound growth rate of 1.8% between 1993 and 1998. According to U.S.
Department of Energy statistics, while demand in the U.S. has risen, domestic
crude oil production has fallen at an annual compound percentage rate of 1.3%
between 1993 and 1998 resulting in an increase in crude oil and petroleum
product imports at an annual compounded rate of 3.4% over the same period. In
addition, the U.S. Department of Energy reports that average U.S. refinery
utilization was at 92% in 1993 and 96% in 1998.
 
     The U.S. Department of Energy projects that the import requirements of
crude oil and refined petroleum products into the U.S. will increase at an
annual compounded rate of 4.3% from 1998 through 2003.
 
     A substantial portion of crude oil and petroleum products storage terminals
are "captive," i.e., they are owned by producers, refiners and pipeline
operators and used almost exclusively for their own operations. The independent
terminaling operator segment of the marine terminaling industry which is
described in this prospectus excludes these captive terminals. Captive terminal
storage is only occasionally made available to the general market and lacks
certain competitive advantages of independent operations, the most important of
which is confidentiality.
 
     The Independent Liquid Terminals Association is an international trade
association that represents commercial operators of bulk liquid terminals,
above-ground tank storage facilities, and pipeline facilities located in North
and South America, Europe, Asia, the United Kingdom, Australia, New Zealand and
South Africa. As published in the 1997 ILTA Bulk Liquids Terminals Directory,
the 86 ILTA member companies operated 483 deepwater barge and pipeline terminals
with an aggregate capacity of over 327 million barrels of dry bulk and liquid
storage capacity in more than 13,720 tanks. More than 400 of these bulk liquid
terminals are located in the U.S. and represent over 277 million barrels of
capacity. The portion of the petroleum terminaling industry covered by
independent companies operating marine terminaling facilities is difficult to
assess.
 
                                       51
<PAGE>

                  U.S. CRUDE OIL AND PETROLEUM PRODUCT IMPORTS
 
                            Imported Crude Oil 
        Year              and Petroleum Products
        ----              ----------------------
                         (million barrels per day)

        1993                       8.62
        1994                       8.99
        1995                       8.84
        1996                       9.48
        1997                      10.16
        1998(1)                   10.20

Source: U.S. Department of Energy
(1) This is a projected number.
 
     Companies generally use marine liquids terminals for various reasons
including:
 
     o to take advantage of economies of scale by transporting crude oil or
       petroleum products in bulk to a terminal as near to the ultimate
       destination as possible;
 
     o to blend crude oil or petroleum products to meet market specifications;
 
     o to process products stored by their customers to add value for a specific
       downstream market;
 
     o to store crude oil or petroleum product temporarily; and
 
     o to access fuel and supplies for consumption by marine vessels
       ("bunkering").
 
BULK CARGO MOVEMENT
 
     Due to significant economies of scale, petroleum companies ship crude oil
from the Middle East, North Sea and West Africa in very-large or ultra-large
crude carriers to a transshipment point such as one of our terminals. These
very-large and ultra-large crude carriers, however, are too large to deliver
their cargo directly to many ports, including virtually all U.S. ports.
Therefore, most petroleum companies are forced to either partially or completely
"lighter" their cargo (the process by which liquid cargo is transferred to
smaller vessels, usually while at sea) or transship their cargo through a
terminal to other smaller vessels that can enter U.S., Canadian and Caribbean
ports. Both of our facilities can handle substantially all of the world's
largest fully-laden very-large and ultra-large crude carriers.
 
     We believe that terminaling offers several advantages over lightering.
Terminaling generally provides more flexibility in the scheduling of deliveries
and allows our customers to deliver their products to multiple locations.
Terminaling is also generally safer and more environmentally sound than
lightering which is conducted at sea and may be impacted by vessel movement,
adverse weather and sea conditions. Lightering in U.S. territorial waters also
creates a risk of liability for owners and shippers of oil. Under the U.S. Oil
Pollution Act of 1990 and other state and federal legislation, significant
liability is imposed for spills in U.S. territorial waters. In Canada, similar
liability exists under the Canadian Shipping Act. Terminaling also provides
customers with the ability to access value added terminal services.
 
     Lightering generally takes significantly longer than discharging at a
terminal. For example, a fully laden ultra-large crude carrier may require up to
seven days to fully discharge by lightering, but only 24 to 48 hours to fully
discharge at our terminals. In addition, terminals allow oil producers
 
                                       52
<PAGE>
to store oil and benefit from value-added services. The advantages of
terminaling may be offset in market conditions where the direct costs of
terminaling are higher than those of lightering. The direct cost differential of
lightering versus terminaling changes as charter rates change for ships of
various sizes. Under current market conditions, lightering in most instances
costs less than terminaling, primarily by allowing very-large and ultra-large
crude carriers to cover the larger portion of the total journey.
 
     The U.S. Oil Pollution Act of 1990 also prohibits single-hulled tankers
built after 1990 from entering U.S. territorial waters (regardless of whether
for lightering or docking purposes). In addition, this law prohibits all vessels
utilizing single-hulls from entering U.S. territorial waters after 2010. The
U.S. Coast Guard has modified these restrictions through regulations which
permit lightering activities in restricted lightering zones near the U.S. East
coast and Gulf coast. The Canadian Standards for Double Hull Construction of Oil
Tankers currently prohibit single-hulled oil tankers, constructed after July
1993, and after January 1, 2010, prohibit substantially all single-hulled oil
tankers from entering Canadian territorial waters. Currently, approximately 80%
of the world's very-large and ultra-large crude carriers are single-hulled. The
majority of such vessels were built prior to 1990.
 
BLENDING
 
     Increasingly stringent environmental regulations in the U.S., Canadian and
European marketplaces create additional demand for facilities that can blend a
variety of components into finished products that meet such regulations as well
as customers' specific requirements. Blending requires specialized equipment and
expertise. In addition, blenders must have a full range of blendstocks
available. The evolving reformulated gasoline market in the U.S. (resulting
primarily from emission-reduction regulations, including the U.S. Clean Air Act,
as amended), tightening specifications for distillates and the increasing need
for blended residual fuel are expected to enhance the growth of the product
blending segment of the terminaling industry. We regularly blend components to
make finished gasolines and various grades of residual fuel. Fuel oils are also
blended for utilities and other commercial uses and crude oils are blended for
refiners.
 
PROCESSING
 
     Atmospheric distillation is a process that applies heat to separate the
hydrocarbons in crude oil into certain petroleum products. Most simple
distillation units, including ours, produce at least three product streams:
naphtha, distillate (heating oil) and residual fuel. The profitability of
atmospheric distillation is dependent on feedstock, operating and other costs
compared to the value of the resulting products.
 
SEASONAL AND OPPORTUNITY STORAGE
 
     Refiners and traders use storage facilities to take advantage of seasonal
movements and anomalies in the crude oil and petroleum products markets. When
crude oil and petroleum product markets are in contango by an amount exceeding
storage costs, the time value of money, the cost of a second vessel plus the
cost of loading and unloading at a terminal, the demand for storage capacity at
terminals usually increases. When crude oil and petroleum products markets are
in backwardation for any length of time, the traditional users of terminal
storage facilities are less likely to store product, thereby reducing storage
utilization levels. Historically, heating oil has been in contango during the
summer months and gasoline has been in contango during the winter months. As a
result, demand for heating oil storage is typically strongest during the summer,
fall and winter months and demand for gasoline storage is typically strongest in
the winter, spring and summer months. We can give no assurances, however, that
the crude oil and petroleum products markets will follow these patterns in the
future.
 
                                       53
<PAGE>

                CRUDE OIL SPOT PRICE VS. FOUR MONTH FUTURE PRICE
 


   Date              Dollars per Barrel
   ----              ------------------

   1/3/92                  $ 0.18
  1/10/92                 $ (0.04)
  1/17/92                  $ 0.36
  1/24/92                  $ 0.28
  1/31/92                  $ 0.14
   2/7/92                  $ 0.40
  2/14/92                  $ 0.09
  2/21/92                  $ 0.28
  2/28/92                  $ 0.40
   3/6/92                  $ 0.33
  3/13/92                  $ 0.51
  3/20/92                  $ 0.22
  3/27/92                  $ 0.19
   4/3/92                  $ 0.27
  4/10/92                  $ -
  4/17/92                 $ (0.01)
  4/24/92                  $ 0.17
   5/1/92                  $ 0.12
   5/8/92                 $ (0.05)
  5/15/92                  $ 0.12
  5/22/92                  $ 0.30
  5/29/92                  $ 0.21
   6/5/92                 $ (0.14)
  6/12/92                 $ (0.31)
  6/19/92                 $ (0.04)
  6/26/92                 $ (0.29)
   7/3/92                 $ (0.32)
  7/10/92                 $ (0.23)
  7/17/92                 $ (0.12)
  7/24/92                 $ (0.32)
  7/31/92                 $ (0.34)
   8/7/92                 $ (0.31)
  8/14/92                 $ (0.21)
  8/21/92                 $ (0.33)
  8/28/92                 $ (0.24)
   9/4/92                 $ (0.26)
  9/11/92                 $ (0.32)
  9/18/92                 $ (0.43)
  9/25/92                 $ (0.25)
  10/2/92                 $ (0.19)
  10/9/92                 $ (0.17)
  10/16/92                $ (0.35)
  10/23/92                $ (0.38)
  10/30/92                $ (0.22)
  11/6/92                 $ (0.09)
  11/13/92                 $ 0.02
  11/20/92                 $ 0.09
  11/27/92                 $ 0.07
  12/4/92                 $ (0.15)
  12/11/92                 $ 0.30
  12/18/92                 $ 0.42
  12/25/92                 $ 0.27
   1/1/93                  $ 0.09
   1/8/93                  $ 0.25
  1/15/93                  $ 0.45
  1/22/93                  $ 0.39
  1/29/93                  $ 0.50
   2/5/93                  $ 0.06
  2/12/93                 $ (0.07)
  2/19/93                  $ 0.10
  2/26/93                  $ 0.47
   3/5/93                  $ 0.19
  3/12/93                  $ 0.05
  3/19/93                  $ 0.17
  3/26/93                  $ 0.43
   4/2/93                  $ 0.30
   4/9/93                  $ 0.18
  4/16/93                  $ 0.36
  4/23/93                  $ 0.65
  4/30/93                  $ 0.39
   5/7/93                  $ 0.29
  5/14/93                  $ 0.22
  5/21/93                  $ 0.71
  5/28/93                  $ 0.39
   6/4/93                  $ 0.28
  6/11/93                  $ 0.34
  6/18/93                  $ 0.69
  6/25/93                  $ 0.94
   7/2/93                  $ 0.52
   7/9/93                  $ 0.71
  7/16/93                  $ 0.58
  7/23/93                  $ 0.95
  7/30/93                  $ 0.49
   8/6/93                  $ 0.65
  8/13/93                  $ 0.90
  8/20/93                  $ 0.87
  8/27/93                  $ 0.63
   9/3/93                  $ 0.46
  9/10/93                  $ 0.66
  9/17/93                  $ 0.98
  9/24/93                  $ 0.71
  10/1/93                  $ 0.53
  10/8/93                  $ 0.48
  10/15/93                 $ 0.32
  10/22/93                 $ 0.40
  10/29/93                 $ 0.25
  11/5/93                  $ 0.58
  11/12/93                 $ 0.64
  11/19/93                 $ 0.79
  11/26/93                 $ 0.77
  12/3/93                  $ 0.63
  12/10/93                 $ 0.89
  12/17/93                 $ 0.84
  12/24/93                 $ 1.09
  12/31/93                 $ 0.95
   1/7/94                  $ 0.84
  1/14/94                  $ 0.53
  1/21/94                  $ 0.30
  1/28/94                  $ 0.22
   2/4/94                  $ 0.01
  2/11/94                  $ 0.31
  2/18/94                  $ 0.51
  2/25/94                  $ 0.67
   3/4/94                  $ 0.53
  3/11/94                  $ 0.36
  3/18/94                  $ 0.25
  3/25/94                  $ 0.13
   4/1/94                  $ 0.22
   4/8/94                  $ 0.37
  4/15/94                  $ 0.13
  4/22/94                 $ (0.45)
  4/29/94                 $ (0.60)
   5/6/94                 $ (0.22)
  5/13/94                 $ (0.79)
  5/20/94                 $ (0.77)
  5/27/94                 $ (0.97)
   6/3/94                 $ (0.65)
  6/10/94                 $ (0.78)
  6/17/94                 $ (0.97)
  6/24/94                 $ (1.48)
   7/1/94                 $ (0.80)
   7/8/94                 $ (1.10)
  7/15/94                 $ (1.20)
  7/22/94                 $ (0.72)
  7/29/94                 $ (0.58)
   8/5/94                 $ (1.18)
  8/12/94                 $ (0.68)
  8/19/94                 $ (0.08)
  8/26/94                  $ 0.13
   9/2/94                  $ 0.24
   9/9/94                  $ 0.25
  9/16/94                  $ 0.35
  9/23/94                  $ 0.56
  9/30/94                  $ 0.36
  10/7/94                  $ 0.13
  10/14/94                $ (0.12)
  10/21/94                 $ 0.16
  10/28/94                 $ 0.02
  11/4/94                 $ (0.45)
  11/11/94                $ (0.51)
  11/18/94                $ (0.15)
  11/25/94                 $ 0.28
  12/2/94                 $ (0.24)
  12/9/94                  $ 0.19
  12/16/94                 $ 0.17
  12/23/94                 $ 0.18
  12/30/94                 $ 0.18
   1/6/95                  $ 0.00
  1/13/95                 $ (0.15)
  1/20/95                 $ (0.25)
  1/27/95                 $ (0.58)
   2/3/95                 $ (0.30)
  2/10/95                 $ (0.53)
  2/17/95                 $ (0.29)
  2/24/95                 $ (0.63)
   3/3/95                 $ (0.44)
  3/10/95                 $ (0.44)
  3/17/95                 $ (0.09)
  3/24/95                 $ (0.23)
  3/31/95                 $ (0.47)
   4/7/95                 $ (0.88)
  4/14/95                 $ (0.71)
  4/21/95                 $ (0.57)
  4/28/95                 $ (1.04)
   5/5/95                 $ (0.94)
  5/12/95                 $ (0.89)
  5/19/95                 $ (0.52)
  5/26/95                 $ (0.61)
   6/2/95                 $ (0.19)
   6/9/95                 $ (0.55)
  6/16/95                 $ (0.48)
  6/23/95                 $ (0.58)
  6/30/95                 $ (0.38)
   7/7/95                 $ (0.39)
  7/14/95                 $ (0.30)
  7/21/95                 $ (0.36)
  7/28/95                 $ (0.24)
   8/4/95                 $ (0.37)
  8/11/95                 $ (0.41)
  8/18/95                 $ (0.49)
  8/25/95                 $ (1.33)
   9/1/95                 $ (0.97)
   9/8/95                 $ (0.60)
  9/15/95                 $ (0.73)
  9/22/95                 $ (1.17)
  9/29/95                 $ (0.33)
  10/6/95                 $ (0.52)
  10/13/95                $ (0.32)
  10/20/95                $ (0.45)
  10/27/95                $ (0.46)
  11/3/95                 $ (0.44)
  11/10/95                $ (0.57)
  11/17/95                $ (0.82)
  11/24/95                $ (0.72)
  12/1/95                 $ (0.60)
  12/8/95                 $ (0.67)
  12/15/95                $ (0.75)
  12/22/95                $ (1.01)
  12/29/95                $ (0.97)
   1/5/96                 $ (1.17)
  1/12/96                 $ (1.49)
  1/19/96                 $ (0.95)
  1/26/96                 $ (1.44)
   2/2/96                 $ (0.57)
   2/9/96                 $ (0.76)
  2/16/96                 $ (0.95)
  2/23/96                 $ (2.70)
   3/1/96                 $ (1.96)
   3/8/96                 $ (1.85)
  3/15/96                 $ (1.92)
  3/22/96                 $ (4.21)
  3/29/96                 $ (3.32)
   4/5/96                 $ (3.03)
  4/12/96                 $ (4.15)
  4/19/96                 $ (5.29)
  4/26/96                 $ (4.82)
   5/3/96                 $ (2.50)
  5/10/96                 $ (2.09)
  5/17/96                 $ (2.32)
  5/24/96                 $ (3.02)
  5/31/96                 $ (2.26)
   6/7/96                 $ (1.43)
  6/14/96                 $ (1.57)
  6/21/96                 $ (2.16)
  6/28/96                 $ (2.43)
   7/5/96                 $ (2.08)
  7/12/96                 $ (1.87)
  7/19/96                 $ (1.77)
  7/26/96                 $ (1.81)
   8/2/96                 $ (1.04)
   8/9/96                 $ (1.36)
  8/16/96                 $ (1.42)
  8/23/96                 $ (1.89)
  8/30/96                 $ (1.37)
   9/6/96                 $ (1.49)
  9/13/96                 $ (1.89)
  9/20/96                 $ (1.62)
  9/27/96                 $ (1.85)
  10/4/96                 $ (1.72)
  10/11/96                $ (1.64)
  10/18/96                $ (1.31)
  10/25/96                $ (1.61)
  11/1/96                 $ (1.54)
  11/8/96                 $ (0.73)
  11/15/96                $ (0.72)
  11/22/96                $ (1.15)
  11/29/96                $ (2.32)
  12/6/96                 $ (1.64)
  12/13/96                $ (1.76)
  12/20/96                $ (1.89)
  12/27/96                $ (3.46)
   1/3/97                 $ (1.83)
  1/10/97                 $ (1.90)
  1/17/97                 $ (1.88)
  1/24/97                 $ (1.69)
  1/31/97                 $ (1.38)
   2/7/97                 $ (1.46)
  2/14/97                 $ (0.82)
  2/21/97                 $ (1.20)
  2/28/97                 $ (0.94)
   3/7/97                 $ (0.23)
  3/14/97                 $ (0.07)
  3/21/97                 $ (0.36)
  3/28/97                 $ (0.48)
   4/4/97                 $ (0.31)
  4/11/97                  $ 0.21
  4/18/97                 $ (0.01)
  4/25/97                 $ (0.14)
   5/2/97                 $ (0.13)
   5/9/97                  $ 0.09
  5/16/97                 $ (0.07)
  5/23/97                 $ (0.09)
  5/30/97                 $ (0.18)
   6/6/97                 $ (0.29)
  6/13/97                  $ 0.46
  6/20/97                  $ 0.29
  6/27/97                  $ 0.65
   7/4/97                  $ 0.04
  7/11/97                  $ 0.22
  7/18/97                  $ 0.19
  7/25/97                  $ 0.47
   8/1/97                  $ 0.12
   8/8/97                  $ 0.02
  8/15/97                  $ 0.42
  8/22/97                  $ 0.18
  8/29/97                  $ 0.30
   9/5/97                  $ 0.21
  9/12/97                  $ 0.22
  9/19/97                  $ 0.26
  9/26/97                  $ 0.47
  10/3/97                  $ 0.02
  10/10/97                $ (0.52)
  10/17/97                $ (0.32)
  10/24/97                 $ 0.18
  10/31/97                 $ 0.05
  11/7/97                  $ 0.04
  11/14/97                 $ 0.18
  11/21/97                 $ 0.11
  11/28/97                 $ 0.43
  12/5/97                  $ 0.54
  12/12/97                 $ 0.47
  12/19/97                 $ 0.62
  12/26/97                 $ 0.48
   1/2/98                  $ 0.36
   1/9/98                  $ 0.52
  1/16/98                  $ 0.61
  1/23/98                  $ 0.63
  1/30/98                  $ 0.86
   2/6/98                  $ 0.51
  2/13/98                  $ 0.60
  2/20/98                  $ 0.75
  2/27/98                  $ 0.97
   3/6/98                  $ 0.86
  3/13/98                  $ 0.89
  3/20/98                  $ 1.06
  3/27/98                  $ 1.28
   4/3/98                  $ 0.53
  4/10/98                  $ 0.75
  4/17/98                  $ 0.84
  4/24/98                  $ 1.50
   5/1/98                  $ 1.65
   5/8/98                  $ 1.20
  5/15/98                  $ 1.31
  5/22/98                  $ 2.11
  5/29/98                  $ 1.29
   6/5/98                  $ 1.33
  6/12/98                  $ 1.80
  6/19/98                  $ 2.70
  6/26/98                  $ 1.82
   7/3/98                  $ 1.54
  7/10/98                  $ 1.14
  7/17/98                  $ 0.76
  7/24/98                  $ 0.87
  7/31/98                  $ 0.90
   8/7/98                  $ 0.86
  8/14/98                  $ 0.89
  8/21/98                  $ 0.79
  8/28/98                  $ 0.88
   9/4/98                  $ 0.93
  9/11/98                  $ 0.58
  9/18/98                  $ 0.64
  9/25/98                  $ 0.51
  10/2/98                  $ 0.25
  10/9/98                  $ 0.20
  10/16/98                 $ 0.46
  10/23/98                 $ 0.63
  10/30/98                 $ 0.56
  11/6/98                  $ 0.41
  11/13/98                 $ 0.58
  11/20/98                 $ 0.87
  11/27/98                 $ 1.40
  12/4/98                  $ 1.12
  12/11/98                 $ 0.98
  12/18/98                 $ 0.92
  12/25/98                 $ 1.01
   1/1/99                  $ 0.86


Source: New York Mercantile Exchange
 
     Since late 1997, all segments of the crude oil and petroleum products
markets have generally been in contango. As a result, previously available
storage tank capacity began to diminish and storage tank lease rates began to
rise during 1998. The shift toward contango is due in part to the current
worldwide excess supply of crude oil, which has resulted in a sharp decrease in
spot prices for most petroleum products. This contango condition followed an
unusually long period of backwardation for all segments of the crude oil and
petroleum products markets which stretched from the beginning of 1995 to late
1997. We believe that our business was adversely impacted during the
backwardation period. Several factors contributed to this unusually long
backwardation period, including anticipation of incremental crude oil supplies
entering the market from Iraq and elsewhere, a shift to "just in time inventory"
positions by many oil companies, and strong demand for petroleum products.
 
     During 1998, members of the Organization of Petroleum Exporting Countries
in conjunction with certain non-OPEC members attempted to reduce worldwide crude
oil production with the intent of supporting oil market prices for petroleum
products. Although we continue to monitor and evaluate developments at OPEC
meetings, we are not aware of any matters from recent meetings that may
adversely impact our current terminaling business.
 
BUNKER SALES
 
     "Bunkering" means the sale and delivery of fuels to marine vessels to be
used for their own engines. The customer base and suppliers of bunker fuel are
located worldwide. Sales of bunker fuel (diesel oil, gas oil and intermediate
fuel oil) are driven primarily by the proximity of the supply location to major
shipping routes and ports of call, the amount of cargo carried by marine vessels
and the price, quantity and quality of bunker fuel.
 
     Bunker fuel is sold under international standards of quality that are
recognized by both fuel suppliers and ship operators. Raw materials for bunker
fuels are purchased in bulk lots of various grades and then blended to meet
customer specifications. Each supplier is responsible for quality control and
other merchantability aspects of the fuel they sell.
 
     Traditionally, the bunker fuel business was concentrated in those ports
with high ship traffic
 
                                       54
<PAGE>

and near primary sources of refined marine fuels. In recent years, the number of
refiner/suppliers in many ports has diminished and stricter environmental laws
have been enacted, primarily in the U.S., Canada and Europe. As a result, the
sale of bunker fuel has increased at locations outside the U.S., Canada and
Europe.
 
     As many vessels have large bunker fuel tanks that allow them to travel long
distances between refueling stops, we compete with bunker delivery locations
around the world. In the Western Hemisphere, there are significant alternative
bunker locations, including on the U.S. East coast and Gulf coast and in Panama,
Puerto Rico, Aruba, Curacao, Halifax, Rotterdam and various North Sea locations.
 
                                       55
<PAGE>
                                    BUSINESS
                            INTRODUCTION AND HISTORY
 
     We believe we are one of the five largest independent marine terminaling
companies in the world as measured in terms of storage capacity. We believe we
are the largest independent marine terminal operator handling crude oil imported
into the Eastern United States. Our two terminals are strategically located at
points of minimal deviation from major petroleum shipping routes. We provide
terminaling services for crude oil and refined products to many of the world's
largest producers of crude oil, integrated oil companies, oil traders, refiners,
petrochemical companies and ship owners. Our customers include Saudi Aramco and
Tosco. These customers transship their products through our facilities to the
Americas and Europe. We own, lease and operate one storage and transshipment
facility located at the island of St. Eustatius, Netherlands Antilles, and one
located in Point Tupper, Nova Scotia, Canada. In connection with our terminaling
business, we also provide related value-added services, including:
 
     o bunkering (the supply of fuel to marine vessels for their own engines);
     o crude oil and petroleum product blending and processing; and
     o bulk product sales.
 
     At the end of 1998, our tank capacity was 18.7 million barrels. Our EBITDA
has increased from $23.3 million in 1996 to $32.1 million in 1998. EBITDA is
presented to provide additional information related to our ability to service
debt and is not an alternative measure of operating results or cash flow from
operations.
 
     Our operations began in 1982 as Statia Terminals N.V., with an oil products
terminal located on the island of St. Eustatius. In 1984, CBI Industries, Inc.,
an industrial gases and contracting services (including storage tank
construction) company, acquired a controlling interest in Statia Terminals N.V.
We purchased Statia Terminals Southwest, Inc. with its facility at Brownsville,
Texas, in 1986. In 1990, CBI Industries became the sole owner of Statia
Terminals N.V. and Statia Terminals Southwest. In 1993, we acquired the
remaining shares not then owned by us of Statia Terminals Point Tupper,
Incorporated, located at Point Tupper. In 1996, Praxair, Inc. acquired CBI
Industries. In November 1996, Castle Harlan Partners II L.P., members of our
management and others acquired from Praxair all of the outstanding capital stock
of Statia Terminals N.V., Statia Terminals, Inc., their subsidiaries and certain
of their affiliates. Castle Harlan Partners II L.P. is a private equity
investment fund managed by Castle Harlan, Inc., a private merchant bank. At the
same time, Statia Terminals Point Tupper, Incorporated was amalgamated into
Statia Terminals Canada, Incorporated. The Issuer, Statia Terminals
International and Statia Terminals Canada were organized for purposes of
facilitating the acquisition by Castle Harlan and our management. In July 1998,
we sold Statia Terminals Southwest to an unaffiliated third party purchaser.
 
     Simultaneously with the closing of this offering, the issuer will redeem or
reclassify all of its currently outstanding capital stock, and the issuer will
issue the common shares offered hereby, the subordinated shares and the
incentive rights. As a result, Praxair's investment in the issuer will be
terminated, and the other current holders of the issuer's capital stock will
continue to own equity of the issuer in the form of the subordinated shares and
incentive rights. See "The Restructuring."
 
     Our day-to-day operations are managed at the respective terminal locations.
Our management team and employee base possess a diverse range of experience and
skills in the terminaling industry. This experience has permitted us to better
understand the objectives of our customers and to forge alliances with those
customers at our terminals to meet those objectives. Thus, we believe that our
operations extend beyond the traditional approach to terminaling. We are a
premier provider of the core services offered by other terminal operators. In
addition, unlike many of our competitors, we refrain from competing with our
customers and provide ancillary, value-added services tailored to support the
particular needs of our customers.
 
                                       56
<PAGE>
                             COMPETITIVE STRENGTHS
 
     We believe that the quality and breadth of our services and our market
presence distinguish us as one of the leading independent marine terminaling
companies in the world. We believe that we are well positioned to compete in the
independent marine terminaling industry and that our most significant
competitive strengths are:
 
     o Strategic Locations.  Our facilities are strategically located near the
U.S. East coast and Gulf coast. Our St. Eustatius facility is located at a point
of minimal deviation from the major shipping routes from the Arabian Gulf via
the Cape of Good Hope, from West Africa to the U.S. East coast and Gulf coast
and from the Panama Canal and South America to Europe. Our Point Tupper facility
is located on the Strait of Canso at Point Tupper, Nova Scotia, a point of
minimal deviation from the shipping routes from the North Sea oil fields to the
U.S. East coast, Canada and the Midwestern U.S. via the St. Lawrence Seaway and
the Great Lakes system. At Point Tupper we operate the deepest independent
ice-free marine terminal on the North American Atlantic coast. The St. Eustatius
facility can accommodate all of, and the Point Tupper facility can accommodate
substantially all of, the world's largest fully-laden very-large and ultra-large
crude carriers.
 
     We offer a lower cost alternative to U.S. based marine terminals, primarily
due to the fact that the Jones Act and certain other U.S. regulations do not
apply to our locations. The U.S. Jones Act mandates that cargo transported
between two U.S. ports be carried only on American-manufactured,
-registered and -crewed vessels, the costs of which are generally considerably
higher than those of comparable foreign vessels. In addition, other U.S.
regulations require the use of expensive double-hulled vessels and unlimited
liability insurance. As a result, use of our foreign facilities is considerably
more cost-effective than use of U.S.-based marine terminals for transshipment to
other U.S. destinations.
 
     o High Quality Assets.  We have built or renovated approximately 80% of our
tank capacity and related marine installations during the last eight years.
Since 1990, we have tripled our storage capacity at St. Eustatius and added an
offshore single point mooring buoy with loading and unloading capabilities. At
Point Tupper, we converted and renovated a former refinery site into an
independent storage terminal. We believe that the speed at which our facility
can discharge or load crude oil and petroleum products and the level of
maintenance and automation and the diversity of our service capabilities at our
facilities generally equals or exceeds that of our competitors. Our other
facilities constructed prior to 1990 have been maintained to high standards and
are in good condition. See "--Information by Location."
 
     o Breadth of Services.  We believe we have a broader range of services than
any of the other independent terminals with which we compete. In addition to
storage, we provide several complementary services which generate ancillary
revenues and additional storage and throughput volume. Such services include
bunkering, crude oil and petroleum product blending and processing, emergency
and spill response, bulk product sales and other ship services. For example, we
own butane storage spheres at each of our facilities which enhance our gasoline
blending capabilities, and we own an atmospheric distillation unit at our St.
Eustatius facility for refining crude oil and petroleum products. We utilize our
butane storage spheres and atmospheric distillation unit to improve the quality
and value of our customers' products.
 
     o Free Trade Status.  Our St. Eustatius facility has qualified for
designation as a free trade zone and our Point Tupper facility has qualified for
designation as a custom bonded warehouse. Such status allows us and our
customers to transship products to other destinations and trade with other
customers with minimal Netherlands Antilles or Canadian tax effects. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Other Matters."
 
     o Experienced Management Team.  Members of our senior management average
over 22 years of experience in terminaling-related industries. Prior to joining
us, members of our senior management worked at companies such as Pakhoed USA,
Inc., GATX Corporation, The Coastal Corporation, Exxon, Hess, Petroleos de
Venezuela S.A. and CBI Industries. Their experience has included training in
terminal operations, crude oil and petroleum product blending, oil trading,
shipping, engineering, construction and project management, refinery operations,
sales and marketing, and finance. Senior management experience has enabled us to
develop key strategic relationships with customers at our
 
                                       57
<PAGE>
terminal locations. See "Management--Directors and Executive Officers."
 
                               BUSINESS STRATEGY
 
     Our business strategy is to manage our operations so we can generate stable
cash flow and pay the minimum quarterly dividend on all of the common and
subordinated shares and to increase our asset values. We intend to pursue this
strategy principally by:
 
     o Developing Strategic Relationships.  To maximize recurring revenues
generated by charges for storage and throughput, we target customers who have a
continuing need to store crude oil and petroleum products to supply a specific
demand, such as a refinery or other downstream distribution to customers. We
seek to understand the long term needs of our principal customers and potential
customers and to modify our facilities and operations to meet those needs. To
provide maximum flexibility to our customers, our tanks have been designed and
constructed to handle a range of crude oil and petroleum products. In certain
cases we may, together with a customer, design and build additional storage or
processing facilities. We can also offer a customized mix of terminaling related
services that improve the quality of or add value to our customers' products. In
this manner, we try to provide long term logistical solutions for these
customers at our strategically located facilities and thereby become their
preferred provider of storage and other terminaling services.
 
     o Generating Stable Cash Flow Through Long Term Contracts.  We have
generally entered into long term storage contracts with the customers with whom
we have established strategic relationships. These contracts generally have
terms of one to five years plus, in most cases, renewal options. These contracts
provide us with minimum monthly payments and generate a stable cash flow from
both the contracted storage services and the provision of terminaling-related
services to these customers and the vessels that transport their products (such
as dock charges and standby emergency response fees). Approximately 71% of our
1998 tank capacity and approximately 64% of our 1998 storage and throughput
revenues (excluding related ancillary services) were from long term contracts.
 
     o Emphasizing Customer Confidentiality.  In contrast to many of our
competitors, we do not compete with our customers in the business of trading
crude oil and petroleum products. This ensures that we take full advantage of
the most important competitive advantage of terminal operations that are
independent from producers, refiners and pipeline operators--confidentiality. We
believe that, in general, our customers prefer to do business with providers of
services who are not competitors in order to maintain the secrecy of important
business data that could affect the demand for and the pricing of their product.
 
     o Capitalizing on a Wide Range of Value-Added Services Offered.  We seek to
further differentiate ourselves from our competitors and to increase revenues
through our comprehensive range of terminaling-related services which currently
includes bunkering, crude oil and petroleum product blending and processing,
emergency and spill response, bulk product sales and various ship services.
 
     o Developing Opportunities at our Point Tupper Facility.  Our facility at
Point Tupper is the deepest independent ice-free marine terminal on the North
American Atlantic coast and one of two independent terminals on the North
American Atlantic coast with the capacity to receive substantially all of the
largest fully-laden very-large and ultra-large crude carriers. Point Tupper
provides regional oil producers seeking to expand their market share in the U.S.
with a facility that is approximately two days by ship from the New York, New
Jersey and Philadelphia refineries. Point Tupper also has access by ship to the
Sarnia, Ontario, Quebec and the U.S. Mid-West refineries. Producers can gain a
strategic advantage by using the Point Tupper terminal to deliver cargo via
very-large or ultra-large crude carriers and then transshipping the cargo via
smaller ships suitable for access to shallower, draft-restricted ports on the
upper U.S. East coast. We believe that currently there is no competitor in the
region that can provide the combination of crude oil storage, crude oil and
petroleum product blending, and transshipment services we offer at Point Tupper.
We are seeking to attract additional storage business from producers of crude
oil and natural gas in the North Sea and from the emerging production areas
located in Eastern Canada. We have a substantial amount of available land at
Point
 
                                       58
<PAGE>
Tupper. We plan to build new storage facilities at Point Tupper as the demand
for storage increases.
 
     o Expanding Our Bunkering Operations.  In order to compete with busy U.S.,
Canadian and European ports and to attract more ship operators, we seek to
provide reliable supply, timely delivery, and consistent quality of bunker fuel
while maintaining overall safety standards. We seek to further develop our
business at Point Tupper and expand this business to additional locations in
Eastern Canada by capitalizing on our reputation for consistently maintaining a
supply of quality marine fuels and lubricants for delivery to bunkering
customers. In addition, we plan to pursue opportunities to supply bunkers at
additional locations in the Caribbean from our St. Eustatius facility.
 
     o Strategic Acquisitions.  From time to time we will consider opportunities
to acquire other marine terminals and related businesses.
 
                             SERVICES AND PRODUCTS
 
     We provide storage services in tanks which are designed to meet our
customers specifications and a full range of terminaling-related services,
including product blending, heating, mixing, separation, and removal of water
and other impurities. Our facilities can handle a variety of petroleum
materials, including light, medium and heavy crude oils, residual fuel oil,
gasoline, gasoline blending components, diesel, marine gas oil, marine diesel
oil, aviation fuel, bunker fuel, and butane. Residual fuel oil is comprised of
the residue from the distillation of crude oil after the light oils, gasoline,
naphtha, kerosene and distillate oils are extracted. We also handle petroleum
diluents, lubricating oils, butane and various other petroleum products.
 
     We own seven berthing locations at our St. Eustatius facility and two
berthing locations at our Point Tupper facility. With these berthing locations
and our uniquely designed mooring facilities and piping configurations, we can
handle oil tankers of various sizes, from relatively small to some of the
largest in the world and provide services such as simultaneous discharging and
loading of vessels and "across the dock" transfers. We charter tugboats and own
other marine equipment to assist with docking operations and provide port
services.
 
     We specialize in "in-tank" or "in-line" blending with computer-assisted
blending technology that assures product integrity and homogeneity. Our
facilities can blend and mix a full range of petroleum products including
gasoline, residual fuel oils (including bunker fuel) and crude oil. We believe
our blending capability has attracted certain customers who have leased capacity
primarily for blending purposes and who have contributed to our bunker fuel and
bulk product sales. We have worked closely with residual fuel oil market
participants (including refiners and oil traders) to assist them with their
blending operations.
 
     We own storage spheres for butane at both of our facilities that enhance
our gasoline blending capabilities. We also own an atmospheric distillation unit
for refining at St. Eustatius. We use the storage spheres and the distillation
unit to improve product quality and add value to our customers' products.
 
     As part of our petroleum product sales, we supply bunker fuel in the
Caribbean and in Nova Scotia, Canada. At and around St. Eustatius, our bunkering
business has evolved from offering bunker fuel to ships at the terminal berths
to a delivery system utilizing specially modified barges which provide fuel to
vessels at anchor. In the first quarter of 1996, we initiated bunker fuel
service operations at Point Tupper with deliveries via pipeline at the terminal
berths and by truck in the surrounding Strait of Canso area. During the 1996,
1997 and 1998 years, 615, 575 and 582 vessels, respectively, received bunker
fuels from us in the Caribbean. In Canada during the 1996, 1997 and 1998 years,
19, 10 and 3 vessels, respectively, received bunker fuels from us.
 
     We purchase small quantities of petroleum products primarily to maintain an
inventory of certain blendstocks and bunker fuel. From time to time we purchase
and sell product to accommodate customers who wish to dispose of small
quantities of product or assist customers' sales activities and occasionally to
take advantage of attractive buying opportunities.
 
     Netherlands Antilles and Canadian environmental laws and regulations
require ship owners, vessel charterers, refiners and terminals to have access to
spill response capabilities. At St. Eustatius, we own and operate the M/V Statia
 
                                       59
<PAGE>
Responder (formerly known as the M/V Megan D. Gambarella), a 194 foot
multi-function emergency response and maintenance vessel with spill response and
firefighting capabilities and underwater diving support. The Statia Alert, a
barge that is capable of recovering 200 gallons per minute of oil/water mixture,
and two response boats that can deploy booms and release absorbent materials,
support our emergency and spill response capability at St. Eustatius. The St.
Eustatius facility also has three tugs on time charter, and owns a line handling
vessel and two mooring launches, all of which are available for safe berthing of
vessels calling at the terminal and for emergency and spill response. Our
customers benefit by ready access to this equipment, and we charge each vessel
that calls at our St. Eustatius facility a fee for this capability.
 
     Statia Terminals Canada charters tugs, mooring launches and other vessels
to assist with the movement of vessels through the Straight of Canso, the safe
berthing of vessels at Point Tupper and other services to vessels.
 
     Statia Terminals Canada owns and operates two fully-equipped spill response
vessels on Cape Breton Island in Canada, one located at Point Tupper and the
other located in Sydney, Nova Scotia. In the event of an oil spill, these
vessels can deploy containment and clean-up equipment including skimmers, booms,
and absorbents. We believe that the presence of fully equipped spill response
vessels in port is important in attracting integrated oil companies to our
facilities.
 
                                    PRICING
 
     Storage and throughput pricing in the petroleum terminaling industry is
subject to a number of factors, including variations in petroleum product
production and consumption, economic conditions, political developments,
seasonality of demand for certain products and the geographic sector of the
world being serviced. At the customer level, terminal selection focuses
primarily on:
 
     o the location;
     o the quality of service; and
     o the range of services offered.
 
Although price is always an issue, price differentials among competing terminals
are frequently less important to the customer because terminaling costs
represent only a small portion of the customer's total distribution costs.
 
     Our pricing strategy is based primarily on petroleum market conditions and
oil price trends. We also take into consideration the quality and range of our
services compared to those of competing terminals, prices prevailing at the time
in the terminaling market in which we operate, and cost savings from shipping to
our terminal locations. In situations requiring special
 
accommodations for the customer (e.g. unique tank modification or construction
of new tanks), we may price on a rate-of-return basis.
 
     We enter into written storage and throughput contracts with customers.
During 1998, approximately 64% of our storage and throughput revenues (excluding
related ancillary services) were attributable to long term (one year or more)
storage and throughput agreements. Our long-term storage and throughput
agreements are individually negotiated with each customer. The typical agreement
specifies tank storage volume, the commodities to be stored, a minimum monthly
charge, an excess throughput charge for throughput volume in excess of the
volume specified in the storage contract and a price escalator. In addition,
there may be charges for certain additional services such as the transfer,
blending, mixing, heating, decanting and other processing of stored commodities.
The minimum monthly charge is due and payable without regard to the volume of
storage capacity, if any, actually utilized. For the minimum monthly charge, the
user is generally allowed to deliver, store for one month and remove the
specified tank storage volume of commodities. As an incentive for the user to
throughput additional barrels, the excess throughput charge is typically a lower
rate per barrel than the rate per barrel utilized in establishing the minimum
monthly charge. Year-to-year escalation of charges is typical in long-term
contracts.
 
                                       60
<PAGE>
                            INFORMATION BY LOCATION
 
  ST. EUSTATIUS, NETHERLANDS ANTILLES
 
     The St. Eustatius facility is located on the Netherlands Antilles island of
St. Eustatius which
is located at a point of minimum deviation
from major shipping routes. St. Eustatius is approximately 1,900 miles from
Houston, 1,500 miles from Philadelphia, 550 miles from Amuay Bay, Venezuela, and
1,100 miles from the Panama Canal. This facility is capable of handling a wide
range of petroleum products, including crude oil and refined products. A
three-berth jetty, a monopile with platform, a floating hose station and an
offshore single point mooring buoy with loading and unloading capabilities serve
the terminal's customers' vessels.
 
     This facility has 27 tanks with a total capacity of 5.2 million barrels
dedicated to fuel oil storage, 15 tanks with total capacity of 1.1 million
barrels dedicated to petroleum products storage, a 15,000 barrel butane sphere,
and eight tanks totaling 5.0 million barrels dedicated to multigrade crude oil
storage. The fuel oil and petroleum product facilities have in-tank and in-line
blending capability. The crude storage is the newest portion of the facility,
construction of which was completed in early 1995 by CBI Industries. The storage
tanks comply with construction standards that meet or exceed American Petroleum
Institute, National Fire Prevention Association and other material industry
standards. Crude oil movements at the terminal are fully-automated. In addition
to the storage and blending services at St. Eustatius, this facility has the
flexibility to utilize certain storage capacity for both feedstock and refined
products to support its atmospheric distillation unit, which is capable of
processing up to 15,000 barrels per day of feedstock, ranging from condensates
to heavy crude oil.
 
     The St. Eustatius facility can accommodate the world's largest vessels for
loading and discharging crude oil. The single point mooring system can handle a
single fully-laden vessel of up to 520,000 dead weight tons (a marine vessel's
carrying capacity) with a draft of up to 120 feet. The single point mooring
system can discharge or load at rates in excess of 100,000 barrels of crude oil
per hour. There are six pumps connected to the single point mooring system, each
of which can pump up to 18,000 barrels per hour from the single point mooring
system to the storage tanks. The jetty at St. Eustatius can accommodate three
vessels simultaneously. The south berth of the jetty can handle vessels of up to
150,000 dead weight tons with a draft of up to 55 feet. The north berth of the
jetty can handle vessels of up to 80,000 dead weight tons with a draft of up to
55 feet. There is also a barge loading station on the jetty. At the south and
north berths of the jetty, 25,000 barrels per hour of fuel oil can be discharged
or loaded. To accommodate the needs of our gasoline blending customers, we have
recently completed installation of a monopile with platform that can handle
vessels of up to 40,000 dead weight tons with a draft of up to 46 feet. The
monopile with platform can handle two vessels simultaneously and can discharge
or load 12,000 barrels per hour of refined products. In addition, this facility
has a floating hose station that we use to load bunker fuels onto our barges for
delivery to customers. We believe that the speed at which our facility at St.
Eustatuis can load crude oil and petroleum products off of or onto vessels gives
us a competitive advantage due to reductions in the time ships spend idle in
ports.
 
     Notwithstanding periods of unusually adverse market conditions, including
the backwardation which persisted from the first quarter of 1995 to the fourth
quarter of 1997, the average percentage of our available capacity that we leased
at the St. Eustatius facility for each of the years ended 1996, 1997, and 1998
was 80%, 76% and 92% respectively. We believe that cost advantages associated
with the location of our facility, shipping economies of scale, product blending
capabilities and the availability of a full range of ancillary services at the
facility has driven the demand for our storage services. Storage capacity at the
St. Eustatius facility has grown from 2.0 million barrels of fuel oil storage in
1982 to its present capacity of 11.3 million barrels for crude oil and petroleum
products.
 
     The ability to blend a comprehensive range of refined products from
gasoline through residual fuel oils has contributed to our success in leasing
the facility's tankage. We have generally leased our refined product tanks at or
near full capacity on a continuous basis. We have worked closely with residual
fuel oil market participants to assist them with their blending operations by
offering a selection of product blending components and computerized blending
services. We have a five-year contract (subject to renewal for an additional
 
                                       61
<PAGE>
term of 5 years at the customer's discretion) with Bolanter Corporation, a
subsidiary of Saudi Aramco, for 5.0 million barrels of dedicated crude oil
storage. Bolanter uses this storage to service a number of its customers in the
Western Hemisphere. The terminal enables Bolanter to transport various grades of
crude oil closer to market, at competitive transportation rates.
 
     Recognizing the strategic advantage of its location in the Caribbean near
major shipping lanes, we deliver bunker fuel to vessels at our St. Eustatius
facility. The bunkering business has evolved from offering fuels to ships at the
berth to a delivery system utilizing specially modified barges that provide fuel
to vessels at anchorage. The location of the terminal on the leeward side of the
island, which provides natural protection for ships, generally favorable
year-round weather conditions and deep navigable water at an anchorage
relatively close to shore, attracts ships to this facility for their bunker fuel
requirements. Four of our barges support the bunker fuel sales operation.
 
     During 1998, we commissioned an atmospheric distillation unit at St.
Eustatius. The unit is capable of processing up to 15,000 barrels per day of
feedstock ranging from condensates to heavy crude oil. This distillation unit
can produce naphtha, distillate (heating oil) and residual fuel oil. We believe
that the capability to process feedstock for third parties may create
opportunities for us.
 
     We own and operate all of the berthing facilities at our St. Eustatius
terminal for which we charge vessels a dock charge. Vessel owners or charterers
may incur separate charges for facilities use and associated services such as
pilotage, tug assistance, line handling, launch service, emergency and spill
response and ship services.
 
  POINT TUPPER, NOVA SCOTIA, CANADA
 
     The Point Tupper terminal is located in the Strait of Canso, near Port
Hawkesbury, Nova Scotia, Canada which is located at a point of minimal deviation
from major shipping routes. Point Tupper is approximately 700 miles from New
York City, 850 miles from Philadelphia and 2,500 miles from Mongstad Terminal in
Norway. This facility operates the deepest independent ice-free marine terminal
on the North American Atlantic coast, with access to the U.S. East coast, Canada
and the Midwestern U.S. via the St. Lawrence Seaway and the Great Lakes system.
The Point Tupper facility can accommodate substantially all of the largest fully
laden very-large and ultra-large crude carriers for loading and discharging.
 
     We renovated our facilities at Point Tupper and converted a former oil
refinery site into an independent storage terminal. This work, performed
primarily by a subsidiary of CBI Industries, began in 1992 and was completed in
1994. The tanks were renovated to comply with construction standards that meet
or exceed American Petroleum Institute, National Fire Prevention Association and
other material industry standards.
 
     We believe that our dock at Point Tupper is one of the premier dock
facilities in North America. The south berth of the Point Tupper facility's
dock, Berth One, can handle fully laden vessels of up to 400,000 dead weight
tons with a draft of up to 84 feet. At Berth One, approximately 75,000 barrels
per hour of crude oil, approximately 40,000 barrels per hour of diesel or
gasoline, or 12,000 barrels per hour of fuel oil can be discharged or loaded.
Berth Two can accommodate vessels of up to 80,000 dead weight tons with drafts
of up to 40 feet. At Berth Two, approximately 25,000 barrels per hour of crude
oil, approximately 25,000 barrels per hour of diesel or gasoline, or
approximately 25,000 barrels per hour of fuel oil can be discharged or loaded.
Liquid movement at the terminal is fully automated. The Point Tupper facility
can accommodate two vessels simultaneously. We charge separately for the use of
the dock facility as well as associated services, including pilotage, tug
assistance, line handling, launch service, spill response and ship services.
 
     The berths at the dock at the Point Tupper facility connect to a 7.4
million barrel tank farm. The terminal has the capability of receiving and
loading crude oil, petroleum products and certain petrochemicals. This facility
has eight tanks with a combined capacity of 3.6 million barrels dedicated to
multigrade crude oil storage, two tanks with a combined capacity of 0.5 million
barrels dedicated to fuel oil storage and 24 tanks with a combined capacity of
3.3 million barrels dedicated to petroleum products (including gasoline,
gasoline blend components, diesel and distillates) storage. During 1997,
approximately two-thirds of the petroleum products storage tanks were converted
to crude oil storage. The facility also has a 55,000 barrel butane storage
sphere. This sphere is one of the largest of its kind in North America and we
expect it to enhance our petroleum products
 
                                       62
<PAGE>
blending operations. The average capacity leased at the Point Tupper facility
over each of the last three years ended 1996, 1997, and 1998 was 55%, 70% and
93%, respectively.
 
     In order to comply with our safe handling procedures and Canadian
environmental laws, we own and operate two fully equipped spill response vessels
on Cape Breton Island, one located at Point Tupper and the other located in
Sydney. In addition to these vessels, we have the capability to respond to
spills on land or water with a combined spill response capability of over 2,500
metric tons at this terminal location. An additional 7,500 metric ton spill
response capability is immediately available at Point Tupper by agreement with
another response organization. Our customers benefit by ready access to the
equipment. In 1995, one of our subsidiaries was granted Canadian Coast Guard
certification as a response organization with spill response capabilities.
Consequently, vessels calling in the Strait of Canso are required to pay us a
subscription fee for access to the services provided by the spill response
organization, even if they do not dock at our terminal.
 
     There are two truck racks at the Point Tupper facility. The north truck
rack has the capability to load 550 barrels per hour of fuel oil and the south
truck rack has the capability to load 550 barrels per hour of fuel oil or up to
550 barrels per hour of diesel.
 
     In 1994, a predecessor to one of our subsidiaries entered into a long term
storage contract with a large oil refiner, Tosco Corporation. The contract
contains two five-year renewal options at the customer's discretion. The
contract commits 3.6 million barrels of crude oil storage at the Point Tupper
facility, representing approximately 48% of the terminal's total capacity. A
portion of the remaining tanks at the Point Tupper facility, initially designed
for the storage of gasoline, distillates, aviation fuel and other petroleum
products, was converted during 1997 to crude oil storage and leased. Currently,
71% of this facility's tankage is dedicated to crude oil, 23% to clean, refined
products and 6% to residual fuel oil.
 
     In the first quarter of 1996, we initiated the offering of bunkering
services at Point Tupper. Delivery of bunker fuel at Point Tupper is currently
being made via pipeline to vessels transferring cargo at the berths and via
truck to vessels in the surrounding area.
 
     We entered into a lease and storage agreement in 1998 with Sable Offshore
Energy, Inc. with regard to a 25 year lease (with two 25 year options) of a
portion of our land and a 12 year agreement for the storage and throughput of
Sable's products. Sable is leasing the site, building a natural gas liquids
fractionation plant, storage and rail handling facilities on the site, and
leasing over 500,000 barrels of our existing storage capacity. The fractionation
plant will process an average of 20,000 barrels per day of natural gas liquids
extracted from the Sable Island region of Nova Scotia, Canada, and delivered via
pipeline for the fractionation plant from Sable's Goldboro Gas Processing Plant
in Guysborough County, Nova Scotia. While the natural gas liquid volumes will
vary according to field source and production rates, the fractionation plant is
expected to produce about 10,300 barrels per day of condensate (light oil),
6,250 barrels a day of propane, and about 3,250 barrels per day of butane. The
fractionation plant is currently under construction and is expected to be
completed by November 1999.
 
     We are finalizing a land exchange agreement with the Province of Nova
Scotia conveying certain land (principally the approximately 1,296 acres
comprising Lake Landrie and certain adjacent watershed lands) we own at the
Point Tupper terminal site to the Province of Nova Scotia in exchange for the
conveyance by the Province of Nova Scotia of certain unused road rights-of-way
on our remaining property at Point Tupper.
 
                                  COMPETITION
 
     The main competition to crude oil storage at our facilities is from
lightering. Under current market conditions, lightering in most instances costs
less than terminaling. The price differential between lightering and terminaling
is primarily driven by the charter rates for vessels of various sizes because
terminaling generally occupies a very-large or ultra-large crude carrier for a
shorter period of time than lightering. A very-large crude carrier can be
lightered in approximately four days if lightering vessels are available for
continuous back to back operations and the weather is good. However, if fewer
lightering vessels are available or bad weather interrupts, it can take longer
to load or
 
                                       63
<PAGE>
discharge product. Depending on charter rates, the longer charter period
associated with lightering is generally offset by various costs associated with
terminaling including storage costs, dock charges and spill response fees. In
addition, terminaling reduces the risk of environmental damage associated with
lightering.
 
     The independent terminaling industry is fragmented and includes both large,
well-financed companies that own many terminal locations, and smaller companies
that may own a single terminal location. We are a member of the Independent
Liquid Terminals Association, which among other functions, publishes a directory
of terminal locations of its members throughout the world. Customers with
specific geographic and other logistical requirements may use the ILTA directory
to identify the terminals in the region available for specific needs and to
select the preferred providers on the basis of service, specific terminal
capabilities and environmental compliance.
 
     In addition to the terminals owned by independent terminal operators, many
state-owned oil producers and major energy and chemical companies also own
extensive terminal facilities, and these terminals often have the same
capabilities as terminals owned by independent operators. While the purpose of
such terminals is to serve the operations of their owners, and they do not
customarily offer terminaling services to third parties, these terminals
occasionally are made available to the market when they have unused capacity on
a short term and irregular basis. Such terminals lack certain competitive
advantages of independent operators, the most important of which is
confidentiality.
 
     In many instances, major energy and chemical companies that own storage and
terminaling facilities are also significant customers of independent terminal
operators. Such companies typically have strong demand for terminals owned by
independent operators when independent terminals have more cost-effective
locations near key transportation links such as deep-water ports. Major energy
and chemical companies also need independent terminal storage when their captive
storage facilities are inadequate, either because of size constraints, the
nature of the stored material or specialized handling requirements.
 
     Independent terminal owners compete based on the location and versatility
of their terminals, service and price. A favorably located terminal will have
access to cost-effective transportation both to and from the terminal. Possible
transportation modes include waterways, railroads, roadways and pipelines.
 
     Terminal versatility is a function of the operator's ability to offer safe
handling for a diverse group of products with potentially complex handling
requirements. The primary service function provided by the terminal is the safe
storage and return of all of the customer's product while maintaining product
integrity. Terminals may also provide additional services, such as heating,
blending, water removal and processing with assurance of proper environmental
handling procedures or vapor control to reduce evaporation.
 
                                       64
<PAGE>
     We believe our competitors to our terminals include:
 
<TABLE>
<CAPTION>
                                                                                                      STORAGE CAPACITY
                                  NAME(1)                                            LOCATION           (BARRELS)
----------------------------------------------------------------------------   --------------------   ----------------
<S>                                                                            <C>                    <C>
ST. EUSTATIUS
  Baprovin (BORCO)..........................................................   Bahamas                    10,475,000(3)
  Bonaire Petroleum Corp. N.V...............................................   Bonaire, N.A.              10,100,000(3)
  Commonwealth Oil Refining Company (CORCO).................................   Puerto Rico                12,000,000(2)
  South Riding Point Holding, Ltd...........................................   Bahamas                     5,200,000
 
POINT TUPPER
  International-Matex Tank Terminals........................................   Bayonne, NJ                14,000,000
  GATX Terminals Corporation................................................   Carteret, NJ                6,652,000
  South Riding Point Holding, Ltd...........................................   Bahamas                     5,200,000
  Stolthaven Perth Amboy Inc................................................   Perth Amboy, NJ             2,146,000(4)
  International-Matex Tank Terminals........................................   Quebec City, Canada         1,270,000
  Multiple..................................................................   NY/NJ Harbor               35,000,000
</TABLE>
 
------------------
 
Source: OPIS Directories Petroleum Terminal Encyclopedia 1999, Tenth Edition,
unless otherwise specified.
 
(1) Does not include captive terminals other than those which provide to third
    parties a significant amount of their capacity on a somewhat regular basis.
    Captive terminals are generally used almost exclusively for the operations
    of the producers, refiners or pipeline operators who own them and are only
    occasionally made available to the market on a short term basis. Captive
    terminals lack certain competitive advantages of independent operations, the
    most important of which is confidentiality. See "Industry."
 
(2) We believe such storage capacity to be less than fully useable.
 
(3) Information provided to us by a source we believe to be reliable.
 
(4) Source: OPIS Petroleum Terminal Encyclopedia, Ninth Edition.
 
     In our bunkering business, we compete with the ports to which or from which
each vessel travels or bypasses.
 
                                   CUSTOMERS
 
     Our customers include many of the world's largest producers of crude oil,
integrated oil companies, oil traders, refiners, petrochemical companies and
ship owners.
 
     We presently have several significant long term contracts at St. Eustatius,
including a five-year contract (with a five-year renewal option at the
customer's discretion) with Bolanter Corporation, N.V., which became effective
in early 1995. Bolanter Corporation is a subsidiary of Saudi Aramco. This
storage and throughput contract commits all of the St. Eustatius facility's
current crude oil storage capacity to Bolanter, which represents approximately
44% of the terminal's total capacity and 7.4% of our 1998 revenues, with an
additional 7.7% of our 1998 revenues derived from parties unaffiliated with
Bolanter but generated by the movement of Bolanter's products through the St.
Eustatius terminal. In addition, revenues from another affiliate of Saudi Aramco
which received bunker fuels at our St. Eustatius facility accounted for 1.5% of
our total 1998 revenues.
 
     In addition, we presently have several significant long term contracts at
Point Tupper, including a five-year contract with two five-year renewal options
(at the customer's discretion) with a major refiner, a subsidiary of Tosco
Corporation. This contract became effective in August 1994 and commits
approximately 49% of the present tank capacity at Point Tupper. It represented
approximately 7.1% of our 1998 revenues, with an additional 1.9% of our 1998
revenues being derived from parties unaffiliated with Tosco but generated by the
movement of Tosco's products through the Point Tupper terminal.
 
     In addition, we have another terminaling services customer which
represented 5.2% of our 1998 revenues. We also supply bunker fuel to a customer
which represented 8.5% of our 1998 revenues.
 
     No other customer accounted for more than 5% of our total 1998 revenues.
 
                                       65
<PAGE>
                                   SUPPLIERS
 
     We presently have a bunker fuel supply contract at St. Eustatius with a
major state-owned oil producer, which became effective in 1992 and was
periodically renewed until it expired on December 31, 1998. We are presently
continuing this supply relationship on a month-to-month basis. We are discussing
renewal of this contract with our present supplier as well as opportunities with
other potential suppliers. This contract presently provides us with the majority
of the fuel oil necessary to support our bunker and bulk product sales
requirements. We procure the balance of our fuel oil and other supplies
necessary for our operations from various sources. We believe that suitable
alternate sources of supply are readily available from which we can procure fuel
oil should deliveries under our current contract be interrupted or are not
renewed. However, such alternative sources of supply are subject to changing oil
market conditions and prices.
 
     At Point Tupper, we are attempting to secure an adequate source of supply
for our bunker fuel sales business to enable significant increases in volumes
for delivery to vessels calling at this facility.
 
                    ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
 
     Our subsidiaries are subject to comprehensive and periodically changing
environmental, health and safety laws and regulations within the jurisdictions
of our operations, including those governing oil spills, emissions of air
pollutants, discharges of wastewater and storm waters, and the disposal of
non-hazardous and hazardous waste. We believe we are presently in substantial
compliance with applicable laws and regulations governing environmental, health
and safety matters. We have taken measures to mitigate our exposure to
environmental risks including automation and monitoring equipment, employee
training, maintaining our own emergency and spill response equipment at each
terminal and maintaining liability insurance for certain accidental spills. The
following table shows our capital expenditures in millions of dollars for
compliance with environmental laws and regulations and routine operational
compliance costs for the periods indicated.
 
<TABLE>
<CAPTION>
                                                                                  CAPITAL         ROUTINE OPERATIONAL
                                    PERIOD                                        EXPENDITURES       COSTS
-------------------------------------------------------------------------------   ------------    -------------------
<S>                                                                               <C>             <C>
1996...........................................................................       $1.3               $ 0.4
1997...........................................................................        1.3                 0.2
1998...........................................................................        2.7                 0.9
</TABLE>
 
  ST. EUSTATIUS
 
     Until recently, the St. Eustatius terminal has not been subject to
significant environmental, health and safety regulations, and health, safety and
environmental audits have not been required by law. No environmental or health
and safety permits are required for the St. Eustatius terminal except under the
St. Eustatius Nuisance Ordinance. A license under the St. Eustatius Nuisance
Ordinance was issued to us in February 1997 subject to compliance with certain
requirements. The requirements established by the license set forth certain
environmental standards for operation of the facility, including monitoring of
air emissions, limits on and monitoring of waste-water discharges, establishment
of a waste-water treatment system, standards for above-ground storage tanks and
tank pits, reporting and clean-up of any soil or water pollution and certain
site security measures. To date, we have complied with the license requirements
and do not expect further compliance to have a material adverse effect on our
business and financial condition, results of operations or our ability to pay
the minimum quarterly dividend. We will address future improvements to the
facility that may be necessary to comply with new environmental, health and
safety laws and regulations, if any, as they arise.
 
     The St. Eustatius terminal management and consultants supervise the on and
off-site disposal and storage of hazardous waste materials. The nature of our
business is such that spills of crude oil or petroleum products may occur at the
terminal periodically. Over the past three years, all spills at
 
                                       66
<PAGE>
the St. Eustatius terminal were reported to the appropriate environmental
authorities and have not resulted in any citations by such authorities for
violations of law. We have remediated all such spills.
 
     Two government inspections were performed during each of 1997 and 1998 with
no citations issued.
 
  POINT TUPPER
 
     The Point Tupper terminal is subject to a variety of environmental, health
and safety regulations administered by the Canadian federal government and the
Nova Scotia Department of Environment. While air emission monitoring is not
required by the NSDOE, surface water discharge outfall and groundwater
monitoring are required and are performed on a routine basis in accordance with
current requirements of the permit issued by NSDOE. We believe we have all
requisite environmental permits in place. The principal permit is the Industrial
Waste Treatment Works Permit issued by the NSDOE in 1992. That permit is
presently being amended by the NSDOE, but we do not expect the amendments to
significantly change our obligations under the permit. The nature of our
business is such that spills of crude oil or refined products may occur at the
terminal periodically. Over the past three years, all spills at the Point Tupper
terminal were reported and remediated to the satisfaction of the applicable
agencies and have not resulted in any citations by such authorities. Statia
Terminals Canada has recently discovered a leak in one tank, has emptied the
tank and is in the process of repairing it and remediating the spillage.
 
     Past uses of the facility by others, including its past operation by others
as an oil refinery, have resulted in certain on-site areas of known and
potential contamination, as described under "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Environmental, Health
and Safety Matters."
 
                                   EMPLOYEES
 
     As of November 30, 1998, excluding contract labor, we employed 211 people.
Forty employees were located in the U.S., 98 on St. Eustatius, and 73 at Point
Tupper. A majority of our employees at both the St. Eustatius and Point Tupper
facilities are unionized. We believe that our relationships with our employees
are good. We have never experienced a material labor related business
disruption.
 
  ST. EUSTATIUS
 
     The Windward Islands Federation of Labor represents the majority of hourly
workers at St. Eustatius. We entered into an agreement with WIFOL on June 1,
1993, which extended to May 31, 1996. The agreement provided for automatic one
year extensions if neither party requested an amendment. We have not requested
or received any requests for an extension. We believe that the agreement no
longer binds us, but we continue to provide pay and benefits to the hourly
workers as if the agreement was still in effect. In early 1997, management and a
select group of supervisory and office personnel at St. Eustatius discussed
organizing into a collective bargaining group. We believe these matters will not
materially impact our business and financial condition, results of operations or
ability to pay the minimum quarterly dividend.
 
  POINT TUPPER
 
     The Communications, Energy and Paperworkers Union represents a majority of
Point Tupper's hourly work force. During 1995, we signed a three-year agreement
with CEPU that expired on September 30, 1998. We are currently negotiating with
CEPU and continuing our operations without an agreement. We believe these
matters will not materially impact our business and financial condition, results
of operations or ability to pay the minimum quarterly dividend.
 
     We have experienced two minor work stoppages in the last four years. In
April 1994, employees stopped working for approximately one-half of a day to
protest alleged inadequate safety conditions at the facility. The following
April, electricians picketed for approximately two hours to protest the
employment of non-union workers on one project. Most of the workers at the
facility were unaffected by the activity.
 
                                       67
<PAGE>
                               LEGAL PROCEEDINGS
 
     See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Legal Proceedings."
 
                                   INSURANCE
 
     Our property insurance covers damage to the real and personal property
located at our two terminals and administrative offices. The property loss limit
is $150 million with a $0.1 million deductible, except for a $0.5 million
deductible for certain losses (wind, flood, earthquake, etc.) at St. Eustatius.
We carry various layers of liability coverage of up to $200 million with a
deductible of approximately $0.3 million (including coverage for liabilities
associated with certain accidental spills). We carry $30 million of coverage on
the offshore single point mooring system at St. Eustatius with a deductible of
approximately $0.3 million. We have coverage up to scheduled values for damage
to our marine vessels with a $50,000 deductible. We also carry other insurance
customary in the industry.
 
     Our current insurance program commenced January 1, 1999 and generally
extends 15 months.
 
     We believe that the cost of business interruption insurance does not
warrant carrying it under current market conditions. Therefore, we do not have,
and do not plan to carry, business interruption insurance except with respect to
the offshore single point mooring system.
 
                                       68
<PAGE>
                                   MANAGEMENT
                        DIRECTORS AND EXECUTIVE OFFICERS
 
     At the closing, the board of directors of the issuer will be divided into 3
classes. The directors serve six year terms which are staggered such that
approximately one-third of the directors are elected every two years. The board
of directors of the issuer duly elects the executive officers to serve until
their respective successors are elected and qualified.
     The following table sets forth certain information with respect to the
directors and executive officers of the issuer:
 
<TABLE>
<CAPTION>
                                                                                TERM
                     NAME                          AGE         POSITION        EXPIRES
-----------------------------------------------    ---     ----------------    -------
<S>                                                <C>     <C>                 <C>        
James G. Cameron(3)............................    52      Director
John K. Castle(2)(3)...........................    58      Director
Admiral James L. Holloway, III(1)..............    76      Director
Francis Jungers(2).............................    72      Director
David B. Pittaway(1)(2)(3).....................    47      Director
Jonathan R. Spicehandler(1)....................    50      Director
Ernest "Jackie" Voges..........................    67      Director
Justin B. Wender(1)............................    29      Director
Thomas M. Thompson, Jr.........................    53      Vice President
Robert R. Russo................................    43      Vice President
James F. Brenner...............................    40      Vice President
                                                             and Treasurer
Jack R. Pine...................................    59      Secretary
</TABLE>
 
------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
(3) Member of Executive Committee.
 
     The directors of Statia Terminals, Inc., an indirect subsidiary of the
issuer, are currently elected annually by their shareholders to serve during the
ensuing year or until a successor is duly elected and qualified. The board of
directors of Statia Terminals, Inc. duly elects the executive officers to serve
until their respective successors are elected and qualified.
 
     The following table sets forth certain information with respect to certain
directors and executive officers of Statia Terminals, Inc.:
 
<TABLE>
<CAPTION>
                   NAME                       AGE                    POSITION
-------------------------------------------   ---   -------------------------------------------
<S>                                           <C>   <C>
James G. Cameron...........................   52    Director, Chairman of the Board and
                                                      President
Thomas M. Thompson, Jr.....................   53    Director and Executive Vice President
Robert R. Russo............................   43    Director and Senior Vice President
Jack R. Pine...............................   59    Senior Vice President, General Counsel and
                                                      Secretary
John D. Franklin...........................   42    Vice President--Marine Fuel Sales
James F. Brenner...........................   40    Vice President--Finance, Treasurer and
                                                      Assistant Secretary
</TABLE>
 
     James F. Brenner. Mr. Brenner has been Vice President and Treasurer of the
issuer since December 23, 1996. Mr. Brenner joined us in 1992, as our
Controller, and was promoted to his present position in May, 1996. Immediately
prior to joining us, he served three years as Vice President, Finance and Chief
Financial Officer of Margo Nursery Farms Inc., a publicly traded agribusiness
firm with European and Latin American operations. From 1986 to 1990,
Mr. Brenner was Treasurer of Latin American Agribusiness Development Corp., a
company providing debt and equity financing to
 
                                       69
<PAGE>
agribusinesses throughout Latin America. His duties included serving as director
for several of its corporate investments. From 1981 to 1986, Mr. Brenner held
various positions with the international accounting firm of
PricewaterhouseCoopers (formerly Price Waterhouse LLP). Mr. Brenner is a
licensed Certified Public Accountant in Florida (inactive status).
 
     James G. Cameron. Mr. Cameron has been a director of the issuer since
February 6, 1997. Mr. Cameron has been with us since 1981. From 1981 to 1984,
Mr. Cameron served as the Project Manager spearheading the design and
construction of the St. Eustatius terminal facility. Mr. Cameron was promoted in
1984 to Executive Vice President of Statia Terminals, Inc. Since being named
President and Chairman of the Board of Statia Terminals, Inc. in 1993,
Mr. Cameron has served on the board of directors of Tankstore (a joint venture
company of CBI Industries, GATX Corporation and Paktank International B.V.).
Mr. Cameron has also served on the board of directors of Petroterminal de
Panama, where he represented CBI Industries' ownership in the pipeline
traversing the isthmus of Panama. His prior experience in the petroleum industry
dates back to 1969 when he joined Cities Service Company as a marine engineer.
Mr. Cameron subsequently joined Pakhoed USA, Inc., where he served in a variety
of positions including Project Engineer, Manager of Engineering & Construction,
Maintenance Manager and Terminal Manager, which included the management of
Paktank's largest facility in Deer Park, Texas.
 
     John K. Castle. Mr. Castle has been a director of the issuer since
February 6, 1997. Mr. Castle is Chairman and Chief Executive Officer of Branford
Castle, Inc., an investment company formed in 1986. Since 1987, Mr. Castle has
been Chairman of Castle Harlan, Inc., a private merchant bank in New York City.
Mr. Castle is Chief Executive Officer of Castle Harlan Partners II, G.P. Inc.,
the general partner of the general partner of Castle Harlan Partners II L.P.,
which is our controlling stockholder. Immediately prior to forming Branford
Castle, Inc. in 1986, Mr. Castle was President and Chief Executive Officer and a
director of Donaldson Lufkin & Jenrette, Inc., which he joined in 1965.
Mr. Castle is a director of Sealed Air Corporation, Morton's Restaurant Group,
Inc., Commemorative Brands, Inc. and Universal Compression, Inc. He is a trustee
of the New York Medical College (for 11 years he was Chairman of the Board), a
member of The New York Presbyterian Hospital's Board of Trustees, a member of
the board of the Whitehead Institute for Biomedical Research and is a member of
the Corporation of the Massachusetts Institute of Technology. Mr. Castle has
also served as a director of The Equitable Life Assurance Society of the United
States.
 
     John D. Franklin. Mr. Franklin joined us in March, 1992 as Manager, Marine
Sales and has been the Vice President--Marine Fuel Sales since 1996. He also
serves as a director of Petroterminal de Panama. Immediately prior to joining
us, he was employed for 14 years with The Coastal Corporation, and its former
subsidiary, Belcher Oil Co. Inc. His duties with Coastal included management of
the company's marine sales division; Manager, National Accounts, and Terminal
Manager at Coastal's New Orleans facility. He has extensive experience in
marketing, terminal operations, and technical sales support.
 
     Admiral James L. Holloway III, U.S.N. (Ret.). Adm. Holloway has been a
director of the issuer since April 29, 1997. Adm. Holloway is a retired Naval
Officer who served as Chief of Naval Operations and a member of the Joint Chiefs
of Staff from 1974 to 1978. After his retirement, from 1981 to 1989 he was
President of the Council of American Flag Ship Operators, a national trade
association representing the owners and operators of U.S. flag vessels in
foreign trade. From 1985 to 1989 he was a member of the President's Blue Ribbon
Commission on Merchant Marine and Defense, and the Commission for a Long Term
Integrated Defense Strategy. In 1986, Admiral Holloway was appointed Special
Envoy of the Vice President to the Middle East and from 1990 to 1992 he served
in a presidential appointment as U.S. Representative to the South Pacific
Commission. Admiral Holloway is currently Chairman of the Naval Historical
Foundation, Chairman of the Naval Academy Foundation, a Governor of St. Johns
College and chairman of the Board of Trustees of Saint James School.
 
     Francis Jungers. Mr. Jungers has been a director of the issuer since
April 29, 1997. Mr. Jungers is a private investor and business consultant in
Portland, Oregon. Mr. Jungers has been a consultant since January 1, 1978. From
1973 to 1978, he was Chairman and Chief Executive Officer of Arabian American
Oil Company which
 
                                       70
<PAGE>
is the largest producer of crude and liquified gas in the world and holds the
concession for all of Saudi Arabia's oil production. Mr. Jungers is a director
of Georgia Pacific Corporation, Thermo Ecotek Corporation, Thermo Electron
Corporation, ThermoQuest Corporation, ONIX Systems Corporation, Donaldson,
Lufkin & Jenrette, Inc., The AES Corporation and ESCO Corporation. Mr. Jungers
is Chairman of the Advisory Board of Common Sense Partners, L.P., a hedge fund.
Mr. Jungers is a member of the Visiting Committee, The University of Washington.
Mr. Jungers is Advisory Trustee of the Board of Trustees, The American
University in Cairo and Trustee of the Oregon Health Sciences University
Foundation.
 
     Jack R. Pine. Mr. Pine has been the issuer's Secretary since December 23,
1996. Mr. Pine has been involved with our legal affairs since our inception and
was formally transferred to Statia Terminals, Inc. from CBI Industries, Inc. in
May 1996 as Senior Vice President, General Counsel and Secretary. Mr. Pine also
serves as a director of Petroterminal de Panama. He has over 30 years of
combined experience with Liquid Carbonic Industries Corporation and CBI
Industries. Mr. Pine joined the legal staff of CBI Industries in 1974 as
Assistant Counsel and was appointed Associate General Counsel in 1984. Prior to
joining CBI Industries, Mr. Pine practiced law in the private sector.
 
     David B. Pittaway. Mr. Pittaway has been a director of the issuer since
September 3, 1996. Mr. Pittaway has been Vice President and Secretary of Castle
Harlan, Inc. a private merchant bank in New York City, since February 1987 and
Director since February 1992. Mr. Pittaway is an executive officer of Castle
Harlan Partners II, G.P. Inc., the general partner of the general partner of
Castle Harlan Partners II L.P., our controlling stockholder. Mr. Pittaway has
been Vice President and Secretary of Branford Castle, Inc., an investment
company, since October 1986 and Vice President, Chief Financial Officer and a
director of Branford Chain, Inc., a marine wholesale company, since June 1987.
Mr. Pittaway is also a director of Morton's Restaurant Group, Inc., Charlie
Brown's Holdings, Inc., and Commemorative Brands, Inc. Prior to 1987,
Mr. Pittaway was Vice President of Strategic Planning and Assistant to the
President of Donaldson Lufkin & Jenrette, Inc.
 
     Robert R. Russo. Mr. Russo has been a Vice President of the issuer since
December 23, 1996. Mr. Russo joined us in 1990 as Manager, Sales, and was
promoted to his present position in May, 1996. His prior experience in the
petroleum industry dates back to 1979 when he joined Belcher Oil Co. Inc., a
subsidiary of The Coastal Corporation. Mr. Russo was Coastal's Vice President,
Heavy Products Trading, from 1987 until his departure to join us in 1990.
 
     Jonathan R. Spicehandler, M.D. Dr. Spicehandler has been a director of the
issuer since April 29, 1997. Since 1993, Dr. Spicehandler has been President of
Schering-Plough Research Institute, the pharmaceutical research arm of
Schering-Plough Corporation, a research based company engaged in the discovery,
development, manufacturing and marketing of pharmaceutical and health care
products worldwide. Dr. Spicehandler is a diplomat of the American Board of
Internal Medicine. He was also elected to the Alpha Omega Alpha Honor Society.
He serves as president emeritus, board of managers, of the New Jersey division
of Cancer Care, Inc. Dr. Spicehandler is a member of the boards of trustees of
the Kessler Institute for Rehabilitation, Inc. and Montclair State University.
He also serves on the board of directors of the National Foundation of
Infectious Diseases and on the Science Policy Board of the Liberty Science
Center. Dr. Spicehandler is a member of the board of associates of the Whitehead
Institute for Biomedical Research.
 
     Thomas M. Thompson, Jr. Mr. Thompson has been a Vice President of the
issuer since December 23, 1996. Mr. Thompson has been with us since 1985 when he
joined as Vice President, Sales & Marketing. He has also held the position of
Senior Vice President, with full responsibility for our Houston, Texas, sales
and operations and President of JASTATIA, Inc., a marine vessel operating joint
venture between Jahre Ship Services A/S and us. Mr. Thompson became Executive
Vice President in May, 1996. His prior experience in the petroleum and chemical
industry dates back to 1968 when he joined GATX Corporation as a sales
representative. He subsequently worked as both a sales manager and General
Manager with Pakhoed USA, Inc.
 
     Ernest "Jackie" Voges. Mr. Voges has been a director of the issuer since
February 2, 1998. From 1982 to 1996, Mr. Voges was General Managing Director of
the Curacao Ports Authority. From 1977
 
                                       71
<PAGE>
to 1982, Mr. Voges held various positions including Dean of the Law School of
the University of the Netherlands Antilles, permanent lecturer for the history
of law and a member of the International Advisory Council of Florida
International University. From 1973 to 1977, he served in various positions
within the government for Land Territory of the Netherlands Antilles including
Vice Prime Minister, Minister of Justice and Minister of Transport and
Communications. From 1967 to 1969 Mr. Voges served as Minister of Public Health.
From 1959 to 1967, he was a member of the Island Council of the Island Territory
of Curacao and from 1966 to 1967 he was Commissioner of the Island Territory of
Curacao. Mr. Voges is Managing Director of Leeward News Holding N.V., Chairman
of the Foundation Stichting Monumentenzorg Curacao and Supervisory Director of
Stadsherstel Corporation N.V. He is also Chairman of the Foundation Stichting
JEKA, Supervisory Director of Smit International Corporation N.V., and Managing
Director of Voges Inc. Corporation N.V. In 1979, Mr. Voges was Knighted in the
Order of the Dutch Lion.
     Justin B. Wender. Mr. Wender has been a director of the issuer since
September 3, 1996. Since 1993, he has been employed by Castle Harlan, Inc. He
currently serves as Director. From 1991 to 1993, Mr. Wender worked in the
Investment Banking Group of Merrill Lynch & Co. He is a board member of Charlie
Brown's Holdings, Inc. and Land 'N' Sea Holdings, Inc.
 
                             EXECUTIVE COMPENSATION
 
     The following table sets forth information concerning the compensation paid
or accrued for the year ended December 31, 1998 for our chief executive officer
and each of our five other most highly compensated executive officers (the
"named executive officers").

<TABLE>
<CAPTION>
                                                                                  LONG TERM COMPENSATION AWARDS
                                                                            ------------------------------------------
                                ANNUAL COMPENSATION                                            SHARES        LONG-TERM
                                                                            RESTRICTED        UNDERLYING     INCENTIVE
NAME AND PRINCIPAL              --------------------   OTHER ANNUAL            STOCK          OPTIONS/SARS     PLAN
POSITION(1)               YEAR  SALARY($)   BONUS($)   COMPENSATION($)(2)   AWARDS($)(3)(4)   (#SHARES)(5)   PAYOUTS($)
------------------------- ----  ---------   --------   ------------------   ---------------   ------------   ---------
 
<S>                       <C>   <C>         <C>        <C>                  <C>               <C>            <C>
James G. Cameron......... 1998   275,482     211,875              --                 --            615             --
                          1997   248,655      97,050              --                 --            630             --
                          1996   215,000          --              --            919,000             --             --
 
Thomas M.
  Thompson, Jr........... 1998   241,549     173,750              --                               490             --
                          1997   208,434      79,000              --                 --            500             --
                          1996   169,260          --              --            695,000             --             --
 
Robert R. Russo.......... 1998   199,232     145,000              --                               425             --
                          1997   178,883      68,400              --                 --            430             --
                          1996   150,936          --              --            625,000             --             --
 
Jack R. Pine............. 1998   161,929      97,500              --                 --            185             --
                          1997   129,450      51,550              --                 --            190             --
                          1996   115,190      11,500              --            311,000             --             --
 
John D. Franklin......... 1998   139,616      97,500              --                 --            185             --
                          1997   128,653      49,250              --                 --            190             --
                          1996    94,967       4,500              --            238,000             --             --
 
James F. Brenner......... 1998   130,289      91,250          57,587                 --            175             --
                          1997   108,895      43,400              --                 --            165             --
                          1996    81,252          --              --            212,000             --             --
 
<CAPTION>
 
NAME AND PRINCIPAL           ALL OTHER
POSITION(1)                COMPENSATIONS($)(6)
-------------------------  -------------------
<S>                        <C>
James G. Cameron.........         69,525
                                  68,077
                                  52,229
Thomas M.
  Thompson, Jr...........         16,677
                                  15,449
                                   1,440

Robert R. Russo..........         13,816
                                  12,680
                                     510

Jack R. Pine.............         11,410
                                  10,648
                                     450

John D. Franklin.........         10,784
                                  10,059
                                     479

James F. Brenner.........         10,941
                                   9,033
                                      43
</TABLE>
 
------------------
 
(1) James G. Cameron became President and Chairman of the Board of Statia
    Terminals, Inc. on July 27, 1993. Thomas M. Thompson, Jr. became Executive
    Vice President of Statia Terminals, Inc. on May 6, 1996. Robert R. Russo
    became Senior Vice President of Statia Terminals, Inc. on May 6, 1996. Jack
    R. Pine became Senior Vice President, General Counsel and Secretary of
                                                Statia Terminals, Inc. on May 6,
 
                                              (Footnotes continued on next page)
 
                                       72
<PAGE>
(Footnotes continued from previous page)
    1996. James F. Brenner became Vice President Finance, Treasurer and
    Assistant Secretary of Statia Terminals, Inc. on May 6, 1996.
 
(2) The compensation reported for 1998 represents $35,923 of relocation expenses
    and $21,664 of tax reimbursements paid to Mr. Brenner.
 
(3) In November 1996, Statia Terminals N.V. awarded a total of $3.0 million in
    its preferred stock to James G. Cameron (919 shares), Thomas M.
    Thompson, Jr. (695 shares), Robert R. Russo (625 shares), Jack R. Pine (311
    shares), John D. Franklin (238 shares) and James F. Brenner (212 shares).
    This award of Statia Terminals N.V. preferred stock was subject to a
    specified restriction period which commenced on the date of the award, and
    other conditions set forth in the restricted stock award agreement between
    Statia Terminals N.V. and the recipient of such stock. Each recipient
    surrendered each of his shares of Statia Terminals N.V. preferred stock in
    exchange for a unit consisting of one share of the issuer's common stock and
    one share of Series E Preferred Stock. The units were also subject to
    substantially similar restrictions and conditions as the Statia
    Terminals N.V. preferred stock, as set forth in a restricted unit award
    agreement between the issuer and each such recipient. Prior to the
    expiration of the restriction period, recipients could not sell, transfer,
    pledge, assign, encumber or otherwise dispose of their units. Such
    restriction periods applicable to the issuer's stock comprising such units
    lapsed, pursuant to the award agreements, in November 1998.
 
(4) The table does not include loans to executive officers by the issuer secured
    by restricted units of the issuer's preferred and common stock. (See
    "Stockholder Loans" below.)
 
(5) Represents options to purchase issuer common stock awarded under the 1997
    Stock Option Plan. The fair values at the dates of grant, November 21, 1997
    and December 3, 1998, were determined by the compensation committee of the
    issuer's board of directors to be $0.10 per share and $0.10 per share for
    the 1997 and 1998 grants. The award agreement specifies that after two years
    of employment after the date of grant and after each of the following three
    years, 25% of the option shall become exercisable unless a liquidation event
    occurs (as defined in the award agreement). If a liquidation event occurs,
    the option shall become fully exercisable. The option will terminate upon
    the employee's termination of employment except in the event of death,
    permanent disability or termination by us other than for substantial cause.
    Each option shall expire ten years after the date of grant.
 
(6) The compensation reported for 1998 represents: (a) the dollar value of split
    dollar life insurance benefits paid by us, (b) matching and discretionary
    contributions made to our 401(k) plan and (c) the cost of life insurance in
    excess of limits prescribed by the Internal Revenue Code. These benefits,
    expressed in the same order as listed in the preceding sentence, amounted to
    $50,789, $16,000 and $2,736 for Mr. Cameron; $0, $14,200 and $2,477 for
    Mr. Thompson; $0, $13,000 and $816 for Mr. Russo; $0, $10,600 and $810 for
    Mr. Pine; $0, $10,600 and $184 for Mr. Franklin; and $0, $10,400 and $541
    for Mr. Brenner.
 
                                       73
<PAGE>
               OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 1998
 
     The following table sets forth certain information regarding options
granted to the named executive officers during 1998. We have not granted any
stock appreciation rights.
 
<TABLE>
<CAPTION>
                                            INDIVIDUAL GRANTS
                           ----------------------------------------------------
                                        % OF
                                        TOTAL
                           NUMBER OF   OPTIONS                                    POTENTIAL REALIZABLE VALUE AT ASSUMED
                           SHARES      GRANTED                                     ANNUAL RATES OF STOCK APPRECIATION
                           UNDERLYING    TO                                                  FOR OPTION TERM
                           OPTIONS     EMPLOYEES  EXERCISE  MARKET   EXPIRATION  ---------------------------------------
NAME                       GRANTED     IN 1998     PRICE    PRICE(1)   DATE          0%           5%            10%
-------------------------- ----------  ---------  --------  -------  ----------  -----------  -----------  -------------
<S>                        <C>         <C>        <C>       <C>      <C>         <C>          <C>          <C>
James G. Cameron..........     615        21.2%    $ 0.10   $810.00    12/3/08   $498,088.50  $811,372.36  $1,292,011.31
Thomas M.
  Thompson, Jr............     490        16.9%      0.10    810.00    12/3/08    396,851.00   646,459.28   1,029,407.38
Robert R. Russo...........     425        14.7%      0.10    810.00    12/3/08    344,207.50   560,704.48     892,853.34
Jack R. Pine..............     185         6.4%      0.10    810.00    12/3/08    149,831.50   244,071.36     388,653.81
John D. Franklin..........     185         6.4%      0.10    810.00    12/3/08    149,831.50   244,071.36     388,653.81
James F. Brenner..........     175         6.0%      0.10    810.00    12/3/08    141,732.50   230,878.31     367,645.49
</TABLE>
 
------------------
 
(1) The market price on the date of grant, December 3, 1998, was determined
    based on a valuation performed at our request by an independent consulting
    firm which specializes in these matters.
 
OPTION EXERCISES AND YEAR-END VALUES
 
     The following table sets forth certain information concerning options to
purchase common stock exercised by the named executive officers during 1998 and
the number and value of unexercised options held by each of the named executive
officers at December 31, 1998.
 
        AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 1998
                           AND YEAR-END OPTION VALUES
 
<TABLE>
<CAPTION>
                                                                NUMBER OF SHARES UNDERLYING          VALUE OF UNEXERCISED
                                      SHARES                      UNEXERCISED OPTIONS AT           IN-THE-MONEY OPTIONS AT
                                      ACQUIRED                      DECEMBER 31, 1998               DECEMBER 31, 1998(1)
                                       ON         VALUE       -------------------------------    ----------------------------
NAME                                  EXERCISE    REALIZED    EXERCISABLE    UNEXERCISABLE       EXERCISABLE    UNEXERCISABLE
-----------------------------------   --------    --------    -----------    ----------------    -----------    -------------
<S>                                   <C>         <C>         <C>            <C>                 <C>            <C>
James G. Cameron...................       0           0            0               1,245              0          $983,425.50
Thomas M. Thompson, Jr.............       0           0            0                 990              0           782,001.00
Robert R. Russo....................       0           0            0                 855              0           675,364.50
Jack R. Pine.......................       0           0            0                 375              0           296,212.50
John D. Franklin...................       0           0            0                 375              0           296,212.50
James F. Brenner...................       0           0            0                 340              0           268,212.50
</TABLE>
 
------------------
 
(1) There was no public trading market for the issuer's common stock as of
    December 31, 1998. The market price of the common stock on December 31, 1998
    was determined based on a valuation performed as of December 3, 1998 at our
    request by an independent consulting firm. The indicated market price as of
    December 3, 1998 of $810 per share was reduced to $790 per share as of
    December 31, 1998 primarily due to additional dividends accrued on the
    issuer's preferred stock during this period. Preferred stock dividends
    reduce the equity value of common stockholders.
 
                                       74
<PAGE>
                               STOCK OPTION PLAN
 
     The issuer's 1997 Stock Option Plan will terminate at the closing of this
offering. Options to purchase an aggregate of 6,145 shares of common stock have
been issued under this plan. All of such options have an exercise price of $0.10
per share. None of such options have been exercised, but all of such options
will be exercised at or by the closing of this offering. No further options will
be issued under this plan.
     We intend to adopt a new stock option plan to become effective at the
closing of this offering. The terms of this new plan, which have not yet been
finally determined, will be described in an amendment to this prospectus to be
filed before this registration statement becomes effective.
 
                               STOCKHOLDER LOANS
 
     On November 27, 1996, Messrs. Cameron, Thompson, Russo, Pine, Franklin,
Brenner and certain other of our officers and managers were granted loans by the
issuer to purchase shares of the issuer's common stock and Series E Preferred
Stock. The loans totaled $1.5 million and were secured by pledges of such stock.
The loans bear interest at 6.49% annually and are due on the earlier of
(i) November 26, 2003, (ii) the sale of the pledged stock, and (iii) a "change
in control" (as defined in the loan agreement).
 
                             EMPLOYMENT AGREEMENTS
 
     We have entered into employment agreements with James G. Cameron,
Thomas M. Thompson, Jr., Robert R. Russo, Jack R. Pine, John D. Franklin and
James F. Brenner. These agreements provide for an annual base salary which is
subject to review at least annually by the board of directors or a committee
thereof. These agreements also provide for an annual cash incentive bonus to be
awarded based on the difference between a target EBITDA and actual EBITDA. The
employment agreements with Mr. Cameron, Thompson and Russo continue until
December 31, 2001 and are renewable for successive three-year periods
thereafter. The employment agreements with Messrs. Pine, Franklin and Brenner
continue until December 31, 1999 and are renewable for successive two-year
periods thereafter. Additional benefits include participation in an executive
life insurance plan for Mr. Cameron. In the event that we terminate any of these
employment agreements without substantial cause or the employee terminates for
good reason (as such terms are defined in each such employment agreement), the
employee shall be entitled to his current medical and dental benefits and his
current compensation. Such entitlements will last to the later of twelve months
or the remaining portion of the term of the relevant employment agreement. Such
entitlements will be payable in monthly installments for such period with the
addition of a pro rated portion of the employee's bonus compensation for the
year of termination. The bonus is only payable as and when ordinarily determined
for such year.
 
                                       75
<PAGE>
                               SECURITY OWNERSHIP
 
     The following table sets forth the number and percentage of shares of
currently outstanding common stock of the issuer beneficially owned as of
December 31, 1998, and as adjusted to reflect the sale of the common shares
offered hereby and the issuance of the subordinated shares pursuant to the
restructuring, by (i) each person known to us to be a beneficial owner of more
than 5% of any class of our voting equity securities, (ii) each of our directors
and executive officers, and (iii) all of our directors and executive officers as
a group. The address of each owner is our principal office unless otherwise
indicated.
 
<TABLE>
<CAPTION>
                                                                 SHARES OF
                                                                COMMON STOCK
                                                            BENENFICIALLY OWNED
                                                           PRIOR TO THE OFFERING      SUBORDINATED SHARES BENEFICIALLY
                                                                    AND                 OWNED AFTER THE OFFERING AND
                                                               RESTRUCTURING                    RESTRUCTURING
                                                          ------------------------    ---------------------------------
                                                          NUMBER OF                   NUMBER OF    PERCENTAGES OF TOTAL
                        NAME(1)                           SHARES(4)    PERCENTAGES    SHARES(1)    VOTING SHARES
-------------------------------------------------------   ---------    -----------    ---------    --------------------
<S>                                                       <C>          <C>            <C>          <C>
James G. Cameron.......................................     10,219(3)     21.69%        824,131             7.23%
Thomas M. Thompson, Jr.................................      1,890         4.01%        152,423             1.34%
Robert R. Russo........................................      1,662         3.53%        134,035             1.18%
Jack R. Pine...........................................        826         1.75%         66,614             0.58%
John D. Franklin.......................................        728         1.55%         58,711             0.52%
James F. Brenner.......................................        650         1.38%         52,420             0.46%
John K. Castle(2)......................................     33,750        71.63%      2,721,832            23.88%
  c/o Castle Harlan, Inc.
  150 East 58th Street
  New York, NY 10155
David B. Pittaway......................................        200         0.42%         16,129             0.14%
Justin B. Wender.......................................         10         0.02%            806             0.01%
Admiral James L. Holloway III..........................        150         0.32%         12,097             0.11%
Francis Jungers........................................        200         0.42%         16,129             0.14%
Dr. Jonathan R. Spicehandler...........................        200         0.42%         16,129             0.14%
Ernest Voges...........................................        100         0.21%          8,065             0.07%
All Officers and Directors(2)..........................     42,580         90.3%      3,433,943             30.1%
Castle Harlan Partners II L.P., affiliates and Castle
  Harlan employees(2)..................................     33,750        71.63%      2,721,832            23.88%
  c/o Castle Harlan, Inc.
  150 East 58th Street
  New York, NY 10155
[Newco]................................................         --           --       3,800,000             33.3%
</TABLE>
 
------------------
(1) All of the shareholders listed, other than [Newco], are shareholders of
    [Newco] and therefore may be deemed beneficial owners of shares owned by
    [Newco], and all of the shares listed as being owned by such shareholders
    after the offering and restructuring will be owned by [Newco].
 
(2) Mr. Castle is the controlling shareholder of the general partner of the
    general partner of Castle Harlan Partners II L.P. He may therefore be deemed
    to be the beneficial owner of shares beneficially owned by Castle Harlan
    Partners II L.P., its affiliates and Castle Harlan employees. Mr. Castle
    disclaims beneficial ownership of the shares owned by Castle Harlan Partners
    II L.P., its affiliates and Castle Harlan employees other than such shares
    that represent his pro rata partnership interests in Castle Harlan Partners
    II L.P. and its affiliates.
 
(3) Includes 7,795 shares owned by certain of our employees who have granted to
    Mr. Cameron a proxy to vote such shares. Mr. Cameron disclaims beneficial
    ownership of these shares.
 
(4) Includes shares which will be acquired pursuant to the exercise of stock
    options at the closing in the amount of 1,245 shares for Mr. Cameron; 990
    shares for Mr. Thompson; 855 shares for Mr. Russo; 375 shares for Mr. Pine;
    375 shares for Mr. Franklin; 340 shares for Mr. Brenner; 100 shares for
    Adm. Holloway; 100 shares for Mr. Jungers; 100 shares for Dr. Spicehandler;
    and 100 shares for Mr. Voges.
 
                                       76
<PAGE>
                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
SALE OF BROWNSVILLE TERMINAL
 
     In July 1998, we sold our terminal in Brownsville, Texas. We used the net
proceeds from such sale to redeem 6,150 shares of Series D Preferred Stock owned
by Castle Harlan.
 
MANAGEMENT AGREEMENT
 
     As part of the acquisition by Castle Harlan of outstanding capital stock of
certain of the issuer's subsidiaries, the issuer entered into a management
agreement with Castle Harlan providing for the payment, subject to certain
conditions, of an annual management fee of $1,350,000 plus expenses for advisory
and strategic planning services. Under the indenture relating to the First
Mortgage Notes, (i) dividends from Statia Terminals International to the issuer
permitting the issuer to pay Castle Harlan's annual management fee, and (ii) a
dividend of the net proceeds of the sale of the Brownsville facility are
excepted from the limitation on restricted payments so long as no default or
event of default exists. In January 1997 and November 1997, Statia Terminals
International declared and subsequently paid on each declaration date a dividend
of $1,350,000 on its common stock to the issuer to enable it to pay management
fees to Castle Harlan, Inc. See note 12 to our consolidated financial statements
for information on preferred and common dividends paid prior to the acquisition
of capital stock by Castle Harlan. This management agreement will terminate at
the closing of this offering.
 
CONSULTING AGREEMENT
 
     Pursuant to an agreement between Castle Harlan and a consultant retained
for assistance with the structuring of the acquisition of capital stock by
Castle Harlan, we paid the consultant upon completion of the acquisition an
advisory fee (the consultant in turn paid a portion of such fee to certain
entities/persons which provided services to the consultant) of $2,500,000 in
cash and 1,500 shares of Series E Preferred Stock and 1,500 shares of common
stock of the issuer. The consultant is also a party to an agreement with Statia
Terminals N.V. dated as of January 1, 1993 pursuant to which the consultant
renders certain advisory and consulting services to the company and is
compensated therefor.
 
     Four of the issuer's directors, Admiral James L. Holloway III, Francis
Jungers, Jonathan R. Spicehandler, M.D. and Ernest Voges, have entered into
consulting agreements with Statia Terminals International for advisory and
consulting services related to investment and strategic planning, financial and
other matters. In consideration of services provided to Statia Terminals
International, each consultant receives a consulting fee of $6,250 per quarter
plus reimbursement of out-of-pocket expenses. The issuer pays each of the
foregoing directors $1,000 per meeting of the board of directors attended.
 
STOCKHOLDERS' AGREEMENTS
 
     The issuer and the current stockholders of the issuer have entered into two
stockholders' agreements which will be terminated at the closing of this
offering.
 
     At the closing of this offering the issuer will enter into an agreement
with [Newco], which will acquire all of the subordinated shares upon the
restructuring, pursuant to which the issuer will grant to [Newco] certain
rights, including demand rights, with respect to registration under the
Securities Act of the subordinated shares and the common shares issuable upon
conversion thereof.
 
LOANS TO MANAGEMENT
 
     On November 27, 1997, the issuer granted certain officers and managers,
including Messrs. Cameron, Thompson, Russo, Pine and Franklin, non-recourse
loans aggregating $1.5 million and secured by pledges of restricted stock. The
loans bear interest at 6.49% annually and are due on the earlier of
(i) November 26, 2003, (ii) the sale of the pledged stock and (iii) a "change in
control" (as defined in the loan agreement). These loans will be repaid at the
closing of this offering.
 
BOARD OF DIRECTORS
 
     Prior to the restructuring:
 
          o Castle Harlan or its affiliates hold 13,850 shares of Series D
            Preferred Stock, 33,750 shares of Series E Preferred Stock and
            33,750 shares of the currently outstanding common stock; and
 
          o certain directors and members of our management hold 4,724 shares of
            Series E Preferred Stock and 4,724 shares of the currently
            outstanding common stock and options to acquire an additional 6,145
            shares of common stock.
 
     Pursuant to the restructuring:
 
          o the issuer's Series E Preferred Stock will be redeemed at its
            liquidation preference;
 
                                       77
<PAGE>
          o all shares of outstanding common stock (47,119 shares, which
            includes an additional 6,145 shares of common stock to be issued
            upon exercise of options at or by the closing) will be reclassified
            as 471,190 subordinated shares;
 
          o the issuer will issue an additional 3,328,810 subordinated shares
            plus 38,000 incentive rights to the holders of the remaining
            outstanding common stock; and
 
          o all of the subordinated shares and incentive rights, and all of the
            shares of Petroterminal de Panama, S.A. currently owned by the
            issuer, will be transferred at the closing to [Newco].
 
     After the restructuring, certain affiliates of Castle Harlan and certain
members of our management will be directors of the issuer. Certain actions taken
by the board of directors may affect the amount of cash available for
distribution to holders of common and subordinated shares or accelerate the
conversion of subordinated shares. Decisions of the board of directors with
respect to the amount and timing of asset purchases and sales, cash
expenditures, borrowings, issuances of additional common shares and the
creation, reduction, cancellation or increase of reserves in any quarter will
affect whether, or the extent to which, there is sufficient available cash from
our operating surplus to meet the minimum quarterly distribution and target
distributions levels on all shares in a given quarter or in subsequent quarters.
 
                                       78
<PAGE>
                          DESCRIPTION OF COMMON SHARES
 
     The common shares will be issued pursuant to the issuer's amended articles
of incorporation. This summary of certain provisions of the articles is not
complete and is qualified in its entirety by reference to the provisions of the
articles. We will make copies of the proposed form of the articles available as
described in "Available Information." The definitions of certain terms used in
the articles and in this summary are substantially the same as those used
elsewhere in this prospectus.
 
GENERAL
 
     The issuer was incorporated on September 4, 1996, in the Netherlands
Antilles as a public company with limited liability. The issuer will have an
authorized capital of $300,000 consisting of the following classes and number of
shares:
 
     o 20,000,000 common shares (referred to in the articles as Class A shares),
       of which at the closing 7,600,000 will issued and be outstanding
       (8,360,000 if the underwriters exercise their over-allotment option in
       full);
 
     o 7,800,000 subordinated shares (referred to in the articles as Class B
       shares), of which at the closing 3,800,000 will issued and be
       outstanding; and
 
     o 2,200,000 incentive rights (referred to in the articles as Class C
       shares), of which at the closing 38,000 will be issued and outstanding.
 
Each common and subordinated share and incentive right shall have a par value of
$0.01.
 
     Subject to the limitations described under "--Issuance of Additional
Securities" below, the issuer has the authority to issue additional common
shares or other equity securities for such consideration and on such terms and
conditions as are established by the issuer's board of directors in its sole
discretion and without the approval of the holders of the common shares,
subordinated shares or incentive rights. The issuer has reserved for issuance
12,400,000 common shares (11,640,000 if the underwriters exercise their
over-allotment option in full; 8,600,000 if all of the subordinated shares are
converted into common shares and the underwriters have not exercised their
over-allotment option, 7,840,000 if they have exercised in full), 4,000,000
subordinated shares, and 2,162,000 incentive rights.
 
DIVIDENDS; DISTRIBUTIONS UPON LIQUIDATION
 
     For a description of the relative rights and preferences of the common
shares, the subordinated shares and the incentive rights in and to dividends and
distributions upon liquidations, see "Cash Dividend Policy."
 
VOTING RIGHTS
 
     Holders of the common shares and holders of the subordinated shares, voting
together as one class, are entitled to one vote for each share on all matters to
be voted upon by shareholders, including the election of directors.
 
     The board of directors shall be divided into 3 classes. Of the initial
board of directors after this offering, one class will serve for two years, one
class will serve for four years and one class will serve for six years.
Thereafter, each director will serve a term of six years. In the case of a
vacancy, upon the expiration of a director's term or otherwise, directors shall
be appointed by the holders of common and subordinated shares upon nomination by
the board of directors through a non-binding resolution. Holders of common
shares and holders of the subordinated shares do not have cumulative voting
rights in the election of directors, which election is by absolute majority of
votes cast at a general meeting of shareholders, for which a quorum consists of
one-third of the aggregate outstanding common shares and subordinated shares.
Accordingly, holders of a majority of the common shares and the subordinated
shares, voting together as one class, may elect all of the directors standing
for election.
 
     In general, a majority of the common shares and the subordinated shares,
voting together as one class at a general meeting, for which a quorum consists
of the holders of one-third of the aggregate outstanding common and subordinated
shares, is required to pass any resolutions. In order to amend the issuer's
articles of incorporation, dissolve or liquidate the issuer or dispose of all or
substantially all of the assets of the issuer, however, sixty-six and two-thirds
percent of the common and subordinated shares, voting together as one class,
voted at a general meeting, for which a quorum
 
                                       79
<PAGE>
consists of one-half of the aggregate outstanding common and subordinated
shares, is required.
 
     Shareholders meetings must be held in the Netherlands Antilles and may only
be called by the board of directors. One or more shareholders holding at least
10% of all outstanding shares may petition the board of directors to call a
meeting and, if the board fails to call a meeting, may petition a Netherlands
Antilles court to call a meeting.
 
ISSUANCE OF ADDITIONAL SHARES
 
     The issuer is authorized to issue up to 12,400,000 additional common shares
and 4,000,000 additional subordinated shares for such consideration and on such
terms and conditions as are established by its board of directors in its sole
discretion without the approval of any shareholders, except as set forth in the
next sentence. During the subordination period, it may not issue more than
4,000,000 additional common shares, and it may not issue any equity securities
ranking senior to the common shares without the prior approval of the holders of
a majority of the common shares and a majority of the subordinated shares, each
voting separately as a class, not including those common and subordinated shares
held by the holders of incentive rights and their affiliates.
 
     Even during the subordination period, the restrictions on issuance of
additional common shares are subject to the following exceptions (that is,
additional common shares may be issued in the following circumstances) if the
issuance occurs:
 
     o upon exercise of the underwriters' over-allotment option;
 
     o upon conversion of the subordinated shares;
 
     o pursuant to employee benefit plans;
 
     o in the event of a combination or subdivision of common shares; or
 
     o in connection with an acquisition or capital improvement that would have
       resulted, on a pro forma basis, in an increase in adjusted operating
       surplus on a per share basis pro forma for the preceding four-quarter
       period (or within 365 days of, and the net proceeds from such issuance
       are used to repay debt incurred in connection with, such an acquisition
       or capital improvement).
 
     The holders of common shares will not have preemptive rights to acquire
additional common shares or other securities that we may issue.
 
     Additional issuances of shares or other equity securities ranking junior to
the common shares may reduce the likelihood of, and the amount of, any
distributions above the minimum quarterly dividend.
 
TRANSFER AGENT AND REGISTRAR
 
     The transfer agent and registrar for the issuer with respect to the common
shares is            .
 
RESTRICTIONS ON OWNERSHIP AND TRANSFER
 
     A non-United States corporation will be classified as a "controlled foreign
corporation" (a "CFC") for United States federal income tax purposes in any
taxable year of such corporation in which more than 50% of either (i) the total
combined voting power of all of its classes of stock entitled to vote or
(ii) the total value of its stock, is owned or considered owned (after applying
certain attribution rules), on any day during such taxable year, by United
States persons who own or are considered to own 10% or more of the total
combined voting power of all of its classes of stock entitled to vote ("Ten
Percent Shareholders"). The CFC rules provide that each Ten Percent Shareholder
of a CFC is required to include in income each year their pro rata share of the
CFC's "Subpart F income" and investment of earnings in U.S. property. Although
the issuer currently is a CFC, it expects that, as a result of the offering, it
will not be classified as a CFC.
 
     Primarily to avoid becoming, or minimize the duration as, a CFC and to
prevent any ownership or transfer of the common shares which may result in such
a classification, any sale, transfer, assignment or other disposition of any
legal interest in or right to the common shares (a "Sale") or any other event
relating to the common shares (other than the conversion of subordinated shares
into common shares, any subsequent transfer of the common shares resulting from
such conversion or any pledge, encumbrance, transfer by operation of law, gift,
inheritance or marital law of any legal or beneficial interest in or right to
the common shares, as well as any sale, transfer, assignment or other
disposition (other than a Sale) of any beneficial, but not legal, interest in or
right to the common shares) that would result in a Violation of the Ownership
Limit is null and void to the extent that such Sale
 
                                       80
<PAGE>
or event causes a Violation of the Ownership Limit. For purposes of this
prospectus, the "Ownership Limit" is 9.9% of the total combined voting power of
all of the issuer's classes of stock entitled to vote, and a "Violation of the
Ownership Limit" occurs when (1) any person would own or would be considered to
own by virtue of the attribution provisions of the CFC rules, or (2) any person
together with its "affiliates" and "associates" (as defined in Rule 12b-2 under
the U.S. Securities Exchange Act of 1934) and any group (within the meaning of
Section 13(d)(3) of such Securities Exchange Act) of which such person is a part
would own or would be considered to own by virtue of the beneficial ownership
provisions of Rule 13d-3 under such Securities Exchange Act, in either case more
than the Ownership Limit. In addition, any pledge, encumbrance, transfer by
operation of law, gift, inheritance or marital law of any legal or beneficial
interest in or right to the common shares, as well as any sale, transfer,
assignment or other disposition (other than a Sale) of any beneficial, but not
legal, interest in or right to the common shares (other than the conversion of
subordinated shares into common shares or any subsequent transfer of the common
shares resulting from such conversion) (a "Gift") that would result in a
Violation of the Ownership Limit is prohibited to the extent that such Gift
causes a Violation of the Ownership Limit. In order to establish these
restrictions, the articles of the issuer and the share certificates include
provisions to such effect. These include, in summary:
 
     o Any person who acquires or attempts or intends to acquire ownership
       (direct or indirect, actual or constructive ownership within the meaning
       of section 958 of the Internal Revenue Code of 1986, as amended (the
       "Code")) of common shares that will or may violate the foregoing
       restrictions on transferability and ownership is required to give notice
       immediately to the issuer and to provide the issuer with such other
       information as it may request in order to determine the effect of such
       Sale, Gift (a Sale and/or a Gift to be referred to as a "Transfer") or
       event on the classification of the issuer as a CFC or for any other
       purpose (the restrictions of transfer and ownership described herein may
       be waived by the board of directors with respect to a Transfer or any
       other event described above).
 
     o The issuer shall not recognize a holder of common shares as such until
       its common shares have been issued in the name of such holder of common
       shares (or in the case of a Transfer, until the common shares so
       transferred have been registered by or on behalf of the board of
       directors of the issuer in the name of such transferee); until such
       recognition, the holder of common shares or transferee cannot exercise
       any voting rights, dividend rights or distribution rights (the same will
       be suspended until such time).
 
     o The board of directors may set a record date for any general meeting of
       shareholders of the issuer in advance of such meeting to verify the
       eligibility of such shareholders to vote, as well as to verify the
       ownership level of each such shareholder.
 
     o The voting rights pertaining to the common shares cannot be transferred
       to a holder of a right of usufruct or pledge.
 
     o In case of a prohibited Gift, the issuer may for the number of common
       shares that exceeds the Ownership Limit ("Excess Common Shares") issue,
       or arrange for the issuance of, certificates, which carry no voting
       rights, evidencing the transfer of such Excess Common Shares as described
       below. The transferee shall be required to offer for transfer its Excess
       Common Shares to a specially created independent legal entity to hold any
       such Excess Common Shares for a certain period of time (see below), which
       entity shall be a Netherlands Antilles foundation having a board of
       directors and having no shareholders (the "Trust"). The Trust's board of
       directors (the "Trustee") shall be appointed by the issuer. If the
       Trustee fails to sell the Excess Common Shares as set forth below, the
       Trustee shall be irrevocably authorized to transfer the Excess Common
       Shares to the issuer. The restrictions described in this paragraph may be
       waived by the Trustee or the issuer with respect to a Gift. In addition,
       by acceptance or receipt of the relevant share certificate(s)
       representing any Excess Common Shares, the transferee shall be deemed to
       have agreed to offer for transfer such Excess Common Shares to the Trust
       as set forth below.
 
                                       81
<PAGE>
     In the event a transferee of Excess Common Shares (the "Prohibited
Transferee") has paid the purchase price for such shares to the transferor, but
has not become the owner of such shares because such transfer causes a Violation
of the Ownership Limit and is, if applicable, null and void, irrespective of the
delivery of share certificates representing such Excess Common Shares, then the
transferor of the Excess Common Shares (who shall have remained as the owner of
such shares) shall be deemed to have made an irrevocable offer to the Trust to
acquire such Excess Common Shares. The Trustee shall in such case notify the
transferor of its acceptance of the offer, and the Trustee shall be irrevocably
authorized to take all necessary steps in order to effectuate the transfer of
such Excess Common Shares. The consideration payable to the transferor by the
Trust for such shares shall be deemed paid and settled by the purchase price for
such shares paid by the Prohibited Transferee, notwithstanding any rights of the
Prohibited Transferee to reclaim any amounts paid to the transferor for such
Excess Common Shares. The issuer also shall be irrevocably authorized to cancel
any share certificates held by the Prohibited Transferee representing Excess
Common Shares and may issue new share certificates to the Trust representing the
Excess Common Shares. In the event that a person holds share certificate(s), or
receives the same, to any Excess Common Shares, other than as a result of a Sale
or other event that is null and void (the "Prohibited Owner"), the Prohibited
Owner shall be deemed to have made an irrevocable offer to the Trust to acquire
such Excess Common Shares. The Trustee shall in such case notify such Prohibited
Owner of its acceptance of the offer, and the Trustee shall be irrevocably
authorized to take all necessary steps in order to effectuate the transfer of
such Excess Common Shares. The consideration payable to the Prohibited Owner for
such shares shall be paid in accordance with the method set forth below. If the
Trustee has not exercised any of the rights of the Trust described in this
paragraph, the issuer shall be authorized to exercise the aforementioned rights
on its own behalf. The restrictions described in this paragraph may be waived by
the Trustee or the issuer with respect to a Transfer or any other event.
 
     The Trustee, who shall be unaffiliated with the issuer and, insofar as
possible, any Prohibited Transferee or any Prohibited Owner, will be required,
within twenty (20) days of the transfer of Excess Common Shares to the Trust, to
sell such Excess Common Shares to a person whose ownership of any such shares
would not violate the Ownership Limit (a "Qualified Person") and to distribute
to the Prohibited Transferee an amount equal to the lesser of (i) the price paid
by the Prohibited Transferee for such Excess Common Shares and (ii) the net
sales proceeds received by the Trust for such Excess Common Shares. In the case
of any Excess Common Shares resulting from any event other than a Sale, or from
a Transfer for no consideration (such as a gift), the Trustee will be required
to sell such Excess Common Shares to a Qualified Person and to distribute to the
Prohibited Owner an amount equal to the lesser of (i) the fair market value of
such Excess Common Shares as of the date of such event and (ii) the net sales
proceeds received by the Trust for such Excess Common Shares. In either case,
any proceeds in excess of the amount distributable to the Prohibited Transferee
or Prohibited Owner, as the case may be, will be required to be distributed to a
Netherlands Antilles charitable organization (which will be free to utilize the
same at its discretion) selected by the issuer that will be the beneficiary of
the Trust (the "Beneficiary"). Prior to a sale of any such Excess Common Shares
by the Trust, the Trustee will be entitled to keep, or receive, in trust for the
Beneficiary, any dividends and any other distributions paid by the issuer with
respect to such Excess Common Shares and also will be exclusively entitled to
exercise all voting rights with respect to such Excess Common Shares upon
acquisition thereof by the Trust.
 
     By acceptance of a share certificate, or upon receipt of any share
certificate, each Prohibited Transferee and Prohibited Owner shall agree and be
deemed to have agreed that any dividend or other distribution paid to such
Prohibited Transferee or Prohibited Owner (prior to the discovery by the issuer)
will be repaid to the Trustee for distribution to the Beneficiary.
 
     In addition, Excess Common Shares held in the Trust may, at all times, be
offered for sale to the issuer, or its designee, at a price per share equal to
the lesser of (i) the price per share in the transaction that resulted in such
transfer to the Trust (or, in the case of a devise or gift, the market value at
the time of such devise or gift) and (ii) the market value of such shares on the
date the issuer, or its designee, accepts such offer. The issuer will have the
right to accept such offer until the Trustee has sold the shares held in the
Trust. Upon any such sale to the issuer, the interest of the
 
                                       82
<PAGE>
Beneficiary in the Excess Common Shares sold will terminate upon the Trustee
distributing the net proceeds of the sale to the Prohibited Transferee or
Prohibited Owner, as the case may be.
 
     All certificates representing common shares will bear a legend referring to
the restrictions described above, as follows:
 
     THE INTERESTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED, ACCEPTED AND HELD
SUBJECT TO THE TERMS OF THE PROSPECTUS, DATED                     , THE ARTICLES
OF THE ISSUER, AS THE SAME MAY BE AMENDED FROM TIME TO TIME (THE "ARTICLES") AND
THIS CERTIFICATE. A COPY OF THE ARTICLES IS AVAILABLE AT THE PRINCIPAL OFFICE OF
THE ISSUER. OWNERSHIP, SALE, ASSIGNMENT, TRANSFER, MORTGAGE, PLEDGE,
HYPOTHECATION OR OTHER ENCUMBRANCE OR DISPOSITION OF THIS CERTIFICATE AND THE
INTERESTS REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS SET FORTH IN THE
PROSPECTUS, THE ARTICLES AND THIS CERTIFICATE, AND THE HOLDER HEREOF, BY THE
ACCEPTANCE OF THIS CERTIFICATE, ACKNOWLEDGES NOTICE OF ALL THE PROVISIONS IN THE
PROSPECTUS, THE ARTICLES AND THIS CERTIFICATE AND AGREES TO BE BOUND THERETO.
OWNERSHIP AND ANY TRANSFER OF THIS CERTIFICATE OR THE SHARES REPRESENTED HEREBY
IN VIOLATION OF THE TERMS OF THE PROSPECTUS, THE ARTICLES AND THIS CERTIFICATE
SHALL BE PROHIBITED, AND SHALL BE NULL AND VOID AND OF NO FORCE AND EFFECT TO
THE EXTENT, AND INSOFAR AS SET FORTH IN THE PROSPECTUS, THE ARTICLES AND THIS
CERTIFICATE.
 
     In addition, each share certificate shall include:
 
     o a provision obligating a transferee to notify the issuer of any Transfer,
       failure of which the transferee shall not be recognized as a shareholder
       of the issuer (see above); and
 
     o a provision obligating a holder of Excess Common Shares to sell such
       shares to the Trust and/or issuer, failure of which the issuer is
       irrevocably authorized to purchase such Excess Common Shares.
 
     Pursuant to a Netherlands Antilles ordinance, a person who directly or
indirectly acquires shares representing 5% or more of all voting securities of
the issuer must notify us immediately of such acquisition. The board of
directors must publicly announce such notice and distribute it to all
shareholders. Failure to comply with the provisions of this ordinance may result
in the limitation of such shares' voting rights to 5% of all voting securities
and may lead to civil and/or criminal penalties.
 
                                       83
<PAGE>
                     DESCRIPTION OF THE SUBORDINATED SHARES
 
     The subordinated shares are a separate class of shares of the issuer, and
the rights of holders of such subordinated shares to participate in dividends
and distributions on liquidation differ from, and are subordinated to, the
rights of the holders of common shares. For any given quarter, any available
cash will first be paid as dividends to the holders of common shares, and then
will be paid as dividends to the holders of subordinated shares depending upon
the amount of available cash for the quarter, the amount of common share
arrearages, if any, and the rights of the holders of incentive rights. Payment
of the first $6.8 million of dividends on the subordinated shares will be
deferred as described under "Cash Dividend Policy--Deferral of Dividends on
Subordinated Shares".
 
CONVERSION OF SUBORDINATED SHARES
 
     The subordination period will generally extend from the closing of this
offering until the first day of any quarter beginning after March 31, 2004 in
respect of which:
 
     o distributions of available cash from operating surplus on the common and
       subordinated shares with respect to each of the three consecutive
       four-quarter periods immediately preceding such day equaled or exceeded
       the sum of the minimum quarterly dividend on all of the outstanding
       common and subordinated shares during such periods;
 
     o the adjusted operating surplus generated during each of the three
       consecutive four-quarter periods immediately preceding such day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis; and
 
     o there are no outstanding common share arrearages.
 
     Prior to the end of the subordination period and to the extent the tests
for conversion described below are satisfied, a portion of the subordinated
shares may be eligible to convert into common shares prior to June 30, 2004.
Subordinated shares will convert into common shares on a one-for-one basis on
the first day after the record date established for the dividend in respect of
any quarter ending on or after (a) March 31, 2002 with respect to one-quarter of
the subordinated shares (950,000 subordinated shares) and (b) March 31, 2003
with respect to one-quarter of the subordinated shares (950,000 subordinated
shares), in respect of which:
 
     o dividends of available cash from operating surplus on the common and
       subordinated shares with respect to each of the three consecutive
       four-quarter periods immediately preceding such day equaled or exceeded
       the sum of the minimum quarterly dividend on all of the outstanding
       common and subordinated shares during such periods;
 
     o the adjusted operating surplus generated during each of the three
       consecutive four-quarter periods immediately preceding such day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis; and
 
     o there are no outstanding common share arrearages;
 
provided, however, that the early conversion of the second one-quarter of
subordinated shares may not occur until at least one year following the early
conversion of the first one-quarter of subordinated shares.
 
     Upon expiration of the subordination period, all remaining subordinated
shares will convert into common shares on a one-for-one basis and will
thereafter participate, pro rata, with the other common shares in distributions
of available cash.
 
DISTRIBUTIONS UPON LIQUIDATION
 
     If the issuer liquidates during the subordination period, under certain
circumstances holders of outstanding common shares will be entitled to receive
more per share in liquidating distributions than holders of outstanding
subordinated shares. Following conversion of the subordinated shares into common
shares, all common and subordinated shares will be treated the same upon
liquidation of the issuer.
 
                                       84
<PAGE>
                        SHARES ELIGIBLE FOR FUTURE SALE
 
     Upon completion of this offering and conversion of the outstanding
subordinated shares into common shares, there will be 11,400,000 common shares
outstanding (12,160,000 common shares if the underwriters' over-allotment option
is exercised in full, in each case assuming no exercise of options or warrants
after January 1, 1999). The 7,600,000 common shares being sold in this offering
(8,360,000 common shares if the underwriters' over-allotment option is exercised
in full) will be freely tradeable in the U.S. without restriction under the U.S.
Securities Act of 1933, unless such common shares are acquired by our
"affiliates" (as defined in Rule 144 under the Securities Act). The 3,800,000
common shares to be outstanding upon conversion of the subordinated shares will
be "restricted securities" (as defined in Rule 144 and Rule 701 under the
Securities Act) and may not be sold unless they are either registered under the
Securities Act or sold pursuant to an exemption from registration, such as the
exemption provided by Rule 144.
 
     In general, under Rule 144 as currently in effect:
 
     o If one year has elapsed since the later of the date of the acquisition of
       the restricted common shares (or the subordinated shares from which they
       were converted) from either the issuer or any of its affiliates, the
       acquirer or subsequent holder thereof may sell, within any three-month
       period commencing 90 days after the date of this prospectus, a number of
       common shares that does not exceed the greater of one percent of the then
       outstanding common shares (approximately 7,600 common shares immediately
       after this offering), or the average weekly trading volume of the common
       shares on the New York Stock Exchange during the four calendar weeks
       preceding the date on which notice of the proposed sale is filed with the
       commission.
 
     o If two years have elapsed since the later of the date of the acquisition
       of the restricted common shares (or the subordinated shares from which
       they were converted) from the issuer or any affiliate of the issuer, a
       person who is not deemed to have been an affiliate of the issuer at any
       time for 90 days preceding a sale would be entitled to sell such common
       shares under Rule 144 without regard to the volume limitations, manner of
       sale provisions or notice requirements.
 
     The one-year and two-year periods may in some circumstances include the
holding period of a prior owner. The one-year and two-year holding periods
described above do not begin until the full purchase price or other
consideration is paid by the person acquiring the restricted common shares (or
subordinated shares) from the issuer or an affiliate of the issuer. Sales under
Rule 144 are also subject to certain manner of sale provisions, notice
requirements and the availability of current public information about the
issuer.
 
     Pursuant to an agreement between the issuer and [Newco], [Newco] has the
right to require the issuer to use its best efforts to register up to all of the
subordinated shares and common shares issuable upon conversion thereof under the
Securities Act. [Newco] also has certain "piggyback" registration rights to
compel the inclusion of such subordinated and common shares in registration
statements filed by the issuer under the Securities Act.
 
     Prior to this offering, there has been no public market for the common
shares. Trading of the common shares on the New York Stock Exchange is expected
to commence immediately following completion of this offering. No prediction can
be made as to the effect, if any, that future sales of common shares or the
availability of common shares for future sale, will have on the market price
prevailing from time to time. Sales of substantial amounts of common shares
(including common shares issued upon conversion of the subordinated shares), or
the perception that such sales could occur, could adversely affect prevailing
market prices of the common shares.
 
                                       85
<PAGE>
                                    TAXATION
                         NETHERLANDS ANTILLES TAXATION
 
     In the opinion of PricewaterhouseCoopers, special Netherlands Antilles tax
advisor to the issuer, the following is a description of the principal
Netherlands Antilles tax consequences relating to the ownership and disposition
of the common shares. Under the laws of the Netherlands Antilles as currently in
effect, a holder of common shares who is not a resident or deemed a resident of,
and during the taxable year has not engaged in trade or business through a
permanent establishment, permanent representative or agent in, the Netherlands
Antilles will not be subject to Netherlands Antilles income tax on dividends
paid with respect to the common shares or on gains realized during that year on
sale or disposal of such shares; the Netherlands Antilles do not impose a
withholding tax on dividends paid by the issuer. There are no gift or
inheritance taxes levied by the Netherlands Antilles when at the time of such
gift or at the time of death, the relevant holder of common shares was not
domiciled or deemed domiciled in the Netherlands Antilles. A person is not
deemed a resident or deemed domiciled in the Netherlands Antilles merely on the
basis of being a holder of common shares.
 
                          U.S. FEDERAL INCOME TAXATION
 
     In the opinion of White & Case LLP, special U.S. tax counsel to the issuer,
the following is a description of the principal U.S. federal income tax
consequences relating to the ownership and disposition of the common shares.
This description is based on (1) the Code, (2) income tax regulations (proposed
and final) issued under the Code and (3) administrative and judicial
interpretations of the Code and regulations, each as in effect and available on
the date of this prospectus.
 
     These income tax laws, regulations, and interpretations, however, may
change at any time, and any change could be retroactive to the date of this
prospectus. These income tax laws and regulations are also subject to various
interpretations, and the Internal Revenue Service or the courts could later
disagree with the explanations or conclusions contained in this description.
 
     This description deals only with the U.S. federal income tax considerations
of holders that are initial purchasers of the common shares and that will hold
common shares as capital assets (as defined in the Code). We do not, however,
address all of the tax consequences that may be relevant to a holder of common
shares.
 
     A "United States Holder" is a beneficial owner of common shares, who for
U.S. federal income tax purposes is:
 
     o a citizen or resident of the U.S.;
 
     o a partnership or corporation created or organized in or under the laws of
       the U.S. or any state thereof (including the District of Columbia);
 
     o an estate if its income is subject to U.S. federal income taxation
       regardless of its source; or
 
     o a trust if such trust validly has elected to be treated as a United
       States person for U.S. federal income tax purposes or if (1) a U.S. court
       can exercise primary supervision over its administration, and (2) one or
       more United States persons have the authority to control all of its
       substantial decisions.
 
     A "Non-United States Holder" is a beneficial owner of common shares other
than a United States Holder.
 
     We also do not address, except as stated below, any of the tax consequences
to (1) holders of common shares that may be subject to special tax treatment
such as financial institutions, real estate investment trusts, tax-exempt
organizations, regulated investment companies, insurance companies, and brokers
and dealers or traders in securities or currencies, (2) persons who acquired
common shares pursuant to an exercise of employee stock options or rights or
otherwise as compensation, (3) persons whose functional currency is not the U.S.
dollar, (4) persons that hold or will hold common shares as part of a
 
                                       86
<PAGE>
position in a straddle or as part of a hedging or conversion transaction and
(5) holders of common shares that own (or are deemed to own) 10% or more (by
voting power or value) of the outstanding stock of the issuer.
 
     Further, we do not address any state, local or foreign tax consequences
relating to the ownership and disposition of the common shares.
 
     PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS
REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE OWNERSHIP AND
DISPOSITION OF THE COMMON SHARES AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR
FOREIGN TAX LAWS.
 
UNITED STATES HOLDERS
 
     DISTRIBUTIONS
 
     If you are a United States Holder, the gross amount of any distribution to
you by the issuer with respect to common shares will be includible in your
income as dividend income to the extent such distributions are paid out of the
current or accumulated earnings and profits of the issuer as determined under
U.S. federal income tax principles. Such dividends will not be eligible for the
dividends received deduction generally allowed to corporate United States
Holders. To the extent that the amount of any distribution by the issuer exceeds
the issuer's current and accumulated earnings and profits as determined under
U.S. federal income tax principles, it will be treated first as a tax-free
return of your adjusted tax basis in the common shares and thereafter as capital
gain.
 
     CONSTRUCTIVE DISTRIBUTIONS
 
     In the event of any combination or subdivision of the common shares
(whether effected by a dividend payable in common shares or otherwise), but not
by reason of the issuance of additional common shares for cash or property, the
minimum quarterly dividend, the target dividend levels, the unrecovered initial
price, the amount of common shares issuable upon conversion of the subordinated
shares, and certain other amounts are all subject to adjustment. Although the
issuer expects that any such adjustments will be made to avoid its application,
Section 305 of the Code and the income tax regulations thereunder may treat a
United States Holder as having received a constructive distribution from the
issuer, resulting in dividend income to the extent of the issuer's current and
accumulated earnings and profits, but only to the extent that any such
adjustments increase the United States Holder's proportionate interest in the
assets or earnings and profits of the issuer.
 
     TAXES WITHHELD ON DIVIDENDS
 
     Dividends received by you with respect to common shares will be treated as
foreign source income, which may be relevant in calculating your foreign tax
credit limitation. Subject to certain conditions and limitations, any
Netherlands Antilles' tax withheld on dividends may be deducted from your
taxable income or credited against your U.S. federal income tax liability. The
limitation on foreign taxes eligible for credit is calculated separately with
respect to specific classes of income. For this purpose, dividends distributed
by the issuer generally will constitute passive income or, in the case of
certain United States Holders, financial services income.
 
     SALE OR EXCHANGE OF COMMON SHARES
 
     If you are a United States Holder, generally you will recognize gain or
loss on the sale or exchange of common shares equal to the difference between
the amount realized on such sale or exchange and your adjusted tax basis in the
common shares. Your adjusted tax basis in the common shares will equal the
amount you paid for the common shares reduced by the amount of any distributions
you received on such common shares that are treated as a tax-free return of your
basis. Such gain or loss will be capital gain or loss. If you are a noncorporate
United States Holder, generally the maximum U.S. federal income tax rate
applicable to such gain will be lower than the maximum U.S. federal income tax
rate applicable to ordinary income if your holding period for such common shares
exceeds one year. For example, generally the maximum rate applicable to ordinary
income in 1999 for a United States Holder who is an individual would be 39.6%,
whereas, generally, net capital gains of such a holder from the disposition of
common shares held for more than one year at the time of disposition would be
subject to a maximum rate of 20%. Any gain recognized by you generally will be
treated as U.S. source income for U.S. foreign tax credit purposes. The
deductibility of capital losses is subject to limitations.
 
                                       87
<PAGE>
  SPECIAL TAX RULES
 
         PASSIVE FOREIGN INVESTMENT
          COMPANY CONSIDERATIONS
 
     A non-U.S. corporation will be classified as a passive foreign investment
company (a "PFIC") for U.S. federal income tax purposes in any taxable year in
which, after applying certain look-through rules, either (1) at least 75% of its
gross income is passive income, or (2) on average at least 50% of the gross
value of its assets is attributable to assets that produce passive income or are
held for the production of passive income. Passive income for this purpose
generally includes dividends, interest, royalties, rents and gains from
commodities and securities transactions.
 
     Based on its estimated gross income, the average value of its gross assets
and the nature of its business, the issuer believes that it will not be
classified as a PFIC for its current taxable year. The issuer's status in future
years will depend on its assets and activities in those years. The issuer has no
reason to believe that its assets or activities will change in a manner that
would cause it to be classified as a PFIC. If the issuer were a PFIC, a United
States Holder of common shares generally would be subject to imputed interest
charges and other disadvantageous tax treatment with respect to any gain from
the sale or exchange of, and certain distributions with respect to, the common
shares.
 
          CONTROLLED FOREIGN CORPORATION
          CONSIDERATIONS
 
     A non-U.S. corporation will be classified as a controlled foreign
corporation (a "CFC") for U.S. federal income tax purposes in any taxable year
of such corporation in which more than 50% of either (1) the total combined
voting power of all classes of stock of such corporation entitled to vote, or
(2) the total value of the stock of such corporation is owned or considered
owned (after applying certain attribution rules) on any day during such taxable
year, by United States persons who own or are considered to own 10% or more of
the total combined voting power of all classes of stock entitled to vote of such
corporation ("Ten Percent Shareholders"). The CFC rules provide that, even if
the CFC has made no distributions to its shareholders, each Ten Percent
Shareholder of a CFC is required to include in income each year such Ten Percent
Shareholder's pro rata share of the CFC's Subpart F income and investment of
earnings in U.S. property. Although the issuer currently is a CFC, the issuer
expects that, as a result of the offering, it will not be classified as a CFC.
In addition, the issuer's articles contain provisions primarily adopted to avoid
becoming, or minimize the duration as, a CFC and to prevent any ownership or
transfer of the common shares which may result in such classification.
 
NON-UNITED STATES HOLDERS
 
     DISTRIBUTIONS
 
     If you are a Non-United States Holder of common shares, generally you will
not be subject to U.S. federal income or withholding tax on dividends received
on common shares, unless such income is effectively connected with the conduct
by you of a trade or business in the U.S.
 
     SALE OR EXCHANGE OF COMMON SHARES
 
     If you are a Non-United States Holder of common shares, generally you will
not be subject to U.S. federal income or withholding tax on any gain realized on
the sale or exchange of such shares unless (1) such gain is effectively
connected with the conduct by you of a trade or business in the U.S. or (2) in
the case of any gain realized by an individual, you are present in the U.S. for
183 days or more in the taxable year of such sale or exchange and certain other
conditions are met.
 
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING REQUIREMENTS
 
     U.S. backup withholding tax and information reporting requirements
generally apply to certain payments to certain noncorporate holders of stock.
Information reporting generally will apply to payments of dividends on, and to
proceeds from the sale or redemption of, common shares by a payor within the
U.S. to a holder of common shares (other than an exempt recipient, including a
corporation, a payee that is a Non-United States Holder that provides an
appropriate certification and certain other persons). A payor within the U.S.
will be required to withhold 31% of any payments of the proceeds from the sale
or redemption of common shares within the U.S. to you (unless you are an exempt
recipient) if you fail to furnish your correct taxpayer identification number or
otherwise fail to comply with such backup withholding tax requirements.
 
                                       88
<PAGE>
     Income tax regulations issued on October 6, 1997, and amended on
December 30, 1998, would modify certain of the rules discussed above generally
with respect to payments on common shares made after December 31, 1999. In
particular, a payor within the U.S. will be required to withhold 31% of any
payments of dividends on, or proceeds from the sale of, common shares within the
U.S. to you (unless you are an exempt recipient such as a corporation or a
Non-United States Holder that provides an appropriate certification) if you fail
to furnish your correct taxpayer identification number or otherwise fail to
comply with, or establish an exemption from, such backup withholding tax
requirements. In the case of such payments by a payor within the U.S. to a
foreign partnership (other than payments to a foreign partnership that qualifies
as a withholding foreign partnership within the meaning of such income tax
regulations and payments to a foreign partnership that are effectively connected
with the conduct of a trade or business in the U.S.), the partners of such
partnership will be required to provide the certification discussed above in
order to establish an exemption from backup withholding tax and information
reporting requirements. Moreover, a payor may rely on a certification provided
by a Non-United States Holder only if such payor does not have actual knowledge
or a reason to know that any information or certification stated in such
certificate is unreliable.
 
     THE ABOVE DESCRIPTION IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF
ALL TAX CONSEQUENCES RELATING TO THE OWNERSHIP AND DISPOSITION OF COMMON SHARES.
PROSPECTIVE PURCHASERS OF COMMON SHARES ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR
PARTICULAR SITUATIONS, AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE
LAWS OF ANY FOREIGN, STATE, LOCAL OR OTHER TAXING JURISDICTION.
 
                                       89
<PAGE>
                              PLAN OF DISTRIBUTION
 
     Upon the terms and subject to the conditions stated in the underwriting
agreement dated      , 1999, the issuer has agreed to sell to each of the
underwriters named below, and each of the underwriters has severally agreed to
purchase from the issuer, the number of common shares set forth opposite its
name below:
 
<TABLE>
<CAPTION>
                                         Number of
Underwriter                             Common Shares
-------------------------------------   -------------
 
<S>                                     <C>
Bear, Stearns & Co. Inc.
 
Morgan Stanley Dean Witter
 
Prudential Securities Incorporated
 
Dain Rauscher Wessels
a division of Dain Rauscher
Incorporated
 
                                          ---------
Total                                     7,600,000
                                          ---------
                                          ---------
</TABLE>
 
     The underwriting agreement provides that the obligations of the several
underwriters to pay for and accept delivery of the common shares offered hereby
are subject to approval of certain legal matters by their counsel and to certain
other conditions. The underwriters are obligated to take and pay for all common
shares offered hereby (other than those covered by the underwriters' over-
allotment option described below) if any such common shares are taken.
 
     The following table shows the per share and total underwriting discounts
and commissions to be paid by us to the underwriters. Such amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares
 
<TABLE>
<CAPTION>
                        PAID BY THE ISSUER
                        ------------------
                         NO EXERCISE          FULL EXERCISE
                        ------------------    -------------
<S>                     <C>                   <C>
Per common share.....       $                   $
Total................       $                   $
</TABLE>
 
     The underwriters propose to offer part of the common shares directly to the
public at the offering price set forth on the cover page of this prospectus and
part of such common shares to certain dealers at such price less a concession
not in excess of $   per common share. The underwriters may allow, and such
dealers may reallow, a concession not in excess of $   per common share to other
underwriters or to certain other dealers. After the initial offering of the
common shares to the public, the offering price and other selling terms may from
time to time be varied by the underwriters. The underwriters have informed us
that they do not intend to confirm sales to accounts over which they exercise
discretionary authority.
 
     The issuer has granted to the underwriters an option, exercisable for
30 days from the date of this prospectus, to purchase up to 760,000 additional
common shares at the initial public offering price set forth on the cover page
of this prospectus, minus the underwriting discounts and commissions. The
underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, made in connection with the offering of the common
shares offered hereby. To the extent such option is exercised, each underwriter
will be obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional common shares as the number of common shares
set forth opposite such underwriter's name in the preceding table bears to the
total number of common shares listed in such table.
 
     In addition, certain persons participating in this offering may engage in
transactions that stabilize, maintain or otherwise affect the price of the
common shares during and after this offering. For instance, the underwriters may
over-allot or otherwise create a short position in the common shares for their
own account by selling more common shares than have been sold to them by the
issuer. The underwriters may then elect to cover any such short position by
purchasing common shares in the open market or by exercising the over-allotment
options granted to the underwriters. In addition, such persons may stabilize or
maintain the price of the common shares by bidding for or purchasing common
shares in the open market and may impose penalty bids, under which selling
concessions allowed to syndicate members or other broker-dealers participating
in this offering are reclaimed if shares previously distributed in this offering
are repurchased in connection with
 
                                       90
<PAGE>
stabilization transactions or otherwise. The effect of these transactions may be
to stabilize or maintain the market price of the common shares at a level above
that which might otherwise prevail in the open market. The imposition of a
penalty bid may also affect the price of the common shares to the extent that it
discourages resales thereof. No representation is made as to the magnitude or
effect of any such stabilization or other transactions. Such transactions may be
effected on the New York Stock Exchange or otherwise, and if commenced, may be
discontinued at any time.
 
     The issuer and its affiliates and the officers and directors of the issuer
and its affiliates have agreed as follows:
 
     o they will not, pursuant to an effective registration statement under the
       Securities Act, offer, sell, contract to sell or otherwise dispose of any
       common or subordinated shares, any securities that are convertible into,
       or exercisable or exchangeable for, or that represent the right to
       receive, common or subordinated shares or any securities that are senior
       to or pari passu with common shares; or
 
     o the issuer will not register any subordinated shares under the Securities
       Act, purchase any subordinated shares or grant any options or warrants to
       purchase common shares
 
in each case, for a period of 180 days after the date of this prospectus,
without the prior written consent of Bear, Stearns & Co. Inc. and Morgan Stanley
Dean Witter, except for issuances of common shares in connection with certain
acquisitions or capital improvements that are accretive on a per common or
subordinated share basis or pursuant to employee benefit plans.
 
     Prior to this offering, there has been no public market for the common
shares of the issuer. Consequently, the initial public offering price has been
determined by negotiations between the issuer and the underwriters. Among the
factors considered in determining the initial public offering price were the
history of and prospects for our business and the industry in which we compete,
an assessment of our management and the present state of our development, our
past and present revenues, earnings and cash flows, the prospects for growth of
our revenues, earnings and cash flows, the current state of the U.S. economy and
the current level of economic activity in the industry in which we compete and
in related or comparable industries, and currently prevailing conditions in the
securities markets, including current market valuations of publicly traded
companies which are comparable to us.
 
     We estimate that the total expenses of this offering, excluding
underwriting discounts and commissions, will be approximately $           .
 
     We have agreed to pay to Bear, Stearns & Co. Inc. a financial advisory fee
in connection with the restructuring described herein in an amount of
$1.5 million. In addition, certain of the underwriters may from time to time
perform investment banking and other financial services for the issuer and its
affiliates for which they may receive advisory or transaction fees, as
applicable, plus out-of-pocket expenses, of the nature and in amounts customary
in the industry for such services.
 
     The issuer has agreed to indemnify the underwriters against certain civil
liabilities, including liabilities under the Securities Act.
 
     We intend to apply to list the common shares on the New York Stock
Exchange, under the symbol "STV."
 
                                       91
<PAGE>
                                    EXPERTS
 
     The consolidated financial statements of the issuer and its subsidiaries as
of December 31, 1997 and 1998 and for the period from January 1, 1996 through
November 27, 1996, the period from inception through December 31, 1996 and the
years ended December 31, 1997 and 1998, included in this prospectus have been
audited by Arthur Andersen LLP, independent certified public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
 
     The opinion set forth under "Taxation--Netherlands Antilles Taxation"
referred to in this prospectus and elsewhere in the registration statement has
been rendered by PricewaterhouseCoopers (Netherlands Antilles), independent
public accountants, and has been referred to herein in reliance upon the
authority of such firm as experts in giving said opinion.
 
                                    LEGAL MATTERS
 
     The validity of the issuance of the common shares offered hereby and
certain U.S. federal income tax consequences will be passed upon for the issuer
by White & Case LLP, New York, New York, with respect to matters of U.S. federal
and state law. A partner at White & Case LLP, through his interest in a holding
company, beneficially owns 93.75 shares of the issuer's currently outstanding
common stock and 93.75 shares of the issuer's currently outstanding Series E
Preferred Stock.
 
     The validity of the issuance of the common shares offered hereby will be
passed upon for the issuer by Smeets Thesseling van Bokhorst Spigt, Curacao,
Netherlands Antilles, with respect to Netherlands Antilles law and Stewart
McKelvey Stirling Scales, Halifax, Nova Scotia, with respect to Canadian and
Nova Scotia law.
 
     Certain legal matters in connection with this offering will be passed upon
for the underwriters by Andrews & Kurth L.L.P., New York, New York.
 
                             AVAILABLE INFORMATION
 
     The issuer has filed with the Securities and Exchange Commission a
registration statement on Form S-1 (together with all amendments, exhibits,
schedules and supplements thereto, the "registration statement") under the
Securities Act and the rules and regulations thereunder, for the registration of
the common shares offered through this prospectus. This prospectus, which forms
a part of the registration statement, does not contain all the information set
forth in the registration statement, certain parts of which have been omitted as
permitted by the commission rules and regulations. Statements made in this
prospectus as to the contents of any contract or other document referred to
herein are not necessarily complete. Where such contract or other document is an
exhibit to the registration statement, each such statement is qualified in all
respects by the provisions of such exhibit, to which reference is hereby made.
 
     The registration statement may be inspected and copied at the public
reference facilities maintained by the commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the following
regional offices of the commission: Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be obtained by mail
from the Public Reference Section of the commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 at prescribed rates. Electronic
registration statements filed through the Electronic Data Gathering Analysis and
Retrieval system are publicly available through the commission's web site at
http://www.sec.gov. All amendments thereto and subsequent periodic reports
required to be filed under the Securities Exchange Act of 1934, as amended, have
been and will be filed through EDGAR.
 
     Although the issuer is not subject to the periodic reporting and other
informational requirements of the Exchange Act, two of the issuer's
subsidiaries, Statia Terminals International N.V. and Statia Terminals Canada,
Incorporated, jointly file (as co-issuers of certain First Mortgage Notes)
reports and other information with the commission in accordance therewith. Such
reports and information may be inspected and copied at the public reference
facilities referred to above or obtained from the address or web sites specified
above.
 
                                       92
<PAGE>
                                   APPENDIX A
                           GLOSSARY OF OFFERING TERMS
 
<TABLE>
<S>                                    <C>
Available cash.......................  For any quarter prior to liquidation, available cash is:
 
                                       (a) the sum of:
 
                                       (1) all of our cash and cash equivalents on hand at the end of that
                                           quarter, and
 
                                       (2) all of our additional cash and cash equivalents on hand on the date of
                                           determination of available cash for that quarter resulting from
                                           working capital borrowings for working capital purposes made after the
                                           end of that quarter;
 
                                       less
 
                                       (b) the amount of any cash reserves necessary or appropriate in the
                                           reasonable discretion of our board of directors to:
 
                                       (1) provide for the proper conduct of our business, including reserves for
                                           future capital expenditures and for our anticipated future credit
                                           needs, after that quarter,
 
                                       (2) provide funds for minimum quarterly dividends and cumulative common
                                           share arrearages for any one or more of the next four quarters, or
 
                                       (3) comply with applicable law or any loan agreement, security agreement,
                                           mortgage, debt instrument or other agreement or obligation to which we
                                           are a party or by which we are bound or our assets are subject.
 
                                       Our board of directors may not establish cash reserves pursuant to (3)
                                       above if the effect of those reserves would be that we are unable to
                                       distribute the minimum quarterly dividend on all common shares, plus any
                                       cumulative common share arrearage on all common shares for that quarter;
                                       and disbursements made by us or cash reserves established, increased or
                                       reduced after the end of that quarter but on or before the date of
                                       determination of available cash for that quarter will be deemed to have
                                       been made, established, increased or reduced for purposes of determining
                                       available cash within that quarter if our board of directors so
                                       determines. However, "available cash" for the quarter in which our
                                       liquidation occurs and any quarter after that will equal zero.
 
Interim capital transactions.........  The following transactions, if they occur prior to liquidation, are
                                       interim capital transactions:
 
                                       o our borrowings and sales of debt securities (other than for working
                                         capital borrowings and other than for items purchased on open account in
                                         the ordinary course of business);
 
                                       o sales of equity interests (other than the common shares sold to the
                                         underwriters for the exercise of their over-allotment option); and
</TABLE>
 
                                      A-1
<PAGE>
<TABLE>
<S>                                    <C>
                                       o sales or other voluntary or involuntary dispositions of our assets,
                                         except for:
 
                                       (a) sales or other dispositions of inventory in the ordinary course of
                                           business,
 
                                       (b) sales or other dispositions of other current assets, such as
                                           receivables and accounts, and
 
                                       (c) sales or other depositions of assets as a part of normal retirements
                                           or replacements.
 
Operating expenditures...............  All expenditures, such as taxes, debt service payments and capital
                                       expenditures, are operating expenditures, except payments or prepayments
                                       of principal and premium on indebtedness if the payment is:
 
                                       o required in connection with the sale or other disposition of assets; or
 
                                       o made in connection with the refinancing or refunding of indebtedness
                                         with the proceeds from new indebtedness or from the sale of equity
                                         interests.
 
                                       At the election and in the reasonable discretion of our board of
                                       directors, any payment of principal or premium will be deemed to be
                                       refunded or refinanced by any indebtedness incurred or to be incurred by
                                       us within 180 days before or after that payment to the extent of the
                                       principal amount of that indebtedness.
 
                                       Operating expenditures do not include:
 
                                       o capital expenditures made for acquisitions or for capital improvements;
 
                                       o payment of transaction expenses relating to interim capital
                                         transactions; or
 
                                       o dividends.
 
                                       Where capital expenditures are made partially for acquisitions or capital
                                       improvements and partially for other purposes, our board of directors'
                                       good faith allocation between the amounts paid for each will be
                                       conclusive.
 
Operating surplus....................  For any period prior to liquidation on a cumulative basis, operating
                                       surplus is:
 
                                       (a) the sum of:
 
                                       (1) $7.5 million,
 
                                       (2) any net positive working capital on hand as of the close of business
                                           on the closing of this offering,
 
                                       (3) all cash receipts for the period beginning on the closing of this
                                           offering and ending on last day of that period, other than cash
                                           receipts from interim capital transactions, and
 
                                       (4) all cash receipts after the end of that period but on or before the
                                           date of determination of Operating Surplus for that period resulting
                                           from working capital borrowings;
</TABLE>
 
                                      A-2
<PAGE>
<TABLE>
<S>                                    <C>
                                       less
 
                                       (b) the sum of:
 
                                       (1) operating expenditures for the period beginning on the closing of this
                                           offering and ending with the last day of that period, and
 
                                       (2) the amount of cash reserves that is necessary or advisable in the
                                           reasonable discretion of our board of directors to provide funds for
                                           future operating expenditures.
 
                                       Disbursements made or cash reserves established, increased or reduced
                                       after the end of this period but on or before the date of determination of
                                       available cash for this period will be deemed to have been made,
                                       established, increased or reduced for purposes of determining operating
                                       surplus, within this period if our board of directors so determines.
                                       However, "operating surplus" for the quarter in which the liquidation
                                       occurs and any subsequent quarter will be equal to zero.
 
Unrecovered initial price............  At any time, the unrecovered initial price of a common share is the
                                       Initial Price of that share, after:
 
                                       o subtracting all dividends from interim capital transactions made on that
                                         common share;
 
                                       o subtracting any dividends of cash made in connection with our
                                         dissolution and liquidation made on that common share; and
 
                                       o adjusting as our board of directors determined is needed to reflect any
                                         distribution, subdivision or combination of the common shares.
 
Working capital borrowings...........  Working capital borrowings are borrowings made exclusively for working
                                       capital purposes and made pursuant to a credit facility or other
                                       arrangement which requires all borrowings under that arrangement to be
                                       reduced to a relatively small amount each year for an economically
                                       meaningful period of time.
</TABLE>
 
                                      A-3
<PAGE>
                                   APPENDIX B
                PRO FORMA AVAILABLE CASH FROM OPERATING SURPLUS
 
     The following table shows the calculation of pro forma available cash from
operating surplus and should be read in conjunction with "Cash Available for
Payment of Dividends", the issuer's consolidated financial statements and the
issuer's unaudited pro forma consolidated condensed financial statements.
 
<TABLE>
<CAPTION>
                                                                   YEAR ENDED
                                                                 DECEMBER 31, 1998
                                                                 ----------------------
                                                                      (UNAUDITED)
                                                                 (DOLLARS IN THOUSANDS)
 
<S>                                                              <C>
Pro forma net income..........................................          $  9,698
 
Add: Depreciation, amortization and non-cash charges(a).......            11,260
 
Less: Maintenance capital expenditures(b).....................            (8,906)
                                                                        --------
 
Pro forma available cash from operating surplus(c)(d).........          $ 12,052
                                                                        --------
                                                                        --------
</TABLE>
 
(a) Reflects historical depreciation, amortization and non-cash charges for the
    issuer less the historical depreciation, amortization and non-cash charges
    for Statia Terminals Southwest, Inc.
 
(b) Represents the actual level of maintenance capital expenditures less actual
    maintenance capital expenditures for Statia Terminals Southwest. We estimate
    that our maintenance capital expenditures will average approximately
    $7.0 million over each of the next three years. See "Management's Discussion
    and Analysis of Financial Condition and Results of Operations--Capital
    Expenditures".
 
(c) The pro forma adjustments in the unaudited pro forma financial statements
    are based upon currently available information and certain estimates and
    assumptions. The unaudited pro forma consolidated condensed financial
    statements do not purport to present our financial position or results of
    operations had the transactions to be effected at the closing of this
    offering actually been completed as of the date indicated. The amount of pro
    forma available cash from operating surplus shown above should only be
    viewed as a general indication of the amounts of available cash from
    operating surplus that may have been generated by us had the transactions
    occurred in earlier periods.
 
(d) The amount of available cash from operating surplus needed to distribute the
    minimum quarterly dividend for four quarters on the common and subordinated
    shares to be outstanding immediately after this offering will be
    $20.5 million (approximately $13.7 million for the common shares and
    approximately $6.8 million for the subordinated shares). The pro forma
    amounts reflected above would not have been sufficient to cover the minimum
    quarterly dividend during the year ended December 31, 1998 on all of the
    common and the subordinated shares.
 
   The amount of available cash from operating surplus needed to distribute the
   minimum quarterly dividend for four quarters on the common and subordinated
   shares to be outstanding immediately after this offering, assuming the
   underwriters exercise their over-allotment option in full, will be
   $21.8 million (approximately $15.0 million for the common shares and
   approximately $6.8 million for the subordinated shares). The pro forma
   amounts reflected above would not have been sufficient to cover the minimum
   quarterly dividend during the year ended December 31, 1998 on all of the
   common and the subordinated shares.
 
                                      B-1
<PAGE>
                                    INDEX TO
                              FINANCIAL STATEMENTS
 
<TABLE>
<S>                                                                                                           <C>
Report of Independent Certified Public Accountants.........................................................    F-2
 
Consolidated Balance Sheets as of December 31, 1997 and December 31, 1998..................................    F-3
 
Consolidated Statements of Income (Loss) for the period from January 1, 1996 through November 27, 1996,
  the period from Inception to December 31, 1996, the year ended December 31, 1997 and the year ended
  December 31, 1998........................................................................................    F-4
 
Consolidated Statements of Stockholders' Equity for the period from Inception to December 31, 1996, the
  year ended December 31, 1997 and the year ended December 31, 1998........................................    F-5
 
Consolidated Statements of Cash Flows for the period from January 1, 1996 through November 27, 1996, the
  period from Inception to December 31, 1996, the year ended December 31, 1997 and the year ended
  December 31, 1998........................................................................................    F-6
 
Notes to Consolidated Financial Statements.................................................................    F-7
</TABLE>
 
                                      F-1
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
To the Board of Managing Directors of
  Statia Terminals Group N.V. and Subsidiaries:
 
We have audited the accompanying consolidated balance sheets of Statia Terminals
Group N.V. (a Netherlands Antilles corporation) and Subsidiaries (the "Company")
as of December 31, 1997 and 1998, and the related consolidated statements of
income (loss), stockholders' equity and cash flows for the period from Inception
through December 31, 1996 and for the years ended December 31, 1997 and 1998. We
have also audited the related combined statements of income (loss) and cash
flows of Statia Terminals, Inc. and Subsidiaries and Affiliates (the
"Predecessor Company") for the period from January 1, 1996 through November 27,
1996. 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 audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company as of
December 31, 1997 and 1998, and the results of its operations and its cash flows
for the period from Inception through December 31, 1996 and for the years ended
December 31, 1997 and 1998 and the results of operations and cash flows of the
Predecessor Company for the period from January 1, 1996 through November 27,
1996, in conformity with generally accepted accounting principles.
 
ARTHUR ANDERSEN LLP
 
West Palm Beach, Florida,
  February 1, 1999
 
                                      F-2
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                                                                 DECEMBER 31,
                                                                                             --------------------
                                                                                               1997        1998
                                                                                             --------    --------
<S>                                                                                          <C>         <C>
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents...............................................................   $  6,113    $ 14,061
  Accounts receivable--
     Trade, less allowance for doubtful accounts of $830 and $785
     in 1997 and 1998, respectively.......................................................     10,092       7,562
  Other...................................................................................      2,348       2,328
  Inventory...............................................................................      1,247       4,528
  Prepaid expenses........................................................................      1,489       1,417
                                                                                             --------    --------
       Total current assets...............................................................     21,289      29,896
PROPERTY AND EQUIPMENT, net...............................................................    218,529     209,970
OTHER NONCURRENT ASSETS, net..............................................................      6,661       5,744
                                                                                             --------    --------
       Total assets.......................................................................   $246,479    $245,610
                                                                                             --------    --------
                                                                                             --------    --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable........................................................................   $  7,732    $  9,306
  Accrued interest payable................................................................      2,027       2,027
  Other accrued expenses..................................................................     11,099      15,946
                                                                                             --------    --------
       Total current liabilities..........................................................     20,858      27,279
LONG-TERM DEBT............................................................................    135,000     135,000
                                                                                             --------    --------
       Total liabilities..................................................................    155,858     162,279
REDEEMABLE PREFERRED STOCK:
     Series A, $0.10 par value, 20,000 shares authorized, issued and outstanding..........   $ 20,000    $ 20,000
     Series B, $0.10 par value, 10,000 shares authorized, issued and outstanding..........     10,000      10,000
     Series C, $0.10 par value, 10,000 shares authorized, issued and outstanding..........     10,000      10,000
STOCKHOLDERS' EQUITY:
  Preferred stock--
     Series D, $0.10 par value, 20,000 shares authorized and issued,
       20,000 shares outstanding at December 31, 1997,
       13,850 shares outstanding at December 31, 1998.....................................     20,000      13,850
     Series E, $0.10 par value, 209,500 shares authorized, 41,000 shares issued,
       41,000 shares outstanding at December 31, 1997 and
       40,974 shares outstanding at December 31, 1998.....................................     41,000      40,974
                                                                                             --------    --------
       Total preferred stock..............................................................     61,000      54,824
  Notes receivable from stockholders......................................................     (1,500)     (1,474)
  Common stock, $0.10 par value, 100,500 shares authorized, 41,000 shares issued and
     outstanding at December 31, 1997, 40,794 shares outstanding at December 31, 1998.....          4           4
  Additional paid-in-capital..............................................................         --         363
  Accumulated deficit.....................................................................     (8,883)    (10,386)
                                                                                             --------    --------
       Total stockholders' equity.........................................................     50,621      43,331
                                                                                             --------    --------
  Total liabilities and stockholders' equity..............................................   $246,479    $245,610
                                                                                             --------    --------
                                                                                             --------    --------
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-3
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                             (DOLLARS IN THOUSANDS)
      The Financial Statements of the Company and the Predecessor Company
              are not comparable in certain respects (See Note 1).
 
<TABLE>
<CAPTION>
                                                                                                  THE COMPANY
                                                               PREDECESSOR       ----------------------------------------------
                                                                 COMPANY         PERIOD FROM
                                                            -----------------    INCEPTION
                                                            JANUARY 1, 1996       THROUGH           YEAR ENDED DECEMBER 31,
                                                               THROUGH           DECEMBER 31,    ------------------------------
                                                            NOVEMBER 27, 1996       1996            1997              1998
                                                            -----------------    ------------    --------------    ------------
REVENUES.................................................       $ 140,998          $ 14,956         $142,499         $136,762
<S>                                                         <C>                  <C>             <C>               <C>
COST OF SERVICES AND PRODUCTS SOLD.......................         129,915            12,803          122,939          106,688
                                                                ---------          --------         --------         --------
    Gross profit.........................................          11,083             2,153           19,560           30,074
ADMINISTRATIVE EXPENSES..................................           8,282               664            7,735            9,500
                                                                ---------          --------         --------         --------
    Operating income.....................................           2,801             1,489           11,825           20,574
LOSS (GAIN) ON DISPOSITION OF PROPERTY AND EQUIPMENT.....             (68)               --             (109)           1,652
INTEREST EXPENSE.........................................           4,187             1,613           16,874           16,851
INTEREST INCOME..........................................              57                40              555              684
                                                                ---------          --------         --------         --------
    Income (loss) before provision for income taxes and
      preferred stock dividends..........................          (1,261)              (84)          (4,385)           2,755
PROVISION FOR INCOME TAXES...............................             629               132              780              320
                                                                ---------          --------         --------         --------
    Income (loss) before preferred stock dividends.......          (1,890)             (216)          (5,165)           2,435
PREFERRED STOCK DIVIDENDS................................             792               306            3,196            3,938
                                                                ---------          --------         --------         --------
    Net income (loss) available to common stockholders...       $  (2,682)         $   (522)        $ (8,361)        $ (1,503)
                                                                ---------          --------         --------         --------
                                                                ---------          --------         --------         --------
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-4
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                     PREFERRED          PREFERRED         NOTES
                                  STOCK--SERIES D    STOCK--SERIES E    RECEIVABLE      COMMON STOCK     ADDITIONAL
                                  ----------------   ----------------      FROM        ---------------   PAID-IN      ACCUMULATED
                                  SHARES   AMOUNT    SHARES   AMOUNT    STOCKHOLDERS   SHARES   AMOUNT   CAPITAL       DEFICIT
                                  ------   -------   ------   -------   ------------   ------   ------   ----------   -----------
 
<S>                               <C>      <C>       <C>      <C>       <C>            <C>      <C>      <C>          <C>
Issuance of common and
  preferred stock..............   20,000   $20,000   41,000   $41,000     $ (1,500)    41,000     $4        $ --       $      --
 
Net income (loss) available to
  common stockholders..........       --        --       --        --           --         --     --          --            (522)
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
 
BALANCE, December 31, 1996.....   20,000    20,000   41,000    41,000       (1,500)    41,000      4          --            (522)
 
Net income (loss) available to
  common stockholders..........       --        --       --        --           --         --     --          --          (8,361)
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
 
BALANCE, December 31, 1997.....   20,000    20,000   41,000    41,000       (1,500)    41,000      4          --          (8,883)
 
Net income (loss) available to
  common stockholders..........       --        --       --        --           --         --     --          --          (1,503)
 
Compensation expense related to
  issuance of options..........       --        --       --        --           --         --     --         363              --
 
Retirement of preferred
  stock........................   (6,150)   (6,150)      --        --           --         --     --          --              --
 
Other..........................       --        --      (26)      (26)          26        (26)    --          --              --
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
 
BALANCE, December 31, 1998.....   13,850   $13,850   40,974   $40,974     $ (1,474)    40,974     $4        $363       $ (10,386)
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
 
<CAPTION>
                                  TOTAL
                                 -------
<S>                              <C>
Issuance of common and
  preferred stock..............  $59,504
Net income (loss) available to
  common stockholders..........     (522)
                                 -------
BALANCE, December 31, 1996.....   58,982
Net income (loss) available to
  common stockholders..........   (8,361)
                                 -------
BALANCE, December 31, 1997.....   50,621
Net income (loss) available to
  common stockholders..........   (1,503)
Compensation expense related to
  issuance of options..........      363
Retirement of preferred
  stock........................   (6,150)
Other..........................       --
                                 -------
BALANCE, December 31, 1998.....  $43,331
                                 -------
                                 -------
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-5
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                             (DOLLARS IN THOUSANDS)
      The Financial Statements of the Company and the Predecessor Company
              are not comparable in certain respects (See Note 1).
 
<TABLE>
<CAPTION>
                                                                    PREDECESSOR
                                                                      COMPANY
                                                                 -----------------                THE COMPANY
                                                                   POST PRAXAIR       -----------------------------------
                                                                    ACQUISITION       PERIOD FROM
                                                                 -----------------     INCEPTION          YEAR ENDED
                                                                 JANUARY 1, 1996        THROUGH          DECEMBER 31,
                                                                    THROUGH           DECEMBER 31,    -------------------
                                                                 NOVEMBER 27, 1996       1996          1997        1998
                                                                 -----------------    ------------    -------    --------
<S>                                                              <C>                  <C>             <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Income (loss) before preferred stock dividends..............       $  (1,890)        $     (216)    $(5,165)   $  2,435
  Adjustments to reconcile net income (loss) before preferred
    stock dividends to net cash provided by operating
    activities:
    Depreciation, amortization, and noncash charges...........          12,296              1,011      10,911      12,383
    Provision for bad debts...................................             406                 --          11          72
    Loss (gain) on disposition of property and equipment......             (68)                --        (109)      1,652
    (Increase) decrease in accounts receivable--trade.........          (1,585)            (1,311)      2,060       2,458
    (Increase) decrease in other accounts receivables.........           3,237             (1,530)        747          20
    (Increase) decrease in inventory..........................          (5,033)             1,950       3,722      (3,281)
    (Increase) decrease in prepaid expense....................             (64)              (809)       (453)         72
    (Increase) decrease in other noncurrent assets............             319                 (2)       (123)          6
    Increase (decrease) in accounts payable...................           3,577                283      (2,202)      1,574
    Increase (decrease) in accrued expenses...................            (811)             2,859         371         799
    Increase (decrease) in payable to affiliates..............          (1,276)                --          --          --
                                                                     ---------         ----------     -------    --------
         Net cash provided by operating activities............           9,108              2,235       9,770      18,190
                                                                     ---------         ----------     -------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment..........................       $ (14,490)        $   (1,203)    $(5,344)   $(10,714)
  Proceeds from sale of property and equipment................             111                 --         112         122
  Proceeds from sale of Statia Terminals Southwest, Inc.......              --                 --          --       6,500
  Buyout of First Salute Leasing, L.P. assets.................         (88,511)                --          --          --
  Acquisition of Statia Operations, net of $185 of cash
    acquired..................................................              --           (173,961)         --          --
  Acquisition of Petroterminal de Panama, S.A.................              --             (1,000)         --          --
  Transaction costs...........................................              --             (9,572)         --          --
  Accrued transaction costs and purchase price adjustments....              --              7,703      (7,703)         --
                                                                     ---------         ----------     -------    --------
         Net cash used in investing activities................        (102,890)          (178,033)    (12,935)     (4,092)
                                                                     ---------         ----------     -------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in advances from Parent............................         203,767                 --          --          --
  Retirement of preferred stock...............................         (18,577)                --          --      (6,150)
  Bank borrowings.............................................          66,000                 --          --          --
  Bank repayments.............................................        (132,400)                --          --          --
  Dividends paid to affiliates................................         (25,792)                --          --          --
  Issuance of 11 3/4% First Mortgage Notes....................              --            135,000          --          --
  Debt costs paid.............................................              --             (6,428)         --          --
  Issuance of preferred stock.................................              --             56,500          --          --
  Issuance of common stock....................................              --                  4          --          --
                                                                     ---------         ----------     -------    --------
         Net cash provided by (used in) financing
           activities.........................................          92,998            185,076          --      (6,150)
                                                                     ---------         ----------     -------    --------
         Increase (decrease) in cash and cash equivalents.....            (784)             9,278      (3,165)      7,948
CASH AND CASH EQUIVALENTS, at beginning.......................           1,469                 --       9,278       6,113
                                                                     ---------         ----------     -------    --------
CASH AND CASH EQUIVALENTS, at end.............................       $     685         $    9,278     $ 6,113    $ 14,061
                                                                     ---------         ----------     -------    --------
                                                                     ---------         ----------     -------    --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for taxes.........................................       $     823         $        9     $   513    $    369
                                                                     ---------         ----------     -------    --------
                                                                     ---------         ----------     -------    --------
  Cash paid for interest......................................       $   4,455         $       --     $15,334    $ 15,940
                                                                     ---------         ----------     -------    --------
                                                                     ---------         ----------     -------    --------
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-6
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
1. ORGANIZATION AND OPERATIONS
 
     Statia Terminals Group N.V. was formed on September 4, 1996 by Castle
Harlan Partners II, L.P. ("Castle Harlan"), a private equity investment fund
managed by Castle Harlan, Inc., a private merchant bank, certain members of
management and others and commenced operations on November 27, 1996
("Inception"). Statia Terminals Group N.V. and Subsidiaries (the "Company") own
and operate petroleum blending, transshipment and storage facilities located on
the island of St. Eustatius, Netherlands Antilles and at Point Tupper, Nova
Scotia, Canada. The Company's terminaling services are furnished to many of the
world's largest producers of crude oil, integrated oil companies, oil traders,
refiners, petrochemical companies and ship owners. In addition to storage, the
Company provides a variety of related terminal services including bunkering,
crude oil and petroleum product blending and processing, and emergency and spill
response. A subsidiary of the Company provides administrative services for the
Company from its office in Deerfield Beach, Florida.
 
     The Company includes the following primary entities (collectively, the
"Statia Operations"): Statia Terminals Group N.V., Statia Terminals
International N.V. ("Statia"), Statia Terminals N.V. (each incorporated in the
Netherlands Antilles), Statia Terminals Canada, Inc. (incorporated in Nova
Scotia, Canada) and Statia Terminals Southwest, Inc. (incorporated in Texas--the
"Brownsville Facility") which was sold in July 1998 (see Note 15). Significant
intercompany balances and transactions have been eliminated.
 
     The Company was formed during 1996 to acquire the capital stock of Statia
Terminals, Inc. and its subsidiaries and affiliates (the "Predecessor Company")
from Praxair, Inc. ("Praxair"). The combined statements of income (loss) and
cash flows from January 1, 1996 through November 27, 1996 ("the period ended
November 27, 1996"), included the accounts of the Predecessor Company. The
Predecessor Company includes primarily the combination of the following commonly
owned companies: Statia Terminals, Inc. (incorporated in Delaware); Statia
Terminals N.V.; Statia Terminals Point Tupper, Inc. (incorporated in Nova
Scotia, Canada); and Statia Terminals Southwest, Inc. Significant intercompany
balances and transactions have been eliminated.
 
     Prior to January 12, 1996, the Predecessor Company was a wholly owned
subsidiary of CBI Industries, Inc. ("CBI"). On January 12, 1996, pursuant to the
Merger Agreement dated December 22, 1995 (the "Merger"), CBI became a wholly
owned subsidiary of Praxair. This Merger transaction was reflected in the
Predecessor Company's combined financial statements as a purchase effective
January 1, 1996 (see Note 3).
 
     On November 27, 1996, Castle Harlan, members of our management and others
acquired from Praxair all of the outstanding capital stock of Statia Terminals
N.V., Statia Terminals, Inc., their subsidiaries and certain of their affiliates
(the "Castle Harlan Acquisition"). The adjusted purchase price of the Castle
Harlan Acquisition totaled approximately $218,146. The Castle Harlan Acquisition
was paid, in part, by funds received by the Company from the issuance of
$135,000 of 11 3/4% First Mortgage Notes (the "Notes") described in Note 6 and
from the sale of the Company's preferred and common stock. The Castle Harlan
Acquisition has been accounted for under the purchase method of accounting. The
purchase price has been allocated to the assets and liabilities of the Company
based on their fair values as of the date of the Castle Harlan Acquisition. The
investment in Petroterminal de Panama, S.A. is carried at cost and is included
in other noncurrent assets.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Use of Estimates
 
     These consolidated financial statements have been prepared in conformity
with generally accepted accounting principles as promulgated in the United
States which require management to make estimates and assumptions that affect
the reported amounts of assets and liabilities. Management is also required to
make judgments regarding disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.
 
                                      F-7
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Revenue Recognition
 
     Revenues from terminaling operations are recognized ratably as the services
are provided. Revenues and commissions from bunkering services,
terminaling-related services and bulk product sales are recognized at the time
of delivery of the service or product.
 
Foreign Currency Translation and Exchange
 
     The consolidated financial statements include the financial statements of
foreign subsidiaries and affiliates translated in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 52 "Foreign Currency Translation."
The assets and liabilities are translated into U.S. dollars at year end exchange
rates. Income and expense items are converted into U.S. dollars at average rates
of exchange prevailing during the year. Substantially all of the Company's
transactions are denominated in U.S. dollars.
 
Stock-Based Compensation Plans
 
     SFAS No. 123, "Accounting for Stock-Based Compensation," allows for either
the adoption of a fair value method for accounting for stock-based compensation
plans or for the continuation of accounting under Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations with supplemental disclosures.
 
     The Company has chosen to account for its stock options using the intrinsic
value based method prescribed in APB Opinion No. 25 and, accordingly, does not
recognize compensation expense for stock option grants made at an exercise price
equal to or in excess of the fair market value of the stock at the date of grant
to employees. SFAS No. 123 does not impact the Company's results of operations,
financial position or cash flows.
 
Cash and Cash Equivalents
 
     The Company's and the Predecessor Company's excess cash is invested in
short-term, highly liquid investments with maturities of three months or less.
Such short-term investments are carried at cost, which approximates market, and
are classified as cash and cash equivalents.
 
Financial Instruments
 
     The Company uses various methods and assumptions to estimate the fair value
of each class of financial instrument. Due to their nature, the carrying value
of cash and cash equivalents, accounts receivable and accounts payable
approximates fair value. The Company's other financial instruments are not
significant.
 
Inventory
 
Inventory of oil products is valued at the lower of weighted average cost or
estimated market value.
 
Property and Equipment
 
     Property and equipment are stated at cost less accumulated depreciation.
Depreciation expense is computed using the straight-line method over the
estimated useful lives of the respective assets. Additions to property and
equipment, replacements, betterments and major renewals are capitalized. Repair
and maintenance expenditures which do not materially increase asset values or
extend useful lives are expensed.
 
     SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," requires that long-lived assets and
certain identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of
 
                                      F-8
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
any asset may not be recoverable. SFAS No. 121 also requires that long-lived
assets and certain identifiable long-lived assets to be disposed of be reported
at the lower of carrying amount or fair value less cost to sell. The Company
continually evaluates factors, events and circumstances which include, but are
not limited to, its historical and projected operating performance, specific
industry trends and general economic conditions to assess whether the remaining
estimated useful lives of long-lived assets may warrant revision or that the
remaining balance of long-lived assets may not be recoverable. When such
factors, events or circumstances indicate that long-lived assets should be
evaluated for possible impairment, the Company uses an estimate of undiscounted
cash flow over the remaining lives of the long-lived assets in measuring their
recoverability.
 
Other Noncurrent Assets
 
     Other noncurrent assets primarily consist of deferred financing costs and
an investment in PTP carried at cost in the amounts of $5,432 and $1,000
respectively, as of December 31, 1997, and $4,521 and $1,000, respectively, as
of December 31, 1998. The deferred financing costs related to establishing debt
obligations are amortized ratably over the life of the underlying obligation.
Debt cost amortization expense was $911 for the years ended December 31, 1997
and 1998.
 
Income Taxes
 
     The Company and the Predecessor Company determine their tax provision and
deferred tax balances in compliance with SFAS No. 109, "Accounting for Income
Taxes." Under this approach, the provision for income taxes represents income
taxes paid or payable for the current year adjusted for the change in deferred
taxes during the year. Deferred income tax assets and liabilities reflect the
net tax effects of temporary differences between the financial statement bases
and the tax bases of assets and liabilities and are adjusted for changes in tax
rates and tax laws when changes are enacted.
 
Comprehensive Income
 
     In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components in the
financial statements. SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997. Reclassification of financial statements for earlier periods
provided for comparative purposes is required. The following types of items are
to be considered in computing comprehensive income: foreign currency translation
adjustments, pension liability adjustments, and unrealized gain/loss on
securities available for sale. For all periods presented herein, there were no
differences between net income and comprehensive income.
 
Segment Information
 
     In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." SFAS No. 131 establishes standards for
the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about product and services, geographic areas, and major customers.
The adoption of SFAS No. 131 had no impact on consolidated results of
operations, financial position or cash flow.
 
                                      F-9
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Reclassifications
 
     Certain reclassifications were made to the 1996 and 1997 financial
statements in order to conform to the 1998 presentation.
 
     A statement of stockholders' equity for the Predecessor Company is not
presented because the information would not be comparable to that of the
Company.
 
3. PRAXAIR PURCHASE ACCOUNTING
 
     As discussed in Note 1, prior to January 12, 1996, the Predecessor Company
was a wholly owned subsidiary of CBI. On January 12, 1996, pursuant to the
Merger Agreement dated December 22, 1995, CBI became a wholly owned subsidiary
of Praxair. This Merger transaction was reflected in the Predecessor Company's
combined financial statements as a purchase effective January 1, 1996. The fair
value assigned to the Predecessor Company as of the Merger date was $210,000,
excluding bank borrowings, Praxair and CBI intercompany and advance accounts and
the buyout of certain off-balance-sheet financing ("Merger Value").
 
     The allocation of the Merger Value to the assets and liabilities acquired,
based on the estimated fair value assigned, was as follows:
 
<TABLE>
<S>                                                              <C>
Merger Value..................................................   $210,000
Less--
  Debt acquired...............................................     66,000
  Intercompany/advance accounts...............................     44,000
  Off-balance sheet obligations...............................     89,000
                                                                 --------
                                                                 $ 11,000
                                                                 --------
                                                                 --------
 
Allocation of merger value--
  Total current assets........................................   $ 17,000
  Property and equipment......................................    111,000
  Other noncurrent assets.....................................      4,000
  Liabilities assumed.........................................   (121,000)
                                                                 --------
                                                                 $ 11,000
                                                                 --------
                                                                 --------
</TABLE>
 
     In addition, $10,000 of Praxair debt was pushed down to the Predecessor
Company's books effective January 1, 1996. This debt was eliminated in
connection with the Castle Harlan Acquisition.
 
4. ACQUISITION
 
     As discussed in Note 1, on November 27, 1996, the Company acquired from
Praxair all of the outstanding capital stock of Statia Terminals N.V., Statia
Terminals, Inc., their subsidiaries and certain affiliates. The Castle Harlan
Acquisition has been accounted for under the purchase method of accounting.
Accordingly, the purchase price was allocated to the assets and liabilities of
the Company based on their respective fair values as of the date of the Castle
Harlan Acquisition. No adjustments were made to the allocated fair values during
1997 or 1998.
 
                                      F-10
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
4. ACQUISITION--(CONTINUED)
 
The allocation of the total purchase price to the assets and liabilities
acquired was as follows:
 
<TABLE>
<S>                                                              <C>
Purchase Price--
  Cash paid...................................................   $175,146
  Stock issued................................................     43,000
  Commissions, fees and expenses..............................     16,000
                                                                 --------
     Total purchase price.....................................   $234,146
                                                                 --------
                                                                 --------
 
Allocation of Purchase Price--
  Current assets..............................................   $ 19,570
  Property and equipment......................................    222,907
  Other non-current assets....................................      7,524
  Liabilities assumed.........................................    (15,855)
                                                                 --------
     Total purchase price.....................................   $234,146
                                                                 --------
                                                                 --------
</TABLE>
 
                                      F-11
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
5. PROPERTY AND EQUIPMENT
 
Property and equipment consisted of the following as of December 31:
 
<TABLE>
<CAPTION>
                                                                                                       USEFUL LIVES
                                                                                 1997        1998       IN YEARS
                                                                               --------    --------    ------------
<S>                                                                            <C>         <C>         <C>
Land........................................................................   $  1,291    $  1,291
Land improvements...........................................................      7,964       7,679           5-20
Buildings and improvements..................................................      2,178       3,303          20-40
Plant machinery.............................................................    216,322     215,017           4-40
Field and office equipment..................................................      1,677       2,497           3-15
                                                                               --------    --------
     Total property and equipment, at cost..................................    229,432     229,787
Less--Accumulated depreciation..............................................     10,903      19,817
                                                                               --------    --------
     Property and equipment, net............................................   $218,529    $209,970
                                                                               --------    --------
                                                                               --------    --------
</TABLE>
 
     Pursuant to the Castle Harlan Acquisition, the Company agreed with
stockholders to sell the Brownsville Facility and the M/V Statia Responder. The
M/V Statia Responder is still in operation, and the revenues and costs,
including depreciation, associated with operating this asset are included in the
accompanying financial statements. If the Company sells this asset in the
future, the net proceeds from this sale may be required to be used to redeem
certain of the Company's preferred stock. On July 29, 1998, the Company sold the
Brownsville Facility.
 
                                      F-12
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
6. DEBT
 
     The Notes due November 15, 2003 were issued by subsidiaries of the Company
(the "Issuers") on November 27, 1996 in connection with the Castle Harlan
Acquisition and pay interest on May 15 and November 15 of each year. The Notes
are redeemable, in whole or, in part, at the option of the Issuers at any time
on or after November 15, 2000, at the following redemption prices (expressed as
percentages of principal amount), together with accrued and unpaid interest, if
any, thereon to the redemption date, if redeemed during the 12-month period
beginning November 15, in the year indicated:
 
<TABLE>
<CAPTION>
                                                        OPTIONAL
YEAR                                                  REDEMPTION PRICE
---------------------------------------------------   ----------------
<S>                                                   <C>
2000                                                       105.875%
2001                                                       102.938%
2002                                                       100.000%
</TABLE>
 
     Notwithstanding the foregoing, any time on or prior to November 15, 1999,
the Issuers may redeem up to 35% of the aggregate principal amount of the Notes
with the proceeds of one or more Equity Offerings (as defined in the Indenture
to the Notes) at a redemption price equal to 111.75% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of redemption,
provided that after giving effect to such redemption, at least 65% of the
aggregate principal amount of the Notes remains outstanding.
 
     The Notes are guaranteed on a full, unconditional, joint and several basis
by each of the indirect and direct active subsidiaries of Statia. The Notes are
also subject to certain financial covenants as set forth in the Indenture, the
most restrictive of which include, but are not limited to the following: (i) a
consolidated fixed charge coverage ratio for the prior four full fiscal quarters
of less than 2.0:1, which, if met, will permit the Company to make additional
borrowings above the Company's revolving credit facility discussed below,
(ii) other limitations on indebtedness and (iii) restrictions on certain
payments. In addition, the Notes place restrictions on the Company's ability to
pay dividends other than distributions from the proceeds of assets held for sale
as discussed above and certain management fees as discussed in Note 12 below.
Except with the occurrence of an event of default, subsidiaries of Statia have
no restrictions upon transfers of funds in the form of dividends, loans or cash
advances.
 
     The Company has a revolving credit facility (the "Credit Facility") which
allows certain of the Company's subsidiaries to borrow up to $17,500 or the
limit of the borrowing base as defined in the Credit Facility. The Credit
Facility calls for a commitment fee of 0.375% per annum on a portion of the
unused funds. The Credit Facility bears interest at a rate of prime plus 0.5%
(8.25% at December 31, 1998). The Credit Facility constitutes senior
indebtedness of the Company and is secured by a first priority lien on certain
of the Company's accounts receivable and inventory. The Credit Facility is
subject to certain restrictive covenants; however, it is not subject to
financial covenants. The Credit Facility does not restrict the Company's
subsidiaries from transferring funds to the Company in the form of dividends,
loans or cash advances; however, the failure to pay interest when due
constitutes an event of default under the Credit Facility and such event of
default, until cured, prohibits upstream dividend payments to be made to the
Company. The Credit Facility expires on November 27, 1999. At December 31, 1997
and 1998, the Company had approximately $8,058 and $7,982, respectively,
available for borrowing under the Credit Facility as limited by the borrowing
base computation and had no outstanding balance.
 
7. PREFERRED STOCK
 
     The Company has authorized preferred stock of $26,950 divided into 269,500
shares with a par value of $0.10 consisting of the following shares: (i) 20,000
shares of 8% Series A Cumulative Preferred Stock (the "Series A Preferred
Stock"); (ii) 10,000 shares of 8% Series B Cumulative Preferred Stock (the
"Series B Preferred Stock"); (iii) 10,000 shares of 8% Series C Cumulative
Preferred Stock (the "Series C Preferred
 
                                      F-13
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
7. PREFERRED STOCK--(CONTINUED)
Stock"); (iv) 20,000 shares of 2% Series D Preferred Stock (the "Series D
Preferred Stock"); and (v) 209,500 shares of 2% Series E Preferred Stock (the
"Series E Preferred Stock"). Under certain circumstances as defined in the
Articles of Incorporation and Preferred Stock Agreements (defined below), the
dividend rates on the Series A, Series B and Series C Preferred Stock may
increase from 8% to 14.75%.
 
     The terms of the Series A, Series B and Series C Preferred Stock contain
provisions for redemption beyond the control of the Company and certain
restrictions on the purchase, redemption, defeasance or retirement of the Notes
unless such action is effected (i) at the stated maturity of the Notes, (ii) in
connection with an event of default, (iii) pursuant to the mandatory purchase
offer provisions of the Indenture governing the Notes relating to asset sales or
(iv) pursuant to the redemption provisions of the Indenture relating to
withholding taxes. Other than as permitted by the foregoing provisions, the
Company may not, directly or indirectly, cause or permit Statia or any of its
subsidiaries to, directly or indirectly, purchase, redeem, defease or retire any
Notes if: (i) in the case of the Series A Preferred Stock, (a) the Company shall
not have declared full cash dividends on such series or, if the Indenture
restricts such declaration, full cash dividends on such series to the extent
permitted by the Indenture, or (b) the Company fails to redeem such series when
such redemption is mandatory, (ii) in the case of the Series B Preferred Stock,
the Company fails to redeem such series when such redemption is mandatory,
(iii) in the case of the Series C Preferred Stock, the Company fails to redeem
such series when such redemption is mandatory, (iv) following the occurrence of
certain events set forth in the Preferred Stock Agreements in which the dividend
rate on the Series A, Series B or Series C Preferred Stock is not 8% per annum,
or (v) such purchase, redemption, defeasance or retirement would reduce the
Consolidated Fixed Charge Coverage Ratio (as defined in the Indenture) that, in
certain circumstances, the Series C Preferred Stock may not be redeemed. The
Series A, B and C Preferred Stock in the aggregate of $40,000 was contributed
from Praxair as non-cash equity.
 
     The Series A and Series C Preferred Stock is non-voting stock with a
liquidation preference of one thousand dollars per share. The Company must
redeem these series on the earliest of (i) one year following the maturity date
of the Notes, (ii) one year from the date on which not more than $10,000
aggregate principal amount of the Notes is outstanding (other than those Notes
held or beneficially owned by the Company or any of its affiliates), (iii) the
date on which a holder or beneficial owner of any equity interest in the Company
(other than Praxair) or any option, warrant, convertible security or synthetic
or derivative product related to such equity interest sells, assigns, pledges or
otherwise transfers any such equity interest, except in limited circumstances,
or (iv) 30 days following receipt of notice from the holders of any such series
that the Company has failed to cure a material breach under the Company's Senior
Preferred Stock Agreement or Shareholder Agreement (together the "Preferred
Stock Agreements").
 
     The Series B Preferred Stock is non-voting stock with a liquidation
preference of one thousand dollars per share. The Company must redeem this
series on the earliest of (i) the second anniversary of the initial issuance of
this series of stock, (ii) one year from the date on which not more than $10,000
aggregate principal amount of the Notes is outstanding, (iii) the date on which
a holder or beneficial owner of any equity interest in the Company (other than
Praxair) or any option, warrant, convertible security or synthetic or derivative
product related to such equity interest sells, assigns, pledges or otherwise
transfers any such equity interest, except in limited circumstances, or
(iv) 30 days following receipt of notice from the Series B Preferred
Stockholders that the Company has failed to cure a material breach under the
Preferred Stock Agreements. To the extent that the Company or one of its
affiliates shall have received proceeds from the sale of the M/V Statia
Responder, an emergency and oil spill response vessel owned by a subsidiary, the
Company must redeem the Series B Preferred Stock at the applicable redemption
price therefor out of such proceeds. The Indenture permits the sale of the M/V
Statia Responder and, in the event of such sale, will permit a payment from
Statia to the Company equal to the amount of the liquidation preference plus
accrued and unpaid dividends on the then outstanding Series B Preferred Stock.
 
                                      F-14
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
7. PREFERRED STOCK--(CONTINUED)
     If the Company has not redeemed the Series B Preferred Stock by
November 27, 1998, the Company may, following the exercise of any option to
exchange the Series B Preferred Stock into common equity of the Company (which
option must be exercised by the holders of the Series B Preferred Stock prior to
the third anniversary of the closing date, November 27, 1996), either redeem the
shares for cash or exchange them for common equity of the Company. If the shares
are not redeemed for cash or exchanged for common equity of the Company then the
dividend rate on the Company's Series A, Series B and Series C Preferred Stock
increases from 8% to 14.75% effective November 28, 1998. As the Series B
Preferred Stock was not redeemed by the Company prior to November 27, 1998, the
dividend rate on the Company's Series A, Series B and Series C Preferred Stock
increased from 8% to 14.75% effective November 28, 1998, in accordance with the
Company's Preferred Stock Agreements and its Articles of Incorporation.
 
     If Statia or one of its subsidiaries is permitted, under the terms of the
Consolidated Fixed Charge Coverage Ratio test in the Limitation on Additional
Indebtedness covenant in the Indenture, to issue indebtedness in an amount up to
or greater than the liquidation preference of the Series C Preferred Stock plus
accrued but unpaid dividends thereon, and the Company does not redeem the Series
C Preferred Stock at the applicable redemption price under certain conditions,
then the management fees payable to Castle Harlan, Inc. (see Note 12) thereafter
accrue and will not be paid in cash until such redemption occurs. The Indenture
permits one or more restricted payments from Statia to the Company when such
Consolidated Fixed Charge Coverage Ratio tests permits the incurrence of
indebtedness in an amount up to the liquidation preference plus accrued and
unpaid dividends on the then outstanding Series C Preferred Stock.
 
     The Series D Preferred Stock is non-voting stock, has a liquidation
preference of one thousand dollars per share for which the dividends have been
waived. The Indenture permits the sale of the Brownsville facility and permits a
restricted payment from Statia to the Company equal to the net proceeds from
such sale. Such amounts are required to be applied to redeem the Series D
Preferred Stock. On July 29, 1998 the Company sold the Brownsville Facility and
a restricted payment of $6,150 was made from Statia to the Company to redeem a
portion of the Series D Preferred Stock.
 
     The Series E Preferred Stock is voting stock which has a liquidation
preference of one thousand dollars per share for which the dividends have been
waived.
 
     For the period ended December 31, 1996, the Company accrued dividends of
$152, $77 and $77 for Series A, Series B, and Series C Preferred Stock,
respectively. For the year ended December 31, 1997, the Company accrued
dividends of $1,598, $799 and $799 for Series A, Series B and Series C Preferred
Stock, respectively. For the year ended December 31, 1998, the Company accrued
dividends of $1,970, $984 and $984 for the Series A, Series B and Series C
Preferred Stock, respectively.
 
8. NOTES RECEIVABLE FROM STOCKHOLDERS
 
     Notes receivable from stockholders represent nonrecourse loans made by the
Company to certain members of management and are secured by pledges of the
Company's common stock. The loans bear interest at 6.49% and are due on the
earlier of (i) November 26, 2003, or (ii) sale of the Company's common stock.
These loans have been classified as a reduction to preferred stock in the
accompanying financial statements.
 
9. LEASES
 
     The Company and the Predecessor Company rent certain facilities, land and
marine equipment under cancelable and noncancelable operating leases. Rental
expense on operating leases was $13,854 (of which $9,870 including $4,270 for
recognition of lease residual value guarantee, relates to the lease described
below), $491, $3,763 and $3,409 for the period ended November 27, 1996, the
period ended December 31, 1996, the year ended
 
                                      F-15
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
9. LEASES--(CONTINUED)
December 31, 1997 and the year ended December 31, 1998, respectively. Future
rental commitments during the years ending 1999 through 2003 are $3,619, $2,569,
$2,504, $2,518 and $837, respectively.
 
     On November 17, 1993, Statia Terminals N.V. and a subsidiary entered into
an agreement with a third-party financier (First Salute Leasing, L.P.) pursuant
to which a portion of its land on St. Eustatius was leased to this third party
for the purpose of construction and operation of five million barrels of crude
oil storage tanks and a single point mooring system. Statia Terminals N.V. acted
as agent for the third party with regard to the construction of the facilities.
Statia Terminals N.V. leased the facility from the third party for a minimum
period of five years beginning February 1, 1995. The aggregate construction cost
incurred for these leased assets totaled $88,513. At the completion of the
initial five year term, Statia Terminals N.V. had the option to extend the
lease, purchase the facility from the lessor, or arrange for the leased
properties to be sold to a third party. In the event of purchase or sale of
these properties, Statia Terminals N.V. was obligated to the lessor for any
shortfall between the purchase or sales price and the lease residual value
guarantee. In connection with the Castle Harlan Acquisition, Praxair terminated
the above First Salute Leasing, L.P. off-balance-sheet financing arrangement and
paid in full all obligations related to this lease.
 
                                      F-16
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
10. INCOME TAXES
 
     The sources of income (loss) by jurisdiction before the provision for
income taxes and preferred stock dividends are:
 
<TABLE>
<CAPTION>
                                                        PREDECESSOR                        THE COMPANY
                                                          COMPANY        -----------------------------------------------
                                                      ----------------   PERIOD FROM
                                                      JANUARY 1, 1996     INCEPTION          YEARS ENDED DECEMBER 31,
                                                        THROUGH            THROUGH
                                                      NOVEMBER 27,       DECEMBER 31,       ----------------------------
                                                          1996              1996               1997           1998
                                                      ----------------   ----------------   ------------    ------------
<S>                                                   <C>                <C>                <C>             <C>
U.S.................................................      $    134            $ (300)         $ (1,823)        $ (362)
Non-U.S.............................................        (1,395)              216            (2,562)         3,117
                                                          --------            ------          --------         ------
                                                          $ (1,261)           $  (84)         $ (4,385)        $2,755
                                                          --------            ------          --------         ------
                                                          --------            ------          --------         ------
</TABLE>
 
     The provision for income taxes consisted of:
 
<TABLE>
<CAPTION>
                                                           PREDECESSOR                       THE COMPANY
                                                             COMPANY        ----------------------------------------------
                                                         ----------------   PERIOD FROM
                                                         JANUARY 1, 1996    INCEPTION           YEARS ENDED DECEMBER 31,
                                                           THROUGH           THROUGH
                                                         NOVEMBER 27,       DECEMBER 31,      ----------------------------
                                                            1996               1996             1997            1998
                                                         ----------------   ---------------   ------------    ------------
<S>                                                      <C>                <C>               <C>             <C>
Current:
  U.S..................................................       $  215             $  --           $ (128)         $   --
  State................................................          (25)               --              (42)             --
  Non-U.S..............................................         (487)             (132)            (610)           (320)
                                                              ------             -----           ------          ------
                                                                (297)             (132)            (780)           (320)
                                                              ------             -----           ------          ------
Deferred:
  U.S..................................................         (332)               --               --              --
                                                              ------             -----           ------          ------
     Total provision...................................       $ (629)            $(132)          $ (780)         $ (320)
                                                              ------             -----           ------          ------
                                                              ------             -----           ------          ------
</TABLE>
 
     The components of the deferred income provision relate primarily to book
versus tax differences in computing depreciation expense.
 
     A reconciliation of income taxes at the U.S. statutory rate of 35% to the
Company's provision for income taxes follows:
 
<TABLE>
<CAPTION>
                                                        PREDECESSOR                       THE COMPANY
                                                          COMPANY        ----------------------------------------------
                                                      ----------------   PERIOD FROM
                                                      JANUARY 1, 1996    INCEPTION           YEARS ENDED DECEMBER 31,
                                                        THROUGH           THROUGH
                                                      NOVEMBER 27,       DECEMBER 31,      ----------------------------
                                                          1996              1996              1997            1998
                                                      ----------------   ---------------   ------------    ------------
<S>                                                   <C>                <C>               <C>             <C>
Income (loss) before income taxes and preferred
  stock dividends...................................      $ (1,261)           $ (84)         $ (4,385)       $  2,755
                                                          --------            -----          --------        --------
Tax (provision) benefit at U.S. statutory rate......           440               29             1,535            (964)
State income taxes..................................            --               --               (14)             --
Non-U.S. tax rate differential and losses without
  tax benefit.......................................        (1,069)            (119)           (2,301)            644
                                                          --------            -----          --------        --------
Other, net..........................................            --              (42)               --              --
                                                          --------            -----          --------        --------
                                                          $   (629)           $(132)         $   (780)       $   (320)
                                                          --------            -----          --------        --------
                                                          --------            -----          --------        --------
</TABLE>
 
                                      F-17
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
10. INCOME TAXES--(CONTINUED)
     For 1996, the Company's effective tax rate exceeds the foreign tax
statutory rates as a result of Canadian large corporation tax and losses
incurred by certain subsidiaries for which the Company has not recognized any
benefit.
 
     The principal temporary differences included on the balance sheets net of
effective tax rates are:
 
<TABLE>
<CAPTION>
                                                                                      THE COMPANY
                                                                              ----------------------------
                                                                              DECEMBER 31,    DECEMBER 31,
                                                                                 1997            1998
                                                                              ------------    ------------
<S>                                                                           <C>             <C>
Net operating loss and ITC carryforwards...................................     $ 30,054        $ 28,080
Valuation allowance........................................................      (30,054)        (28,080)
                                                                                --------        --------
                                                                                $     --        $     --
                                                                                --------        --------
                                                                                --------        --------
</TABLE>
 
     The Company's net deferred tax assets primarily relate to Canadian
investment tax credits and net operating loss carryforwards. The Company has
provided a full valuation allowance against these tax assets, because it is not
certain that the deferred tax assets will be utilized in the future.
 
     The Company's Canadian subsidiaries are subject to a federal large
corporation tax based on 0.225% of the subsidiaries' total equity. As of
April 1, 1997, Nova Scotia enacted a provincial capital tax based on 0.25% of
the subsidiaries' total equity (prorated to 0.1888% for the 1997 calendar year).
Additionally, the Company's Canadian subsidiaries have benefited from taxable
loss and investment tax credit carryforwards, which are available for
utilization over a seven-to-ten-year period to offset future taxable income. The
combined net operating loss and investment tax credit carryforward available to
offset Canadian taxable income was $66,786 as of December 31, 1997, and $62,399
as of December 31, 1998, and expires in varying amounts though 2005.
 
     On June 1, 1989, the governments of the Netherlands Antilles and St.
Eustatius approved a Free Zone and Profit Tax Agreement retroactive to
January 1, 1989 and concluding on December 31, 2000. This agreement requires a
subsidiary of the Company to pay a 2% rate on taxable income, as defined, or a
minimum payment of 500 Netherlands Antilles guilders ($282). This agreement
further provides that any amounts paid in order to meet the minimum annual
payment will be available to offset future tax liabilities under the agreement
to the extent that the minimum annual payment is greater than 2% of taxable
income. At December 31, 1998, the amount available to offset future tax
liability under the agreement was approximately $1,412. Currently, the
subsidiary is renegotiating a new agreement with the governments of the
Netherland Antilles and St. Eustatius that will be effective from January 1,
1998, through December 31, 2010, with extension provisions to 2015.
 
     Certain of the Company's Netherlands Antilles subsidiaries are not part of
the Free Zone and Profit Tax Agreement and, accordingly, pay Netherlands
Antilles federal income tax at an effective tax rate of up to 45%. Approximately
$67 and $28 of profit tax is included in the Netherlands Antilles tax provision
for the periods ended December 31, 1997 and December 31, 1998, respectively.
 
11. STOCK OPTIONS
 
     During 1997, the stockholders of the Company approved the 1997 Stock Option
Plan (the "Plan") which allows up to 7,235 shares of $0.10 par value common
stock of the Company to be delivered pursuant to incentive stock option award
agreements or nonqualified stock option award agreements. The incentive stock
option award agreement specifies that after two years of employment from the
date of grant and after each of the following three years, 25% of the option
shares become exercisable unless a Liquidation Event occurs (as defined in the
award agreement) at which time the option becomes fully exercisable. The options
terminate upon termination of employment, except in the event of death,
permanent disability or Company termination other than for substantial cause.
Each option expires ten years after the date of grant.
 
                                      F-18
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
11. STOCK OPTIONS--(CONTINUED)
     During November 1997, 2,895 shares of common stock were granted to certain
employees of the Company pursuant to incentive stock option award agreements at
an exercise price of $0.10, which equaled the fair market value of the Company's
common stock. The Company applies APB Opinion No. 25 and related interpretations
in accounting for options granted to employees and directors. Accordingly, no
compensation costs have been recognized related to the stock options granted in
1997.
 
     During December 1998, 2,895 shares of common stock were granted to certain
employees of the Company pursuant to incentive stock option award agreements at
an exercise price of $0.10. The Company recorded the required compensation
expense under APB 25 on the date of grant representing the difference between
the estimated fair value of the options and the exercise price of $0.10 per
share amortized over the vesting period of five years. The fair value of such
options was determined based on an independent appraisal of the Company's common
stock on the date of grant of $810 per share. The total amount of compensation
expense recognized during 1998 related to such options was $39 and is included
in cost of services and products sold and administrative expenses.
 
     The Company also granted 400 options to purchase common stock to
non-employee directors of the Company. These options vested immediately on the
date of grant. The Company recorded $324 of compensation expense under
APB No. 25 on the date of grant. This amount represented the difference between
the fair value of $810 per share and the exercise price of $0.10 per share. The
compensation expense is included in administrative expenses.
 
     Had compensation cost been recorded for the Company's awards based on fair
value at the grant dates consistent with the methodologies of SFAS No. 123, the
Company's 1998 reported net income (loss) available to common stockholders would
have been reduced to the pro forma amounts indicated below:
 
<TABLE>
<S>                                                                                              <C>
Net income (loss) available to common stockholders:
  As reported.................................................................................   $(1,503)
  Pro forma...................................................................................   $(1,960)
</TABLE>
 
     Under SFAS 123, the value of each option granted is estimated on the date
of grant using the Black Scholes model with the following assumptions: Risk-free
interest rate--6.3%, dividend yield--0%, and expected life of the option--10
years.
 
12. RELATED PARTY TRANSACTIONS
 
     Prior to November 27, 1996, the Company engaged in various related-party
transactions with Praxair, CBI and their affiliates. Advances consisted
principally of funds loaned by Praxair/CBI for disbursements, debt service and
dividends offset by the transfer of the Predecessor Company's excess cash. The
advances were non-interest-bearing and did not have a specified maturity date.
 
     The Predecessor Company regularly contracted with affiliates of CBI for the
construction and expansion of its facilities and for certain repair and
maintenance work. During the period ended November 27, 1996, $4,828 was paid to
Praxair or CBI affiliates for these activities related to its property and
equipment. It is not possible to determine whether the results of operations and
financial position of the Predecessor Company would be significantly different
had the Predecessor Company contracted with independent third parties for its
construction, expansion, repair and maintenance needs.
 
     Praxair and CBI directly allocated certain corporate administrative
services to the Predecessor Company including certain legal services, risk
management, tax advice and return preparation, employee benefit administration,
cash management and other services. During the period ended November 27, 1996,
$138 was paid for these direct and indirect administrative services. All
intercompany balances owed to Praxair, CBI and their affiliates were fully paid
in connection with the Acquisition.
 
                                      F-19
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
12. RELATED PARTY TRANSACTIONS--(CONTINUED)
     The Company entered into a ten-year management agreement with Castle
Harlan, Inc., to pay an annual management fee of $1,350, plus out-of-pocket
expenses, advisory and strategic planning services subject to certain
conditions. In the event the net proceeds from the sale of the M/V Statia
Responder exceed a specified threshold, Castle Harlan, Inc. may be entitled to a
payment of up to $1,000. This agreement terminates upon a change in control.
 
13. COMMITMENTS AND CONTINGENCIES
 
  Environmental, Health and Safety Matters
 
     In connection with the Castle Harlan Acquisition, studies were undertaken
by and for Praxair to identify potential environmental, health and safety
matters. Certain matters involving potential environmental costs were identified
at the Point Tupper, Nova Scotia, Canada facility. Praxair has agreed to pay for
certain of these environmental costs subject to certain limitations. Praxair has
paid approximately $2,300 during the period from November 27, 1996 to
December 31, 1998 related to such costs. Based on investigations conducted and
information available to date, the potential cost of additional remediation and
compliance is estimated at $1,000, substantially all of which the Company
believes is the responsibility of Praxair per the Castle Harlan Acquisition
agreement. The Company has also identified certain other environmental, health
and safety costs not covered by the agreement with Praxair for which $1,500 was
accrued in 1996 ($10 of which has been expended through December 31, 1998). The
Company believes that these environmental, health and safety costs, subject to
reimbursements from Praxair, will not have a material adverse effect on the
Company's financial position, cash flows or results of operations.
 
  Litigation
 
     Global Petroleum Corp. ("Global") brought an action against the Company in
December 1993 in the Supreme Court of Nova Scotia seeking the release of certain
petroleum products owned by Global that the Company was holding to secure the
payment of certain invoices. Global secured the release of the products by
posting a $2,000 bond. Global claims damages of $1,200 for breach of contract
and the Company counter-claimed for breach of contract and payment of the
approximately $2,000 of unpaid invoices for product storage and other service.
In April 1996, Global, Scotia Synfuels Limited and their related companies
brought suit against CBI and the Company in the Supreme Court of Nova Scotia
alleging damages in the amount of $100,000 resulting from misrepresentation,
fraud and breach of fiduciary duty associated with the reactivation of the Point
Tupper facility and the sale of their shares in Point Tupper Terminals Company,
a predecessor to Statia Canada, to an affiliate of the Company and CBI.
 
     In May 1994, the U.S. Department of Justice brought an action in the U.S.
District Court for the District of the Virgin Islands against Statia Terminals,
Inc. and Statia Terminals, N.V. for $3,600 of pollution clean-up costs in
connection with the discharge of oil into the territorial waters of the U.S.
Virgin Islands and Puerto Rico by a barge that had been loaded by Statia
Terminals, N.V. at St. Eustatius but was not affiliated with the Company. On
April 16, 1998, the U.S. District Court ruled that it lacked jurisdiction over
Statia Terminals, N.V. and dismissed it from the case.
 
     The Company believes the allegations made in these proceedings are without
merit; therefore, the Company intends to vigorously contest these claims. In
connection with the Castle Harlan Acquisition, Praxair agreed to indemnify the
Company against damages relating to the foregoing proceedings. While no
estimates can reasonably be made of any ultimate liability at this time, the
Company believes the ultimate outcome of these proceedings will not have a
material adverse effect on the Company's business, financial condition or
results of operations.
 
                                      F-20
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
13. COMMITMENTS AND CONTINGENCIES--(CONTINUED)
     The Company is involved in various other claims and litigation arising in
the normal course of its business. Based upon analysis of legal matters and
discussions with legal counsel, the Company believes that the ultimate outcome
of these matters will not have a material adverse effect on the Company's
financial position, cash flows and results of operations.
 
  Accrued Expenses
 
     A summary of accrued expenses consists of the following as of December 31:
 
<TABLE>
<CAPTION>
                                                                                      1997       1998
                                                                                     -------    -------
<S>                                                                                  <C>        <C>
Dividends payable.................................................................   $ 3,502    $ 7,440
Personnel and related costs.......................................................     2,296      2,835
Professional fees.................................................................     1,079      1,175
Environmental expenses............................................................     1,500      1,490
Other.............................................................................     2,722      3,006
                                                                                     -------    -------
                                                                                     $11,099    $15,946
                                                                                     -------    -------
                                                                                     -------    -------
</TABLE>
 
14. SEGMENT INFORMATION
 
     The Company is organized around several different factors the most
significant of which are products and services and geographic location. The
Company's primary products and services are bunker and bulk product sales and
terminaling services (consisting of storage, throughput, dock charges, emergency
response fees and other terminal charges).
 
     The primary measures of profit and loss utilized by the Company's
management to make decisions about resources to be allocated to each division
are earnings before interest, taxes, depreciation, amortization and certain
unallocated profits and losses ("Internal EBITDA") and earnings before interest
taxes and certain unallocated profits and losses ("Internal EBIT").
 
                                      F-21
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
14. SEGMENT INFORMATION--(CONTINUED)
     The following information is provided for the Company's bunker and bulk
products sales and terminaling services segments:
 
<TABLE>
<CAPTION>
                                                              PREDECESSOR
                                                              PREDECESSOR
                                                                COMPANY
                                                                COMPANY                         THE COMPANY
                                                            ----------------   ----------------------------------------------
                                                              FOR THE            FOR THE
                                                            PERIOD FROM        PERIOD FROM
                                                            JANUARY 1, 1996     INCEPTION            FOR THE YEARS ENDED
                                                              THROUGH            THROUGH                 DECEMBER 31,
                                                            NOVEMBER 27,       DECEMBER 31,      ----------------------------
                                                                1996              1996              1997            1998
                                                            ----------------   ---------------   ------------    ------------
<S>                                                         <C>                <C>               <C>             <C>
REVENUES:
  Terminaling services....................................      $ 44,119           $ 5,693         $ 53,165        $ 66,625
  Bunker and bulk product sales...........................        96,879             9,263           89,334          70,137
                                                                --------           -------         --------        --------
     Total................................................      $140,998           $14,956         $142,499        $136,762
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
INTERNAL EBITDA:
  Terminaling services....................................      $ 15,037           $ 2,351         $ 20,417        $ 30,845
  Bunker and bulk product sales...........................         3,277                14            2,699           2,965
                                                                --------           -------         --------        --------
     Total................................................      $ 18,314           $ 2,365         $ 23,116        $ 33,810
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
DEPRECIATION AND AMORTIZATION EXPENSE:
  Terminaling services....................................      $  8,832           $   868         $ 10,093        $ 10,923
  Bunker and bulk product sales...........................           541                66              818             498
                                                                --------           -------         --------        --------
     Total................................................      $  9,373           $   934         $ 10,911        $ 11,421
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
INTERNAL EBIT:
  Terminaling services....................................      $  6,205           $ 1,483         $ 10,324        $ 19,922
  Bunker and bulk product sales...........................         2,736               (52)           1,881           2,467
                                                                --------           -------         --------        --------
     Total................................................      $  8,941           $ 1,431         $ 12,205        $ 22,389
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
CAPITAL EXPENDITURES:
  Terminaling services....................................      $ 12,868           $ 1,147         $  4,735        $  8,274
  Bunker and bulk product sales...........................         1,234                --               58           1,212
  Other unallocated.......................................           388                56              551           1,228
                                                                --------           -------         --------        --------
     Total................................................      $ 14,490           $ 1,203         $  5,344        $ 10,714
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                                   --------------------
                                                                                     1997        1998
                                                                                   --------    --------
<S>                                                                                <C>         <C>
ASSETS:
  Terminaling services..........................................................   $220,591    $208,642
  Bunker and bulk product sales.................................................      8,964      12,058
  Unallocated assets............................................................     16,924      24,910
                                                                                   --------    --------
                                                                                   $246,479    $245,610
                                                                                   --------    --------
                                                                                   --------    --------
</TABLE>
 
                                      F-22
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
14. SEGMENT INFORMATION--(CONTINUED)
     A reconciliation of Internal EBIT to the Company's income (loss) before
provision for income taxes and preferred stock dividends is as follows:
 
<TABLE>
<CAPTION>
                                                    PREDECESSOR                        THE COMPANY
                                                      COMPANY        -----------------------------------------------
                                                  ----------------   PERIOD FROM
                                                  JANUARY 1, 1996     INCEPTION             FOR THE YEARS ENDED
                                                    THROUGH            THROUGH                  DECEMBER 31,
                                                  NOVEMBER 27,       DECEMBER 31,       ----------------------------
                                                      1996               1996              1997            1998
                                                  ----------------   ----------------   ------------    ------------
<S>                                               <C>                <C>                <C>             <C>
Internal EBIT...................................      $  8,941           $  1,431         $ 12,205        $ 22,389
Unallocated operating and administrative
  expenses......................................          (472)               (30)          (1,182)         (2,726)
Interest expense excluding debt cost
  amortization expense..........................        (9,787)            (1,525)         (15,963)        (15,940)
Interest income.................................            57                 40              555             684
Loss on sale of Statia Terminals Southwest,
  Inc...........................................            --                 --               --          (1,652)
                                                      --------           --------         --------        --------
Income (loss) before provision for income taxes
  and preferred stock dividends.................      $ (1,261)          $    (84)        $ (4,385)       $  2,755
                                                      --------           --------         --------        --------
                                                      --------           --------         --------        --------
</TABLE>
 
     The following information is provided with respect to the geographic
operations of the Company:
 
<TABLE>
<CAPTION>
                                                   PREDECESSOR                        THE COMPANY
                                                     COMPANY        -----------------------------------------------
                                                 ----------------   PERIOD FROM
                                                 JANUARY 1, 1996     INCEPTION             FOR THE YEARS ENDED
                                                   THROUGH            THROUGH                  DECEMBER 31,
                                                 NOVEMBER 27,       DECEMBER 31,       ----------------------------
                                                     1996               1996              1997            1998
                                                 ----------------   ----------------   ------------    ------------
<S>                                              <C>                <C>                <C>             <C>
REVENUES:
  Caribbean....................................      $126,557           $ 13,194         $122,042        $114,091
  Canada.......................................        11,724              1,631           18,586          21,058
  United States................................         2,717                131            1,871           1,613
                                                     --------           --------         --------        --------
     Total revenues............................      $140,998           $ 14,956         $142,499        $136,762
                                                     --------           --------         --------        --------
                                                     --------           --------         --------        --------
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                                   --------------------
                                                                                     1997        1998
                                                                                   --------    --------
<S>                                                                                <C>         <C>
LONG-TERM ASSETS:
  Caribbean.....................................................................   $185,702    $183,872
  Canada........................................................................     29,826      29,170
  United States.................................................................      8,662       1,672
  Panama........................................................................      1,000       1,000
                                                                                   --------    --------
                                                                                   $225,190    $215,714
                                                                                   --------    --------
                                                                                   --------    --------
</TABLE>
 
Significant Customers
 
     The Company presently has long term storage and throughput contracts with
Bolanter Corporation N.V. (an affiliate of Saudi Aramco) and a subsidiary of
Tosco Corporation which expire in 2000 and 1999, respectively. The Company also
derives revenues from parties unaffiliated with either Saudi Aramco or Tosco,
because of the movement of Saudi Aramco and Tosco products through the Company's
terminals. Additionally, the Company sells bunker fuels to another affiliate of
Saudi Aramco at its St. Eustatius facility.
 
                                      F-23
<PAGE>
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
14. SEGMENT INFORMATION--(CONTINUED)
     The following table sets forth such revenues as a percentage of our total
revenue.
 
<TABLE>
<CAPTION>
                                                                 PREDECESSOR
                                                                   COMPANY                           THE COMPANY
                                                               ---------------    -------------------------------------------------
                                                               JANUARY 1, 1996                                YEARS ENDED 
                                                                THROUGH           PERIOD FROM                  DECEMBER 31,
                                                               NOVEMBER 27,       INCEPTION THROUGH    ----------------------------
                                                                  1996            DECEMBER 31, 1996      1997            1998
                                                               ---------------    -----------------    ------------    ------------
<S>                                                            <C>                <C>                  <C>             <C>
Saudi Aramco-related revenues
Storage and throughput contract.............................          6.2%                5.9%              7.0%            7.4%
Unaffiliated third parties..................................         11.7%                7.7%              6.4%            7.7%
Bunker sales................................................          1.7%                2.2%              2.1%            1.5%
                                                                    -----               -----              ----            ----
  Total.....................................................         19.6%               15.8%             15.5%           16.6%
                                                                    -----               -----              ----            ----
                                                                    -----               -----              ----            ----
Tosco-related revenues
Storage and throughput contract.............................          4.1%                3.2%              6.9%            7.1%
Unaffiliated third parties..................................          1.3%                4.7%              3.9%            1.9%
Bunker sales................................................          0.6%                0.8%              0.1%            0.0%
                                                                    -----               -----              ----            ----
  Total.....................................................          6.0%                8.7%             10.9%            9.0%
                                                                    -----               -----              ----            ----
                                                                    -----               -----              ----            ----
</TABLE>
 
     Although the Company has long-standing relationships and long-term
contracts with these customers, if such long-term contracts were not renewed or
replaced at the end of their terms, or if the Company otherwise lost any
significant portion of its revenues from these two customers, such
non-renewal/replacement or loss could have a material adverse effect on the
Company's business, financial condition and ability to pay dividends. The
Company also has long-term contracts with other key customers, and there can be
no assurance that these contracts will be renewed at the end of their terms or
that the Company will be able to enter into other long-term contracts on terms
favorable to it, or at all.
 
     No other customer accounted for more than 10% of the Predecessor Company's
or the Company's total revenues in 1996, 1997 or 1998.
 
15. LOSS ON SALE OF STATIA TERMINALS SOUTHWEST, INC.
 
     On July 29, 1998, the Company sold Statia Terminals Southwest, Inc.
("Southwest") for $6,500 in cash resulting in net proceeds of approximately
$6,150. The Company retained certain of the pre-closing assets and liabilities
of Southwest consisting primarily of accounts receivable and accrued expenses
and agreed to indemnify the purchaser for certain contingent legal and
environmental matters up to a maximum of $500. No provision has been made in the
Company's financial statements for these contingent matters as management
believes it is not probable the Company will ever be required to provide such
indemnification. The net book value of the assets and liabilities sold on
July 29, 1998, was $7,802. The loss on the sale of Southwest of $1,652 is
included in gain (loss) on sale of property and equipment since substantially
all of the value of Southwest was originally recorded in this account when the
Company was acquired.
 
                                      F-24
<PAGE>

                                    [LOGO]

<PAGE>
                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
     The following table sets forth the cost and expenses, other than the
underwriting discount, payable by the Registrant in connection with the sale of
common shares being registered. All amounts are estimates except the SEC
registration fee, the National Association of Securities Dealers filing fees and
the New York Stock Exchange listing fee.
 
<TABLE>
<CAPTION>
                                                                              AMOUNT TO BE PAID
                                                                              -----------------
<S>                                                                           <C>
SEC registration fee.......................................................        $42,256
NASD filing fee............................................................
NYSE listing fee...........................................................
Printing and engraving.....................................................
Legal fees and expenses....................................................
Accounting fees and expenses...............................................
Blue sky fees and expenses (including legal fees)..........................
Transfer agent fees........................................................
Miscellaneous..............................................................
  Total....................................................................        $
                                                                                   -------
                                                                                   -------
</TABLE>
 
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
Netherlands Antilles
 
     The Articles of Incorporation of the Issuer contain specific provisions
under which members of the board of directors, officers, and attorneys-in-fact
are indemnified against any liability which such person may incur in the
aforementioned capacity as such.
 
ITEM 15. RECENT SALES OF UNREGISTERED SHARES.
 
     In November 1996, the Registrant issued (i) $40 million of preferred stock
to Praxair, (ii) $55 million of preferred stock and common stock to Castle
Harlan and its affiliates, (iii) $4.5 million of preferred stock and common
stock to our senior management and (iv) $1.5 million of preferred stock and
common stock to a consultant of the registrant. Each of these securities were
issued pursuant to the exception provided by Section 4(2) of the Securities Act
of 1933, as amended.
 
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 
     (a)  Exhibits
 
<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER                                                   DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
<S>         <C>  
1+           --   Form of Underwriting Agreement
3.1          --   Articles of Incorporation Statia Terminals Group N.V.
3.2+         --   Proposed Articles of Incorporation of Statia Terminals Group N.V.
4.1*         --   Indenture, dated as of November 27, 1996, among and Statia Terminals International N.V., Statia
                  Terminals Canada, Incorporated, as Issuers, and Statia Terminals Corporation N.V., Statia
                  Terminals Delaware, Inc., Statia Terminals, Inc., Statia Terminals, N.V., Statia Delaware Holdco
                  II, Inc., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Terminals Southwest,
                  Inc., W.P. Company, Inc., Seven Seas Steamship Company, Inc., Seven Seas Steamship Company (Sint
                  Eustatius) N.V., Point Tupper Marine Services Limited, Statia Laboratory Services N.V., Statia
                  Tugs N.V. (collectively, the "Subsidiary Guarantors") and Marine Midland Bank.
4.1a***      --   First Amendment, dated as of August 14, 1997, to the Indenture, dated as of November 27, 1996,
                  among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia Terminals
                  Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada, the
                  Subsidiary Guarantors named therein and Marine Midland Bank.
</TABLE>
 
                                      II-1
<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER                                                   DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
<S>         <C>  
4.1b****     --   Second Amendment, dated as of February 25, 1998, to the Indenture, dated as of November 27, 1996,
                  among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia Terminals
                  Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada, the
                  Subsidiary Guarantors named therein and Marine Midland Bank.
4.2*         --   Form of Guarantee of shares issued pursuant to the Indenture (included in Exhibit 4.1 hereto).
4.3*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals
                  International N.V. and Marine Midland Bank.
4.4          --   Amendment, dated as of December 18, 1998, by and among Statia Terminals Delaware N.V., Marine
                  Midland Bank and Statia Terminals Delaware Inc. to Share Pledge Agreement, dated as of
                  November 27, 1996 by and between Statia Terminals International N.V. and Marine Midland Bank.
4.5*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals, N.V. and
                  Marine Midland Bank.
4.6*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals Corporation
                  N.V. and Marine Midland Bank.
4.7*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Seven Seas Steamship
                  Company, Inc. and Marine Midland Bank.
4.8*         --   Fiduciary Transfer of Tangible Assets Agreement, dated as of November 27, 1996, by and between
                  Statia Terminals, N.V., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia
                  Laboratory Services N.V., Statia Tugs N.V., Seven Seas Steamship Company (Sint Eustatius) N.V. and
                  Marine Midland Bank.
4.9*         --   Fiduciary Assignment of Intangible Assets Agreement, dated as of November 27, 1996, by and between
                  Statia Terminals International N.V., Statia Terminals Corporation N.V., Statia Terminals, N.V.,
                  Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Laboratory Services N.V., Seven
                  Seas Steamship Company (Sint Eustatius) N.V., Statia Tugs N.V. and Marine Midland Bank.
4.10*        --   Deed of Mortgage, dated as of November 27, 1996, by and among Statia Terminals, N.V., Statia
                  Laboratory Services N.V., Saba Trustcompany N.V. and Bicen Development Corporation N.V. as
                  mortgagors and Marine Midland Bank as mortgagee.
4.11*        --   Fixed and Floating Charge Debenture, made as of November 27, 1996, between Statia Terminals
                  Canada, Incorporated and Marine Midland Bank.
4.12*        --   Debenture Delivery Agreement, dated as of November 27, 1996, between Statia Terminals Canada,
                  Incorporated and Marine Midland Bank.
4.13*        --   Shares Pledge Agreement, made as of November 27, 1996, between Statia Terminals Canada,
                  Incorporated and Marine Midland Bank.
4.14*        --   Shares Pledge Agreement, dated as of November 27, 1996, between Statia Terminals Corporation N.V.
                  and Marine Midland Bank.
4.15*        --   Debt Allocation Agreement, dated as of November 27, 1996, between Statia Terminals International
                  N.V. and Statia Terminals Canada, Incorporated.
4.16*        --   United States Shares Pledge and Share Agreement, dated as of November 27, 1996, by and among
                  Statia Terminals International N.V., Statia Delaware Holdco II, Statia Terminals Delaware, Inc.,
                  Statia Terminals, Inc., W.P. Company, Inc. and Marine Midland Bank.
4.17+        --   Registration Rights Agreement between Statia Terminals Group N.V. and [Newco], dated
                                , 1999.
5.1+         --   Opinion of White & Case LLP regarding the legality of the common shares.
5.2+         --   Opinion of Smeets Thesseling van Bokhorst Spigt, special Netherlands Antilles counsel to the
                  Issuer, regarding the legality of the common shares.
8.1          --   Opinion of White & Case LLP regarding certain tax matters (contained in the opinion filed as
                  Exhibit 5.1 hereto).
</TABLE>
 
                                      II-2
<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER                                                   DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
<S>         <C>  
8.2+         --   Opinion of PricewaterhouseCoopers, special Netherlands Antilles tax adviser to the Issuers,
                  regarding certain tax matters.
10.1*        --   Storage and Throughput Agreement, dated as of May 6, 1993 ("Storage and Throughput Agreement").
10.2*        --   Marine Fuel Agreement, dated as of May 6, 1993 ("Marine Fuel Agreement").
10.3*        --   Amendment, dated as of January 1, 1996 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement.
10.3a****    --   Amendment, dated as of December 27, 1996 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement for the year ended December 31, 1997.
10.3b****    --   Amendment, dated as of December 28, 1997 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement for the year ended December 31, 1998.
10.4*        --   Storage and Throughput Agreement, dated as of August 20, 1993.
10.5*        --   Storage and Throughput Agreement, dated as of August 1, 1994.
10.6*        --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and James G. Cameron.
10.7**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Thomas M. Thompson, Jr.
10.8**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Robert R. Russo.
10.9**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and John D. Franklin.
10.10*       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and James F. Brenner.
10.11*       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Jack R. Pine.
10.12*       --   Loan and Share Agreement, dated as of November 27, 1996 between Congress Financial Corporation
                  (Florida) and Statia Terminals, N.V.
10.13*       --   Loan Agreement, dated as of November 27, 1996, by and among Congress Financial Corporation
                  (Canada), Statia Terminals Canada, Incorporated and Point Tupper Marine Services Limited.
10.14****    --   1997 Stock Option Plan with Award Agreements.
21.1         --   Subsidiaries of the Registrant.
23.1         --   Consent of Arthur Andersen LLP.
23.2         --   Consent of White & Case LLP (contained in the opinion filed as Exhibit 5.1 hereto).
23.3         --   Consent of Smeets Thesseling van Bokhorst Spigt (contained in the opinion filed as Exhibit 5.2
                  hereto).
23.4         --   Consent of PricewaterhouseCoopers (contained in Exhibit 8.2 hereto).
23.5         --   Consent of The Independent Liquid Terminals Association.
23.6         --   Consent of The New York Mercantile Exchange.
23.7         --   Consent of Oil Price Information Service.
27.1****     --   Financial Data Schedules (for electronic filing only).
</TABLE>
 
                                                        (Footnotes on next page)
 
                                      II-3
<PAGE>
(Footnotes from previous page)

------------------------
+    To be supplied by amendment.
 
*    Incorporated by reference to the Registration Statement of Statia Terminals
     International N.V. and Statia Terminals Canada, Incorporated on Form S-4,
     dated December 20, 1996, and amendments thereto filed with the U.S.
     Securities and Exchange Commission (Registration Statement No. 333-18455),
     which became effective on February 14, 1997.
 
**   Incorporated by reference to the December 31, 1996 Form 10-K, Dated
     May 13, 1997.
 
***  Incorporated by reference to the September 30, 1997 Form 10-Q, dated
     November 14, 1997.
 
**** Incorporated by reference to the December 31, 1997 Form 10-K, dated
     March 31, 1998.
 
ITEM 17. UNDERTAKINGS.
 
     The undersigned Registrant hereby undertakes to provide to the Underwriter
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.
 
     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation of the Registrant, the Underwriting Agreement, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the shares being registered hereunder, the Registrant will,
unless in the opinion of counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
 
     The undersigned Registrant hereby undertakes that:
 
          (1) For purposes of determining any liability under the Act, the
     information omitted from the form of Prospectus filed as part of this
     Registration Statement in reliance upon Rule 430A and contained in a form
     of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or
     497(h) under the Act shall be deemed to be part of this Registration
     Statement as of the time it was declared effective.
 
          (2) For the purposes of determining any liability under the Act, each
     post-effective amendment that contains a form of Prospectus shall be deemed
     to be a new Registration Statement relating to the shares offered therein,
     and the offering of such shares at that time shall be deemed to be the
     initial bona fide offering thereof.
 
          (3) That, for purposes of determining any liability under the
     Securities Act of 1933, each filing of the Registrant's annual report
     pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
     (and, where applicable, each filing of an employee benefit plan's annual
     report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
     that is incorporated by reference in this Registration Statement shall be
     deemed to be a new Registration Statement relating to the securities
     offered herein, and the offering of such shares at that time shall be
     deemed to be the initial bona fide offering thereof.
 
                                      II-4
<PAGE>
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Deerfield Beach, State of
Florida, on February 12, 1999.
 
                                          STATIA TERMINALS GROUP N.V.

                                          By:        /s/ JAMES G. CAMERON
                                             -----------------------------------
                                            Name: James G. Cameron
                                            Title: Director
 
                                          By:          /s/ JACK R. PINE
                                             -----------------------------------
                                            Name: Jack R. Pine
                                            Title: Secretary
 
                               POWER OF ATTORNEY
 
     Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James G. Cameron, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this Registration Statement.
 
     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on February 12, 1999.
 
<TABLE>
<CAPTION>
                SIGNATURE                                      TITLE
------------------------------------------  -------------------------------------------
 
<S>                                         <C>                                           
           /s/ JAMES G. CAMERON                              Director
------------------------------------------
             James G. Cameron
 
            /s/ JOHN K. CASTLE                               Director
------------------------------------------
              John K. Castle
 
    /s/ ADMIRAL JAMES L. HOLLOWAY III                        Director
------------------------------------------
      Admiral James L. Holloway, III
 
           /s/ FRANCIS JUNGERS                               Director
------------------------------------------
             Francis Jungers
 
          /s/ DAVID B. PITTAWAY                              Director
------------------------------------------
            David B. Pittaway
 
       /s/ JONATHAN R. SPICEHANDLER                          Director
------------------------------------------
         Jonathan R. Spicehandler
 
             /s/ ERNEST VOGES                                Director
------------------------------------------
               Ernest Voges
 
           /s/ JUSTIN B. WENDER                              Director
------------------------------------------
             Justin B. Wender
 
           /s/ JAMES F. BRENNER               Vice President and Treasurer (Principal
------------------------------------------
             James F. Brenner                 Executive Officer, Principal Financial
                                             Officer and Principal Accounting Officer)
</TABLE>
 
                                      II-5
<PAGE>
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER     DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
<S>         <C> 
1+           --   Form of Underwriting Agreement
3.1          --   Articles of Incorporation Statia Terminals Group N.V.
3.2+         --   Proposed Articles of Incorporation of Statia Terminals Group N.V.
4.1*         --   Indenture, dated as of November 27, 1996, among and Statia Terminals International N.V., Statia
                  Terminals Canada, Incorporated, as Issuers, and Statia Terminals Corporation N.V., Statia
                  Terminals Delaware, Inc., Statia Terminals, Inc., Statia Terminals, N.V., Statia Delaware Holdco
                  II, Inc., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Terminals Southwest,
                  Inc., W.P. Company, Inc., Seven Seas Steamship Company, Inc., Seven Seas Steamship Company (Sint
                  Eustatius) N.V., Point Tupper Marine Services Limited, Statia Laboratory Services N.V., Statia
                  Tugs N.V. (collectively, the "Subsidiary Guarantors") and Marine Midland Bank.
4.1a***      --   First Amendment, dated as of August 14, 1997, to the Indenture, dated as of November 27, 1996,
                  among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia Terminals
                  Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada, the
                  Subsidiary Guarantors named therein and Marine Midland Bank.
4.1b****     --   Second Amendment, dated as of February 25, 1998, to the Indenture, dated as of November 27, 1996,
                  among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia Terminals
                  Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada, the
                  Subsidiary Guarantors named therein and Marine Midland Bank.
4.2*         --   Form of Guarantee of shares issued pursuant to the Indenture (included in Exhibit 4.1 hereto).
4.3*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals
                  International N.V. and Marine Midland Bank.
4.4          --   Amendment, dated as of December 18, 1998, by and among Statia Terminals Delaware N.V., Marine
                  Midland Bank and Statia Terminals Delaware Inc. to Share Pledge Agreement, dated as of November
                  27, 1996, by and between Statia Terminals International N.V. and Marine Midland Bank.
4.5*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals, N.V. and
                  Marine Midland Bank.
4.6*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals Corporation
                  N.V. and Marine Midland Bank.
4.7*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Seven Seas Steamship
                  Company, Inc. and Marine Midland Bank.
4.8*         --   Fiduciary Transfer of Tangible Assets Agreement, dated as of November 27, 1996, by and between
                  Statia Terminals, N.V., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia
                  Laboratory Services N.V., Statia Tugs N.V., Seven Seas Steamship Company (Sint Eustatius) N.V. and
                  Marine Midland Bank.
4.9*         --   Fiduciary Assignment of Intangible Assets Agreement, dated as of November 27, 1996, by and between
                  Statia Terminals International N.V., Statia Terminals Corporation N.V., Statia Terminals, N.V.,
                  Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Laboratory Services N.V., Seven
                  Seas Steamship Company (Sint Eustatius) N.V., Statia Tugs N.V. and Marine Midland Bank.
4.10*        --   Deed of Mortgage, dated as of November 27, 1996, by and among Statia Terminals, N.V., Statia
                  Laboratory Services N.V., Saba Trustcompany N.V. and Bicen Development Corporation N.V. as
                  mortgagors and Marine Midland Bank as mortgagee.
4.11*        --   Fixed and Floating Charge Debenture, made as of November 27, 1996, between Statia Terminals
                  Canada, Incorporated and Marine Midland Bank.
4.12*        --   Debenture Delivery Agreement, dated as of November 27, 1996, between Statia Terminals Canada,
                  Incorporated and Marine Midland Bank.
4.13*        --   Shares Pledge Agreement, made as of November 27, 1996, between Statia Terminals Canada,
                  Incorporated and Marine Midland Bank.
</TABLE>
 
<PAGE>
<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER     DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
<S>         <C>   
4.14*        --   Shares Pledge Agreement, dated as of November 27, 1996, between Statia Terminals Corporation N.V.
                  and Marine Midland Bank.
4.15*        --   Debt Allocation Agreement, dated as of November 27, 1996, between Statia Terminals International
                  N.V. and Statia Terminals Canada, Incorporated.
4.16*        --   United States Shares Pledge and Share Agreement, dated as of November 27, 1996, by and among
                  Statia Terminals International N.V., Statia Delaware Holdco II, Statia Terminals Delaware, Inc.,
                  Statia Terminals, Inc., W.P. Company, Inc. and Marine Midland Bank.
4.17+        --   Registration Rights Agreement between Statia Terminals Group N.V. and [Newco], dated             ,
                  1999.
5.1+         --   Opinion of White & Case LLP regarding the legality of the common shares.
5.2+         --   Opinion of Smeets Thesseling van Bokhorst Spigt, special Netherlands Antilles counsel to the
                  Issuer, regarding the legality of the common shares.
8.1          --   Opinion of White & Case LLP regarding certain tax matters (contained in the opinion filed as
                  Exhibit 5.1 hereto).
8.2+         --   Opinion of Coopers & Lybrand LLP, special Netherlands Antilles tax adviser to the Issuers,
                  regarding certain tax matters.
10.1*        --   Storage and Throughput Agreement, dated as of May 6, 1993 ("Storage and Throughput Agreement").
10.2*        --   Marine Fuel Agreement, dated as of May 6, 1993 ("Marine Fuel Agreement").
10.3*        --   Amendment, dated as of January 1, 1996 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement.
10.3a****    --   Amendment, dated as of December 27, 1996 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement for the year ended December 31, 1997.
10.3b****    --   Amendment, dated as of December 28, 1997 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement for the year ended December 31, 1998.
10.4*        --   Storage and Throughput Agreement, dated as of August 20, 1993.
10.5*        --   Storage and Throughput Agreement, dated as of August 1, 1994.
10.6*        --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and James G. Cameron.
10.7**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Thomas M. Thompson, Jr.
10.8**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Robert R. Russo.
10.9**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and John D. Franklin.
10.10*       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and James F. Brenner.
10.11*       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Jack R. Pine.
10.12*       --   Loan and Share Agreement, dated as of November 27, 1996 between Congress Financial Corporation
                  (Florida) and Statia Terminals, N.V.
10.13*       --   Loan Agreement, dated as of November 27, 1996, by and among Congress Financial Corporation
                  (Canada), Statia Terminals Canada, Incorporated and Point Tupper Marine Services Limited.
10.14****    --   1997 Stock Option Plan with Award Agreements.
21.1         --   Subsidiaries of the Registrant.
23.1         --   Consent of Arthur Andersen LLP.
23.2         --   Consent of White & Case LLP (contained in the opinion filed as Exhibit 5.1 hereto).
23.3         --   Consent of Smeets Thesseling van Bokhorst Spigt (contained in the opinion filed as Exhibit 5.2
                  hereto).
</TABLE>
 
<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER     DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
<S>         <C>   
23.4         --   Consent of Coopers & Lybrand LLP (contained in Exhibit 8.2 hereto).
23.5         --   Consent of The Independent Liquid Terminals Association.
23.6         --   Consent of The New York Mercantile Exchange.
23.7         --   Consent of Oil Price Information Service.
27.1****     --   Financial Data Schedules (for electronic filing only).
</TABLE>
 
------------------------
 
+    To be supplied by amendment.
 
*    Incorporated by reference to the Registration Statement of Statia Terminals
     International N.V. and Statia Terminals Canada, Incorporated on Form S-4,
     dated December 20, 1996, and amendments thereto filed with the U.S.
     Securities and Exchange Commission (Registration Statement No. 333-18455),
     which became effective on February 14, 1997.
 
**   Incorporated by reference to the December 31, 1996 Form 10-K, Dated
     May 13, 1997.
 
***  Incorporated by reference to the September 30, 1997 Form 10-Q, dated
     November 14, 1997.
 
**** Incorporated by reference to the December 31, 1997 Form 10-K, dated
     March 31, 1998.
[{"type": "S-1", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 574166}]
{"company-data": {"conformed-name": "STATIA TERMINALS GROUP NV", "cik": "0001078029", "assigned-sic": "", "irs-number": "522003016"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-72317", "film-number": "99537734"}, "business-address": {"street1": "TUMBLEDOWN DICK BAY", "city": "ST EUSTATIUS", "state": "P7", "zip": "00000", "phone": "011599382300"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 12, 1999
 
                                                      REGISTRATION NO. 333-
================================================================================
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------
                          STATIA TERMINALS GROUP N.V.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NETHERLANDS ANTILLES                          4226                               52-2003016
  (STATE OR OTHER JURISDICTION OF         (PRIMARY STANDARD INDUSTRIAL                (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)         CLASSIFICATION CODE NUMBER)               IDENTIFICATION NO.)
------------------------
 
                              TUMBLEDOWN DICK BAY
                      ST. EUSTATIUS, NETHERLANDS ANTILLES
                                (011) 5993-82300
              (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
       INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

                            ------------------------
 
                             CT CORPORATION SYSTEM
                                 1633 BROADWAY
                            NEW YORK, NEW YORK 10019
                                 (212) 664-1666
           (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                   INCLUDING AREA CODE, OF AGENT FOR SERVICE)

                            ------------------------
 
                                   Copies to:
JACK R. PINE, ESQ.                  JOHN W. ERICKSON, ESQ.              MICHAEL ROSENWASSER, ESQ.
       STATIA TERMINALS, INC.                  WHITE & CASE LLP                    ANDREWS & KURTH L.L.P.
  801 WARRENVILLE ROAD, SUITE 200         1155 AVENUE OF THE AMERICAS           805 THIRD AVENUE, 7TH FLOOR
     LISLE, ILLINOIS 60532-1376          NEW YORK, NEW YORK 10036-2787            NEW YORK, NEW YORK 10022
          (630) 435-9540                        (212) 819-8200                        (212) 850-2816
------------------------
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
 
    If any of the shares being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
 
    If this Form is filed to register additional shares for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
 
    If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
PROPOSED
        TITLE OF EACH CLASS                    MAXIMUM AGGREGATE                         AMOUNT OF
     OF SHARES TO BE REGISTERED                OFFERING PRICE(1)                    REGISTRATION FEE(2)
------------------------------------  ------------------------------------  ----------------------------------
Common Shares, par value $0.01 per
share...............................              $152,000,000                            $42,256
(1) Estimated solely for the purpose of computing the amount of the registration
    fee pursuant to Rule 457(o).
 
(2) Calculated pursuant to Rule 457(a) based on an estimate of the proposed
    maximum aggregate offering price.

                            ------------------------
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================
The information in this prospectus is not complete and may be changed.  These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective.  This prospectus is not an
offer to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.
 
PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED FEBRUARY [    ], 1999
 
                                7,600,000 SHARES

                                    [LOGO]
 
                          STATIA TERMINALS GROUP N.V.
                                 COMMON SHARES
                            ------------------------
 
STATIA TERMINALS GROUP N.V. IS OFFERING 7,600,000 COMMON SHARES. THIS IS OUR
INITIAL PUBLIC OFFERING AND NO PUBLIC MARKET CURRENTLY EXISTS FOR OUR COMMON
   SHARES. WE ANTICIPATE THAT THE INITIAL PUBLIC            OFFERING PRICE
              WILL BE BETWEEN $19.50 AND $20.50 PER COMMON SHARE.
 
WE INTEND, TO THE EXTENT WE HAVE SUFFICIENT AVAILABLE CASH, TO PAY TO EACH
HOLDER OF COMMON SHARES A DIVIDEND OF AT LEAST $0.45 PER COMMON SHARE PER
   QUARTER (REFERRED TO IN THIS PROSPECTUS AS THE MINIMUM QUARTERLY
     DIVIDEND) OR $1.80 PER COMMON SHARE ON A YEARLY BASIS. OUR BOARD OF
       DIRECTORS HAS DISCRETION IN PAYING CASH DIVIDENDS AND ESTABLISHING
       RESERVES. DURING A SUBORDINATION PERIOD, WHICH GENERALLY WILL
         NOT END PRIOR TO JUNE 30, 2004, WE WILL PAY THE MINIMUM
           QUARTERLY DIVIDEND TO HOLDERS OF COMMON SHARES BEFORE ANY
                     DIVIDENDS WILL BE PAID TO HOLDERS OF
                              SUBORDINATED SHARES.

                            ------------------------
 
 WE HAVE APPLIED TO LIST THE COMMON SHARES ON THE NEW YORK STOCK EXCHANGE UNDER
                               THE SYMBOL "STV".
                            ------------------------
 
                 INVESTING IN THE COMMON SHARES INVOLVES RISKS.
                    SEE "RISK FACTORS" BEGINNING ON PAGE 10.
 
                            ------------------------
 
                             PRICE $       A SHARE
                            ------------------------
UNDERWRITING
                                                 PRICE TO         DISCOUNTS AND     PROCEEDS TO
                                                  PUBLIC           COMMISSIONS        COMPANY
                                              --------------      --------------    ------------
Per Common Share...................              $                   $                $
Total..............................           $                   $                $
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
 
Statia Terminals Group N.V. has granted the underwriters the right to purchase
up to an additional 760,000 common shares to cover over-allotments. The
underwriters expect the common shares will be ready for delivery in New York,
New York on or about        , 1999.
 
                            ------------------------
 
                           JOINT BOOKRUNNING MANAGERS
 
BEAR, STEARNS & CO. INC.                              MORGAN STANLEY DEAN WITTER
 
                            ------------------------
 
PRUDENTIAL SECURITIES                                      DAIN RAUSCHER WESSELS
                                        A DIVISION OF DAIN RAUSCHER INCORPORATED
 
             , 1999
[LOGO]

                                [MAP GRAPHIC]

 
     You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, common shares only in jurisdictions where offers and sales are permitted.
The information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or of any
sale of the common shares.
 
     Until        , 1999 (25 days after the date of this prospectus), all
dealers that buy, sell or trade in our common shares, whether or not
participating in this offering, may be required to deliver a prospectus. This
delivery requirement is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
TABLE OF CONTENTS
PAGE
                                                                                                            ------
Guide to Reading This Prospectus.........................................................................      iii
Forward-Looking Statements...............................................................................      iii
Enforcement of Certain Civil Liabilities.................................................................      iii
Prospectus Summary.......................................................................................        1
  The Company............................................................................................        1
  Industry...............................................................................................        2
  Business Strategy......................................................................................        3
  The Offering...........................................................................................        4
  Summary Historical and Pro Forma Combined Financial Data...............................................        8
Risk Factors.............................................................................................       10
  Risks Inherent in the Common Shares....................................................................       10
  Risks Inherent in Our Business.........................................................................       14
The Restructuring........................................................................................       17
Use of Proceeds..........................................................................................       19
Capitalization...........................................................................................       20
Dilution.................................................................................................       21
Cash Dividend Policy.....................................................................................       22
  General................................................................................................       22
  Quarterly Dividends of Available Cash..................................................................       23
  Dividends from Operating Surplus During Subordination Period...........................................       23
  Dividends from Operating Surplus After Subordination Period............................................       25
  Incentive Dividends--Hypothetical Annualized Yield.....................................................       25
  Dividends from Interim Capital Transactions............................................................       26
  Adjustment of Minimum Quarterly Dividend and Target Dividend Levels....................................       27
  Distribution of Cash upon Liquidation..................................................................       27
Cash Available for Payment of Dividends..................................................................       29
  Available Cash from Operating Surplus..................................................................       29
  Restrictions Imposed by Netherlands Antilles Law.......................................................       30
  Restrictions Imposed by Indenture......................................................................       30
Unaudited Pro Forma Consolidated Condensed Financial Statements..........................................       32
Selected Consolidated Financial Data.....................................................................       36
Management's Discussion and Analysis of Financial Condition and Results of Operations....................       37
  Overview of Operations.................................................................................       37
  Results of Operations..................................................................................       39
  Liquidity and Capital Resources--Subsequent to the Castle Harlan Acquisition...........................       43
  Liquidity and Capital Resources--Prior to the Castle Harlan Acquisition................................       44
  Capital Expenditures...................................................................................       44
  Environmental, Health and Safety Matters...............................................................       45
  Information Technology and the Year 2000...............................................................       47
  Political, Inflation, Currency and Interest Rate Risks.................................................       47
  Tax Matters............................................................................................       48
  Legal Proceedings......................................................................................       48
  Insurance..............................................................................................       49
  Accounting Standards and Policies......................................................................       49
  Other Matters..........................................................................................       49
  Quantitative and Qualitative Disclosures About Market Risk.............................................       49
Industry.................................................................................................       51
  Terminaling............................................................................................       51
  Bulk Cargo Movement....................................................................................       52
  Blending...............................................................................................       53
  Processing.............................................................................................       53
i
PAGE
                                                                                                            ------
Seasonal and Opportunity Storage.......................................................................       53
  Bunker Sales...........................................................................................       54
Business.................................................................................................       56
  Introduction and History...............................................................................       56
  Competitive Strengths..................................................................................       57
  Business Strategy......................................................................................       58
  Services and Products..................................................................................       59
  Pricing................................................................................................       60
  Information by Location................................................................................       61
  Competition............................................................................................       63
  Customers..............................................................................................       65
  Suppliers..............................................................................................       65
  Environmental, Health and Safety Matters...............................................................       65
  Employees..............................................................................................       67
  Legal Proceedings......................................................................................       68
  Insurance..............................................................................................       68
Management...............................................................................................       69
  Directors and Executive Officers.......................................................................       69
  Executive Compensation.................................................................................       72
  Stock Option Plan......................................................................................       75
  Stockholder Loans......................................................................................       75
  Employment Agreements..................................................................................       75
Security Ownership.......................................................................................       76
Certain Relationships and Related Transactions...........................................................       77
  Sale of Brownsville Terminal...........................................................................       77
  Management Agreement...................................................................................       77
  Consulting Agreement...................................................................................       77
  Stockholders Agreements................................................................................       77
  Loans to Management....................................................................................       77
  Board of Directors.....................................................................................       77
Description of Common Shares.............................................................................       79
  General................................................................................................       79
  Dividends; Distributions Upon Liquidation..............................................................       79
  Voting Rights..........................................................................................       79
  Issuance of Additional Shares..........................................................................       80
  Transfer Agent and Registrar...........................................................................       80
  Restrictions on Ownership and Transfer.................................................................       80
Description of the Subordinated Shares...................................................................       84
  Conversion of Subordinated Shares......................................................................       84
  Distributions upon Liquidation.........................................................................       84
Shares Eligible for Future Sale..........................................................................       85
Taxation.................................................................................................       86
  Netherlands Antilles Taxation..........................................................................       86
  U.S. Federal Income Taxation...........................................................................       86
Plan of Distribution.....................................................................................       90
Experts..................................................................................................       92
Legal Matters............................................................................................       92
Available Information....................................................................................       92
Glossary of Offering Terms...............................................................................      A-1
Pro Forma Available Cash from Operating Surplus..........................................................      B-1
Index to Financial Statements............................................................................      F-1
ii
GUIDE TO READING THIS PROSPECTUS
 
     The following should help you understand some of the conventions and
defined terms used in this prospectus:
 
     o Frequently in this prospectus, we refer to ourselves, Statia Terminals
       Group N.V., as "we," "us," or the "issuer." Generally we refer to
       ourselves as "we" or "us" when discussing our operations. As the context
       requires, references to "we" and "us" include all of our subsidiaries,
       including Statia Terminals International N.V. Generally, we refer to
       ourselves as "the issuer" when discussing our legal entity which will
       issue the common shares, its structure or other matters which require us
       to differentiate such legal entity from the group of companies we use to
       conduct our business.
 
     o For ease of reference, a glossary of certain terms used in this
       prospectus and useful in understanding the common shares we are offering
       in this prospectus is included as Appendix A to this prospectus.
 
     o Unless we state otherwise, the information in this prospectus assumes
       that the underwriters' over-allotment option is not exercised.
 
     o Unless we state otherwise, all references in this prospectus to "$" or
       "dollars" are to United States dollars.
 
                           FORWARD-LOOKING STATEMENTS
 
     Some of the information in this prospectus includes forward-looking
statements. The statements about our plans, strategies, and prospects under the
headings "Prospectus Summary," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" are
forward-looking statements. Additional forward-looking statements can be
identified by the use of forward-looking terminology such as "may," "will,"
"believe," "anticipate," "expect" and "estimate."
 
     All forward-looking statements involve risks and uncertainties. Although we
believe that our plans, intentions and expectations reflected in or suggested by
forward-looking statements are reasonable, we may not achieve them. Important
factors that could cause actual results to differ materially from our forward-
looking statements are included in "Risk Factors" and elsewhere in this
prospectus. These factors include, but are not limited to, fluctuations in the
supply of and demand for crude oil and other petroleum products, changes in the
petroleum terminaling industry, changes in government regulations affecting the
petroleum industry, the financial condition of our customers, adverse weather
conditions, the condition of the U.S. economy, risks associated with our efforts
to comply with year 2000 requirements, and other factors included in this
prospectus.
 
                  ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
 
     Our Netherlands Antilles counsel, Smeets Thesseling van Bokhorst Spigt,
Curacao, has advised us as to risks relating to the enforceability of certain
civil liabilities under the U.S. federal securities laws and related foreign
judgments by courts of the Netherlands Antilles. Our Canadian counsel, Stewart
McKelvey Stirling Scales, has advised us as to risks relating to the
enforceability of such civil liabilities and foreign judgments by courts of the
Province of Nova Scotia. See "Risk Factors--You may not be able to sue us
effectively in the Netherlands Antilles or Canada."
 
     The issuer has appointed CT Corporation System, 1633 Broadway, New York
10019 as its agent for service of process in the United States.
 
                                      iii
PROSPECTUS SUMMARY
 
     This summary highlights information contained elsewhere in this prospectus.
It is not complete and does not contain all of the information that you should
consider before investing in the common shares. You should read the entire
prospectus carefully, including the "Risk Factors" section which begins on
page 10 and the financial statements and the notes to those statements.
 
                                  THE COMPANY
 
     We believe we are one of the five largest independent marine terminaling
companies in the world as measured in terms of storage capacity. We believe we
are the largest independent marine terminal operator handling crude oil imported
into the Eastern United States. Our two terminals are strategically located at
points of minimal deviation from major petroleum shipping routes. We provide
services to many of the world's largest producers of crude oil, integrated oil
companies, oil traders, refiners, petrochemical companies and ship owners. These
customers include Saudi Aramco and Tosco. Our customers transfer their products
to our facilities for subsequent transfer to vessels destined for the Americas
and Europe in a process known as "transshipment".
 
     We own and operate a facility on the island of St. Eustatius, Netherlands
Antilles, and a facility at Point Tupper, Nova Scotia, Canada. At Point Tupper,
we operate the deepest independent ice-free marine terminal on the North
American Atlantic coast. Both of our facilities can accommodate substantially
all of the world's largest fully-laden very-large and ultra-large crude
carriers. Our facilities are qualified to allow us and our customers to
transship products to other destinations with minimal Netherlands Antilles or
Canadian tax effects. In addition to storage, we also provide related services,
including bunkering (the supply of fuel to marine vessels for their own
engines), crude oil and petroleum product blending and processing, and emergency
and spill response.
 
     We have built or renovated 80% of our tank capacity and related facilities
over the last eight years. Since 1990, we have tripled our storage capacity at
St. Eustatius and added an offshore single point mooring buoy with loading and
unloading capabilities. During the period from 1992 through 1994, we converted
and renovated a former refinery site into an independent storage terminal at
Point Tupper. At the end of 1998, our tank capacity was 18.7 million barrels.
 
     Our earnings before interest, income taxes, depreciation and amortization
(EBITDA) have increased from $23.3 million in 1996 to $32.1 million in 1998.
EBITDA is presented to provide additional information related to our ability to
service debts and is not an alternative measure of operating results or cash
flow from operations.
 
     Since November 1996, Castle Harlan Partners II L.P. and certain of its
affiliates have owned the majority of our outstanding voting shares.
 
     Our principal executive offices are located at Tumbledown Dick Bay, St.
Eustatius, Netherlands Antilles, and our telephone number is (011) 5993-82300.
 
                                       1
INDUSTRY
 
     The marine petroleum terminaling industry is primarily engaged in bulk
storage and transshipment of crude oil and petroleum products. Many terminals in
the world are "captive," i.e., they are owned by producers, refiners and
pipeline operators and used almost exclusively for their own operations. The
industry segment in which we compete, and which is described in this prospectus,
excludes these captive terminals. Captive terminal storage is only occasionally
made available to the general market and lacks certain competitive advantages of
independent operations.
 
     Demand for terminaling services depends on the amount of crude oil and
petroleum products imported into the U.S. According to the U.S. Department of
Energy, crude oil and petroleum products imports into the U.S. have increased at
an annual compounded rate of 3.4% from 1993 to 1998. In addition, in 1998 the
average U.S. refinery utilization was near peak capacity at 96% according to the
U.S. Department of Energy. The U.S. Department of Energy projects that the
import requirements of crude oil and refined petroleum products into the U.S.
will increase at an annual compounded rate of 4.3% from 1998 through 2003.
 
     Due to significant economies of scale, crude oil is shipped from the Middle
East, North Sea and West Africa in very-large and ultra-large crude carriers.
These vessels, however, are too large to deliver their cargo directly to many
ports, including virtually all U.S. ports. Therefore, most petroleum companies
shipping by these vessels "lighter" their cargo (the process by which liquid
cargo is transferred to smaller vessels, usually while at sea) or transship
their cargo through a terminal to other smaller vessels. While the direct costs
of transshippment service provided by terminals is typically more expensive than
lightering, terminals offer several advantages over lightering, such as:
 
o reduced risk of environmental damage,
o less dependence on weather conditions,
o increased scheduling certainty,
o ability to access value-added terminal services, and
o ability to store products close to the market.
 
                                       2
[D
BUSINESS STRATEGY
 
     Our business strategy is to manage our operations so we can generate stable
cash flow and pay the minimum quarterly dividend on all of the common and
subordinated shares and to increase our asset values. We intend to pursue this
strategy by:
 
     o Developing Strategic Relationships.  To maximize recurring revenues
generated by charges for storage and throughput (flow of product), we generally
target customers who have a continuing need to store crude oil and petroleum
products to supply a specific demand, such as a refinery or other downstream
distribution to consumers. We seek to understand the long term needs of our
principal customers and potential customers and to modify our facilities and
operations to meet those needs. In this manner, we try to provide long term
logistical solutions for these customers at our strategically located facilities
and thereby become their preferred provider of storage and other terminaling
services.
 
     o Generating Stable Cash Flow Through Long Term Contracts.   We have
generally entered into long term storage contracts with the customers with whom
we have established strategic relationships. These contracts generally have
terms of one to five years plus, in most cases, renewal options. These contracts
provide us with minimum monthly payments and generate a stable cash flow from
both the storage services contracted for and the provision of
terminaling-related services to these customers and the vessels that transport
their products (such as dock charges and standby emergency response fees).
Approximately 71% of our 1998 tank capacity and approximately 64% of our 1998
revenues from storage and throughput (excluding related ancillary services) were
from long term contracts.
 
     o Emphasizing Customer Confidentiality.  In contrast to many of our
competitors, we do not compete with our customers in the business of trading
crude oil and petroleum products. We believe that, in general, our customers
prefer to do business with providers of services who are not competitors in
order to maintain the confidentiality of important business data.
 
     o Capitalizing on a Wide Range of Value-Added Services.  We seek to further
differentiate ourselves from our competitors and to increase revenues through
our comprehensive range of terminaling-related services which include:
 
     o bunkering,
     o crude oil and petroleum product blending and processing,
     o bulk product sales, and
     o various ship services.
 
     o Developing Opportunities at our Point Tupper Facility.  We believe that
there is no competitor in the region that can provide the combination of
services we offer at Point Tupper. We are seeking to attract additional business
from customers in the North Sea and from the emerging production areas located
in Eastern Canada. Due to this initiative, we plan to build new storage
facilities at Point Tupper as the demand increases.
 
     o Expanding Our Bunkering Operations.  We seek to expand our business in
Eastern Canada by capitalizing on our reputation for consistently maintaining a
supply of quality marine fuels and lubricants for delivery to bunkering
customers. In addition, we plan to pursue opportunities to supply bunkers at
additional locations in the Caribbean from our St. Eustatius facility.
 
     o Strategic Acquisitions.  From time to time we will consider opportunities
to acquire other marine terminals and related businesses.
 
                                       3
THE OFFERING
Securities Offered........................  7,600,000 common shares (8,360,000 common shares if the underwriters
                                            exercise their over-allotment option in full).
 
Shares to be Outstanding After This
  Offering................................  7,600,000 common shares (8,360,000 common shares if the underwriters
                                            exercise their over-allotment option in full) and 3,800,000
                                            subordinated shares. In addition, 38,000 incentive rights will be
                                            outstanding.
 
Dividends.................................  o We intend to pay, to the extent there is sufficient available cash,
                                              at least a minimum quarterly dividend of $0.45 per share ($1.80 per
                                              share on a yearly basis). This dividend is subject to adjustment in
                                              certain circumstances.
 
                                            o "Available cash" for any quarter will consist generally of all cash
                                              on hand at the end of such quarter, as adjusted for reserves. We
                                              have discretion in establishing reserves. Further, Netherlands
                                              Antilles law as well as our debt instruments may limit the amount
                                              of available cash.
 
                                            o In general, available cash will be paid as dividends approximately
                                              45 days after each March 31, June 30, September 30 and December 31
                                              to the holders of common and subordinated shares and incentive
                                              rights on the applicable record date. Dividends will be paid in the
                                              following priorities:
 
                                                 First, to the common shares until each has received $0.45 per
                                                 quarter plus any arrearages from prior quarters.
 
                                                 Second, to the subordinated shares until each has received $0.45
                                                 per quarter. Subordinated shares do not accrue dividend
                                                 arrearages.
 
                                            o If dividends of available cash paid to the holders of common and
                                              subordinated shares exceed a target level of $0.45 per share per
                                              quarter, the holders of incentive rights will receive incentive
                                              dividends as described under "Incentive Dividends" below.
 
                                            o The minimum quarterly dividend for the period from the closing of
                                              this offering through June 30, 1999 will be adjusted based on the
                                              actual length of such period.
 
                                            See "Cash Dividend Policy."
 
Deferral of Dividends on Subordinated
  Shares..................................  Payment of the first $6.8 million of dividends (an amount equal to
                                            one year of minimum quarterly dividends on the subordinated shares)
                                            that would have otherwise been paid on the subordinated shares will
                                            be deferred (but deemed paid) until we meet certain financial tests.
 
Incentive Dividends.......................  If quarterly dividends of available cash paid to the common and
                                            subordinated shares exceed specified target dividend levels, the
                                            holders of incentive rights will receive dividends which represent an
                                            increasing percentage of the total dividends we distribute in excess
                                            of the target dividend levels. The dividends to the holders of
                                            incentive rights described above are referred to as the
4
"incentive dividends." See "Cash Dividend Policy--Incentive
                                            Dividends--Hypothetical Annualized Yield."
 
Subordination Period......................  o The subordination period will generally end once we meet certain
                                              financial tests, but it cannot end prior to June 30, 2004.
                                              Generally, these tests will be satisfied when we have earned and
                                              paid the minimum quarterly dividend on all shares for each of the
                                              three preceding four-quarter periods.
 
                                            o When the subordination period ends, all subordinated shares will
                                              convert into common shares on a one-for-one basis and will then
                                              participate equally with the other common shares (subject to the
                                              dividend rights of incentive rights) in future dividends of
                                              available cash. The common shares will then no longer accrue
                                              dividend arrearages.
 
                                            See "Cash Dividend Policy--Dividends from Operating Surplus During
                                            Subordination Period."
 
Early Conversion of Subordinated Shares...  o If the tests set forth above for ending the subordination period
                                              have been met for any quarter ending on or after March 31, 2002,
                                              one-quarter of the subordinated shares will convert into common
                                              shares.
 
                                            o If these tests have been met for any quarter ending on or after
                                              March 31, 2003, an additional one-quarter of the subordinated
                                              shares will convert into common shares. The early conversion of
                                              this second one-quarter of the subordinated shares may not occur
                                              until at least one year following the early conversion of the first
                                              one-quarter of the subordinated shares.
 
                                            Upon early conversion, any unpaid deferred dividends allocable to the
                                            subordinated shares so converted shall be re-allocated pro rata to
                                            the remaining unconverted subordinated shares.
 
                                            See "Cash Dividend Policy--Dividends from Operating Surplus During
                                            Subordination Period."
 
Ability to Issue Additional Shares........  We can issue an additional 12,400,000 common shares (11,640,000 if
                                            the underwriters exercise their over-allotment option in full;
                                            8,600,000 if all of the initially outstanding subordinated shares are
                                            converted into common shares and the underwriters have not exercised
                                            their over-allotment option, 7,840,000 if they have exercised such
                                            option in full) and 4,000,000 subordinated shares without the
                                            approval of the holders of common and subordinated shares. During the
                                            subordination period, however, we cannot, without the approval of the
                                            holders of a majority of the common shares and the holders of a
                                            majority of the subordinated shares, issue:
 
                                            o equity securities ranking prior or senior to the common shares on
                                              dividends or upon a dissolution and liquidation of the issuer; or
 
                                            o more than 4,000,000 common shares (excluding common shares issued
                                              upon exercise of the underwriters' over-allotment option, upon
                                              conversion of subordinated shares, pursuant to employee benefit
                                              plans, upon a combination or subdivision of the common
5
shares, or in connection with the making of certain
                                              acquisitions or capital improvements that result on a pro forma
                                              basis in increased available cash on a per common and subordinated
                                              share basis) or an equivalent number of securities ranking on a
                                              parity with the common shares.
 
                                            See "Description of Common Shares--Issuance of Additional Shares."
 
Restrictions on Ownership
  and Transfer............................  Any sale, transfer, assignment or other disposition of any legal
                                            interest in or right to the common shares or any other event relating
                                            to the common shares (other than the conversion of subordinated
                                            shares into common shares, any subsequent transfer of the common
                                            shares resulting from such conversion or any pledge, encumbrance,
                                            transfer by operation of law, gift, inheritance or marital law of any
                                            legal or beneficial interest in or right to the common shares, as
                                            well as any other sale, transfer, assignment or other disposition of
                                            any beneficial, but not legal, interest in or right to the common
                                            shares) that would result in any person or group owning or being
                                            considered to own more than 9.9% of the total combined voting power
                                            of all classes of stock entitled to vote of the issuer will be null
                                            and void. In addition, any pledge, encumbrance, transfer by operation
                                            of law, gift, inheritance or marital law of any legal or beneficial
                                            interest in or right to the common shares and any other sale,
                                            transfer, assignment or other disposition of any beneficial, but not
                                            legal, interest in or right to the common shares (other than the
                                            conversion of subordinated shares into common shares or any
                                            subsequent transfer of the common shares resulting from such
                                            conversion) that would result in such ownership is prohibited. See
                                            "Description of Common Shares--Restrictions on Ownership and
                                            Transfer."
 
Distributions Upon Liquidation............  If we liquidate during the subordination period, the outstanding
                                            common shares will receive a distribution of our net assets from
                                            liquidation (after satisfaction of our creditors) up to the price
                                            paid for such common shares in this offering plus dividend arrearages
                                            prior to any distributions being made to the subordinated shares or
                                            to the holders of incentive rights (whose distributions will be
                                            allocated as set forth in the issuer's articles). See "Cash Dividend
                                            Policy--Distribution of Cash Upon Liquidation."
 
Use of Proceeds...........................  We estimate that the net proceeds the issuer will receive from the
                                            sale of common shares offered through this prospectus will be
                                            approximately $142.1 million (or $156.3 million if the underwriters
                                            exercise their over-allotment option in full), after deducting
                                            underwriting discounts and commissions, but before deducting fees and
                                            expenses incurred in connection with this offering. The issuer
                                            anticipates using the net proceeds of this offering and other cash on
                                            hand to:
 
                                            o redeem all of the issuer's Series A Preferred Stock, Series B
                                              Preferred Stock, Series C Preferred Stock, Series D Preferred Stock
                                              and Series E Preferred Stock; and
6
o purchase additional capital stock of Statia Terminals International
                                              which will use the proceeds to redeem 25% of its First Mortgage
                                              Notes (35% if the underwriters exercise their over-allotment option
                                              in full).
 
                                            See "Use of Proceeds" and "The Restructuring."
 
Listing...................................  We intend to apply to list the common shares on the New York Stock
                                            Exchange.
 
NYSE Symbol...............................  "STV"
7
SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA
 
     The following table sets forth summary financial data for the periods and
as of the dates indicated. In January 1996, our former parent, CBI Industries,
Inc., was acquired by Praxair, Inc. The statement of operations data for each of
(i) the period from January 1, 1996 through November 27, 1996, (ii) the period
from November 27, 1996 through December 31, 1996, and (iii) the years ended
December 31, 1997 and 1998 have been derived from, and are qualified by
reference to, our audited consolidated financial statements included elsewhere
in this prospectus. The summary unaudited pro forma financial information is
presented for illustrative purposes only and is not necessarily indicative of
the operating results or financial position that would have occurred had
(i) the disposition of Statia Terminals Southwest, Inc., (ii) this offering and
(iii) the restructuring been consummated as of the dates indicated, nor is the
summary unaudited pro forma financial information necessarily indicative of
future operating results or financial position. The summary historical
consolidated financial data set forth below should be read in conjunction with,
and is qualified by reference to, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Unaudited Pro Forma
Consolidated Condensed Financial Statements" and our consolidated financial
statements and accompanying notes thereto and other financial information
included elsewhere in this prospectus.
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                     PRE-CASTLE HARLAN
                                        ACQUISITION                          POST-CASTLE HARLAN ACQUISITION
                                     ------------------   --------------------------------------------------------------------
                                     JANUARY 1, 1996      NOVEMBER 27, 1996
                                        THROUGH             THROUGH                      YEAR ENDED DECEMBER 31,
                                     NOVEMBER 27,            DECEMBER 31,    -------------------------------------------------- 
                                        1996(7)               1996(7)                1997                1998(8)       1998(9)
                                     ------------------   -----------------  -----------------------  -----------  ------------
                                                                                                                   (UNAUDITED)
STATEMENT OF OPERATIONS DATA:
Revenues.........................       $140,998             $14,956              $ 142,499          $ 136,762   $   135,149
  Cost of services and products
    sold...........................        129,915              12,803                122,939            106,688       105,014
  Gross profit.....................         11,083               2,153                 19,560             30,074        30,135
  Administrative expenses..........          8,282                 664                  7,735              9,500         8,150
  Operating income.................          2,801               1,489                 11,825             20,574        21,985
  Loss (gain) on disposition of
    property and equipment.........            (68)                 --                   (109)             1,652            --
  Interest expense.................          4,187               1,613                 16,874             16,851        12,651
  Provision for income taxes.......            629                 132                    780                320           320
  Net income (loss) available to
    holders of common equity.......         (2,682)               (522)                (8,361)            (1,503)        9,698
  Pro forma diluted earnings per
    common and subordinated share
    and incentive rights(1)........            N/A                 N/A                    N/A                N/A          0.85
  Weighted average shares
    outstanding in computing pro
    forma diluted earnings per
    share(1).......................            N/A                 N/A                    N/A                N/A    11,438,000
 
BALANCE SHEET DATA:
  Total assets.....................                                                                      245,610       241,471
  Long-term debt...................                                                                      135,000       101,250
  Redeemable Preferred Stock Series
    A through C....................                                                                       40,000            --
  Preferred Stock Series D and E...                                                                       54,824            --
  Total stockholders' equity.......                                                                       43,331       119,704
 
OPERATING DATA:
  EBITDA(2)........................         20,822               2,452                 22,489             32,092        33,206
  Maintenance capital
    expenditures...................         12,887               1,203                  4,401              9,000         8,906
  Capacity (in thousands of
    barrels)(3)....................         20,387              20,387                 20,387             19,556
  Percentage capacity leased(4)....             68%                 74%                    70%                91%
  Throughput (in thousands of
    barrels)(5)....................         81,994              13,223                118,275            119,502
  Vessel calls(6)..................            922                 108                  1,030              1,027
8
N/A - Not applicable

------------------
 
(1) Earnings per share data including shares outstanding are not included on an
    historical basis as such information would not be representative of the
    capital structure of the issuer before this offering. Shares outstanding
    include incentive rights.
 
(2) EBITDA is defined as the sum of (i) income before income tax provision
    (benefit), (ii) interest expense, (iii) depreciation and amortization of
    certain intangible assets, (iv) certain non-cash charges, and (v) the
    portion of the First Salute Leasing, L.P. lease payments that represents
    interest expense for the periods prior to the November 27, 1996 purchase
    transaction. The amount of the First Salute related interest expense
    excluded from EBITDA was $5,600 for the period ended November 27, 1996.
    EBITDA is presented not as an alternative measure of operating results or
    cash flow from operations (as determined in accordance with generally
    accepted accounting principles), but rather to provide additional
    information related to our debt servicing ability.
 
(3) Computed as average capacity available for lease for the periods indicated.
    One barrel equals forty-two U.S. gallons.
 
(4) Represents the storage capacity leased to third parties weighted for the
    number of days leased in the month divided by the capacity available for
    lease.
 
(5) Throughput volume is the total number of inbound barrels discharged from a
    vessel, tank, rail car or tanker truck, not including across-the-dock or
    tank-to-tank transfers.
 
(6) A vessel call occurs when a vessel docks or anchors at one of our terminal
    locations in order to load and/or discharge cargo and/or to take on bunker
    fuel. Such dockage or anchorage is counted as one vessel call regardless of
    the number of activities carried on by the vessel. A vessel call also occurs
    when we sell and deliver bunker fuel to a vessel not calling at our
    terminals for the above purposes.
 
(7) Prior to January 12, 1996, we were a wholly owned subsidiary of CBI
    Industries. On January 12, 1996, pursuant to the merger agreement dated
    December 22, 1995, CBI Industries became a wholly owned subsidiary of
    Praxair. This transaction was reflected in our consolidated financial
    statements as a purchase, effective January 1, 1996. On November 27, 1996,
    Castle Harlan, members of our management and others acquired us from
    Praxair. This transaction is reflected in our consolidated financial
    statements effective November 27, 1996 as a purchase. The application of
    purchase accounting at each acquisition date resulted in changes to the
    historical cost basis of accounting for certain assets. Accordingly, the
    information provided for periods before and after each of these transactions
    is not comparable.
 
(8) Includes the operations of Statia Terminals Southwest, Inc. through
    June 30, 1998.
 
(9) Gives pro forma effect to (i) the disposition of Statia Terminals Southwest,
    (ii) elimination of the Castle Harlan management fee, (iii) this offering,
    (iv) the restructuring, (v) the use of the net proceeds from this offering
    as described under "Use of Proceeds" and (vi) the transfer of all of the
    shares of Petroterminal de Panama, S.A. currently owned by the issuer to a
    newly-formed corporation owned by our current owners other than Praxair
    (collectively, the "pro forma transactions"), as if the pro forma
    transactions had occurred on January 1, 1998. For balance sheet data, gives
    pro forma balance sheet effect to the pro forma transactions as if they
    occurred on December 31, 1998.
 
                                       9
RISK FACTORS
 
     You should carefully consider the following factors and other information
in this prospectus before deciding to invest in common shares. The risks and
uncertainties described below are not the only ones facing us. Additional risks
and uncertainties not presently known to us or that we currently deem immaterial
may also impair our business operations.
 
     If any of the following risks actually occur, our business, financial
condition, results of operations or ability to pay the minimum quarterly
dividend could be materially adversely affected. In such case the trading prices
of the common shares could decline, and you may lose all or part of your
investment.
 
                      RISKS INHERENT IN THE COMMON SHARES
 
    WE MAY NOT BE ABLE TO PAY AS MUCH IN DIVIDENDS TO YOU AS WE CURRENTLY
    INTEND.
 
     Although the issuer will pay dividends equal to all of its available cash,
we can give no assurances regarding the amounts of available cash that we will
generate. Therefore, we cannot guarantee that the issuer will pay the minimum
quarterly dividend. The actual amounts of cash dividends may fluctuate and will
depend upon numerous factors relating to our business which may be beyond our
control, including:
 
     o cash flow generated by operations,
     o required principal and interest payments on our debt,
     o restrictions contained in our debt instruments,
     o issuances of debt and equity securities by us,
     o fluctuations in working capital,
     o capital expenditures,
     o adjustments in reserves (including the expenditure of unfunded previously
       reserved amounts),
     o prevailing economic conditions, and
     o financial, business and other factors.
 
     Cash dividends are dependent primarily on our operating cash flow, draws
from our cash on hand and working capital borrowings, and not solely on our
profitability, which is affected by non-cash items. Therefore, cash dividends
might be paid during periods when we record losses and might not be paid during
periods when we record profits. The issuer's articles give it discretion in
establishing reserves for the proper conduct of our business, and the exercise
of that discretion will affect the amount of available cash.
 
     We will need approximately $20.5 million of available cash from our
operating surplus to pay the minimum quarterly dividend for four quarters on the
common and subordinated shares to be outstanding immediately after this offering
($13.7 million for the common shares and $6.8 million for the subordinated
shares). The amount of pro forma available cash from our operating surplus
generated during the year ended December 31, 1998 was approximately
$12.1 million. This amount would not have been sufficient to allow the issuer to
pay the minimum quarterly dividend on all of the common and subordinated shares
with respect to such period. For the calculation of pro forma available cash
from our operating surplus had the restructuring to be consummated at the
closing of this offering been completed on January 1, 1998, see "Cash Available
for Payment of Dividends" and Appendix B.
 
     Because our terminaling activities are cyclical, it is likely that we will
make additions to reserves during certain quarters in order to fund operating
expenses, capital expenditures, interest and principal payments, and cash
dividends to holders of common and subordinated shares in future quarters. The
effect of the establishment of such reserves will be to increase the likelihood
that the issuer will pay the minimum quarterly dividend in any given quarter but
to decrease the likelihood that the issuer will pay any amount in excess of the
minimum quarterly dividend in such quarter. As a result of these and other
factors, we can give no assurances regarding the actual levels of cash dividends
the issuer will pay to holders of common and subordinated shares.
 
    THE INDENTURE MAY LIMIT THE AMOUNT OF DIVIDENDS WE CAN PAY TO YOU.
 
     The issuer depends entirely on dividends from Statia Terminals
International to pay you. Statia Terminals International's ability to pay
dividends is restricted by the indenture relating to its First Mortgage Notes
which generally requires, among other things, that it pay dividends:
 
     o only out of a pool equal to (i) 50% of its accrued consolidated net
       income (less 100% of accrued consolidated net loss) since November 27,
       1996 plus (ii) the net cash proceeds of any sale of its capital stock;
       and
 
                                       10
o only when its consolidated fixed charge coverage ratio is at least 2
       to 1.
 
     We will redeem 25% of the First Mortgage Notes (35% if the underwriters
exercise their over-allotment option in full) with the proceeds of this
offering. We currently intend to redeem the remainder of the First Mortgage
Notes on or around November 15, 2000. We expect that we will not be able to
redeem the First Mortgage Notes at November 15, 2000 or even at maturity on
November 15, 2003 based on our projected operating cash flow. Therefore, we will
need to refinance the First Mortgage Notes. We can give no assurances that we
will be able to refinance the First Mortgage Notes on terms acceptable to us, if
at all. The terms of the debt incurred in connection with any refinancing may
also include terms which will, under certain circumstances, limit the issuer's
ability to pay dividends.
 
     Although we can give no assurances, we believe that, at least through
November 15, 2000, the indenture restrictions will permit Statia Terminals
International to pay sufficient dividends to the issuer to cover at least the
minimum quarterly dividend that the issuer would be required to pay on the
common and subordinated shares out of available cash from operating surplus. See
"Cash Available For Payment of Dividends--Indenture Restrictions."
 
    OUR LEVEL OF INDEBTEDNESS MAY LIMIT THE AMOUNT OF DIVIDENDS WE CAN PAY TO
    YOU.
 
     As of December 31, 1998, our total long-term indebtedness on a pro forma
basis, assuming that the restructuring and the issuance of the common and
subordinated shares had already occurred, was $101.3 million. Subject to the
restrictions in Statia Terminals International's indenture relating to the First
Mortgage Notes and our $17.5 million revolving credit facility, we may incur
additional indebtedness from time to time to provide working capital, to finance
acquisitions or capital expenditures or for other corporate purposes.
 
     Our level of indebtedness could have important consequences to holders of
the common shares, because of the following:
 
     o a substantial portion of our cash flow from operations must be dedicated
       to debt service and will not be available for other purposes;
 
     o our ability to obtain additional debt financing in the future for working
       capital, capital expenditures or acquisitions may be limited; and
 
     o our level of indebtedness could limit our flexibility in reacting to
       changes in the industry and economic conditions generally.
 
     The issuer's ability to pay dividends on the common shares and our ability
to satisfy our other debt obligations will depend upon our future operating
performance, which will be affected by prevailing economic conditions and
financial, business and other factors, most of which are beyond our control. If
we have an unexpected downturn in our operations, we could be forced to adopt an
alternative strategy that may include reducing or eliminating dividends,
reducing or delaying capital expenditures, selling assets, restructuring or
refinancing our indebtedness or seeking additional equity capital. We can give
no assurances that we could effect any of these strategies on satisfactory
terms, if at all. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources--Subsequent
to the Castle Harlan Acquisition."
 
    NETHERLANDS ANTILLES LAW MAY LIMIT THE AMOUNT OF DIVIDENDS WE CAN PAY TO
    YOU.
 
     The issuer must comply with certain Netherlands Antilles laws governing
when we may pay dividends to the holders of common and subordinated shares and
incentive rights. Generally, we may not pay you unless our equity exceeds the
nominal value of our issued and outstanding capital. See "Cash Available for
Payment of Dividends--Restrictions Imposed by Netherlands Antilles Law."
 
    WE MAY NOT DO AS WELL AS WE PROJECT AND, THEREFORE, YOU MAY NOT RECEIVE
    DIVIDENDS.
 
     We have relied on certain assumptions concerning our future operations in
establishing the terms of this offering, including the number and initial public
offering price of the common shares, the amount of subordinated shares and
incentive rights to be received by the current holders of the issuer's equity
securities and the minimum quarterly dividend. See "Cash Available for Payment
of Dividends--Available Cash from Operating Surplus."
 
     Whether our assumptions are realized, in many cases, is not within our
control and cannot be predicted with any degree of certainty. In the event that
our assumptions are not realized, the actual amount of available cash from
operating surplus that we generate could be substantially less than that
currently expected and may be less in any quarter than that required to pay the
minimum
 
                                       11
quarterly dividend. See "Cash Available for Payment of Dividends."
 
    YOU MAY EXPERIENCE DILUTION OF YOUR COMMON SHARES.
 
     Based on the circumstances of each case, the issuance of additional common
shares or securities ranking senior to the common shares may:
 
     o dilute the value of the interests of the then-existing holders of common
       shares in our net assets;
 
     o dilute the interests of holders of common shares in dividends and other
       distributions by us; and
 
     o modify the preference of holders of common shares upon dissolution and
       liquidation of the issuer.
 
     During the subordination period, we are authorized, in our discretion, to
issue up to 4,000,000 additional common shares (in addition to common shares
issued upon the exercise of the underwriters' over-allotment option, upon
conversion of subordinated shares, pursuant to employee benefit plans, upon
combination or subdivision of common shares or in connection with certain
combinations and capital improvements). After the end of the subordination
period, we may issue the authorized but unissued common shares, without the
approval of the holders of the common shares.
 
    ISSUANCE OF ADDITIONAL COMMON SHARES MAY REDUCE THE DIVIDENDS ON YOUR
    SHARES.
 
     Our ability to pay the full minimum quarterly dividend on all the common
shares may be reduced by any increase in the number of outstanding common
shares, whether as a result of the conversion of subordinated shares or as a
result of future issuances of common shares. Any of these actions will increase
the percentage of the aggregate minimum quarterly dividend payable to the
holders of common shares and decrease the percentage of the aggregate minimum
quarterly dividends payable to the holders of subordinated shares, which will in
turn have the effect of:
 
     o reducing the amount of support provided by the subordination feature of
       the subordinated shares; and
 
     o increasing the risk that we will be unable to pay the minimum quarterly
       dividend in full on all the common shares.
 
    OUR BOARD OF DIRECTORS MAY HAVE CONFLICTS OF INTEREST WITH YOU.
 
     Some of the issuer's directors may hold, directly or indirectly,
subordinated shares and/or incentive rights. Decisions of the board of directors
with respect to the amount and timing of asset purchases and sales, cash
expenditures, borrowings, issuances of additional common shares and the
creation, reduction, cancellation or increase of reserves in any quarter will
affect whether, or the extent to which, there is sufficient available cash from
our operating surplus to meet the minimum quarterly dividend and target dividend
levels on all common and subordinated shares in a given quarter or in subsequent
quarters. In addition, actions by the board of directors may have the effect of
enabling the holders of subordinated shares or incentive rights to receive
dividends on subordinated shares or incentive dividends or hastening the
expiration of the subordination period or the conversion of subordinated shares
into common shares.
 
     Netherlands Antilles law protecting the interests of minority shareholders
may not be as protective in all circumstances as the law protecting minority
shareholders in U.S. jurisdictions. In addition, under Netherlands Antilles law,
liability of corporate directors is basically limited to cases of willful
malfeasance and gross negligence. The issuer's articles permit it to indemnify
its directors except in cases where the director acted in bad faith or in a
manner in which he did not reasonably believe to be in, or not opposed to, the
best interests of the issuer.
 
    YOU WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION OF YOUR COMMON
    SHARES.
 
     The assumed initial public offering price of $20.00 per common share
exceeds the pro forma tangible net book value of $10.15 per common share. You
will incur immediate and substantial dilution of tangible net book value of
$9.85 per common share. See "Dilution."
 
    YOU MAY NOT BE ABLE TO SUE US EFFECTIVELY IN THE NETHERLANDS ANTILLES OR
    CANADA.
 
     Netherlands Antilles
 
     The issuer is incorporated under the laws of the Netherlands Antilles, and
all of its operating assets are located outside the U.S. Accordingly, it may not
be possible to effect service of process on the issuer within the U.S. other
than through its appointed agent for service of process. In addition, it may be
difficult for holders of common shares to
 
                                       12
realize in the Netherlands Antilles upon a judgment rendered against the issuer
in a U.S. court.
 
     We have been advised by our Netherlands Antilles counsel, Smeets Thesseling
van Bokhorst Spigt as follows. Legal actions may be instituted directly against
the issuer in the Netherlands Antilles. However, to enforce in the Netherlands
Antilles a judgment for the payment of money obtained against the issuer in U.S.
courts, an enforcement action must be brought before a competent Netherlands
Antilles court. A Netherlands Antilles court will generally recognize a U.S.
judgment if:
 
     o certain procedural protections provided in the Netherlands Antilles have
       been observed; and
 
     o the judgment obtained in the U.S. and the proceedings related to it are
       not contrary to natural justice or public policy in the Netherlands
       Antilles.
 
If a U.S. judgment is not recognized by a Netherlands Antilles court,
relitigation of the merits will be required in order to obtain enforcement of
the judgment in the Netherlands Antilles. In addition, it is unlikely that:
 
     o the courts of the Netherlands Antilles would enforce judgments entered by
       U.S. courts predicated upon the civil liability provisions of the U.S.
       federal securities laws; or
 
     o actions can be brought in the Netherlands Antilles in relation to civil
       liabilities predicated upon the U.S. federal securities laws.
 
     Canada
 
     Our subsidiary, Statia Terminals Canada, Incorporated is incorporated under
the laws of Nova Scotia, Canada, and all of its assets are located outside the
U.S., primarily in the Province of Nova Scotia, Canada. Accordingly, it may not
be possible to effect service of process on Statia Terminals Canada within the
U.S. other than through its appointed service of process agent. In addition, it
may be difficult for holders of common shares to realize in the U.S. upon a
judgment obtained against Statia Terminals Canada in a U.S. court.
 
     We have been advised by our Nova Scotia counsel, Stewart McKelvey Stirling
Scales as follows. Legal actions may be instituted directly against Statia
Terminals Canada in the Province of Nova Scotia and a Nova Scotia court would
recognize and enforce a final judgment obtained against Statia Terminals Canada
in a U.S. court provided that:
 
     o the U.S. court validly took jurisdiction under Nova Scotia law;
 
     o the judgment was not obtained by fraud, or in a manner contrary to
       natural justice and its enforcement would not be inconsistent with public
       policy, as applied by a Nova Scotia court; and
 
     o the enforcement of such judgment in Nova Scotia does not constitute
       directly or indirectly the enforcement of U.S. penal law.
 
Such Nova Scotia counsel has also advised that there is some doubt that:
 
     o the courts of the Province of Nova Scotia would enforce judgments entered
       by U.S. courts predicated upon the civil liability provisions of the U.S.
       federal securities laws; and
 
     o actions can be brought in the Province of Nova Scotia in relation to
       civil liabilities predicated upon the U.S. federal securities laws.
 
    CASTLE HARLAN AND OUR MANAGEMENT HAVE PRACTICAL CONTROL OF US.
 
     Upon the closing of the offering, all of the subordinated shares and
incentive rights will be transferred to [Newco], a [Netherlands Antilles]
corporation which will be controlled by Castle Harlan, the directors and
executive officers of the issuer and their affiliates. As a result, [Newco] will
own approximately 33% of the outstanding shares entitled to vote. As a result of
this ownership, restrictions on transfer and certain provisions of Netherlands
Antilles law, [Newco] will be able to exercise practical control over most
matters requiring shareholder approval, including the election of directors. See
"Management", "Security Ownership" and "Description of Common Shares."
 
    A NON-NEGOTIATED CHANGE OF CONTROL IS UNLIKELY.
 
     Certain provisions of Netherlands Antilles law and the issuer's articles
would make it more difficult for a third party to acquire control of the issuer
without the cooperation of [Newco], even if such change in control would be
beneficial to shareholders. See "Description of Common Shares." 
 
    THERE IS NO PRIOR MARKET FOR OUR SHARES.
 
     We do not know the extent to which investor interest in us will lead to
development of a trading 

                                       13
market or how quickly you can sell your shares. Prior to the offering, there has
been no public market for the common shares. We have applied to list the common
shares on the New York Stock Exchange. See also "Description of Common
Shares--Restrictions on Ownership and Transfer" and "Plan of Distribution."
 
                         RISKS INHERENT IN OUR BUSINESS
 
    CHANGE IN DEMAND FOR U.S. CRUDE OIL AND PETROLEUM PRODUCT IMPORTS AFFECTS
    OUR FINANCIAL RESULTS.
 
     Our operations are largely dependent on the demand for crude oil and
petroleum products imported into the U.S. The demand for imported crude oil and
petroleum products in the U.S. is influenced by a number of factors, including
weather conditions, economic growth, pricing of petroleum products and
substitute products, government policy, transportation costs, domestic
production and refining capacity and utilization. Changes in government
regulation that affect the petroleum industry, including the imposition of a
surcharge on imported oil or an increase in taxes on crude oil and oil products,
could adversely affect our business. These factors are beyond our control, and
we can give no assurances that conditions affecting supply and demand of crude
oil and petroleum products favorable to our business and financial condition and
our ability to pay the minimum quarterly dividend will exist.
 
    THE FORWARD PRICING STRUCTURE FOR CRUDE OIL AND PETROLEUM PRODUCTS AND THE
    WORLD TANKER MARKET AFFECTS OUR FINANCIAL RESULTS.
 
     When the forward prices for crude oil and petroleum products that we store
fall below spot prices for any length of time, customers using our storage
facilities are less likely to store such product, thereby reducing storage
utilization levels. This market condition is referred to as "backwardation."
When forward prices exceed spot prices for any length of time the market is said
to be in "contango." When the crude oil and petroleum products market is in
contango for a specific product by an amount exceeding storage costs, time value
of money, cost of a second vessel and the cost of loading and unloading at the
terminal, the demand for storage capacity at our terminals for such product
usually increases. Thus, our operations are also dependent on the availability
of and the reasonableness of charter rates of very-large and ultra-large crude
carriers to transfer products to our facilities and of smaller vessels to
subsequently transfer products from our facilities to downstream users.
 
     Historically, heating oil has been in contango during the summer months and
gasoline has been in contango during the winter months. We can give no
assurances that the market will follow this pattern in the future. For example,
from the beginning of 1995 to late 1997, all segments of the crude oil and
petroleum products markets were generally in backwardation. As a result, we
believe that utilization of our facilities was adversely impacted during that
period. Since late 1997 all segments of the crude oil and petroleum products
markets have generally been in contango, and consequently we are currently
experiencing an increase in the utilization of our facilities. However, we can
give no assurances that such market conditions will continue.
 
    CERTAIN CUSTOMERS AND CERTAIN LONG TERM CONTRACTS ARE IMPORTANT TO OUR
    FINANCIAL RESULTS.
 
     Revenues from Bolanter Corporation N.V. (an affiliate of Saudi Aramco)
constituted approximately 8.9% (plus an additional 7.7% generated by the
movement of Bolanter's products through our St. Eustatius terminal) of our total
1998 revenues. Revenues from Tosco Corporation constituted approximately 7.1%
(plus an additional 1.9% generated by the movement of Tosco's products through
our Point Tupper terminal) of our total 1998 revenues. We can give no assurances
that these long-term contracts will be renewed at the end of their terms,
January 31, 2000 and July 31, 1999, respectively. If these contracts were not
renewed or replaced or we otherwise lost any significant portion of our revenues
from these two customers, such non-renewal/replacement or loss could have a
material adverse effect on our business, financial condition and ability to pay
the minimum quarterly dividend. We also have long-term contracts with other key
customers, and there can be no assurance that these contracts will be renewed at
the end of their terms or that we will be able to enter into other long-term
contracts on terms favorable to us, or at all. See "Business--Customers."
 
                                       14
THE BENEFICIAL TAX STATUS OF OUR FACILITIES MAY END.
 
     Our St. Eustatius facility has qualified for designation as a free trade
zone and our Point Tupper facility has qualified for designation as a customs
bonded warehouse. Such status allows customers and us to transship commodities
to other destinations with minimal Netherlands Antilles or Canadian tax effects.
 
     Pursuant to a Free Zone and Profit Tax Agreement with the island government
of St. Eustatius which is scheduled to expire on December 31, 2000, we are
subject to a minimum annual tax of 500,000 Netherlands Antilles guilders
(approximately $282,000). This agreement provides that any amounts paid to meet
the minimum annual payment will be available to offset future tax liabilities
under the agreement to the extent that the minimum annual payment is greater
than 2% of taxable income. We can give no assurances that this agreement will be
extended on terms favorable to us, or at all.
 
     In Canada, the customs bonded warehouse designation expires annually. We
routinely renew this designation through compliance with regulations, including
providing evidence of bonding arrangements and fee payments. It is possible that
we could lose our customs bonded warehouse designation in Canada through non-
compliance, inability to obtain the necessary bonding arrangements or as a
result of significant changes in regulations.
 
     Should these free trade zone or custom bonded warehouse designations
terminate, our business, financial condition and ability to pay the minimum
quarterly dividend may be adversely impacted.
 
    CANADIAN INCOME TAXES COULD INCREASE.
 
     Certain net operating loss and investment tax credit carryforwards of
Statia Terminals Canada are scheduled to expire at various times through the
year 2002. We expect that in 1999, these carryforwards will reduce our Canadian
income tax expense by approximately $2.3 million. Therefore, if the operations
of Statia Terminals Canada do not produce increasing after-tax cash flow
sufficient to offset any increase in taxes resulting from such expirations, or
if we do not otherwise offset any shortfall in available cash required to pay
the minimum quarterly dividend, the issuer may not be able to pay the full
amount of the minimum quarterly dividend on all of the common and subordinated
shares.
 
    ADVERSE WEATHER CAN NEGATIVELY AFFECT OUR OPERATIONS.
 
     Our operations are disrupted from time to time by adverse weather
conditions. Since its construction in 1982, our St. Eustatius facility has been
adversely impacted by six hurricanes. The three that most seriously affected us
occurred in the third and fourth quarters of 1995. Operations at the St.
Eustatius facility ceased for varying lengths of time from August 28, 1995 to
October 3, 1995, and during September 1995, vessel calls at the St. Eustatius
facility decreased substantially. Through December 31, 1997, we spent
$20.6 million on repairs and improvements related to the 1995 hurricanes of
which $12.6 million was covered by insurance. Hurricane Georges in September
1998 caused approximately $5.8 million in damage of which all but $0.5 million
was covered by insurance. We have no business interruption insurance. See
"Business --Insurance" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
 
    WE HAVE SEVERAL TYPES OF COMPETITORS.
 
     Our principal competition with respect to transshipment is from lightering.
Under current market conditions, lightering is generally less expensive than
terminaling, and it is possible that an increasing percentage of transshipment
could be handled through lightering. In addition, because the independent marine
terminaling industry is fragmented, we compete both with large, well-financed
companies that own many terminal locations and with small companies that may own
a single terminal location. Certain companies offering marine terminaling
facilities have more storage capacity and greater financial and other resources
than we do. We believe that most of our principal competitors are less
highly-leveraged than we are and may therefore have greater financing and
operating flexibility than we do. We can give no assurances that we will not
encounter increased competition in the future, which could have a material
adverse effect on our business, financial condition and our ability to pay the
minimum quarterly dividend.
 
    ENVIRONMENTAL RISKS AND NEW GOVERNMENTAL REGULATION MAY NEGATIVELY AFFECT
    US.
 
     Our operations and properties are subject to laws and regulations in our
geographic areas of operation relating to environmental, health and safety
matters. The nature of our operations and previous operations by others at our
facilities exposes us to the risk of claims with respect to environmental,
health and safety matters, and we 
 
                                       15
can give no assurances that we will not incur material costs or liabilities in
connection with such claims. The costs associated with our planned environmental
investigation, remediation and upgrading at the Point Tupper terminal could be
substantial, although we believe most of such costs are the responsibility of
Praxair under an indemnity given in connection with the Castle Harlan
acquisition. We believe that the remainder are covered by accruals. As of
December 31, 1998, our environmental accruals were approximately $1.5 million.
We do not have cash reserves set aside equal to such accruals. In addition,
future events, such as the discovery of environmental conditions, changes in
existing laws and regulations or their interpretation, the issuance of penalties
for regulatory violations, or more vigorous enforcement policies of regulatory
agencies, may give rise to unexpected expenditures or liabilities that could be
material to our business, financial condition and our ability to pay the minimum
quarterly dividend. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Environmental, Health and Safety Matters"
and "Business--Environmental, Health and Safety Matters."
 
    PRAXAIR MAY DISPUTE OR DELAY PAYMENTS WITH RESPECT TO ITS INDEMNITY
    OBLIGATIONS TO US.
 
     When Castle Harlan acquired us from Praxair, Praxair agreed to indemnify us
from the costs of certain matters, including certain environmental, tax and
legal matters. Any dispute or delay in payment under Praxair's indemnification
obligations to us could affect our ability to pay the minimum quarterly dividend
during a particular quarter or quarters.
 
    WE MAY NOT BE READY FOR YEAR 2000 PROBLEMS.
 
     We can give no assurance that our programs designed to minimize the impact
of the transition to the year 2000 on our electronic date-sensitive equipment
will be completely successful. If they are not, the date change from 1999 to
2000 could materially affect our results of operations, financial condition or
our ability to pay the minimum quarterly dividend. Our operations may also be
negatively affected by the inability of third parties with whom we deal to
manage this problem in a timely manner. The full extent of any adverse impact is
impossible to determine. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Information Technology and the Year 2000."
 
                                       16
THE RESTRUCTURING
 
     In November 1996 Castle Harlan, our management and others acquired control
of us from Praxair. As part of this acquisition:
 
     o the issuer issued $40 million of preferred stock to Praxair;
 
     o the issuer issued $55 million of preferred stock and common stock to
       Castle Harlan and its affiliates;
 
     o the issuer issued $4.5 million of preferred stock and common stock to
       certain members of our management;
 
     o the issuer issued $1.5 million of preferred stock and common stock to a
       consultant of ours;
 
     o Statia Terminals International received a capital contribution of
       $98.5 million from the issuer, consisting of $55.5 million of cash and
       $43.0 million of equity in certain of our subsidiaries; and
 
     o Statia Terminals International and Statia Terminals Canada, Incorporated
       issued $135.0 million of First Mortgage Notes, Series A (which were
       subsequently exchanged for the First Mortgage Notes).
 
We used a portion of the contributed capital and proceeds from the issuance of
the First Mortgage Notes, Series A (i) to pay the cash portion of the purchase
price of approximately $174.1 million to Praxair, and (ii) to pay $16.0 million
of commissions, fees and expenses. In connection with but prior to the
acquisition, Praxair repaid all of our third-party indebtedness, including an
off-balance sheet lease obligation, bank debts, preferred stock from a former
affiliate and related party advances.
 
     All of the currently outstanding stock of the issuer is owned as follows:
 
     o Praxair holds 20,000 shares of Series A Preferred Stock, 10,000 shares of
       Series B Preferred Stock and 10,000 shares of Series C Preferred Stock;
 
     o Castle Harlan and its affiliates hold 13,850 shares of Series D Preferred
       Stock, 33,750 shares of Series E Preferred Stock and 33,750 shares of
       common stock;
 
     o certain directors and members of our management hold 4,724 shares of
       Series E Preferred Stock and 4,724 shares of common stock and options to
       acquire an additional 6,145 shares of common stock; and
 
     o other shareholders hold 2,500 shares of Series E Preferred Stock and
       2,500 shares of common stock.
 
There are no subordinated shares or incentive rights outstanding, and the
issuer's currently outstanding common stock, all of which will be reclassified
by the issuer at the closing of this offering (as described in the next
paragraph), does not have the same rights and provisions as the common shares
offered through this prospectus.
 
     Upon the issuance of the common shares at the closing of this offering the
issuer will redeem or reclassify all of its currently outstanding capital stock
and issue the subordinated shares and incentive rights as follows:
 
     o using the net proceeds of this offering, the issuer will redeem all of
       its Series A Preferred Stock, Series B Preferred Stock, Series C
       Preferred Stock, Series D Preferred Stock and Series E Preferred Stock at
       their respective liquidation preferences plus all cumulative unpaid
       dividends on such preferred stock;
 
     o the issuer will reclassify the 47,119 shares of its outstanding common
       stock (which will include 6,145 shares of common stock to be issued upon
       exercise of options at or by the closing) as 471,190 subordinated shares;
 
     o the issuer will issue an additional 3,328,810 subordinated shares plus
       38,000 incentive rights to the holders of the remaining outstanding
       common stock; and
 
     o all of the subordinated shares and incentive rights will be transferred
       to [Newco] by the holders thereof.
 
                                       17
SHARES ISSUED AND OUTSTANDING                                             SHARES AND INCENTIVE RIGHTS TO BE
   PRIOR TO THE RESTRUCTURING AND        ACTION TO BE TAKEN PURSUANT TO       ISSUED AND OUTSTANDING AFTER THE
              OFFERING                   THE RESTRUCTURING AND OFFERING          RESTRUCTURING AND OFFERING
------------------------------------  ------------------------------------  ------------------------------------
20,000 Series A ....................  Redeemed                              None
  Preferred Shares
 
10,000 Series B ....................  Redeemed                              None
  Preferred Shares
 
10,000 Series C ....................  Redeemed                              None
  Preferred Shares
 
13,850 Series D ....................  Redeemed                              None
  Preferred Shares
 
40,974 Series E ....................  Redeemed                              None
  Preferred Shares
 
47,119 shares of common stock
  (after exercise of options) ......  Reclassified                          471,190 subordinated shares
 
                                      Additional issuance to holders of     3,328,810 subordinated shares
                                      outstanding common stock              38,000 incentive rights
 
                                      Public offering                       7,600,000 common shares
18
USE OF PROCEEDS
 
     We estimate that the net proceeds we will receive from the sale of the
common shares offered through this prospectus will be approximately $142.1
million (or $156.3 million if the underwriters exercise their over-allotment
option in full), after deducting underwriting discounts and commissions but
before deducting fees and expenses incurred in connection with this offering. We
anticipate using the net proceeds of this offering and other cash on hand to:
 
     o redeem all of the issuer's Series A Preferred Stock, Series B Preferred
       Stock, and Series C Preferred Stock for $40.0 million;
 
     o pay $9.2 million in accrued dividends [assuming this offering closes on
       March 31, 1999] with respect to the issuer's Series A Preferred Stock,
       Series B Preferred Stock, and Series C Preferred Stock;
 
     o redeem all of the issuer's Series D Preferred Stock and Series E
       Preferred Stock for approximately $54.8 million;
 
     o purchase additional capital stock of Statia Terminals International for
       approximately $37.7 million ($52.8 million if the underwriters exercise
       their over-allotment option in full), all of which Statia Terminals
       International will use to redeem 25% (35% if the underwriters exercise
       their over-allotment option in full) of its 11 3/4% First Mortgage Notes
       due 2003, Series B (including a $4.0 million premium over par
       ($5.6 million if the underwriters exercise their over-allotment option in
       full); and
 
     o pay approximately $5.1 million representing the fees and expenses
       incurred in connection with this offering.
 
                                       19
CAPITALIZATION
 
     The following table sets forth (i) the historical capitalization of the
issuer as of December 31, 1998, (ii) the pro forma transaction adjustments
required to reflect the pro forma transactions, including the sale of the common
shares offered in this prospectus, the application of the net proceeds from such
sale as described in "Use of Proceeds" and the restructuring, and (iii) the pro
forma capitalization of the issuer as of December 31, 1998. The table is derived
from, should be read in conjunction with, and is qualified in its entirety by
reference to the historical and pro forma financial statements and notes thereto
included elsewhere in this prospectus.
AS OF DECEMBER 31, 1998 (UNAUDITED)
                                                                           -------------------------------------------
                                                                                     (DOLLARS IN THOUSANDS)
                                                                                         TRANSACTION       PRO FORMA
                                                                           HISTORICAL    ADJUSTMENTS(1)    AS ADJUSTED
                                                                           ----------    --------------    -----------
Cash and cash equivalents...............................................   $   14,061       $ (2,013)       $  12,048
                                                                           ----------       --------        ---------
Long-term debt..........................................................      135,000        (33,750)         101,250
Redeemable Preferred Stock Series A through C...........................       40,000        (40,000)              --
 
Stockholders' equity:
  Preferred Stock Series D and E........................................       54,824        (54,824)              --
  Notes receivable from stockholders....................................       (1,474)         1,474               --
  Common stock..........................................................            4             (4)              --
  Common shares.........................................................           --             76               76
  Subordinated shares...................................................           --             38               38
  Additional paid-in-capital............................................          363        135,709          136,072
  Accumulated deficit...................................................      (10,386)        (6,096)         (16,482)
                                                                           ----------       --------        ---------
     Total stockholders' equity.........................................       43,331         76,373          119,704
                                                                           ----------       --------        ---------
 
     Total capitalization...............................................   $  218,331       $  2,623        $ 220,954
                                                                           ----------       --------        ---------
                                                                           ----------       --------        ---------
------------------
 
(1) See notes to unaudited pro forma consolidated condensed financial statements
    for a discussion of the pro forma transaction adjustments.
 
                                       20
DILUTION
 
     On a pro forma basis as of December 31, 1998 after giving effect to the
restructuring and the issuance of the common and subordinated shares and
incentive rights, the tangible net book value of the issuer's assets would have
been approximately $116.1 million or $10.15 per common share (assuming an
initial public offering price of $20.00 per common share). Purchasers of common
shares in the offering will experience substantial and immediate dilution in
tangible net book value per common share for financial accounting purposes, as
illustrated in the following table:
Assumed initial public offering price per common share...............................             $20.00
  Net tangible book value (deficit) per common share before the offering(1)..........   $(3.83)
  Increase in net tangible book value per common share attributable to new
     investors.......................................................................    13.98
                                                                                        ------
Less: Pro forma tangible net book value per common share after the offering(2)(3)....              10.15
                                                                                                  ------
Immediate dilution in tangible net book value per common share to new investors......             $ 9.85
                                                                                                  ------
                                                                                                  ------
------------------
 
(1) The net tangible book value does not include intangible assets with a book
    value of $4.5 million.
 
(2) Determined by dividing the total number of shares (7,600,000 common shares,
    3,800,000 subordinated shares and 38,000 incentive rights) to be outstanding
    after the offering made hereby into the pro forma tangible net book value of
    the issuer, after giving effect to the application of the estimated net
    proceeds of the offering before deducting expenses incurred in connection
    with this offering.
 
(3) The net tangible book value does not include intangible assets with a book
    value of $3.6 million.
 
     There could be additional future dilution if options are granted under any
new stock option plan.
     The following table sets forth the number of shares that will be issued by
the issuer and the total consideration to the issuer contributed by the
purchasers of common shares in this offering upon the consummation of the
restructuring and the issuance of the common and subordinated shares and
incentive rights:
COMMON AND/OR
                                                  SUBORDINATED SHARES
                                                    AND/OR INCENTIVE
                                                     RIGHTS ISSUED                 CONSIDERATION
                                                 ----------------------      --------------------------
                                                   NUMBER       PERCENT         AMOUNT          PERCENT
                                                 -----------    -------      -------------      -------
Existing shareholders.........................     3,838,000      33.55%     $      38,380(2)      0.03%
New investors(1) .............................     7,600,000      66.45        152,000,000        99.97
                                                 -----------    -------      -------------      -------
Total.........................................    11,438,000     100.00%     $ 152,038,380       100.00%
                                                 -----------    -------      -------------      -------
                                                 -----------    -------      -------------      -------
------------------
 
(1) Assumes that the underwriters' over-allotment option is not exercised.
 
(2) A nominal value has been attributed to the incentive rights ($0.01 per
    incentive right).
 
                                       21
CASH DIVIDEND POLICY
 
GENERAL
 
     AVAILABLE CASH
 
     We will pay as dividends, subject to Netherlands Antilles law and our
indenture as described in "Cash Available for Payment of Dividends," from
legally available funds, on a quarterly basis, all of our available cash as
described in this prospectus.
 
     Available cash is defined in the glossary and generally means, for any of
our fiscal quarters, all cash on hand at the end of the quarter less the amount
of cash reserves that is necessary or appropriate in the reasonable discretion
of our board of directors to:
 
     o provide for the proper conduct of our business, such as capital and
       operating expenditures and payment of taxes and levies;
 
     o comply with applicable law or any of our debt instruments or other
       agreements; or
 
     o provide funds for dividends to holders of common and subordinated shares
       and incentive rights for any one or more of the next four fiscal
       quarters.
 
     It is important to note that the reserves established by our board of
directors are not limited to reserves under generally accepted accounting
principles.
 
     OPERATING SURPLUS AND INTERIM CAPITAL TRANSACTIONS
 
     Cash dividends will be characterized as dividends from either operating
surplus or interim capital transactions. This distinction affects the amounts
distributed to holders of common and subordinated shares relative to the holders
of incentive rights, and under certain circumstances it determines whether
holders of subordinated shares receive any dividends. See "--Quarterly Dividends
of Available Cash."
 
     Operating surplus means generally, for any period prior to liquidation on a
cumulative basis, the sum of:
 
     (1) $7.5 million,
 
     (2) any net positive working capital on hand as of the close of business on
         the closing of this offering, and
 
     (3) all cash receipts for the period beginning at the closing of this
         offering and ending with the last day of that period, other than cash
         receipts from interim capital transactions;
 
        less
 
     (4) all of our operating expenses for the period beginning at the closing
         of this offering and ending with the last day of that period and the
         amount of cash reserves that is necessary or advisable in the
         discretion of our board of directors to provide funds for future
         operating expenditures.
 
     Interim capital transactions are:
 
     o borrowings and sales of debt securities (other than for working capital
       purposes and other than for items purchased on open account in the
       ordinary course of business);
 
     o sales of equity securities; and
 
     o sales or other dispositions of assets for cash (other than inventory,
       accounts receivable and other assets all as disposed of in the ordinary
       course of business).
 
     To avoid the difficulty of trying to determine whether available cash paid
as a dividend by us is from operating surplus or from interim capital
transactions, all available cash paid as a dividend from any source will be
treated as a dividend from operating surplus until the sum of all available cash
paid as a dividend since the closing of this offering equals the operating
surplus as of the end of the quarter prior to that dividend. Any available cash
in excess of that amount (regardless of its source) will be deemed to be from
interim capital transactions and paid accordingly.
 
     If available cash from interim capital transactions is paid as a dividend
for each common share in an aggregate amount per common share equal to the
initial price of that common share, plus any common share arrearages, the
distinction between operating surplus and interim capital transactions will
cease, and all dividends of available cash will be treated as if they were from
 
                                       22
operating surplus. We do not anticipate that there will be significant dividends
from interim capital transactions.
 
     SUBORDINATED SHARES
 
     The subordinated shares are entitled to receive the minimum quarterly
dividend only after the common shares have received the minimum quarterly
dividend plus any arrearages thereon. Payment of the first $6.8 million of
dividends on the subordinated shares will be deferred as described in
"--Deferral of Dividends on Subordinated Shares." The subordinated shares are
not entitled to arrearages but will be entitled to payment of deferred dividends
no later than the end of the subordination period.
 
     Upon expiration of the subordination period, which will generally not occur
prior to             , 2004, the subordinated shares will convert into common
shares on a one-for-one basis and will thereafter participate pro rata with the
other common shares in dividends of available cash. The subordinated shares are
also subordinated to the common shares upon liquidation.
 
     INCENTIVE DIVIDENDS
 
     The incentive rights are non-voting shares which represent the right to
receive an increasing percentage of quarterly dividends of available cash from
operating surplus after the minimum quarterly dividend and the target dividend
levels have been achieved. The target dividend levels are based on the amounts
of available cash from operating surplus paid as dividends in excess of the
payments made for the minimum quarterly dividend and common share arrearages, if
any.
 
     EFFECT OF ISSUANCE OF ADDITIONAL SHARES
 
     Subject to the limitations described under "Description of Common
Shares--Issuance of Additional Shares," we have the authority to issue
additional common shares or other equity securities for the consideration and on
the terms and conditions as are established by our board of directors in its
sole discretion and without the approval of the holders of the common or
subordinated shares or the holders of the incentive rights. It is possible that
we will fund acquisitions through the issuance of additional common shares or
other equity securities. Holders of any additional common shares issued will be
entitled to share equally with the then-existing holders of common shares in
dividends of available cash. In addition, the issuance of additional securities
may dilute the value of the interests of the then-existing holders of common
shares in our net assets.
 
QUARTERLY DIVIDENDS OF AVAILABLE CASH
 
     We will pay dividends to our shareholders for each of our fiscal quarters
prior to the issuer's liquidation in an amount equal to 100% of our available
cash for that quarter. We expect to pay dividends of all available cash within
approximately 45 days after the end of each quarter, commencing with the quarter
ending June 30, 1999, to holders of record on the applicable record date. The
minimum quarterly dividend and the target dividend levels for the period from
the closing of this offering through June 30, 1999 will be adjusted downward
based on the actual length of that period. The minimum quarterly dividend and
the target dividend levels are also subject to certain other adjustments as
described below under "--Dividends from Interim Capital Transactions" and
"--Adjustment of Minimum Quarterly Dividend and Target Dividend Levels."
 
     For each quarter during the subordination period, to the extent there is
sufficient available cash, a holder of common shares will have the right to
receive the minimum quarterly dividend, plus any common share arrearages, prior
to any dividend of available cash to the holders of subordinated shares. This
subordination feature will enhance our ability to pay the minimum quarterly
dividend on the common shares during the subordination period. There is no
guarantee, however, that the minimum quarterly dividend will be paid on the
common shares.
 
     Upon expiration of the subordination period, all subordinated shares will
be converted on a one-for-one basis into common shares and will participate pro
rata with all other common shares in future dividends of available cash. Under
certain circumstances, up to 50% of the subordinated shares may convert into
common shares prior to the expiration of the subordination period. Common shares
will not accrue arrearages for dividends for any quarter after the end of the
subordination period and subordinated shares will not accrue any arrearages for
dividends for any quarter but will be entitled to payment of deferred dividends.
 
                                       23
DIVIDENDS FROM OPERATING SURPLUS DURING SUBORDINATION PERIOD
 
     The subordination period will generally extend from the closing of this
offering until the first day of any quarter beginning after March 31, 2004 for
which:
 
     o dividends of available cash from operating surplus on the common and
       subordinated shares for each of the three consecutive four-quarter
       periods immediately preceding that day equaled or exceeded the sum of the
       minimum quarterly dividend on all of the outstanding shares during those
       periods;
 
     o the adjusted operating surplus generated during each of the three
       consecutive four-quarter periods immediately preceding that day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis during those periods; and
 
     o there are no outstanding common share arrearages.
 
     Prior to the end of the subordination period, a portion of the subordinated
shares will convert into common shares on a one-for-one basis on the first day
after the record date established for the dividend for any quarter ending on or
after (a) March 31, 2002 for one-quarter of the subordinated shares (950,000
subordinated shares) and (b) March 31, 2003 for one-quarter of the subordinated
shares (950,000 subordinated shares) for which:
 
     o dividends of available cash from operating surplus on the common and
       subordinated shares for each of the three consecutive four-quarter
       periods immediately preceding that date equaled or exceeded the sum of
       the minimum quarterly dividend on all of the outstanding shares during
       those periods;
 
     o the adjusted operating surplus generated during each of the three
       consecutive four-quarter periods immediately preceding that date equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis during those periods; and
 
     o there are no outstanding common share arrearages;
 
provided, however, that the early conversion of the second one-quarter of
subordinated shares may not occur until at least one year following the early
conversion of the first one-quarter of subordinated shares.
 
     Upon expiration of the subordination period, all remaining subordinated
shares will convert into common shares on a one-for-one basis and will
thereafter participate, pro rata, with the other common shares in dividends of
available cash.
 
     "Adjusted operating surplus" for any period generally means:
 
     (1) the operating surplus generated during that period;
 
     less
 
     (2) any net increase in working capital borrowings during that period, and
 
     (3) any net reduction in cash reserves for operating expenditures during
         that period not relating to an operating expenditure made during that
         period;
 
   plus
 
     (4) any net decrease in working capital borrowings during that period, and
 
     (5) any net increase in cash reserves for operating expenditures during
         that period required by any debt instrument for the repayment of
         principal, interest or premium.
 
     Operating surplus generated during a period is equal to the difference
between:
 
     (1) the operating surplus determined at the end of that period; and
 
     (2) the operating surplus determined at the beginning of the period.
 
     Dividends paid by us of available cash from operating surplus for any
quarter during the subordination period will be paid in the following manner:
 
     o First, 100% to the common shares, pro rata, until each outstanding common
       share has been paid an amount equal to the minimum quarterly dividend for
       that quarter;
 
     o Second, 100% to the common shares, pro rata, until each outstanding
       common share has been paid an amount equal to any
 
                                       24
common share arrearages accrued and unpaid for any prior quarters during
       the subordination period;
 
     o Third, 100% to the subordinated shares, pro rata, until each outstanding
       subordinated share has been paid an amount equal to the minimum quarterly
       dividend for that quarter; and
 
     o Thereafter, as described in "--Incentive Dividends--Hypothetical
       Annualized Yield" below.
 
     For common shares, the term "common share arrearages" means the amount by
which the minimum quarterly dividend in any quarter during the subordination
period exceeds the dividend of available cash from operating surplus actually
paid for that quarter on a common share issued in this offering, cumulative for
that quarter and all prior quarters during the subordination period. Common
share arrearages will not accrue interest.
 
DIVIDENDS FROM OPERATING SURPLUS AFTER SUBORDINATION PERIOD
 
     Dividends paid by us of available cash from operating surplus for any
quarter after the subordination period will be paid in the following manner:
 
     o First, 100% to all common and subordinated shares, pro rata, until each
       share has been paid an amount equal to the minimum quarterly dividend for
       that quarter; and
 
     o Thereafter, in the manner described in "--Incentive
       Dividends--Hypothetical Annualized Yield" below.
 
DEFERRAL OF DIVIDENDS ON SUBORDINATED SHARES
 
     All matters discussed in this "Cash Dividend Policy" section are subject to
the following:
 
     Payment of the first $6.8 million of dividends that would have otherwise
been paid on the subordinated shares will be deferred until the end of the
deferral period. Except as set forth in the next paragraph, such deferred
dividends will be deemed to have been paid for the purposes of determining
available cash, operating surplus, adjusted operating surplus, target dividend
levels, early conversion rights and the expiration of the subordination period.
The deferred amounts may be used by us during the deferral period for any
business purpose other than to pay dividends on the subordinated shares.
 
     After the deferral period all available cash from operating surplus
(including, for this purpose, the amount thereof allocated to the deferred
dividends) remaining after the minimum quarterly dividend (other than the
deferred dividends) is paid on all common and subordinated shares shall be paid
to the subordinated shares until the deferred dividends have been paid in full.
 
     The deferral period will generally extend from the closing of this offering
until the first day of any quarter beginning after March 31, 2001 for which:
 
     o dividends of available cash from operating surplus on the common and
       subordinated shares (including deferred dividends) for each of the two
       consecutive four-quarter periods immediately preceding that day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       outstanding shares during those periods;
 
     o the adjusted operating surplus generated during each of the two
       consecutive four-quarter periods immediately preceding that day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis during those periods; and
 
     o there are no outstanding common share arrearages.
 
     Upon early conversion any unpaid deferred dividends allocable to the
subordinated shares so converted shall be re-allocated pro rata to the remaining
unconverted subordinated shares.
 
     Any deferred dividends remaining unpaid at the end of the subordination
period shall be paid on the subordinated shares at that time regardless of
whether there is any available cash at that time.
 
INCENTIVE DIVIDENDS--HYPOTHETICAL ANNUALIZED YIELD
 
     For any quarter for which available cash from operating surplus is
distributed to the holders of common and subordinated shares in an amount equal
to the minimum quarterly dividend on all common and subordinated shares and to
the holders of common shares in an amount equal to any unpaid common share
arrearages, then any available cash from operating surplus for that quarter will
be
 
                                       25
paid as dividends among the holders of common shares and subordinated shares and
the holders of incentive rights in the following manner:
 
     o First, 85% to all common and subordinated shares, pro rata, and 15% to
       the incentive rights, until the common and subordinated shares have
       received (including the minimum quarterly dividend) a total of $0.495 for
       that quarter to each outstanding common and subordinated share (the
       "first target dividend");
 
     o Second, 75% to all common and subordinated shares, pro rata, and 25% to
       the incentive rights, until the common and subordinated shares have
       received (including the minimum quarterly dividend) a total of $0.675 for
       such quarter in respect of each outstanding common or subordinated share
       (the "second target dividend"); and
 
     o Thereafter, 50% to all common and subordinated shares, pro rata, and 50%
       to the incentive rights.
 
     The dividends to the holders of incentive rights set forth above (other
than in their capacity as holders of common and subordinated shares) represent
the incentive dividends.
 
     The following table illustrates the percentage allocation of the additional
available cash from operating surplus between the common shares, subordinated
shares and incentive rights up to the various target dividend levels and a
hypothetical annualized percentage yield to be realized by a holder of common or
subordinated shares or incentive rights at each target dividend level. For a
discussion of the tax consequences of ownership of common shares, see
"Taxation." For purposes of the following table, the annualized percentage yield
is calculated on a pretax basis by dividing each level of dividend by an initial
public offering price of $20.00 per common share. To the extent that the trading
price of the common shares is greater than $20.00 per share, the calculated
dividend yield will decrease. The calculations are also based on the assumption
that the quarterly dividend amounts shown do not include any common share
arrearages. The amounts set forth under "Marginal Percentage Interest in
Dividends" are the percentage interests of the holders of incentive rights and
the holders of common and subordinated shares in the amount by which any
available cash from operating surplus paid as dividends exceeds the minimum
quarterly dividend up to and including the corresponding amount in the column
"Quarterly Dividend Amount." The percentage interests shown for the holders of
common and subordinated shares and the holders of incentive rights for the
minimum quarterly dividend are also applicable to quarterly dividend amounts
that are less than the minimum quarterly dividend.
MARGINAL PERCENTAGE
                                                                                            INTEREST IN DIVIDENDS
                                                                                           ------------------------
                                                                                           HOLDERS OF
                                                       QUARTERLY                           COMMON AND    HOLDERS OF
                                                        DIVIDEND        HYPOTHETICAL       SUBORDINATED  INCENTIVE
                                                         AMOUNT        ANNUALIZED YIELD    SHARES        RIGHTS
                                                     --------------    ----------------    ----------    ----------
Minimum quarterly dividend........................   $         0.45               9.0%         100%           0%
First target dividend.............................   $        0.495               9.9%          85%          15%
Second target dividend............................   $        0.675              13.5%          75%          25%
Thereafter........................................   above $  0.675        above 13.5%          50%          50%
DIVIDENDS FROM INTERIM CAPITAL TRANSACTIONS
 
     Dividends paid by us of available cash from interim capital transactions
will be paid in the following manner:
 
     o First, 100% to all common and subordinated shares, pro rata, until each
       outstanding common share has been paid available cash from interim
       capital transactions in an aggregate amount per common share equal to the
       initial price;
 
     o Second, 100% to the common shares until each outstanding common share has
       been paid available cash from interim capital transactions in an
       aggregate amount equal to any unpaid common share arrearages for all
       common shares; and
 
     o Thereafter, all dividends of available cash from interim capital
       transactions will be paid as if they were from operating surplus.
 
                                       26
As a dividend of available cash from interim capital transactions is paid
the minimum quarterly dividend and the target dividend levels will be adjusted
downward by multiplying each such amount by a number equal to:
 
     (1) the initial price of the common shares reduced by that dividend (and
         all prior dividends) of available cash from interim capital
         transactions (the "unrecovered initial price");
 
   divided by
 
     (2) the initial price, or the unrecovered initial price, as the case may
         be, of the common shares immediately prior to that dividend of
         available cash from interim capital transactions.
 
     This adjustment to the minimum quarterly dividend may make it more likely
that subordinated shares will be converted into common shares (whether pursuant
to the termination of the subordination period or to the provisions permitting
early conversion of some subordinated shares) and may accelerate the dates at
which those conversions occur.
 
     When "payback" of the initial price has occurred, i.e., when the
unrecovered initial price of the common shares is zero (and any accrued common
share arrearages have been paid), then in effect the minimum quarterly dividend
and each of the target dividend levels will have been reduced to zero for
subsequent quarters. Thereafter, all dividends of available cash from all
sources will be treated as if they were paid from operating surplus. Because the
minimum quarterly dividend and the target dividend levels will have been reduced
to zero, the holders of incentive rights will be entitled thereafter to receive
50% of all dividends of available cash (in addition to any dividends to which
they may be entitled as holders of common and subordinated shares).
 
     Dividends of available cash from interim capital transactions will not
reduce the minimum quarterly dividend or target dividend levels for the quarter
for which they are paid as dividends.
 
ADJUSTMENT OF MINIMUM QUARTERLY DIVIDEND AND TARGET DIVIDEND LEVELS
 
     The minimum quarterly dividend and target dividend levels will be reduced
upon a dividend of available cash from interim capital transactions.
Additionally, in the event of any combination or subdivision of common shares
(whether effected by a dividend payable in common shares or otherwise), but not
by reason of the issuance of additional common shares for cash or property, the
following amounts will be proportionately adjusted upward or downward, as
appropriate:
 
     o the minimum quarterly dividend;
 
     o the target dividend levels;
 
     o the unrecovered initial price;
 
     o the amount of additional common shares issuable during the subordination
       period without a shareholder vote;
 
     o the amount of common shares issuable upon conversion of the subordinated
       shares; and
 
     o other amounts calculated on a per common and/or subordinated share basis.
 
     For example, in the event of a two-for-one split of the common shares
(assuming no prior adjustments), the minimum quarterly dividend, each of the
target dividend levels and the initial price of the common shares would each be
reduced to 50% of its initial level.
 
DISTRIBUTION OF CASH UPON LIQUIDATION
 
     Following the commencement of the dissolution and liquidation of the
issuer, assets will be sold or otherwise disposed of from time to time. The
proceeds of such liquidation will, first, be applied to the payment of our
creditors in the order of priority provided in the issuer's articles and by law
and, thereafter, be distributed to the holders of common and subordinated shares
and the holders of incentive rights in accordance with their respective
priorities as described below.
 
     The allocations upon liquidation are intended, to the extent possible, to
entitle the holders of outstanding common shares to a preference over the
holders of outstanding subordinated shares upon liquidation, to the extent
required to permit holders of common shares to receive their unrecovered initial
price and the minimum quarterly dividend due on such common shares plus any
unpaid common share arrearages.
 
     If the issuer liquidates before the end of the subordination period, any
distribution will be allocated as follows:
 
     o First, 100% to the common shares, pro rata, until each common share
       receives an amount equal to the sum of:
 
       (1) the unrecovered initial price of such common share,
 
                                       27
(2) the amount of the minimum quarterly dividend for the quarter during
           which the issuer's liquidation occurs, and
 
       (3) any unpaid common share arrearages on such common share;
 
     o Second, 100% to the subordinated shares, pro rata, until each
       subordinated share receives an amount equal to the sum of:
 
       (1) the unrecovered initial price of such subordinated share,
 
       (2) the amount of the minimum quarterly dividend for the quarter during
           which the issuer's liquidation occurs, and
 
       (3) any unpaid deferred dividends on such subordinated share;
 
     o Third, 85% to the common and subordinated shares, pro rata, and 15% to
       the incentive rights, until there has been allocated under this paragraph
       third an amount equal to:
 
       (1) the aggregate cumulative sum of the excess of the first target
           dividend over the minimum quarterly dividend for all common and
           subordinated shares for each quarter of the issuer's existence,
 
       less
 
       (2) the aggregate cumulative amount of any dividends of available cash
           from operating surplus in excess of the minimum quarterly dividend
           that were paid 85% to the common and subordinated shares, pro rata,
           and 15% to the incentive rights for each quarter of the issuer's
           existence;
 
     o Fourth, 75% to all common and subordinated shares, pro rata, and 25% to
       the incentive rights, until there has been allocated under this paragraph
       fourth an amount equal to:
 
       (1) the aggregate cumulative sum of the excess of the second target
           dividend over the first target dividend for all common and
           subordinated shares for each quarter of the issuer's existence,
 
       less
 
       (2) the aggregate cumulative amount of any dividends of available cash
           from operating surplus in excess of the first target dividend that
           were paid 75% to the common and subordinated shares, pro rata, and
           25% to the incentive rights for each quarter of the issuer's
           existence; and
 
     o Thereafter, 50% to all common and subordinated shares, pro rata, and 50%
       to the incentive rights.
 
     If liquidation occurs after the subordination period, the distinction
between common shares and subordinated shares will disappear, so that
clauses (2) and (3) of paragraph first above and all of paragraph second above
will no longer be applicable.
 
                                       28
CASH AVAILABLE FOR PAYMENT OF DIVIDENDS
 
AVAILABLE CASH FROM OPERATING SURPLUS
 
     Based on the amount of working capital that we expect to have at the time
of the closing of this offering and our ability to make working capital
borrowings under our credit facility, we believe that we should have sufficient
available cash from our operating surplus to enable us to pay the minimum
quarterly dividend on the common and subordinated shares to be outstanding
immediately after the consummation of this offering with respect to each quarter
at least through the quarter ending June 30, 2000. Available cash for any
quarter will consist generally of all cash on hand at the end of such quarter,
as adjusted for reserves. Operating surplus generally consists of cash generated
from operations, after deducting related expenditures and other items, plus our
net positive working capital at the closing of this offering plus $7.5 million.
The definitions of available cash and operating surplus are set forth in the
glossary. There is significant uncertainty associated with our belief because
our belief is based on a number of assumptions, including the assumptions that:
 
     o the demand for terminaling services, for crude oil and petroleum products
       and sales of bunker and other bulk products will not decline from current
       levels;
 
     o the aggregate gross margins will continue at not less than the levels
       experienced during the quarter ended December 31, 1998 on an annualized
       basis;
 
     o no material accidents or other force majeure events will occur that
       disrupt our terminaling facilities; and
 
     o market, regulatory and overall economic conditions will not change
       substantially.
 
     Although we believe such assumptions are within a range of reasonableness,
whether the assumptions are realized is not, in a number of cases, within our
control and cannot be predicted with any degree of certainty. In the event that
our assumptions are not realized, the actual available cash from operating
surplus that we generate could be substantially less than that currently
expected and could, therefore, be insufficient to permit us to pay dividends at
the levels described above. See "Risk Factors--Risks Inherent in the Common
Shares--We may not be able to pay as much in dividends to you as we currently
intend." In addition, the terms of our indebtedness will restrict the ability of
the issuer to distribute cash to holders of common and subordinated shares and
incentive rights under certain circumstances, including in the event of a
default under the terms of such indebtedness. Accordingly, we can give no
assurances that payment of the minimum quarterly dividend or any other amounts
will be made. See "Cash Dividend Policy" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." We do not intend to
update the expression of belief set forth above.
 
     We need $20.5 million of available cash from our operating surplus to pay
the minimum quarterly dividend for four quarters on the common and subordinated
shares to be outstanding immediately after this offering ($13.7 million for the
common shares and $6.8 million for the subordinated shares). The amount of pro
forma available cash from our operating surplus generated during the year ended
December 31, 1998 was approximately $12.1 million. Assuming normalized
maintenance capital expenditures of $7.0 million per year, the amount of pro
forma available cash from operating surplus generated during the fourth quarter
of 1998 would have been approximately equal to $5.1 million, the amount needed
to pay the minimum quarterly dividend on all common and subordinated shares. We
expect that our level of operations in the fourth quarter of 1998 will continue
throughout 1999. We can give no assurances, however, that our expectations will
in fact be realized. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Appendix B--Pro Forma Available Cash
from Operating Surplus."
 
     We derived the amounts of pro forma available cash from operating surplus
set forth above from our pro forma and historical financial statements in the
manner set forth in Appendix B. The pro forma adjustments are based upon
currently available information and certain estimates and assumptions. The pro
forma financial statements do not purport to present our results of operations
had the restructuring actually been completed as of the dates indicated.
Furthermore, available cash from operating surplus is a cash accounting concept,
while our historical and pro forma financial statements have been prepared on an
accrual basis. As a consequence, the amount of pro forma available cash from
operating surplus
 
                                       29
shown above should only be viewed as a general indication of the amount of
available cash from operating surplus that we might have generated had this
offering occurred on January 1, 1998.
 
RESTRICTIONS IMPOSED BY NETHERLANDS ANTILLES LAW
 
     Under Netherlands Antilles law, we may make one or more distributions to
our shareholders out of legally available funds. Such distributions can be made
out of our profits or reserves. Profits are established at our annual general
meeting of shareholders after we prepare and submit the balance sheet and profit
and loss account to our shareholders. Upon adoption of these financial
statements at the annual general meeting of shareholders, the profit, if any, is
set as the positive balance of the profit and loss account, after allocation of
amounts to reserves or creation of one or more provisions. The issuer's articles
provide that we may distribute such profit, as we deem fit. In addition, the
issuer's articles provide that we may allocate, in whole or in part, any profit
amounts to reserves (the profit reserves) and make distributions therefrom, as
well as to distribute out of reserves.
 
     Notwithstanding the above, we may declare and distribute one or more
interim-dividends, as an advance payment of expected profits. Such declaration
can only occur if we have, at the time of such declaration, the reasonable
expectation that we will make sufficient profits for the relevant financial year
to justify the interim-dividend. However, at the time of the declaration of the
interim dividend, we may further determine that any amounts not covered by the
profits, as set by the annual general meeting of shareholders for the relevant
financial year, shall be qualified as distribution out of freely distributable
reserves, if any, such as the capital surplus, being the aggregate amounts paid
in excess of the par value per share by each holder of common or subordinated
share.
 
     The distribution out of profits and/or reserves generally may be made to
shareholders insofar as our equity exceeds the nominal value of the issued and
outstanding capital. In addition, in the event that the profits and loss account
shows a loss for any given year, which loss cannot be covered by the reserves or
compensated in another manner, no profit can be distributed in any subsequent
year until such loss has been recovered or has been offset by reserves.
 
RESTRICTIONS IMPOSED BY INDENTURE
 
     The issuer is a holding company and depends entirely on dividends from
Statia Terminals International for its cash flow. Statia Terminals
International's ability to pay dividends to the issuer is subject to certain
restrictions contained in the indenture relating to its First Mortgage Notes.
Under the terms of the indenture the payment by Statia Terminals International
of any dividend to the issuer may not be made if at the time of declaration:
 
     o First, a default or event of default under the indenture shall have
       occurred and be continuing or shall occur as a consequence thereof;
 
     o Second, Statia Terminals International's consolidated fixed charge
       coverage ratio (as defined in the indenture) for the prior four full
       fiscal quarters is less than 2.0 to 1; or
 
     o Third, the amount of such dividend, when added to the aggregate amount of
       all other dividends and certain other restricted payments made by Statia
       Terminals International after November 27, 1996 and not covered by other
       exceptions in the indenture, exceeds the sum of:
 
          (A) 50% of Statia Terminals International's consolidated net income
              (as defined in the indenture) (taken as one accounting period)
              from November 27, 1996 to the end of Statia Terminals
              International's most recently ended fiscal quarter for which
              internal financial statements are available at the time of such
              dividend (or, if such aggregate consolidated net income is a
              deficit, minus 100% of such aggregate deficit), plus
 
          (B) the net cash proceeds from the issuance and sale (other than to a
              subsidiary of Statia Terminals International) after November 27,
              1996 of Statia Terminals International's capital stock.
 
     Certain other dividends, generally unrelated to operating cash flow, are
permitted notwithstanding the second and third clauses above.
 
     With respect to the first clause above, there is no default or event of
default under the indenture.
 
                                       30
With respect to the second clause above, for the four fiscal quarters ended
December 31, 1998, Statia Terminals International's consolidated fixed charge
coverage ratio was 2.0 to 1 on an historical basis and 2.7 to 1 on a pro forma
basis which assumes that this offering had closed at the beginning of such
period.
 
     With respect to the third clause above:
 
     o for the period from November 27, 1996 through December 31, 1998 Statia
       Terminals International's consolidated net income (as defined in the
       indenture) was $0.6 million; and
 
     o we expect to use $37.7 million of the net proceeds of this offering
       ($52.8 if the underwriters exercise their over-allotment option in full)
       to purchase additional capital stock of Statia Terminals International.
 
During such period Statia Terminals International has not paid any dividends and
has not made any other restricted payments which would be required to be
included in the calculation pursuant to the third clause above and has not sold
any of its capital stock.
 
     The redemption of approximately $33.8 million principal amount (plus a
redemption premium of $4.0 million) of the First Mortgage Notes at 111.75% of
the principal amount from the proceeds of this offering ($47.3 million principal
amount (plus a redemption premium of $5.6 million) if the underwriters exercise
their over-allotment option in full) will have a favorable impact on Statia
Terminals International's consolidated fixed charge coverage ratio. We currently
intend to redeem the remainder of the First Mortgage Notes on approximately
November 15, 2000 at 105.875% of the principal amount and, therefore, eliminate
at such time the restrictions imposed by the indenture. We expect to fund such
redemption principally from the issuance of new debt. We can give no assurances
that we will be able to issue such debt at the time or, if we are able to, how
favorable the terms of such issuance will be. It is likely that such new debt
would also contain restrictions on payment of dividends under certain
circumstances.
 
     Based on the foregoing and if our net income were to continue at the level
we project for 1999 we believe that, at least through November 15, 2000, the
foregoing indenture restrictions will permit Statia Terminals International to
pay sufficient dividends to the issuer to cover at least the minimum quarterly
dividend that would be required to be paid on the common and subordinated shares
out of available cash from operating surplus.
 
                                       31
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 
     The following unaudited pro forma consolidated condensed balance sheet as
of December 31, 1998 was prepared to illustrate the estimated effects of:
 
     o the disposition of Statia Terminals Southwest,
     o elimination of the Castle Harlan management fee,
     o this offering,
     o the use of the net proceeds from this offering as described under "Use of
       Proceeds",
     o the restructuring, and
     o the transfer of the shares of Petroterminal de Panama, currently owned by
       us, to a newly-formed corporation owned by our current owners other than
       Praxair,
 
(collectively, the "pro forma transactions") as if such transactions had
occurred on December 31, 1998. The following unaudited pro forma statement of
operations for the year ended December 31, 1998 was prepared to illustrate the
estimated effects of the pro forma transactions as if they had occurred as of
January 1, 1998.
 
     The unaudited pro forma consolidated condensed financial statements should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations," our financial statements and the notes
thereto, and the other financial information included elsewhere or incorporated
by reference in this prospectus. This pro forma financial information is
provided for informational purposes only and does not purport to be indicative
of the results of operations or financial position which would have been
obtained had the pro forma transactions been completed on the dates indicated or
the financial condition or results of operations for any future date or period.
 
                                       32
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
                             (DOLLARS IN THOUSANDS)
AS OF DECEMBER 31, 1998
                                                                    -----------------------------------------
                                                                                  PRO FORMA
                                                                    HISTORICAL    ADJUSTMENTS       PRO FORMA
                                                                    ----------    -----------       ---------
ASSETS:
Current assets:
  Cash and cash equivalents......................................    $ 14,061      $ 137,000 (a)    $  12,048
                                                                                    (102,264)(b)
                                                                                       1,474 (c)
                                                                                     (33,750)(d)
                                                                                        (507)(e)
                                                                                      (3,966)(f)
  Accounts receivable............................................
    Trade, net...................................................       7,562             --            7,562
    Other........................................................       2,328             --            2,328
  Inventory, net.................................................       4,528             --            4,528
  Prepaid expenses...............................................       1,417         (1,181)(g)          236
                                                                     --------      ---------        ---------
    Total current assets.........................................      29,896         (3,194)          26,702
Property and equipment, net......................................     209,970             --          209,970
Other noncurrent assets, net.....................................       5,744         (1,130)(h)        3,614
                                                                                      (1,000)(i)
                                                                     --------      ---------        ---------
                                                                     $245,610      $  (5,324)       $ 240,286
                                                                     --------      ---------        ---------
                                                                     --------      ---------        ---------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Accounts payable...............................................    $  9,306      $      --        $   9,306
  Accrued interest payable.......................................       2,027           (507)(e)        1,520
  Other accrued expenses.........................................      15,946         (7,440)(b)        8,506
                                                                     --------      ---------        ---------
    Total current liabilities....................................      27,279         (7,947)          19,332
Long-term debt...................................................     135,000        (33,750)(d)      101,250
                                                                     --------      ---------        ---------
    Total liabilities............................................     162,279        (41,697)         120,582
                                                                     --------      ---------        ---------
Redeemable Preferred Stock Series A through C....................      40,000        (40,000)(b)           --
Preferred stock:
  Preferred Stock Series D and E.................................      54,824        (54,824)(b)           --
  Notes receivable from stockholders.............................      (1,474)         1,474 (c)           --
Common stock.....................................................           4             (4)(a)           --
Common shares....................................................          --             76 (a)           76
Subordinated shares..............................................          --             38 (a)           38
Additional paid-in-capital.......................................         363        136,890 (a)      136,072
                                                                                      (1,181)(g)
Accumulated deficit..............................................     (10,386)        (3,966)(f)      (16,482)
                                                                                      (1,000)(i)
                                                                                      (1,130)(h)
                                                                     --------      ---------        ---------
    Total stockholders' equity...................................      43,331         76,373          119,704
                                                                     --------      ---------        ---------
                                                                     $245,610      $  (5,324)       $ 240,286
                                                                     --------      ---------        ---------
                                                                     --------      ---------        ---------
33
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
YEAR ENDED DECEMBER 31, 1998
                                                   ---------------------------------------------------------------------
                                                                                              DISPOSITION
                                                   HISTORICAL    ADJUSTMENTS      SUBTOTAL    OF STSW(N)     PRO FORMA
                                                   ----------    -----------      --------    ----------    ------------
Revenues........................................    $136,762       $    --        $136,762     $ (1,613)    $    135,149
Costs of services and products sold.............     106,688            --         106,688       (1,674)         105,014
                                                    --------       -------        --------     --------     ------------
  Gross profit..................................      30,074            --          30,074           61           30,135
Administrative expense..........................       9,500        (1,350)(k)       8,150           --            8,150
                                                    --------       -------        --------     --------     ------------
  Operating income..............................      20,574         1,350          21,924           61           21,985
  Loss on sale of property and equipment........       1,652            --           1,652       (1,652)              --
Interest expense................................      16,851        (4,193)(l)      12,658           (7)          12,651
Interest income.................................         684            --             684           --              684
                                                    --------       -------        --------     --------     ------------
  Income (loss) before income taxes.............       2,755         5,543           8,298        1,720           10,018
Provision for income taxes......................         320            --             320           --              320
                                                    --------       -------        --------     --------     ------------
  Net income (loss).............................       2,435         5,543           7,978        1,720            9,698
Preferred dividends.............................       3,938        (3,938)(m)          --           --               --
                                                    --------       -------        --------     --------     ------------
  Net income (loss) available to holders of
    common equity...............................    $ (1,503)      $ 9,481        $  7,978     $  1,720     $      9,698
                                                    --------       -------        --------     --------     ------------
                                                    --------       -------        --------     --------     ------------
Pro forma diluted earnings per common and
  subordinated share and incentive right (j):...                                                            $       0.85
                                                                                                            ------------
                                                                                                            ------------
Common and subordinated shares and incentive
  rights outstanding in computing pro forma
  diluted earnings per share:...................                                                              11,438,000
                                                                                                            ------------
                                                                                                            ------------
Depreciation....................................    $ 10,510       $    --        $ 10,510     $   (297)    $     10,213
EBITDA(1).......................................    $ 32,092       $ 1,350(k)     $ 33,442     $   (236)    $     33,206
------------------
(1) EBITDA is defined as the sum of (i) income (loss) before income provision
    (benefit), (ii) loss on sale of property and equipment, (iii) interest
    expense less interest income, (iv) depreciation, amortization of certain
    intangible assets and (v) certain non-cash charges.
 
                                       34
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
(a) Reflects the issuance of 7,600,000 common shares, $0.01 par value, 3,800,000
    subordinated shares, $0.01 par value, and 38,000 incentive rights, $0.01 par
    value, in connection with this offering at an assumed initial public
    offering price of $20 per common share. The estimated costs of this
    offering, including the underwriting discount and estimated offering
    expenses and fees, totaling $15 million have been reflected as an offset to
    additional paid-in capital. The resulting net cash proceeds of this offering
    total $137 million.
 
(b) Represents the retirement of the issuer's Preferred Stock Series A through E
    and accrued preferred stock dividends as of December 31, 1998.
 
(c) Represents the repayment of notes receivable from stockholders in connection
    with this offering.
 
(d) Reflects the redemption of 25% of Statia Terminals International's 11 3/4%
    First Mortgage Notes.
 
(e) Represents the payment of accrued interest on 25% of Statia Terminals
    International's 11 3/4% First Mortgage Notes.
 
(f) Represents a cash charge related to the early retirement of 25% of Statia
    Terminals International's 11 3/4% First Mortgage Notes. This charge
    represents an extraordinary loss on early retirement of debt; accordingly,
    this is not reflected in the pro forma combined statements of operations.
 
(g) Represents the write-off of the balance of the prepaid Castle Harlan
    management fee as of December 31, 1998.
 
(h) Represents the write-off of 25% of total capitalized bond issuance costs as
    of December 31, 1998 related to Statia Terminals International's 11 3/4%
    First Mortgage Notes. This charge represents an extraordinary loss on early
    retirement of debt; accordingly, this is not reflected in the pro forma
    combined statements of operations.
 
(i) Represents the transfer of the shares of Petroterminal de Panama to a
    newly-formed corporation owned by the current owners of the issuer other
    than Praxair.
 
(j) Earnings per share data is not included on an historical basis as such
    information would not be representative of the capital structure of the
    issuer after this offering.
 
(k) Represents the elimination of the Castle Harlan management fee payable by
    the issuer. The management fee will be eliminated in connection with this
    offering (exclusive of certain expenses).
 
(l) Represents the reduction in interest expense and amortization of bond
    issuance costs resulting from the redemption of 25% of Statia Terminals
    International's 11 3/4% First Mortgage Notes.
 
(m) Represents the elimination of preferred stock dividends resulting from the
    retirement of the issuer's Preferred Stock Series A through E.
 
(n) Reflects the exclusion of the operating results of Statia Terminals
    Southwest.
 
                                       35
SELECTED CONSOLIDATED FINANCIAL DATA
 
     The following table sets forth selected financial data for the periods and
as of the dates indicated. In January 1996, our former parent, CBI Industries,
was acquired by Praxair. The statement of operations data for each of (i) the
period from January 1, 1996 through November 27, 1996, (ii) the period from
November 27, 1996 through December 31, 1996, and (iii) the years ended
December 31, 1997 and 1998 have been derived from and are qualified by reference
to, our audited consolidated financial statements included elsewhere in this
prospectus. The Statement of Operations Data for the years ended December 31,
1993, 1994 and 1995 have been derived from the Audited Combined Financial
Statements of Statia Terminals, Inc. and its Subsidiaries and Affiliates not
included in this prospectus. The summary historical consolidated financial data
set forth below should be read in conjunction with, and is qualified by
reference to, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Unaudited Pro Forma Consolidated Condensed Financial
Statements" and our consolidated financial statements and accompanying notes
thereto and other financial information included elsewhere in this prospectus.
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                               PRE-CASTLE HARLAN ACQUISITION               POST-CASTLE HARLAN ACQUISITION
                                        -------------------------------------------  ----------------------------------------
                                          PRE-PRAXAIR ACQUISITION      JANUARY 1,     NOVEMBER 27,
                                        ----------------------------      1996           1996
                                          YEAR ENDED DECEMBER 31,       THROUGH        THROUGH       YEAR ENDED DECEMBER 31,
                                        ----------------------------   NOVEMBER 27,   DECEMBER 31,  --------------------------
                                          1993      1994    1995(2)     1996(2)        1996(2)         1997        1998(3)
                                        --------  --------  --------   ------------   ------------  ------------  ------------
STATEMENT OF OPERATIONS DATA:
Revenues............................. $112,076  $132,666  $135,541     $140,998       $ 14,956      $142,499      $136,762
  Cost of services and products sold...   95,028   110,185   117,722      129,915         12,803       122,939       106,688
  Gross profit.........................   17,048    22,481    17,819       11,083          2,153        19,560        30,074
  Administrative expenses..............    4,395     5,345     6,957        8,282            664         7,735         9,500
  Operating income.....................   12,653    17,136    10,862        2,801          1,489        11,825        20,574
  Loss (gain) on disposition of
    property and equipment.............        7       (34)       59          (68)            --          (109)        1,652
  Interest expense.....................      726     3,114     4,478        4,187          1,613        16,874        16,851
  Provision for income taxes...........    1,873     1,219       390          629            132           780           320
  Net income (loss) available to common
    stockholders.......................   10,046    10,944     4,569       (2,682)          (522)       (8,361)       (1,503)
BALANCE SHEET DATA:
  Total assets.........................                                                                              245,610
  Long-term debt.......................                                                                              135,000
  Redeemable Preferred Stock Series A
    through C..........................                                                                               40,000
  Preferred Stock Series D and E.......                                                                               54,824
  Total stockholders' equity...........                                                                               43,331
OPERATING DATA:
  EBITDA(1)............................   19,438    27,921    28,720       20,822          2,452        22,489        32,092
  Maintenance capital expenditures.....    7,791     6,867     9,975       12,887          1,203         4,401         9,000
  Capacity (in thousands of barrels)...   11,590    15,387    20,387       20,387         20,387        20,387        19,566
  Percentage capacity leased...........       79%       87%       76%          68%            74%           70%           91%
  Throughput (in thousands of
    barrels)...........................   37,591    60,630   109,805       81,994         13,223       118,275       119,502
  Vessel calls.........................      967     1,063       973          922            108         1,030         1,027
------------------
(1) EBITDA is defined as the sum of (i) income (loss) before income tax
    provision (benefit), (ii) interest expense, less interest income
    (iii) depreciation and amortization of certain intangible assets,
    (iv) certain non-cash charges, and (v) the portion of the First Salute lease
    payments that represents interest expense for the periods prior to the
    November 27, 1996 purchase transaction. The amount of the First Salute
    related interest expense excluded from EBITDA was $5,741 for the year ended
    December 31, 1995 and $5,600 for the period ended November 27, 1996. EBITDA
    is presented not as an alternative measure of operating results or cash flow
    from operations (as determined in accordance with generally accepted
    accounting principles), but rather to provide additional information related
    to our debt servicing ability.
 
(2) Prior to January 12, 1996, we were a wholly owned subsidiary of
    CBI Industries. On January 12, 1996, pursuant to the merger agreement dated
    December 22, 1995, CBI Industries became a wholly owned subsidiary of
    Praxair. This transaction was reflected in our consolidated financial
    statements as a purchase, effective January 1, 1996. On November 27, 1996,
    Castle Harlan, members of our management and others acquired us from
    Praxair. This transaction is reflected in our consolidated financial
    statements effective November 27, 1996 as a purchase. The application of
    purchase accounting at each acquisition date resulted in changes to the
    historical cost basis of accounting for certain assets. Accordingly, the
    information provided for periods before and after each of these transactions
    is not comparable.
 
(3) Includes the operations of Statia Terminals Southwest through June 30, 1998.
 
                                       36
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
     For purposes of the discussion below, reference is made to our consolidated
balance sheet as of December 31, 1997 and 1998, and our consolidated income and
cash flow statements for the period January 1, 1996 through November 27, 1996
(after our acquisition by Praxair), for the period November 27, 1996 through
December 31, 1996 (after the acquisition by Castle Harlan, our management and
others), and the years ended December 31, 1997 and 1998. We prepare our
financial statements in accordance with U.S. generally accepted accounting
principles.
 
     To facilitate a meaningful discussion of our comparative operating
performance for the years ended December 31, 1996, 1997 and 1998, this
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" presents financial information on a traditional comparative basis
for all periods unless otherwise indicated. Consequently, the information
presented below for the year ended December 31, 1996 does not necessarily comply
with the accounting requirements for companies subject to major acquisitions.
Generally accepted accounting principles in the U.S. call for the separate
reporting of our new company (after the Castle Harlan acquisition) and our
predecessor company (both before and after the Praxair acquisition). A solid
black line in certain tables separates financial information that may not be
comparable across periods.
 
     Substantially all of our transactions are denominated in U.S. dollars. All
figures are in U.S. dollars unless otherwise indicated.
 
OVERVIEW OF OPERATIONS
 
     We began our operations in 1982 as Statia Terminals N.V., a Netherlands
Antilles corporation, operating an oil products terminal located on the island
of St. Eustatius. In 1984, CBI Industries, an industrial gases and contracting
services (including storage tank construction) company, acquired a controlling
interest in Statia Terminals N.V. In 1986, Statia Terminals N.V. purchased
Statia Terminals Southwest, with its facility at Brownsville, Texas. In 1990,
CBI Industries became the sole owner of Statia Terminals N.V. and Statia
Terminals Southwest. In 1993, we acquired full control of Statia Terminals Point
Tupper, Incorporated, located at Point Tupper, Nova Scotia.
 
     In January 1996, Praxair acquired CBI Industries. In November 1996, Castle
Harlan, our management and others acquired from Praxair all of the outstanding
capital stock of Statia Terminals N.V., Statia Terminals, Inc., their
subsidiaries and certain of their affiliates. Castle Harlan is a private equity
investment fund managed by Castle Harlan, Inc., a private merchant bank. At the
same time, Statia Terminals Point Tupper was amalgamated into Statia Terminals
Canada. Statia Terminals Canada and Statia Terminals International were
organized for purposes of facilitating the Castle Harlan acquisition. In July
1998, we sold Statia Terminals Southwest to an unaffiliated third party
purchaser.
 
     During 1992, we invested in additional terminal facilities located at Point
Tupper, Nova Scotia. We completed refurbishment of this 7.4 million barrel
facility during 1994. The total capital investment was $74.1 million. At St.
Eustatius during the fourth quarter of 1993, we commenced construction of five
million barrels of crude oil storage and a single point mooring buoy, which was
completed and leased during the first quarter of 1995, with a total capital
investment of $107.5 million. Over the three-year period from 1993 to 1995, we
added crude oil storage and related services to our established fuel oil,
petroleum products, and other services. In addition to blending and other
ancillary services, we added marine emergency response services at each of our
facilities and added limited refining capability through our atmospheric
distillation unit at St. Eustatius during 1995. Finally, during the fourth
quarter of 1995 and the first quarter of 1996, we made investments in a heating
system and butane sphere at Point Tupper. These additions to capacity have led
to more throughput and, therefore, higher revenues from storage, throughput and
ancillary services. We did not make significant investments to expand our
operating capacity during 1997 and 1998.
 
     The operations at St. Eustatius suffered damages from Hurricanes Iris, Luis
and Marilyn, causing closure of the terminal for approximately three weeks at
the end of the third quarter of 1995. Repair of damages caused by these
hurricanes and installation of certain improvements were substantially completed
by the end of the third quarter of 1996. We spent $20.6 million on repairs and
improvements related to the hurricanes, $6.8 million of which was capitalized as
property and equipment. Claims related to the hurricanes were filed with
insurance carriers and ultimately settled for $12.6 million.
 
     During September 1998, Hurricane Georges damaged the St. Eustatius
facility. Hurricane Georges did not significantly impact operations of the
facility which returned to normal within days of the storm. The preliminary
estimate of the damage to the facility is $5.8 million. Insulation on certain
 
                                       37
storage tanks, electrical transmission systems and roofs of several buildings
sustained damage. In advance of the storm, on September 19, 1998, the facility
ceased terminal operations and instituted its hurricane preparation and damage
prevention plan. The terminal returned to full operations by September 29, 1998.
During the third quarter of 1998, we recorded a charge of $0.8 million
representing an insurance deductible of $0.5 million related to the hurricane
damage and certain other costs resulting from the hurricane which we anticipate
will not be recovered through our insurance policies.
 
     The following table sets forth for the periods indicated certain key
statistics for each of our operating locations.
 
       CAPACITY, CAPACITY LEASED, THROUGHPUT AND VESSEL CALLS BY LOCATION
               (CAPACITY AND THROUGHPUT IN THOUSANDS OF BARRELS)
FOR THE YEAR ENDED
                                                                                            DECEMBER 31,
                                                                                    -----------------------------
                                                                                     1996       1997       1998
                                                                                    -------    -------    -------
Netherlands Antilles and the Caribbean
  Total capacity.................................................................    11,334     11,334     11,334
  Capacity leased................................................................        80%        76%        92%
  Throughput.....................................................................    69,395     62,944     74,158
  Vessel calls...................................................................       880        792        864
Canada
  Total capacity.................................................................     7,404      7,404      7,404
  Capacity leased................................................................        55%        70%        93%
  Throughput.....................................................................    23,350     53,011     43,468
  Vessel calls...................................................................        62        125        104
Texas
  Total capacity.................................................................     1,649      1,649        N/M
  Capacity leased................................................................        52%        31%       N/M
  Throughput.....................................................................     2,472      2,320        N/M
  Vessel calls...................................................................        88        113        N/M
All locations (1)
  Total capacity.................................................................    20,387     20,387     19,556
  Capacity leased................................................................        69%        70%        91%
  Throughput.....................................................................    95,217    118,275    119,502
  Vessel calls...................................................................     1,030      1,030      1,027
------------------
 
(1) The Brownsville, Texas facility was sold on July 29, 1998. The statistics
    above include the operations of the Brownsville facility through June 30,
    1998.
 
N/M: Not meaningful
 
     A majority of our revenues are generated by bunker and bulk product sales
which fluctuate with global oil prices. As a result, we experience volatility in
our revenue stream, which is not necessarily indicative of our profitability.
 
     Gross profits from terminaling services are higher than gross profits from
bunker and bulk product sales. Our operating costs for terminaling services are
relatively fixed and generally do not change significantly with changes in
capacity leased. Additions or reductions in storage, throughput and ancillary
service revenues directly impact our operating income. Costs for the procurement
of bunker fuels and bulk petroleum products are variable and linked to global
oil prices. Our bunker and bulk product costs are also impacted by market supply
conditions, types of products sold and volumes delivered.
 
     In addition, our operating costs are impacted by inflationary cost
increases, cost increases due to additional storage capacity and costs of
providing certain additional ancillary services.
 
RESULTS OF OPERATIONS
 
     The following table sets forth, for the periods indicated, the percentage
of revenues represented by certain items in our consolidated income statements.
 
                                       38
RESULTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31,
                                                                     -------------------------------------------------------------
                                                                            1996                  1997                 1998
                                                                     -------------------   ------------------   ------------------
                                                                                 % OF                 % OF                 % OF
                                                                     DOLLARS    REVENUES   DOLLARS   REVENUES   DOLLARS   REVENUES
                                                                     --------   --------   --------  --------   --------  --------
Revenues:
Terminaling services...............................................  $ 49,812      31.9%   $ 53,165     37.3%   $ 66,625     48.7%
Bunker and bulk product sales......................................   106,142      68.1%     89,334     62.7%     70,137     51.3%
                                                                     --------    ------    --------   ------    --------   ------
  Total revenues...................................................   155,954     100.0%    142,499    100.0%    136,762    100.0%
Cost of services and products sold.................................   142,718      91.5%    122,939     86.3%    106,688     78.0%
                                                                     --------    ------    --------   ------    --------   ------
  Gross profit.....................................................    13,236       8.5%     19,560     13.7%     30,074     22.0%
Administrative expenses............................................     8,946       5.7%      7,735      5.4%      9,500      6.9%
                                                                     --------    ------    --------   ------    --------   ------
  Operating income.................................................     4,290       2.8%     11,825      8.3%     20,574     15.0%
Loss (gain) on dispositions of property and equipment..............      (68)        --       (109)     (0.1)%     1,652      1.2%
Interest expense...................................................     5,800       3.7%     16,874     11.8%     16,851     12.3%
Interest income....................................................        97       0.1%        555      0.4%        684      0.5%
                                                                     --------    ------    --------   ------    --------   ------
Income (loss) before income taxes..................................    (1,345)     (0.8)%    (4,385)    (3.0)%     2,755      2.0%
Provision for income taxes.........................................       761       0.5%        780      0.5%        320      0.2%
Preferred stock dividends..........................................     1,098       0.7%      3,196      2.2%      3,938      2.9%
                                                                     --------    ------    --------   ------    --------   ------
  Net income (loss) available to common stockholders...............  $ (3,204)     (2.0)%  $ (8,361)    (5.7)%  $ (1,503)    (1.1)%
                                                                     --------    ------    --------   ------    --------   ------
                                                                     --------    ------    --------   ------    --------   ------
The following tables set forth for the periods indicated (i) the total
revenues and total operating income (loss), after allocation of administrative
expenses, at each of our operating locations and (ii) the percentage such
revenue and operating income (loss) relate to our total revenue and operating
income.
 
                              REVENUES BY LOCATION
                             (DOLLARS IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31,
                                                                            ------------------------------------------------------
                                                                                 1996                1997               1998
                                                                            ---------------    ----------------    ---------------
                                                                                      % OF                % OF               % OF
                                                                            DOLLARS   TOTAL    DOLLARS    TOTAL    DOLLARS   TOTAL
                                                                            --------  -----    --------   -----    --------  -----
Netherlands Antilles and the Caribbean...................................   $139,751   89.6%   $122,042    85.6%   $114,091   83.4%
Canada...................................................................     13,355    8.6%     18,586    13.0%     21,058   15.4%
Brownsville, Texas facility(1)...........................................      2,848    1.8%      1,871     1.4%      1,613    1.2%
                                                                            --------  -----    --------   -----    --------  -----
  Total..................................................................   $155,954  100.0%   $142,499   100.0%   $136,762  100.0%
                                                                            --------  -----    --------   -----    --------  -----
                                                                            --------  -----    --------   -----    --------  -----
------------------
 
(1) We sold our Brownsville, Texas facility on July 29, 1998. The figures above
    and our consolidated financial statements include the Brownsville facility
    through June 30, 1998.
                        OPERATING INCOME (LOSS) BY LOCATION
                              (DOLLARS IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31,
                                                                      --------------------------------------------------------
                                                                            1996                1997                1998
                                                                      ----------------    ----------------    ----------------
                                                                                 % OF                % OF                % OF
                                                                      DOLLARS    TOTAL    DOLLARS    TOTAL    DOLLARS    TOTAL
                                                                      --------   -----    --------   -----    --------   -----
Netherlands Antilles and the Caribbean..........................   $  6,826   159.1 %  $ 10,301    87.1 %  $ 14,442    70.2 %
   Canada..........................................................     (1,177)  (27.4)%     3,539    29.9 %     6,625    32.2 %
   Brownsville, Texas facility(1)..................................     (1,359)  (31.7)%    (2,015)  (17.0)%      (493)   (2.4)%
                                                                      --------   -----    --------   -----    --------   -----
   Total...........................................................   $  4,290   100.0 %  $ 11,825   100.0 %  $ 20,574   100.0 %
                                                                      --------   -----    --------   -----    --------   -----
                                                                      --------   -----    --------   -----    --------   -----
---------------------
 
    (1) We sold our Brownsville, Texas facility on July 29, 1998. The figures
        above and our consolidated financial statements include the Brownsville
        facility through June 30, 1998.
 
                                       39
YEAR ENDED DECEMBER 31, 1998 COMPARED WITH YEAR ENDED DECEMBER 31, 1997
 
  Comparability
 
     On July 29, 1998, we sold Statia Terminals Southwest to an unrelated
third-party. Our consolidated financial statements include the operations of
Statia Terminals Southwest through June 30, 1998. Therefore, the year ended
December 31, 1997 includes the operations of Statia Terminals Southwest for six
months more than the same period in 1998. Certain pro forma information related
to the sale of Statia Terminals Southwest is presented in the unaudited pro
forma consolidated condensed financial statements included elsewhere in this
prospectus.
 
  Revenues
 
     Total revenues for the year ended December 31, 1998 were $136.8 million
compared to $142.5 million for the year ended December 31, 1997, a decrease of
$5.7 million, or 4.0%.
 
     Revenues from terminaling services (consisting of storage, throughput, dock
charges, emergency response fees and other terminal charges) for the year ended
December 31, 1998 were $66.6 million compared to $53.2 million for the previous
year, an increase of $13.4 million, or 25.3%. The improvement in terminaling
services revenue for the year ended December 31, 1998 compared to the previous
year was principally due to:
 
     o our ability to attract additional long term customers who use our
       facilities as part of their strategic distribution networks;
 
     o additional vessel calls at St. Eustatius resulting in higher dock charges
       and emergency response fees; and
 
     o the recent contango conditions in the international petroleum markets.
 
     Revenues from terminaling services at St. Eustatius increased approximately
$8.7 million, or 24.2%, during the year ended December 31, 1998 as compared to
the year ended December 31, 1997. Total throughput increased from 62.9 million
barrels during the year ended December 31, 1997 to 74.2 million barrels during
the same period of 1998 due primarily to higher throughput of fuel oil and
petroleum products, and was partially offset by reduced throughout of crude oil.
Seventy-two more vessels called at the St. Eustatius facility during the year
ended December 31, 1998 than during the same period of 1997 resulting in higher
revenues from dock charges and stand-by emergency response fees. For the year
ended December 31, 1998, the overall percentage of capacity leased at this
facility was 92% compared to 76% for the same period of 1997, reflecting
increases in the percentage of capacity leased for fuel oil tankage and
petroleum products.
 
     Revenues from terminaling services at Point Tupper increased $5.1 million,
or 32.6% during the year ended December 31, 1998 as compared to the year ended
December 31, 1997. The percentage of tank capacity leased at Point Tupper
increased from 70% for the year ended December 31, 1997 to 93% for the same
period of 1998. This increase was primarily the result of additional crude oil
and clean petroleum products tankage leased during the year ended December 31,
1998 as compared to the same period of 1997. Fewer vessel calls led to lower
port charge revenues at this facility during the year ended December 31, 1998 as
compared to the same period of 1997.
 
     Revenues from bunker and bulk product sales were $70.1 million for the year
ended December 31, 1998 compared to $89.3 million for the same period in 1997, a
decrease of $19.2 million, or 21.5%. The decrease was primarily due to lower
comparative selling prices for bunker fuels reflecting current market
conditions. Average selling prices decreased 30.2% when comparing the year ended
December 31, 1998 with the same period of 1997. However, metric tons of bunkers
and bulk product sold increased 13.6% during the year ended December 31, 1998 as
compared to the same period of 1997.
 
  Gross Profit
 
     Gross profit for the year ended December 31, 1998 was $30.1 million
compared to $19.6 million for the same period of 1997, representing an increase
of $10.5 million, or 53.3%. The increase in gross profit is primarily the result
of the increased terminaling services revenue produced at a small incremental
cost. Additionally, we realized higher gross margins on bunker sales during the
year ended December 31, 1998 as compared to the same period of 1997 due to
higher volumes of bunker fuels delivered.
 
Administrative Expenses
 
     Administrative expenses were $9.5 million for the year ended December 31,
1998 as compared to $7.7 million for the same period of 1997, representing an
increase of $1.8 million, or 22.8%. The increase during the year ended December
31, 1998 as compared to the same period of 1997 is primarily the result of
higher personnel costs and certain professional fees.
 
  Loss on Sale of Assets
 
     As more fully discussed in note 15 of notes to the consolidated financial
statements, we recognized a loss on the sale of Statia Terminals Southwest
  
                                       40
during the year ended December 31, 1998 of $1.7 million.
 
  Interest Expense
 
     During the years ended December 31, 1997 and 1998, we incurred
$16.9 million of interest expense from interest accrued on our 11 3/4% First
Mortgage Notes due in 2003, amortization expense related to deferred financing
costs and certain bank charges.
 
  Preferred Stock Dividends
 
     Preferred stock dividends were $3.9 million for the year ended
December 31, 1998 as compared to $3.2 million for the same period of 1997,
representing an increase of $0.7 million, or 23.2%. Preferred stock dividends
have been computed and accrued but not paid on the issuer's Series A, B and C
Preferred Stock. The increase during the year ended December 31, 1998 as
compared to the same period of 1997 is the result of the increasing balance of
dividends payable and a rate increase.
 
  Net Income (Loss)
 
     Net loss available to common stockholders was $1.5 million for the year
ended December 31, 1998 as compared to a net loss of $8.4 million for the same
period of 1997, an improvement of $6.9 million. The decrease in the net loss is
attributable to the net effect of the factors discussed above.
 
YEAR ENDED DECEMBER 31, 1997 COMPARED WITH YEAR ENDED DECEMBER 31, 1996
 
  Comparability
 
     Gross profit, operating income and net income (loss) for the years ended
December 31, 1997 and 1996 are not comparable due to the effects of purchase
accounting applied as a result of the Castle Harlan acquisition and the effects
of the acquisition of the First Salute assets. Depreciation, amortization and
other operating expenses, which are components of gross profit, changed due to
revaluation of various assets to their fair values at the date of such
acquisition. Changes in components of our debt and equity accounts resulted in
changes to interest expense, dividends and costs of services and products sold.
 
  Revenues
 
     Total revenues for the year ended December 31, 1997 were $142.5 million
compared to $156.0 million for the year ended December 31, 1996, a decrease of
$13.5 million, or 8.6%.
 
     Revenues from terminaling services for the year ended December 31, 1997
were $53.2 million compared to $49.8 million for the previous year, an increase
of $3.4 million, or 6.7%. Increased revenues from terminaling services at Point
Tupper were partially offset by lower revenues from terminaling services at
St. Eustatius.
 
     Revenues from terminaling services at St. Eustatius decreased
$1.9 million, or 5.1%, during the year ended December 31, 1997 as compared to
the year ended December 31, 1996. Lower crude oil throughput and reductions in
the percentage of capacity leased for clean petroleum products resulted in lower
1997 revenues from storage, throughput and ancillary services. A customer
occupied all of the petroleum products storage for three-quarters of the 1996
year while the petroleum products tankage went essentially unleased for the 1997
year.
 
     Revenues from terminaling services at Point Tupper increased $6.6 million,
or 73.1% during the year ended December 31, 1997 as compared to the year ended
December 31, 1996. Incremental spot storage leases for crude oil from our
primary Canadian customer, Tosco, crude oil and petroleum products leases from
several new customers, plus 30 million barrels, or 127%, of increased throughput
from 1996 and additional ancillary services, contributed to the higher revenues
from terminaling services. Additionally, certain unleased tankage was converted
from petroleum product storage to crude oil storage to meet customer demand.
 
     Revenues from bunker and bulk product sales fell $16.8 million, or 15.8%,
to $89.3 million for the year ended December 31, 1997 from $106.1 million for
the same period in 1996. The drop is primarily attributable to increased
competition from elsewhere in the Caribbean, the U.S. Gulf coast and other ports
resulting in lower volumes of bunker fuel delivered and fewer bulk product
sales. At St. Eustatius, the volume of bunker fuels delivered fell 12.9%.
Comparative average selling prices year-to-year were virtually unchanged. At
Point Tupper, we were unable to expand our bunker sales business initiated in
1996 due to our inability to find an adequate source of supply.
 
     Our Brownsville, Texas facility, which we sold on July 29, 1998,
experienced a reduction in total revenues due to the loss of storage business
for gasoline and diesel fuels and vegetable oils primarily to competing
facilities in the region. Statia Terminal Southwest's revenues were
$1.9 million for the year ended December 31, 1997, down $0.9 million or 28.3%,
from $2.8 million for the same period in 1996.
 
  Gross Profit
 
     Gross profit for the year ended December 31, 1997 was $19.6 million
compared to $13.2 million for the year ended December 31, 1996 representing
 
                                       41
an increase of $6.4 million, or 48.5%. During the period from January 1, 1996
through November 27, 1996, lease expenses related to First Salute of $5.6
million consisting primarily of interest were included in cost of services and
products sold. This lease was fully satisfied in connection with the Castle
Harlan acquisition. Additionally, the increased terminaling services revenue
positively impacted our gross profit.
 
  Administrative Expenses
 
     Administrative expenses were $7.7 million for the year ended December 31,
1997 as compared to $8.9 million for the year ended December 31, 1996,
representing a decrease of $1.2 million, or 13.5%. For the year ended
December 31, 1996, administrative expenses included $3.0 million of non-cash
stock based compensation awarded to certain of our managers in connection with
the Praxair and Castle Harlan acquisitions. Exclusive of the non-recurring stock
based compensation, selling and administrative expenses increased from year-to-
year primarily due to higher personnel costs.
 
  Interest Expense
 
     Since the Castle Harlan acquisition in November 1996, our interest expenses
have related to interest accrued on our 11 3/4% First Mortgage Notes due 2003,
amortization expense related to deferred financing costs and certain bank
charges. For the year ended December 31, 1997, interest expenses amounted to
$16.9 million. For the year ended December 31, 1996, interest expenses related
to the First Mortgage Notes due 2003, third party debt obligation, net of
amounts charged to capital projects and the effects of an interest rate swap,
amortization expense related to deferred financing costs and certain bank
charges, were $5.8 million.
 
  Preferred Stock Dividends
 
     Preferred stock dividends were $3.2 million for the year ended
December 31, 1997 as compared to $1.1 million for the year ended December 31,
1996. Preferred stock dividends subsequent to November 27, 1996 represent
amounts accrued but not paid on the issuer's Series A, B and C Preferred Stock
and related dividend payable balances. Preferred stock dividends for the year
ended December 31, 1996 are not comparable to those incurred for the year ended
December 31, 1997 due to changes in the issuer's capital structure resulting
from the Praxair and Castle Harlan acquisitions.
 
  Net Income (Loss)
 
     Net loss available to common stockholders was $8.4 million for the year
ended December 31, 1997 as compared to $3.2 million for the year ended
December 31, 1996, representing an increase of $5.2 million. The increase in the
net loss is attributable to the net effect of the factors discussed above.
 
SELECTED QUARTERLY FINANCIAL INFORMATION
 
     Our 1998 operating income and EBITDA increased quarter over quarter in 1998
and for each quarter of 1998 compared to the same quarters in 1997. This trend
is a result of our entering into additional long term contracts over the
two-year period resulting in higher capacity leased, increased volumes of bunker
fuel delivered due, in part, to reduced competition, and additional revenues
from ancillary services due to higher terminal activity.
 
     The following table sets forth certain selected unaudited quarterly
operating results for each of our last eight quarters. This information was
prepared by us on a basis consistent with our audited financial statements and
includes all adjustments (consisting of normal and recurring adjustments) that
we consider necessary for a fair presentation of the data. These quarterly
results are not necessarily indicative of future results of operations. This
information should be read in conjuction with our consolidated financial
statements and notes thereto included elsewhere in this prospectus.
QUARTERS ENDED                          TOTAL
                                                   -------------------------------------------------------    --------
                                                   MARCH 31     JUNE 30      SEPTEMBER 30     DECEMBER 31
                                                   ---------    ---------    -------------    ------------
1997
Total revenues..................................    $32,709      $33,148        $35,333         $ 41,309      $142,499
Operating income................................      2,394        2,508          2,439            4,484        11,825
EBITDA..........................................      4,986        5,115          4,896            7,492        22,489
                      1998
Total revenues..................................    $30,364      $36,472        $32,699         $ 37,227      $136,762
Operating income................................      2,999        5,231          5,635            6,709        20,574
EBITDA..........................................      5,804        8,082          8,336            9,870        32,092
42
LIQUIDITY AND CAPITAL RESOURCES--SUBSEQUENT TO THE CASTLE HARLAN ACQUISITION
 
  Cash Flow from Operating Activities
 
     Net cash provided by operating activities was $18.2 million and
$9.8 million for the years ended December 31, 1998 and 1997 and $2.2 million for
the period from November 27, 1996 through December 31, 1996, respectively. Cash
flow from operations has been our primary source of liquidity during the periods
subsequent to the Castle Harlan acquisition. Differences between net losses and
positive operating cash flow have resulted primarily from depreciation and
amortization burdens and changes in various asset and liability accounts.
Additionally, during the year ended December 31, 1998, we recognized a
$1.7 million non-cash loss on the sale of Statia Terminals Southwest (see
note 15 of notes to consolidated financial statements for more information).
 
     At December 31, 1997, we had cash and cash equivalents on hand of
$6.1 million compared to $14.1 million at December 31, 1998.
 
  Cash Flow from Investing Activities
 
     Net cash used in investing activities was $4.1 million and $12.9 million
for the years ended December 31, 1998 and 1997 and $178.0 million for the period
from November 27, 1996 through December 31, 1996, respectively. Investing
activities during 1998 and 1997 and the period ended December 31, 1996 included
purchases of property and equipment of $10.7 million, $5.3 million and
$1.2 million, respectively. Additionally, as more fully discussed in note 15 of
notes to consolidated financial statements, on July 29, 1998, we received
$6.5 million of cash proceeds from the sale of our Brownsville, Texas facility.
 
     During the year ended December 31, 1997 and the period ended December 31,
1996, we spent $7.7 million and $176.8 million, respectively, related to the
Castle Harlan acquisition. These amounts include (i) approximately
$175.1 million in cash paid to Praxair (of which $170.0 million was paid at
closing and $5.1 million was paid in February 1997) to satisfy the cash portion
of the purchase price, and (ii) $9.4 million of commissions, fees and expenses.
 
  Cash Flow from Financing Activities
 
     During the year ended December 31, 1998 we utilized the net proceeds from
the sale of the Brownsville, Texas facility to retire $6.15 million of the
issuer's Series D Preferred Stock.
 
     As part of the Castle Harlan acquisition, we issued $135.0 million of First
Mortgage Notes, received proceeds of $56.5 million from the issuance of
preferred and common stock and paid $6.4 million of debt costs. The net cash
proceeds from these transactions were substantially used as described above in
"--Cash Flow from Investing Activities".
 
     In connection with the Castle Harlan acquisition prior to November 27, 1996
all of our third-party indebtedness, including an off-balance sheet lease
obligation, bank debts, preferred stock from a former affiliate and advances
from Praxair, was repaid. In addition, on November 27, 1996, we entered into a
new $17.5 million revolving credit facility secured by our accounts receivable
and oil inventory. The revolving credit facility is available for working
capital needs and letter of credit financing, and it permits us to borrow in
accordance with our available borrowing base which was estimated at
$8.0 million as of December 31, 1998. No draws on the revolving credit facility
have occurred. The revolving credit facility bears interest at the prime rate
plus 0.50% per annum (8.25% at December 31, 1998) and will expire on
November 27, 1999.
 
     The debt service costs associated with the borrowings under the First
Mortgage Notes have significantly increased liquidity requirements. The First
Mortgage Notes accrue interest at 11 3/4% per annum payable semi-annually on
May 15 and November 15. The First Mortgage Notes will mature on November 15,
2003. The First Mortgage Notes are redeemable in whole or in part at the option
of Statia Terminals International at any time on or after November 15, 2000 at
redemption prices set forth in the indenture relating to the First Mortgage
Notes. The First Mortgage Notes may be redeemed or purchased prior to
November 15, 2000 in certain circumstances as defined in the indenture relating
to the First Mortgage Notes.
 
     The indenture generally limits the incurrence of additional debt by Statia
Terminals International, limits the ability of Statia Terminals International to
pay the issuer dividends or make any other distribution to the issuer, and
limits the ability of Statia Terminals International to sell its assets. We may
incur additional indebtedness as long as our fixed charge coverage ratio (as
defined in the indenture) is greater than 2.0 to 1. Under the terms of the
indenture, Statia Terminals International may not pay the issuer any dividend if
at the time of declaration:
 
     o a default or event of default under the indenture shall have occurred and
       be continuing or shall occur as a consequence thereof;
 
     o Statia Terminals International's consolidated fixed charge coverage ratio
       (as defined in
 
                                       43
the indenture) for the prior four full quarters is less than 2.0 to 1; or
 
     o the amount of such dividend, when added to the aggregate amount of all
       other dividends and certain other restricted payments made by Statia
       Terminals International after November 27, 1996 and not covered by other
       exceptions in the indenture, exceeds a certain sum. Such sum is:
 
          o 50% of Statia Terminals International's consolidated net income (as
            defined in the indenture) (taken as one accounting period) from
            November 27, 1996 to the end of Statia Terminals International's
            most recently ended fiscal quarter for which internal financial
            statements are available at the time of such dividend (or, if such
            aggregate consolidated net income is a deficit, minus 100% of such
            aggregate deficit),
 
          plus
 
          o the net cash proceeds from the issuance and sale (other than to a
            subsidiary of Statia Terminals International) after November 27,
            1996 of Statia Terminals International capital stock.
 
Certain other dividends, generally unrelated to operating cash flow, are
permitted notwithstanding the second and third items above.
 
     We believe that cash flow generated by operations and amounts available
under the revolving credit facility will be sufficient, until the maturity of
the First Mortgage Notes, to fund working capital needs, capital expenditures
and other operating requirements (including any expenditures required by
applicable environmental laws and regulations) and service debt. Our operating
performance and ability to service or refinance the First Mortgage Notes and to
extend or refinance the revolving credit facility will be subject to future
economic conditions and to financial, business and other factors, many of which
are beyond our control. We can give no assurances that our future operating
performance will be sufficient to service our indebtedness or that we will be
able to repay at maturity or refinance our indebtedness in whole or in part.
 
LIQUIDITY AND CAPITAL RESOURCES--PRIOR TO THE CASTLE HARLAN ACQUISITION
 
     Except for cash of our Canadian subsidiaries, prior to the Castle Harlan
acquisition we had been a participant in Praxair/CBI Industries' cash management
system whereby all cash receipts were swept into our predecessor company's
(prior to the Castle Harlan acquisition) investment program. Cash for operations
and capital expansion has been funded by our operations, our predecessor
company's operations (prior to the Castle Harlan acquisition) and debt
facilities available to us (guaranteed by our predecessor company). During 1996
prior to the Castle Harlan acquisition, cash provided by operations of
$9.1 million, proceeds from insurance claims related to hurricane damage
incurred in 1995 of $12.6 million and net advances from Praxair of approximately
$19.3 million (exclusive of advances related to repayment of existing
indebtedness) were used to finance the purchase of property and equipment of
$14.5 million and pay dividends to Praxair and its affiliates of $25.8 million.
 
CAPITAL EXPENDITURES
 
     We spent $15.7 million, $5.3 million and $10.7 million during the years
ended December 31, 1996, 1997 and 1998, respectively. These amounts include
$1.6 million, $0.9 million and $1.7 million, respectively, which was spent to
enhance our ability to generate incremental revenues. Capital expenditures for
1996 were primarily for improvements made in connection with hurricane damage
incurred in 1995. During 1997, capital expenditures were made primarily for
various piping and tank enhancements at each location and a new warehouse at St.
Eustatius. During 1998, a majority of capital expenditures were related to
maintenance capital expenditures including our terminal and marine maintenance
programs.
 
     Our preliminary capital expenditure budget for 1999 is $7.0 million for
maintenance capital expenditures and $2.4 million for producing incremental
revenues. Additional spending is contingent upon the addition of incremental
terminaling business.
 
     The following table sets forth capital expenditures by location and
separates such expenditures into those which produce, or have the potential to
produce, incremental revenue, and those which represent maintainance capital
expenditures.
 
                                       44
SUMMARY OF CAPITAL EXPENDITURES BY LOCATION
                             (DOLLARS IN THOUSANDS)
PRODUCE        MAINTENANCE
                                                          INCREMENTAL      CAPITAL
                                                          REVENUES        EXPENDITURES       TOTAL       % OF TOTAL
                                                          -----------     -------------     --------     ----------
YEAR ENDED DECEMBER 31, 1996
  Netherlands Antilles................................      $89,344(1)       $11,969(2)     $101,313(1)(2)     97.2%
  Canada..............................................          751              451           1,202          1.2%
  Brownsville, Texas (3)..............................           19            1,226           1,245          1.2%
  All other United States.............................           --              444             444          0.4%
                                                            -------          -------        --------       ------
     Total............................................      $90,114          $14,090        $104,204        100.0%
                                                            -------          -------        --------       ------
                                                            -------          -------        --------       ------
YEAR ENDED DECEMBER 31, 1997
  Netherlands Antilles................................      $   696          $ 2,858        $  3,556         66.5%
  Canada..............................................          120              834             954         17.9%
  Brownsville, Texas (3)..............................          125              100             225          4.2%
  All other United States.............................           --              609             609         11.4%
                                                            -------          -------        --------       ------
     Total............................................      $   941          $ 4,401        $  5,344        100.0%
                                                            -------          -------        --------       ------
                                                            -------          -------        --------       ------
YEAR ENDED DECEMBER 31, 1998
  Netherlands Antilles................................      $   667          $ 5,990        $  6,657         62.1%
  Canada..............................................          829              476           1,305         12.2%
  Brownsville, Texas (3)..............................          218               94             312          2.9%
  All other United States.............................           --            2,440           2,440         22.8%
                                                            -------          -------        --------       ------
     Total............................................      $ 1,714          $ 9,000        $ 10,714        100.0%
                                                            -------          -------        --------       ------
                                                            -------          -------        --------       ------
(1) Includes purchase of First Salute assets.
(2) Includes $6.8 million of capitalized enhancements related to the hurricanes
    of 1995.
(3) We sold our Brownsville, Texas facility on July 29, 1998.
 
     Prior to 1996, we financed the construction of certain crude oil
terminaling assets at St. Eustatius through a leveraged lease arrangement,
effectively removing $88.5 million of assets and liabilities from our balance
sheet (See note 9 to the consolidated financial statements). We leased land to a
special purpose financing entity, First Salute, upon which the crude tanks were
constructed. These crude oil facilities at St. Eustatius were leased back to us.
During the life of the lease, we accounted for monthly lease payments,
consisting primarily of interest on the underlying financing, and recognized an
accrual towards the residual guarantee value within the line item cost of
services and products sold. During 1996, we paid $5.6 million to First Salute
which consisted primarily of interest costs on the underlying debt. All
obligations under the lease were satisfied prior to the Castle Harlan
acquisition and the related assets were included on the balance sheet at that
time.
 
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
 
     We are subject to comprehensive and periodically changing environmental,
health and safety laws and regulations within the jurisdictions of our
operations, including those governing oil spills, emissions of air pollutants,
discharges of wastewater and storm waters, and the disposal of non-hazardous and
hazardous waste. In 1996, 1997, and 1998, our capital expenditures for
compliance with environmental, health and safety laws and regulations were
approximately $1.3 million, $1.3 million and $2.7 million, respectively. These
figures do not include routine operational compliance costs, such as the costs
for the disposal of hazardous and non-hazardous solid waste, which were
approximately $0.4 million, $0.2 million and $0.9 million in 1996, 1997 and
1998, respectively. We believe we are presently in substantial compliance with
applicable laws and regulations governing environmental, health and safety
matters. The Praxair agreement includes a covenant by Praxair to pay certain
environmental investigation, response and upgrade costs, subject in some cases
 
                                       45
to monetary limitations. However, we cannot guarantee that Praxair will pay all
of the indemnified amounts without dispute or delay.
 
     Past uses of the Point Tupper facility, including its past operation by
others as an oil refinery, have resulted in certain on-site areas of known and
potential contamination, as described below. Under Canadian environmental,
health and safety laws, we, as the owner and operator of the facility, can be
held liable for mitigation or remediation of, and damages arising from, these or
other as yet unknown environmental, health and safety conditions at the
facility.
 
     In connection with the Castle Harlan acquisition in 1996, phase I and
limited phase II environmental site assessments were conducted at the Point
Tupper terminal to identify potential environmental, health and safety matters.
Certain environmental matters and conditions that were likely to require the
incurrence of costs were identified and Praxair agreed to pay the costs of
addressing certain of such matters, subject in some cases to monetary
limitations. Since then we have been undertaking, in accordance with
environmental, health and safety laws, investigations, remediation and upgrading
to address these and other more recently identified matters.
 
     Certain of such matters involve environmental contamination associated with
certain areas of the property (some of which result from the past operation of
the facility by others as a refinery). These include a former sludge and waste
disposal area (with respect to which a remediation plan is being developed), two
pump stations (with respect to which further delineation and remediation of
contaminated soil are underway), and the area surrounding an above-ground crude
oil storage tank (the investigation and delineation of which is at an early
stage, although the contamination appears to be contained within a fairly
limited area).
 
     Certain terminal facilities have also been identified as requiring
upgrading or remediation to meet the requirements of existing environmental,
health and safety laws. These include, among other matters, an oil-water
separator required to process facility run-off and to treat ballast water (with
respect to which the rebuilding of the separator is expected to be completed in
1999, a ballast reception line has been installed, and petroleum contamination
discovered beneath the separator is being addressed), upgrading of containment
areas for above-ground storage tanks (with respect to which survey work has been
completed and civil work is expected to commence during 1999), removal of
underground storage tanks (with respect to which the removal has been completed
and the remediation of associated contaminated soil is underway), and the
presence of friable asbestos that is being removed from certain areas of the
terminal (the removal and disposal of substantially all of which has been
completed and we are awaiting final inspection and the issuance of a certificate
of compliance).
 
     With respect to the foregoing environmental liabilities and costs, Praxair,
in connection with the Castle Harlan acquisition, to date has paid approximately
$2.3 million. We anticipate incurring additional costs of $0.7 million which are
not likely to be reimbursable from Praxair. Based on the investigation conducted
and information available to date, the potential cost of additional remediation
and compliance related to the foregoing matters is currently estimated to be
approximately $10 million, substantially all of which we believe is Praxair's
responsibility for under the Praxair agreement.
 
     We have also identified environmental, health and safety costs that are not
covered by the Praxair agreement (including the $0.7 million discussed above)
for which we accrued $1.5 million during 1996, $10,000 of which has been spent
through the end of 1998. We can give no assurances that such accrual is
sufficient to cover all such environmental, health and safety costs.
 
     We can give no assurances that additional liabilities (either presently
known or discovered in the future) under existing or future environmental,
health and safety laws and outside the scope of the Praxair agreement will not
be material. In addition, we can give no assurances that we will not have to
incur material expenses before Praxair pays amounts for which Praxair ultimately
would be responsible.
 
     We anticipate that we will incur additional capital and operating costs in
the future to comply with currently existing laws and regulations, amendments to
such laws and regulations, new regulatory requirements arising from recently
enacted statutes, and possibly new statutory enactments. As government
regulatory agencies have not yet promulgated the final standards for proposed
environmental, health and safety programs, we cannot at this time reasonably
 
                                       46
estimate the cost for compliance with these additional requirements (some of
which will not take effect for several years) or the timing of any such costs.
However, we believe any such costs will not have a material adverse effect on
our business and financial condition or results of operations.
 
     See generally "Risk Factors--Environmental risks and new governmental
regulation may negatively affect us" and "Business--Environmental, Health and
Safety Matters."
 
INFORMATION TECHNOLOGY AND THE YEAR 2000
 
     Certain computer software and hardware applications and embedded
microprocessor, microcontroller or other processing technology applications and
systems use only two digits to refer to a year rather than four digits. As a
result, these applications could fail or create erroneous results in dealing
with certain dates and especially if the applications recognize "00" as the year
1900 rather than the year 2000. During 1997, we developed a Year 2000 plan to
upgrade our key information systems and simultaneously address the potential
disruption to both operating and accounting systems that might be caused by the
Year 2000 problem. The Year 2000 plan also provides for the evaluations of the
systems of customers, vendors, and other third-party service providers and
evaluations of our non-information technology systems, which include embedded
technologies such as microcontrollers (also referred to as non-traditional
information technology).
 
     We have substantially completed the assessment phase of the Year 2000 plan
as it relates to both traditional and non-traditional technology applications
and systems. We are currently in the process of testing new Year 2000 compliant
terminal operations softwareat our facilities. We anticipate that the Year 2000
compliant terminal operations systems will be fully implemented in the first
quarter of 1999. We recently selected a fully integrated Year 2000 compliant
finance, accounting, and human resources system and expect to have the new
system fully operational by the third quarter of 1999.
 
     We have identified certain of our significant existing non-traditional
information technology systems as not being Year 2000 compliant. We are
currently evaluating the best means to mitigate the possible adverse effects
resulting from the potential failure of these systems including repair or
replacement. However, we believe that in a worst case scenario, existing manual
overrides would prevent the failure of these systems from having a material
adverse effect on our operations.
 
     In accordance with our Year 2000 plan, we have initiated a formal
communications process with other companies with which our systems interface or
rely on to determine the extent to which those companies are addressing their
Year 2000 compliance. In connection with this process, we have sent numerous
letters and questionnaires to third parties and are evaluating those responses
as they are received. Where necessary, we will be working with those companies
that are not yet Year 2000 compliant to mitigate any material adverse effect
such non-compliance may have on us. Based upon information we have received and
reviewed of our possible existing relationships with third parties, we do not
currently anticipate that any third-party non-compliance would have a material
adverse effect on our business, results of operations, or financial condition.
 
     In 1998, we spent $1.1 million related to our Year 2000 remediation efforts
of which we have capitalized $1.0 million and expensed $0.1 million. In 1999, we
anticipate spending an additional $0.8 million to complete these efforts of
which we anticipate capitalizing $0.7 million and expensing $0.1 million.
However, we cannot guarantee that these estimates will be met and actual
expenditures could differ materially from these estimates.
 
     Based upon information currently available to us, we believe our efforts
will succeed in preventing the Year 2000 issue from having a material adverse
effect on us. However, the pervasive nature of the Year 2000 issue may prevent
us from fully assessing and rectifying all systems that could have an effect on
our business, results of operations, or financial condition.
 
POLITICAL, INFLATION, CURRENCY AND INTEREST RATE RISKS
 
     We periodically evaluate the political stability and economic environment
in the countries in which we operate. As a result of these evaluations, we are
not presently aware of any matters that may adversely impact our business,
results of operations or financial condition. The general rate of inflation in
the countries where we operate has been relatively low in recent years causing a
modest impact on operating costs. Typically, inflationary cost increases result
in adjustments to storage and
 
                                       47
throughput charges because long term contracts generally contain price
escalation provisions. Bunker fuel and bulk product sales prices are based on
active markets, and we are generally able to pass any cost increases to
customers. Except for minor local operating expenses in Canadian dollars and
Netherlands Antilles guilders, all of our transactions are in U.S. dollars.
Therefore, we believe we are not significantly exposed to exchange rate
fluctuations.
 
     As all of our present debt obligations carry a fixed rate of interest
(except for the undrawn revolving credit facility which varies with changes in
the lender's prime lending rate), we believe our exposure to interest rate
fluctuations is minimal.
 
TAX MATTERS
 
     Our St. Eustatius facility has qualified for designation as a free trade
zone and our Point Tupper facility has qualified for designation as a customs
bonded warehouse. Such status allows customers and us to transship commodities
to other destinations with minimal Netherlands Antilles or Canadian tax effects.
 
     Pursuant to a Free Zone and Profit Tax Agreement with the island government
of St. Eustatius which is scheduled to expire on December 31, 2000, we are
subject to a minimum annual tax of 500,000 Netherlands Antilles guilders
(approximately $282,000). This agreement further provides that any amounts paid
to meet the minimum annual payment will be available to offset future tax
liabilities under such agreement to the extent that the minimum annual payment
is greater than 2% of taxable income. Discussions regarding modification and
extension of this agreement are in progress, and we believe that, although
certain terms and conditions could be modified and that the amounts payable to
these governments may be increased, extension of this agreement is likely.
However, it is possible that such amounts may be increased more than anticipated
and that government authorities may impose additional fees if this agreement is
not extended or is otherwise amended.
 
     Tax rates in the jurisdictions in which we operate did not change
significantly between 1996 and 1998. Certain income tax liabilities incurred
prior to November 27, 1996 were assumed by Praxair,and we retained net operating
loss carryforwards of $7.5 million in Canada. We also retained certain
investment tax credits in the Netherlands Antilles and Canada, which may be used
to offset future taxes payable. As a result of the Castle Harlan acquisition,
certain Canadian assets were revalued for tax purposes resulting in a loss of
$77.2 million during 1996.
 
     The combined net operating loss and investment tax credit carryforward
available to offset Canadian taxable income was $62.4 million as of
December 31, 1998 which expires in varying amounts through 2005.
 
     We have provided a full valuation allowance against these deferred tax
assets because it is not certain that any deferred tax assets will be utilized
in the future.
 
LEGAL PROCEEDINGS
 
     Global Petroleum Corp. and one of its affiliates sued us in December of
1993 seeking the release of certain petroleum products we were holding to secure
the payment of invoices. The Supreme Court of Nova Scotia ordered the release of
the products once Global posted a $2.0 million bond. Global claimed damages of
$1.2 million for breach of contract, and we counterclaimed for breach of
contract and payment of approximately $2.0 million of overdue invoices. In April
1996, Global, Scotia Synfuels Limited and their related companies sued CBI
Industries and us in the Supreme Court of Nova Scotia alleging $100 million in
damages resulting from misrepresentation, fraud and breach of fiduciary duty
associated with the reactivation of the Point Tupper facility and the sale of
their shares in the entity owning the Point Tupper facility to one of our
affiliates which was at that time a subsidiary of CBI Industries.
 
     In May 1994, the U.S. Department of Justice sued two of our subsidiaries
for $3.6 million of pollution clean-up costs in connection with the discharge of
oil into the territorial waters of the U.S. Virgin Islands and Puerto Rico by a
barge that had been loaded by one our subsidiaries at St. Eustatius but was not
affiliated with us. On April 16, 1998, the U.S. District Court ruled that it
lacked jurisdiction over such subsidiary and dismissed it from the case.
 
     We believe the allegations made in these proceedings are without merit and
intend to vigorously contest these claims. In connection with the Castle Harlan
acquisition, Praxair agreed to indemnify us against damages relating to the
 
                                       48
proceedings described above. While we can not estimate any ultimate liability or
guaranty that Praxair will pay all of the indemnified damages without dispute or
delay, we believe these proceedings will not materially affect our business and
financial condition, results of operations or ability to pay the minimum
quarterly dividend.
 
     We are involved in various other claims and litigation related to the
ordinary conduct of our business. Based upon our analysis of legal matters and
our discussions with legal counsel, we believe that these matters will not
materially impact our business and financial condition, results of operations or
ability to pay the minimum quarterly dividend.
 
INSURANCE
 
     We maintain insurance policies on insurable risks at levels we consider
appropriate. At the present time, we do not carry business interruption
insurance (except with respect to the offshore single point mooring system) due
to, what we believe, are excessive premium costs for the coverage provided.
While we believe we are adequately insured, future losses could exceed insurance
policy limits, or under adverse interpretations, be excluded from coverage.
Future liability or costs, if any, incurred under such circumstances could
adversely impact cash flow. See "Business--Insurance."
 
ACCOUNTING STANDARDS AND POLICIES
 
     In 1998, we adopted Statement of Financial Accounting Standards ("SFAS")
No. 128--"Earnings Per Share." Pro forma diluted earnings per common and
subordinated share and incentive right calculations are determined by dividing
net income by the weighted average number of common and subordinated shares and
incentive rights outstanding. SFAS No. 128 had no impact on our reported
earnings per share.
 
     In 1998, we adopted SFAS No. 130--"Reporting Comprehensive Income" which
establishes standards for the reporting and display of comprehensive income and
its components. There were no material differences between net income and
comprehensive income.
 
     In 1998, we adopted SFAS No. 131--"Disclosures about Segments of an
Enterprise and Related Information" which establishes standards for the way that
public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports issued to
stockholders. It also establishes standards for related disclosures about
product and service, geographic areas, and major customers. The adoption of SFAS
No. 131 had no impact on results of operations, financial position or cash flow.
 
     In June 1998, the FASB issued SFAS No. 133--"Accounting for Derivative
Instruments and Hedging Activities" which establishes certain standards of
accounting for derivative instruments including specific hedge accounting
criteria. SFAS No. 133 is effective for fiscal years beginning after June 15,
1999 although earlier adoption is allowed. We have not yet quantified the
impacts of adopting SFAS No. 133 and have not determined when we will adopt SFAS
No. 133. However, as we do not presently have derivative instruments, we do not
expect SFAS No. 133 to have a material impact on us.
 
OTHER MATTERS
 
     We have reclassified our emergency spill response vessel M/V Statia
Responder (formerly known as the M/V Megan D. Gambarella) from its original
asset held for sale classification to property and equipment as we are no longer
actively seeking buyers for the vessel. Certain of the issuer's preferred stock
agreements would have required the issuer to utilize any net proceeds from the
sale of the vessel to redeem Series B Preferred Stock at the applicable
redemption price prior to November 28, 1998. As the Series B Preferred Stock was
not redeemed by the issuer prior to November 28, 1998, the dividend rates on the
issuer's Series A, B and C Preferred Stock increased from 8% to 14.75% effective
November 28, 1998, in accordance with the issuer's preferred stock agreements.
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
     We periodically purchase refined petroleum products from our customers and
others for resale as bunker fuel, for small volume sales to commercial interests
and to maintain an inventory of blend stocks for its customers. Petroleum
product inventories are held for short periods, generally not exceeding ninety
days. We do not presently have any derivative positions to hedge our inventory
of
 
                                       49
petroleum products. The following table indicates the aggregate carrying value
of our petroleum products on hand at December 31, 1998 computed at average
costs, net of any lower of cost or market valuation provisions, and the
estimated fair value of such products.
 
                      ON BALANCE SHEET COMMODITY POSITION
                             (DOLLARS IN THOUSANDS)
AS OF DECEMBER 31, 1998
                                                                                       -----------------------------
                                                                                       CARRYING AMOUNT    FAIR VALUE
                                                                                       ---------------    ----------
Petroleum inventory:
  Statia Terminals N.V. ............................................................       $ 4,205          $4,205
  Statia Terminals Canada...........................................................           323             338
                                                                                           -------          ------
Total...............................................................................       $ 4,528          $4,543
                                                                                           -------          ------
                                                                                           -------          ------
50
INDUSTRY
 
TERMINALING
 
     The petroleum terminaling industry consists of two market segments. One
segment is characterized by the ownership and management of terminals inland
along major crude oil or petroleum product pipelines. This segment is primarily
engaged in the distribution of crude oil to inland refineries or of petroleum
products via pipeline, rail or truck. The second segment of the industry is
marine terminaling. This segment is primarily engaged in bulk storage and
transshipment of crude oil and petroleum products of domestic and overseas
producers, integrated oil companies, traders, refiners and distributors.
"Transshipment" is the process whereby customers transfer their products either
from a vessel to storage tanks for subsequent transfer to other vessels for
delivery to other destinations or from one ship to another ship across the dock.
We are engaged only in marine terminaling.
 
     Demand for terminaling services depends on the supply of and demand for
crude oil and petroleum products in the U.S. The U.S. Department of Energy
reports that U.S. demand for crude oil and petroleum products increased at an
annual compound growth rate of 1.8% between 1993 and 1998. According to U.S.
Department of Energy statistics, while demand in the U.S. has risen, domestic
crude oil production has fallen at an annual compound percentage rate of 1.3%
between 1993 and 1998 resulting in an increase in crude oil and petroleum
product imports at an annual compounded rate of 3.4% over the same period. In
addition, the U.S. Department of Energy reports that average U.S. refinery
utilization was at 92% in 1993 and 96% in 1998.
 
     The U.S. Department of Energy projects that the import requirements of
crude oil and refined petroleum products into the U.S. will increase at an
annual compounded rate of 4.3% from 1998 through 2003.
 
     A substantial portion of crude oil and petroleum products storage terminals
are "captive," i.e., they are owned by producers, refiners and pipeline
operators and used almost exclusively for their own operations. The independent
terminaling operator segment of the marine terminaling industry which is
described in this prospectus excludes these captive terminals. Captive terminal
storage is only occasionally made available to the general market and lacks
certain competitive advantages of independent operations, the most important of
which is confidentiality.
 
     The Independent Liquid Terminals Association is an international trade
association that represents commercial operators of bulk liquid terminals,
above-ground tank storage facilities, and pipeline facilities located in North
and South America, Europe, Asia, the United Kingdom, Australia, New Zealand and
South Africa. As published in the 1997 ILTA Bulk Liquids Terminals Directory,
the 86 ILTA member companies operated 483 deepwater barge and pipeline terminals
with an aggregate capacity of over 327 million barrels of dry bulk and liquid
storage capacity in more than 13,720 tanks. More than 400 of these bulk liquid
terminals are located in the U.S. and represent over 277 million barrels of
capacity. The portion of the petroleum terminaling industry covered by
independent companies operating marine terminaling facilities is difficult to
assess.
 
                                       51
U.S. CRUDE OIL AND PETROLEUM PRODUCT IMPORTS
 
                            Imported Crude Oil 
        Year              and Petroleum Products
        ----              ----------------------
                         (million barrels per day)

        1993                       8.62
        1994                       8.99
        1995                       8.84
        1996                       9.48
        1997                      10.16
        1998(1)                   10.20

Source: U.S. Department of Energy
(1) This is a projected number.
 
     Companies generally use marine liquids terminals for various reasons
including:
 
     o to take advantage of economies of scale by transporting crude oil or
       petroleum products in bulk to a terminal as near to the ultimate
       destination as possible;
 
     o to blend crude oil or petroleum products to meet market specifications;
 
     o to process products stored by their customers to add value for a specific
       downstream market;
 
     o to store crude oil or petroleum product temporarily; and
 
     o to access fuel and supplies for consumption by marine vessels
       ("bunkering").
 
BULK CARGO MOVEMENT
 
     Due to significant economies of scale, petroleum companies ship crude oil
from the Middle East, North Sea and West Africa in very-large or ultra-large
crude carriers to a transshipment point such as one of our terminals. These
very-large and ultra-large crude carriers, however, are too large to deliver
their cargo directly to many ports, including virtually all U.S. ports.
Therefore, most petroleum companies are forced to either partially or completely
"lighter" their cargo (the process by which liquid cargo is transferred to
smaller vessels, usually while at sea) or transship their cargo through a
terminal to other smaller vessels that can enter U.S., Canadian and Caribbean
ports. Both of our facilities can handle substantially all of the world's
largest fully-laden very-large and ultra-large crude carriers.
 
     We believe that terminaling offers several advantages over lightering.
Terminaling generally provides more flexibility in the scheduling of deliveries
and allows our customers to deliver their products to multiple locations.
Terminaling is also generally safer and more environmentally sound than
lightering which is conducted at sea and may be impacted by vessel movement,
adverse weather and sea conditions. Lightering in U.S. territorial waters also
creates a risk of liability for owners and shippers of oil. Under the U.S. Oil
Pollution Act of 1990 and other state and federal legislation, significant
liability is imposed for spills in U.S. territorial waters. In Canada, similar
liability exists under the Canadian Shipping Act. Terminaling also provides
customers with the ability to access value added terminal services.
 
     Lightering generally takes significantly longer than discharging at a
terminal. For example, a fully laden ultra-large crude carrier may require up to
seven days to fully discharge by lightering, but only 24 to 48 hours to fully
discharge at our terminals. In addition, terminals allow oil producers
 
                                       52
to store oil and benefit from value-added services. The advantages of
terminaling may be offset in market conditions where the direct costs of
terminaling are higher than those of lightering. The direct cost differential of
lightering versus terminaling changes as charter rates change for ships of
various sizes. Under current market conditions, lightering in most instances
costs less than terminaling, primarily by allowing very-large and ultra-large
crude carriers to cover the larger portion of the total journey.
 
     The U.S. Oil Pollution Act of 1990 also prohibits single-hulled tankers
built after 1990 from entering U.S. territorial waters (regardless of whether
for lightering or docking purposes). In addition, this law prohibits all vessels
utilizing single-hulls from entering U.S. territorial waters after 2010. The
U.S. Coast Guard has modified these restrictions through regulations which
permit lightering activities in restricted lightering zones near the U.S. East
coast and Gulf coast. The Canadian Standards for Double Hull Construction of Oil
Tankers currently prohibit single-hulled oil tankers, constructed after July
1993, and after January 1, 2010, prohibit substantially all single-hulled oil
tankers from entering Canadian territorial waters. Currently, approximately 80%
of the world's very-large and ultra-large crude carriers are single-hulled. The
majority of such vessels were built prior to 1990.
 
BLENDING
 
     Increasingly stringent environmental regulations in the U.S., Canadian and
European marketplaces create additional demand for facilities that can blend a
variety of components into finished products that meet such regulations as well
as customers' specific requirements. Blending requires specialized equipment and
expertise. In addition, blenders must have a full range of blendstocks
available. The evolving reformulated gasoline market in the U.S. (resulting
primarily from emission-reduction regulations, including the U.S. Clean Air Act,
as amended), tightening specifications for distillates and the increasing need
for blended residual fuel are expected to enhance the growth of the product
blending segment of the terminaling industry. We regularly blend components to
make finished gasolines and various grades of residual fuel. Fuel oils are also
blended for utilities and other commercial uses and crude oils are blended for
refiners.
 
PROCESSING
 
     Atmospheric distillation is a process that applies heat to separate the
hydrocarbons in crude oil into certain petroleum products. Most simple
distillation units, including ours, produce at least three product streams:
naphtha, distillate (heating oil) and residual fuel. The profitability of
atmospheric distillation is dependent on feedstock, operating and other costs
compared to the value of the resulting products.
 
SEASONAL AND OPPORTUNITY STORAGE
 
     Refiners and traders use storage facilities to take advantage of seasonal
movements and anomalies in the crude oil and petroleum products markets. When
crude oil and petroleum product markets are in contango by an amount exceeding
storage costs, the time value of money, the cost of a second vessel plus the
cost of loading and unloading at a terminal, the demand for storage capacity at
terminals usually increases. When crude oil and petroleum products markets are
in backwardation for any length of time, the traditional users of terminal
storage facilities are less likely to store product, thereby reducing storage
utilization levels. Historically, heating oil has been in contango during the
summer months and gasoline has been in contango during the winter months. As a
result, demand for heating oil storage is typically strongest during the summer,
fall and winter months and demand for gasoline storage is typically strongest in
the winter, spring and summer months. We can give no assurances, however, that
the crude oil and petroleum products markets will follow these patterns in the
future.
 
                                       53
CRUDE OIL SPOT PRICE VS. FOUR MONTH FUTURE PRICE
 

   Date              Dollars per Barrel
   ----              ------------------

   1/3/92                  $ 0.18
  1/10/92                 $ (0.04)
  1/17/92                  $ 0.36
  1/24/92                  $ 0.28
  1/31/92                  $ 0.14
   2/7/92                  $ 0.40
  2/14/92                  $ 0.09
  2/21/92                  $ 0.28
  2/28/92                  $ 0.40
   3/6/92                  $ 0.33
  3/13/92                  $ 0.51
  3/20/92                  $ 0.22
  3/27/92                  $ 0.19
   4/3/92                  $ 0.27
  4/10/92                  $ -
  4/17/92                 $ (0.01)
  4/24/92                  $ 0.17
   5/1/92                  $ 0.12
   5/8/92                 $ (0.05)
  5/15/92                  $ 0.12
  5/22/92                  $ 0.30
  5/29/92                  $ 0.21
   6/5/92                 $ (0.14)
  6/12/92                 $ (0.31)
  6/19/92                 $ (0.04)
  6/26/92                 $ (0.29)
   7/3/92                 $ (0.32)
  7/10/92                 $ (0.23)
  7/17/92                 $ (0.12)
  7/24/92                 $ (0.32)
  7/31/92                 $ (0.34)
   8/7/92                 $ (0.31)
  8/14/92                 $ (0.21)
  8/21/92                 $ (0.33)
  8/28/92                 $ (0.24)
   9/4/92                 $ (0.26)
  9/11/92                 $ (0.32)
  9/18/92                 $ (0.43)
  9/25/92                 $ (0.25)
  10/2/92                 $ (0.19)
  10/9/92                 $ (0.17)
  10/16/92                $ (0.35)
  10/23/92                $ (0.38)
  10/30/92                $ (0.22)
  11/6/92                 $ (0.09)
  11/13/92                 $ 0.02
  11/20/92                 $ 0.09
  11/27/92                 $ 0.07
  12/4/92                 $ (0.15)
  12/11/92                 $ 0.30
  12/18/92                 $ 0.42
  12/25/92                 $ 0.27
   1/1/93                  $ 0.09
   1/8/93                  $ 0.25
  1/15/93                  $ 0.45
  1/22/93                  $ 0.39
  1/29/93                  $ 0.50
   2/5/93                  $ 0.06
  2/12/93                 $ (0.07)
  2/19/93                  $ 0.10
  2/26/93                  $ 0.47
   3/5/93                  $ 0.19
  3/12/93                  $ 0.05
  3/19/93                  $ 0.17
  3/26/93                  $ 0.43
   4/2/93                  $ 0.30
   4/9/93                  $ 0.18
  4/16/93                  $ 0.36
  4/23/93                  $ 0.65
  4/30/93                  $ 0.39
   5/7/93                  $ 0.29
  5/14/93                  $ 0.22
  5/21/93                  $ 0.71
  5/28/93                  $ 0.39
   6/4/93                  $ 0.28
  6/11/93                  $ 0.34
  6/18/93                  $ 0.69
  6/25/93                  $ 0.94
   7/2/93                  $ 0.52
   7/9/93                  $ 0.71
  7/16/93                  $ 0.58
  7/23/93                  $ 0.95
  7/30/93                  $ 0.49
   8/6/93                  $ 0.65
  8/13/93                  $ 0.90
  8/20/93                  $ 0.87
  8/27/93                  $ 0.63
   9/3/93                  $ 0.46
  9/10/93                  $ 0.66
  9/17/93                  $ 0.98
  9/24/93                  $ 0.71
  10/1/93                  $ 0.53
  10/8/93                  $ 0.48
  10/15/93                 $ 0.32
  10/22/93                 $ 0.40
  10/29/93                 $ 0.25
  11/5/93                  $ 0.58
  11/12/93                 $ 0.64
  11/19/93                 $ 0.79
  11/26/93                 $ 0.77
  12/3/93                  $ 0.63
  12/10/93                 $ 0.89
  12/17/93                 $ 0.84
  12/24/93                 $ 1.09
  12/31/93                 $ 0.95
   1/7/94                  $ 0.84
  1/14/94                  $ 0.53
  1/21/94                  $ 0.30
  1/28/94                  $ 0.22
   2/4/94                  $ 0.01
  2/11/94                  $ 0.31
  2/18/94                  $ 0.51
  2/25/94                  $ 0.67
   3/4/94                  $ 0.53
  3/11/94                  $ 0.36
  3/18/94                  $ 0.25
  3/25/94                  $ 0.13
   4/1/94                  $ 0.22
   4/8/94                  $ 0.37
  4/15/94                  $ 0.13
  4/22/94                 $ (0.45)
  4/29/94                 $ (0.60)
   5/6/94                 $ (0.22)
  5/13/94                 $ (0.79)
  5/20/94                 $ (0.77)
  5/27/94                 $ (0.97)
   6/3/94                 $ (0.65)
  6/10/94                 $ (0.78)
  6/17/94                 $ (0.97)
  6/24/94                 $ (1.48)
   7/1/94                 $ (0.80)
   7/8/94                 $ (1.10)
  7/15/94                 $ (1.20)
  7/22/94                 $ (0.72)
  7/29/94                 $ (0.58)
   8/5/94                 $ (1.18)
  8/12/94                 $ (0.68)
  8/19/94                 $ (0.08)
  8/26/94                  $ 0.13
   9/2/94                  $ 0.24
   9/9/94                  $ 0.25
  9/16/94                  $ 0.35
  9/23/94                  $ 0.56
  9/30/94                  $ 0.36
  10/7/94                  $ 0.13
  10/14/94                $ (0.12)
  10/21/94                 $ 0.16
  10/28/94                 $ 0.02
  11/4/94                 $ (0.45)
  11/11/94                $ (0.51)
  11/18/94                $ (0.15)
  11/25/94                 $ 0.28
  12/2/94                 $ (0.24)
  12/9/94                  $ 0.19
  12/16/94                 $ 0.17
  12/23/94                 $ 0.18
  12/30/94                 $ 0.18
   1/6/95                  $ 0.00
  1/13/95                 $ (0.15)
  1/20/95                 $ (0.25)
  1/27/95                 $ (0.58)
   2/3/95                 $ (0.30)
  2/10/95                 $ (0.53)
  2/17/95                 $ (0.29)
  2/24/95                 $ (0.63)
   3/3/95                 $ (0.44)
  3/10/95                 $ (0.44)
  3/17/95                 $ (0.09)
  3/24/95                 $ (0.23)
  3/31/95                 $ (0.47)
   4/7/95                 $ (0.88)
  4/14/95                 $ (0.71)
  4/21/95                 $ (0.57)
  4/28/95                 $ (1.04)
   5/5/95                 $ (0.94)
  5/12/95                 $ (0.89)
  5/19/95                 $ (0.52)
  5/26/95                 $ (0.61)
   6/2/95                 $ (0.19)
   6/9/95                 $ (0.55)
  6/16/95                 $ (0.48)
  6/23/95                 $ (0.58)
  6/30/95                 $ (0.38)
   7/7/95                 $ (0.39)
  7/14/95                 $ (0.30)
  7/21/95                 $ (0.36)
  7/28/95                 $ (0.24)
   8/4/95                 $ (0.37)
  8/11/95                 $ (0.41)
  8/18/95                 $ (0.49)
  8/25/95                 $ (1.33)
   9/1/95                 $ (0.97)
   9/8/95                 $ (0.60)
  9/15/95                 $ (0.73)
  9/22/95                 $ (1.17)
  9/29/95                 $ (0.33)
  10/6/95                 $ (0.52)
  10/13/95                $ (0.32)
  10/20/95                $ (0.45)
  10/27/95                $ (0.46)
  11/3/95                 $ (0.44)
  11/10/95                $ (0.57)
  11/17/95                $ (0.82)
  11/24/95                $ (0.72)
  12/1/95                 $ (0.60)
  12/8/95                 $ (0.67)
  12/15/95                $ (0.75)
  12/22/95                $ (1.01)
  12/29/95                $ (0.97)
   1/5/96                 $ (1.17)
  1/12/96                 $ (1.49)
  1/19/96                 $ (0.95)
  1/26/96                 $ (1.44)
   2/2/96                 $ (0.57)
   2/9/96                 $ (0.76)
  2/16/96                 $ (0.95)
  2/23/96                 $ (2.70)
   3/1/96                 $ (1.96)
   3/8/96                 $ (1.85)
  3/15/96                 $ (1.92)
  3/22/96                 $ (4.21)
  3/29/96                 $ (3.32)
   4/5/96                 $ (3.03)
  4/12/96                 $ (4.15)
  4/19/96                 $ (5.29)
  4/26/96                 $ (4.82)
   5/3/96                 $ (2.50)
  5/10/96                 $ (2.09)
  5/17/96                 $ (2.32)
  5/24/96                 $ (3.02)
  5/31/96                 $ (2.26)
   6/7/96                 $ (1.43)
  6/14/96                 $ (1.57)
  6/21/96                 $ (2.16)
  6/28/96                 $ (2.43)
   7/5/96                 $ (2.08)
  7/12/96                 $ (1.87)
  7/19/96                 $ (1.77)
  7/26/96                 $ (1.81)
   8/2/96                 $ (1.04)
   8/9/96                 $ (1.36)
  8/16/96                 $ (1.42)
  8/23/96                 $ (1.89)
  8/30/96                 $ (1.37)
   9/6/96                 $ (1.49)
  9/13/96                 $ (1.89)
  9/20/96                 $ (1.62)
  9/27/96                 $ (1.85)
  10/4/96                 $ (1.72)
  10/11/96                $ (1.64)
  10/18/96                $ (1.31)
  10/25/96                $ (1.61)
  11/1/96                 $ (1.54)
  11/8/96                 $ (0.73)
  11/15/96                $ (0.72)
  11/22/96                $ (1.15)
  11/29/96                $ (2.32)
  12/6/96                 $ (1.64)
  12/13/96                $ (1.76)
  12/20/96                $ (1.89)
  12/27/96                $ (3.46)
   1/3/97                 $ (1.83)
  1/10/97                 $ (1.90)
  1/17/97                 $ (1.88)
  1/24/97                 $ (1.69)
  1/31/97                 $ (1.38)
   2/7/97                 $ (1.46)
  2/14/97                 $ (0.82)
  2/21/97                 $ (1.20)
  2/28/97                 $ (0.94)
   3/7/97                 $ (0.23)
  3/14/97                 $ (0.07)
  3/21/97                 $ (0.36)
  3/28/97                 $ (0.48)
   4/4/97                 $ (0.31)
  4/11/97                  $ 0.21
  4/18/97                 $ (0.01)
  4/25/97                 $ (0.14)
   5/2/97                 $ (0.13)
   5/9/97                  $ 0.09
  5/16/97                 $ (0.07)
  5/23/97                 $ (0.09)
  5/30/97                 $ (0.18)
   6/6/97                 $ (0.29)
  6/13/97                  $ 0.46
  6/20/97                  $ 0.29
  6/27/97                  $ 0.65
   7/4/97                  $ 0.04
  7/11/97                  $ 0.22
  7/18/97                  $ 0.19
  7/25/97                  $ 0.47
   8/1/97                  $ 0.12
   8/8/97                  $ 0.02
  8/15/97                  $ 0.42
  8/22/97                  $ 0.18
  8/29/97                  $ 0.30
   9/5/97                  $ 0.21
  9/12/97                  $ 0.22
  9/19/97                  $ 0.26
  9/26/97                  $ 0.47
  10/3/97                  $ 0.02
  10/10/97                $ (0.52)
  10/17/97                $ (0.32)
  10/24/97                 $ 0.18
  10/31/97                 $ 0.05
  11/7/97                  $ 0.04
  11/14/97                 $ 0.18
  11/21/97                 $ 0.11
  11/28/97                 $ 0.43
  12/5/97                  $ 0.54
  12/12/97                 $ 0.47
  12/19/97                 $ 0.62
  12/26/97                 $ 0.48
   1/2/98                  $ 0.36
   1/9/98                  $ 0.52
  1/16/98                  $ 0.61
  1/23/98                  $ 0.63
  1/30/98                  $ 0.86
   2/6/98                  $ 0.51
  2/13/98                  $ 0.60
  2/20/98                  $ 0.75
  2/27/98                  $ 0.97
   3/6/98                  $ 0.86
  3/13/98                  $ 0.89
  3/20/98                  $ 1.06
  3/27/98                  $ 1.28
   4/3/98                  $ 0.53
  4/10/98                  $ 0.75
  4/17/98                  $ 0.84
  4/24/98                  $ 1.50
   5/1/98                  $ 1.65
   5/8/98                  $ 1.20
  5/15/98                  $ 1.31
  5/22/98                  $ 2.11
  5/29/98                  $ 1.29
   6/5/98                  $ 1.33
  6/12/98                  $ 1.80
  6/19/98                  $ 2.70
  6/26/98                  $ 1.82
   7/3/98                  $ 1.54
  7/10/98                  $ 1.14
  7/17/98                  $ 0.76
  7/24/98                  $ 0.87
  7/31/98                  $ 0.90
   8/7/98                  $ 0.86
  8/14/98                  $ 0.89
  8/21/98                  $ 0.79
  8/28/98                  $ 0.88
   9/4/98                  $ 0.93
  9/11/98                  $ 0.58
  9/18/98                  $ 0.64
  9/25/98                  $ 0.51
  10/2/98                  $ 0.25
  10/9/98                  $ 0.20
  10/16/98                 $ 0.46
  10/23/98                 $ 0.63
  10/30/98                 $ 0.56
  11/6/98                  $ 0.41
  11/13/98                 $ 0.58
  11/20/98                 $ 0.87
  11/27/98                 $ 1.40
  12/4/98                  $ 1.12
  12/11/98                 $ 0.98
  12/18/98                 $ 0.92
  12/25/98                 $ 1.01
   1/1/99                  $ 0.86

Source: New York Mercantile Exchange
 
     Since late 1997, all segments of the crude oil and petroleum products
markets have generally been in contango. As a result, previously available
storage tank capacity began to diminish and storage tank lease rates began to
rise during 1998. The shift toward contango is due in part to the current
worldwide excess supply of crude oil, which has resulted in a sharp decrease in
spot prices for most petroleum products. This contango condition followed an
unusually long period of backwardation for all segments of the crude oil and
petroleum products markets which stretched from the beginning of 1995 to late
1997. We believe that our business was adversely impacted during the
backwardation period. Several factors contributed to this unusually long
backwardation period, including anticipation of incremental crude oil supplies
entering the market from Iraq and elsewhere, a shift to "just in time inventory"
positions by many oil companies, and strong demand for petroleum products.
 
     During 1998, members of the Organization of Petroleum Exporting Countries
in conjunction with certain non-OPEC members attempted to reduce worldwide crude
oil production with the intent of supporting oil market prices for petroleum
products. Although we continue to monitor and evaluate developments at OPEC
meetings, we are not aware of any matters from recent meetings that may
adversely impact our current terminaling business.
 
BUNKER SALES
 
     "Bunkering" means the sale and delivery of fuels to marine vessels to be
used for their own engines. The customer base and suppliers of bunker fuel are
located worldwide. Sales of bunker fuel (diesel oil, gas oil and intermediate
fuel oil) are driven primarily by the proximity of the supply location to major
shipping routes and ports of call, the amount of cargo carried by marine vessels
and the price, quantity and quality of bunker fuel.
 
     Bunker fuel is sold under international standards of quality that are
recognized by both fuel suppliers and ship operators. Raw materials for bunker
fuels are purchased in bulk lots of various grades and then blended to meet
customer specifications. Each supplier is responsible for quality control and
other merchantability aspects of the fuel they sell.
 
     Traditionally, the bunker fuel business was concentrated in those ports
with high ship traffic
 
                                       54
and near primary sources of refined marine fuels. In recent years, the number of
refiner/suppliers in many ports has diminished and stricter environmental laws
have been enacted, primarily in the U.S., Canada and Europe. As a result, the
sale of bunker fuel has increased at locations outside the U.S., Canada and
Europe.
 
     As many vessels have large bunker fuel tanks that allow them to travel long
distances between refueling stops, we compete with bunker delivery locations
around the world. In the Western Hemisphere, there are significant alternative
bunker locations, including on the U.S. East coast and Gulf coast and in Panama,
Puerto Rico, Aruba, Curacao, Halifax, Rotterdam and various North Sea locations.
 
                                       55
BUSINESS
                            INTRODUCTION AND HISTORY
 
     We believe we are one of the five largest independent marine terminaling
companies in the world as measured in terms of storage capacity. We believe we
are the largest independent marine terminal operator handling crude oil imported
into the Eastern United States. Our two terminals are strategically located at
points of minimal deviation from major petroleum shipping routes. We provide
terminaling services for crude oil and refined products to many of the world's
largest producers of crude oil, integrated oil companies, oil traders, refiners,
petrochemical companies and ship owners. Our customers include Saudi Aramco and
Tosco. These customers transship their products through our facilities to the
Americas and Europe. We own, lease and operate one storage and transshipment
facility located at the island of St. Eustatius, Netherlands Antilles, and one
located in Point Tupper, Nova Scotia, Canada. In connection with our terminaling
business, we also provide related value-added services, including:
 
     o bunkering (the supply of fuel to marine vessels for their own engines);
     o crude oil and petroleum product blending and processing; and
     o bulk product sales.
 
     At the end of 1998, our tank capacity was 18.7 million barrels. Our EBITDA
has increased from $23.3 million in 1996 to $32.1 million in 1998. EBITDA is
presented to provide additional information related to our ability to service
debt and is not an alternative measure of operating results or cash flow from
operations.
 
     Our operations began in 1982 as Statia Terminals N.V., with an oil products
terminal located on the island of St. Eustatius. In 1984, CBI Industries, Inc.,
an industrial gases and contracting services (including storage tank
construction) company, acquired a controlling interest in Statia Terminals N.V.
We purchased Statia Terminals Southwest, Inc. with its facility at Brownsville,
Texas, in 1986. In 1990, CBI Industries became the sole owner of Statia
Terminals N.V. and Statia Terminals Southwest. In 1993, we acquired the
remaining shares not then owned by us of Statia Terminals Point Tupper,
Incorporated, located at Point Tupper. In 1996, Praxair, Inc. acquired CBI
Industries. In November 1996, Castle Harlan Partners II L.P., members of our
management and others acquired from Praxair all of the outstanding capital stock
of Statia Terminals N.V., Statia Terminals, Inc., their subsidiaries and certain
of their affiliates. Castle Harlan Partners II L.P. is a private equity
investment fund managed by Castle Harlan, Inc., a private merchant bank. At the
same time, Statia Terminals Point Tupper, Incorporated was amalgamated into
Statia Terminals Canada, Incorporated. The Issuer, Statia Terminals
International and Statia Terminals Canada were organized for purposes of
facilitating the acquisition by Castle Harlan and our management. In July 1998,
we sold Statia Terminals Southwest to an unaffiliated third party purchaser.
 
     Simultaneously with the closing of this offering, the issuer will redeem or
reclassify all of its currently outstanding capital stock, and the issuer will
issue the common shares offered hereby, the subordinated shares and the
incentive rights. As a result, Praxair's investment in the issuer will be
terminated, and the other current holders of the issuer's capital stock will
continue to own equity of the issuer in the form of the subordinated shares and
incentive rights. See "The Restructuring."
 
     Our day-to-day operations are managed at the respective terminal locations.
Our management team and employee base possess a diverse range of experience and
skills in the terminaling industry. This experience has permitted us to better
understand the objectives of our customers and to forge alliances with those
customers at our terminals to meet those objectives. Thus, we believe that our
operations extend beyond the traditional approach to terminaling. We are a
premier provider of the core services offered by other terminal operators. In
addition, unlike many of our competitors, we refrain from competing with our
customers and provide ancillary, value-added services tailored to support the
particular needs of our customers.
 
                                       56
COMPETITIVE STRENGTHS
 
     We believe that the quality and breadth of our services and our market
presence distinguish us as one of the leading independent marine terminaling
companies in the world. We believe that we are well positioned to compete in the
independent marine terminaling industry and that our most significant
competitive strengths are:
 
     o Strategic Locations.  Our facilities are strategically located near the
U.S. East coast and Gulf coast. Our St. Eustatius facility is located at a point
of minimal deviation from the major shipping routes from the Arabian Gulf via
the Cape of Good Hope, from West Africa to the U.S. East coast and Gulf coast
and from the Panama Canal and South America to Europe. Our Point Tupper facility
is located on the Strait of Canso at Point Tupper, Nova Scotia, a point of
minimal deviation from the shipping routes from the North Sea oil fields to the
U.S. East coast, Canada and the Midwestern U.S. via the St. Lawrence Seaway and
the Great Lakes system. At Point Tupper we operate the deepest independent
ice-free marine terminal on the North American Atlantic coast. The St. Eustatius
facility can accommodate all of, and the Point Tupper facility can accommodate
substantially all of, the world's largest fully-laden very-large and ultra-large
crude carriers.
 
     We offer a lower cost alternative to U.S. based marine terminals, primarily
due to the fact that the Jones Act and certain other U.S. regulations do not
apply to our locations. The U.S. Jones Act mandates that cargo transported
between two U.S. ports be carried only on American-manufactured,
-registered and -crewed vessels, the costs of which are generally considerably
higher than those of comparable foreign vessels. In addition, other U.S.
regulations require the use of expensive double-hulled vessels and unlimited
liability insurance. As a result, use of our foreign facilities is considerably
more cost-effective than use of U.S.-based marine terminals for transshipment to
other U.S. destinations.
 
     o High Quality Assets.  We have built or renovated approximately 80% of our
tank capacity and related marine installations during the last eight years.
Since 1990, we have tripled our storage capacity at St. Eustatius and added an
offshore single point mooring buoy with loading and unloading capabilities. At
Point Tupper, we converted and renovated a former refinery site into an
independent storage terminal. We believe that the speed at which our facility
can discharge or load crude oil and petroleum products and the level of
maintenance and automation and the diversity of our service capabilities at our
facilities generally equals or exceeds that of our competitors. Our other
facilities constructed prior to 1990 have been maintained to high standards and
are in good condition. See "--Information by Location."
 
     o Breadth of Services.  We believe we have a broader range of services than
any of the other independent terminals with which we compete. In addition to
storage, we provide several complementary services which generate ancillary
revenues and additional storage and throughput volume. Such services include
bunkering, crude oil and petroleum product blending and processing, emergency
and spill response, bulk product sales and other ship services. For example, we
own butane storage spheres at each of our facilities which enhance our gasoline
blending capabilities, and we own an atmospheric distillation unit at our St.
Eustatius facility for refining crude oil and petroleum products. We utilize our
butane storage spheres and atmospheric distillation unit to improve the quality
and value of our customers' products.
 
     o Free Trade Status.  Our St. Eustatius facility has qualified for
designation as a free trade zone and our Point Tupper facility has qualified for
designation as a custom bonded warehouse. Such status allows us and our
customers to transship products to other destinations and trade with other
customers with minimal Netherlands Antilles or Canadian tax effects. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Other Matters."
 
     o Experienced Management Team.  Members of our senior management average
over 22 years of experience in terminaling-related industries. Prior to joining
us, members of our senior management worked at companies such as Pakhoed USA,
Inc., GATX Corporation, The Coastal Corporation, Exxon, Hess, Petroleos de
Venezuela S.A. and CBI Industries. Their experience has included training in
terminal operations, crude oil and petroleum product blending, oil trading,
shipping, engineering, construction and project management, refinery operations,
sales and marketing, and finance. Senior management experience has enabled us to
develop key strategic relationships with customers at our
 
                                       57
terminal locations. See "Management--Directors and Executive Officers."
 
                               BUSINESS STRATEGY
 
     Our business strategy is to manage our operations so we can generate stable
cash flow and pay the minimum quarterly dividend on all of the common and
subordinated shares and to increase our asset values. We intend to pursue this
strategy principally by:
 
     o Developing Strategic Relationships.  To maximize recurring revenues
generated by charges for storage and throughput, we target customers who have a
continuing need to store crude oil and petroleum products to supply a specific
demand, such as a refinery or other downstream distribution to customers. We
seek to understand the long term needs of our principal customers and potential
customers and to modify our facilities and operations to meet those needs. To
provide maximum flexibility to our customers, our tanks have been designed and
constructed to handle a range of crude oil and petroleum products. In certain
cases we may, together with a customer, design and build additional storage or
processing facilities. We can also offer a customized mix of terminaling related
services that improve the quality of or add value to our customers' products. In
this manner, we try to provide long term logistical solutions for these
customers at our strategically located facilities and thereby become their
preferred provider of storage and other terminaling services.
 
     o Generating Stable Cash Flow Through Long Term Contracts.  We have
generally entered into long term storage contracts with the customers with whom
we have established strategic relationships. These contracts generally have
terms of one to five years plus, in most cases, renewal options. These contracts
provide us with minimum monthly payments and generate a stable cash flow from
both the contracted storage services and the provision of terminaling-related
services to these customers and the vessels that transport their products (such
as dock charges and standby emergency response fees). Approximately 71% of our
1998 tank capacity and approximately 64% of our 1998 storage and throughput
revenues (excluding related ancillary services) were from long term contracts.
 
     o Emphasizing Customer Confidentiality.  In contrast to many of our
competitors, we do not compete with our customers in the business of trading
crude oil and petroleum products. This ensures that we take full advantage of
the most important competitive advantage of terminal operations that are
independent from producers, refiners and pipeline operators--confidentiality. We
believe that, in general, our customers prefer to do business with providers of
services who are not competitors in order to maintain the secrecy of important
business data that could affect the demand for and the pricing of their product.
 
     o Capitalizing on a Wide Range of Value-Added Services Offered.  We seek to
further differentiate ourselves from our competitors and to increase revenues
through our comprehensive range of terminaling-related services which currently
includes bunkering, crude oil and petroleum product blending and processing,
emergency and spill response, bulk product sales and various ship services.
 
     o Developing Opportunities at our Point Tupper Facility.  Our facility at
Point Tupper is the deepest independent ice-free marine terminal on the North
American Atlantic coast and one of two independent terminals on the North
American Atlantic coast with the capacity to receive substantially all of the
largest fully-laden very-large and ultra-large crude carriers. Point Tupper
provides regional oil producers seeking to expand their market share in the U.S.
with a facility that is approximately two days by ship from the New York, New
Jersey and Philadelphia refineries. Point Tupper also has access by ship to the
Sarnia, Ontario, Quebec and the U.S. Mid-West refineries. Producers can gain a
strategic advantage by using the Point Tupper terminal to deliver cargo via
very-large or ultra-large crude carriers and then transshipping the cargo via
smaller ships suitable for access to shallower, draft-restricted ports on the
upper U.S. East coast. We believe that currently there is no competitor in the
region that can provide the combination of crude oil storage, crude oil and
petroleum product blending, and transshipment services we offer at Point Tupper.
We are seeking to attract additional storage business from producers of crude
oil and natural gas in the North Sea and from the emerging production areas
located in Eastern Canada. We have a substantial amount of available land at
Point
 
                                       58
Tupper. We plan to build new storage facilities at Point Tupper as the demand
for storage increases.
 
     o Expanding Our Bunkering Operations.  In order to compete with busy U.S.,
Canadian and European ports and to attract more ship operators, we seek to
provide reliable supply, timely delivery, and consistent quality of bunker fuel
while maintaining overall safety standards. We seek to further develop our
business at Point Tupper and expand this business to additional locations in
Eastern Canada by capitalizing on our reputation for consistently maintaining a
supply of quality marine fuels and lubricants for delivery to bunkering
customers. In addition, we plan to pursue opportunities to supply bunkers at
additional locations in the Caribbean from our St. Eustatius facility.
 
     o Strategic Acquisitions.  From time to time we will consider opportunities
to acquire other marine terminals and related businesses.
 
                             SERVICES AND PRODUCTS
 
     We provide storage services in tanks which are designed to meet our
customers specifications and a full range of terminaling-related services,
including product blending, heating, mixing, separation, and removal of water
and other impurities. Our facilities can handle a variety of petroleum
materials, including light, medium and heavy crude oils, residual fuel oil,
gasoline, gasoline blending components, diesel, marine gas oil, marine diesel
oil, aviation fuel, bunker fuel, and butane. Residual fuel oil is comprised of
the residue from the distillation of crude oil after the light oils, gasoline,
naphtha, kerosene and distillate oils are extracted. We also handle petroleum
diluents, lubricating oils, butane and various other petroleum products.
 
     We own seven berthing locations at our St. Eustatius facility and two
berthing locations at our Point Tupper facility. With these berthing locations
and our uniquely designed mooring facilities and piping configurations, we can
handle oil tankers of various sizes, from relatively small to some of the
largest in the world and provide services such as simultaneous discharging and
loading of vessels and "across the dock" transfers. We charter tugboats and own
other marine equipment to assist with docking operations and provide port
services.
 
     We specialize in "in-tank" or "in-line" blending with computer-assisted
blending technology that assures product integrity and homogeneity. Our
facilities can blend and mix a full range of petroleum products including
gasoline, residual fuel oils (including bunker fuel) and crude oil. We believe
our blending capability has attracted certain customers who have leased capacity
primarily for blending purposes and who have contributed to our bunker fuel and
bulk product sales. We have worked closely with residual fuel oil market
participants (including refiners and oil traders) to assist them with their
blending operations.
 
     We own storage spheres for butane at both of our facilities that enhance
our gasoline blending capabilities. We also own an atmospheric distillation unit
for refining at St. Eustatius. We use the storage spheres and the distillation
unit to improve product quality and add value to our customers' products.
 
     As part of our petroleum product sales, we supply bunker fuel in the
Caribbean and in Nova Scotia, Canada. At and around St. Eustatius, our bunkering
business has evolved from offering bunker fuel to ships at the terminal berths
to a delivery system utilizing specially modified barges which provide fuel to
vessels at anchor. In the first quarter of 1996, we initiated bunker fuel
service operations at Point Tupper with deliveries via pipeline at the terminal
berths and by truck in the surrounding Strait of Canso area. During the 1996,
1997 and 1998 years, 615, 575 and 582 vessels, respectively, received bunker
fuels from us in the Caribbean. In Canada during the 1996, 1997 and 1998 years,
19, 10 and 3 vessels, respectively, received bunker fuels from us.
 
     We purchase small quantities of petroleum products primarily to maintain an
inventory of certain blendstocks and bunker fuel. From time to time we purchase
and sell product to accommodate customers who wish to dispose of small
quantities of product or assist customers' sales activities and occasionally to
take advantage of attractive buying opportunities.
 
     Netherlands Antilles and Canadian environmental laws and regulations
require ship owners, vessel charterers, refiners and terminals to have access to
spill response capabilities. At St. Eustatius, we own and operate the M/V Statia
 
                                       59
Responder (formerly known as the M/V Megan D. Gambarella), a 194 foot
multi-function emergency response and maintenance vessel with spill response and
firefighting capabilities and underwater diving support. The Statia Alert, a
barge that is capable of recovering 200 gallons per minute of oil/water mixture,
and two response boats that can deploy booms and release absorbent materials,
support our emergency and spill response capability at St. Eustatius. The St.
Eustatius facility also has three tugs on time charter, and owns a line handling
vessel and two mooring launches, all of which are available for safe berthing of
vessels calling at the terminal and for emergency and spill response. Our
customers benefit by ready access to this equipment, and we charge each vessel
that calls at our St. Eustatius facility a fee for this capability.
 
     Statia Terminals Canada charters tugs, mooring launches and other vessels
to assist with the movement of vessels through the Straight of Canso, the safe
berthing of vessels at Point Tupper and other services to vessels.
 
     Statia Terminals Canada owns and operates two fully-equipped spill response
vessels on Cape Breton Island in Canada, one located at Point Tupper and the
other located in Sydney, Nova Scotia. In the event of an oil spill, these
vessels can deploy containment and clean-up equipment including skimmers, booms,
and absorbents. We believe that the presence of fully equipped spill response
vessels in port is important in attracting integrated oil companies to our
facilities.
 
                                    PRICING
 
     Storage and throughput pricing in the petroleum terminaling industry is
subject to a number of factors, including variations in petroleum product
production and consumption, economic conditions, political developments,
seasonality of demand for certain products and the geographic sector of the
world being serviced. At the customer level, terminal selection focuses
primarily on:
 
     o the location;
     o the quality of service; and
     o the range of services offered.
 
Although price is always an issue, price differentials among competing terminals
are frequently less important to the customer because terminaling costs
represent only a small portion of the customer's total distribution costs.
 
     Our pricing strategy is based primarily on petroleum market conditions and
oil price trends. We also take into consideration the quality and range of our
services compared to those of competing terminals, prices prevailing at the time
in the terminaling market in which we operate, and cost savings from shipping to
our terminal locations. In situations requiring special
 
accommodations for the customer (e.g. unique tank modification or construction
of new tanks), we may price on a rate-of-return basis.
 
     We enter into written storage and throughput contracts with customers.
During 1998, approximately 64% of our storage and throughput revenues (excluding
related ancillary services) were attributable to long term (one year or more)
storage and throughput agreements. Our long-term storage and throughput
agreements are individually negotiated with each customer. The typical agreement
specifies tank storage volume, the commodities to be stored, a minimum monthly
charge, an excess throughput charge for throughput volume in excess of the
volume specified in the storage contract and a price escalator. In addition,
there may be charges for certain additional services such as the transfer,
blending, mixing, heating, decanting and other processing of stored commodities.
The minimum monthly charge is due and payable without regard to the volume of
storage capacity, if any, actually utilized. For the minimum monthly charge, the
user is generally allowed to deliver, store for one month and remove the
specified tank storage volume of commodities. As an incentive for the user to
throughput additional barrels, the excess throughput charge is typically a lower
rate per barrel than the rate per barrel utilized in establishing the minimum
monthly charge. Year-to-year escalation of charges is typical in long-term
contracts.
 
                                       60
INFORMATION BY LOCATION
 
  ST. EUSTATIUS, NETHERLANDS ANTILLES
 
     The St. Eustatius facility is located on the Netherlands Antilles island of
St. Eustatius which
is located at a point of minimum deviation
from major shipping routes. St. Eustatius is approximately 1,900 miles from
Houston, 1,500 miles from Philadelphia, 550 miles from Amuay Bay, Venezuela, and
1,100 miles from the Panama Canal. This facility is capable of handling a wide
range of petroleum products, including crude oil and refined products. A
three-berth jetty, a monopile with platform, a floating hose station and an
offshore single point mooring buoy with loading and unloading capabilities serve
the terminal's customers' vessels.
 
     This facility has 27 tanks with a total capacity of 5.2 million barrels
dedicated to fuel oil storage, 15 tanks with total capacity of 1.1 million
barrels dedicated to petroleum products storage, a 15,000 barrel butane sphere,
and eight tanks totaling 5.0 million barrels dedicated to multigrade crude oil
storage. The fuel oil and petroleum product facilities have in-tank and in-line
blending capability. The crude storage is the newest portion of the facility,
construction of which was completed in early 1995 by CBI Industries. The storage
tanks comply with construction standards that meet or exceed American Petroleum
Institute, National Fire Prevention Association and other material industry
standards. Crude oil movements at the terminal are fully-automated. In addition
to the storage and blending services at St. Eustatius, this facility has the
flexibility to utilize certain storage capacity for both feedstock and refined
products to support its atmospheric distillation unit, which is capable of
processing up to 15,000 barrels per day of feedstock, ranging from condensates
to heavy crude oil.
 
     The St. Eustatius facility can accommodate the world's largest vessels for
loading and discharging crude oil. The single point mooring system can handle a
single fully-laden vessel of up to 520,000 dead weight tons (a marine vessel's
carrying capacity) with a draft of up to 120 feet. The single point mooring
system can discharge or load at rates in excess of 100,000 barrels of crude oil
per hour. There are six pumps connected to the single point mooring system, each
of which can pump up to 18,000 barrels per hour from the single point mooring
system to the storage tanks. The jetty at St. Eustatius can accommodate three
vessels simultaneously. The south berth of the jetty can handle vessels of up to
150,000 dead weight tons with a draft of up to 55 feet. The north berth of the
jetty can handle vessels of up to 80,000 dead weight tons with a draft of up to
55 feet. There is also a barge loading station on the jetty. At the south and
north berths of the jetty, 25,000 barrels per hour of fuel oil can be discharged
or loaded. To accommodate the needs of our gasoline blending customers, we have
recently completed installation of a monopile with platform that can handle
vessels of up to 40,000 dead weight tons with a draft of up to 46 feet. The
monopile with platform can handle two vessels simultaneously and can discharge
or load 12,000 barrels per hour of refined products. In addition, this facility
has a floating hose station that we use to load bunker fuels onto our barges for
delivery to customers. We believe that the speed at which our facility at St.
Eustatuis can load crude oil and petroleum products off of or onto vessels gives
us a competitive advantage due to reductions in the time ships spend idle in
ports.
 
     Notwithstanding periods of unusually adverse market conditions, including
the backwardation which persisted from the first quarter of 1995 to the fourth
quarter of 1997, the average percentage of our available capacity that we leased
at the St. Eustatius facility for each of the years ended 1996, 1997, and 1998
was 80%, 76% and 92% respectively. We believe that cost advantages associated
with the location of our facility, shipping economies of scale, product blending
capabilities and the availability of a full range of ancillary services at the
facility has driven the demand for our storage services. Storage capacity at the
St. Eustatius facility has grown from 2.0 million barrels of fuel oil storage in
1982 to its present capacity of 11.3 million barrels for crude oil and petroleum
products.
 
     The ability to blend a comprehensive range of refined products from
gasoline through residual fuel oils has contributed to our success in leasing
the facility's tankage. We have generally leased our refined product tanks at or
near full capacity on a continuous basis. We have worked closely with residual
fuel oil market participants to assist them with their blending operations by
offering a selection of product blending components and computerized blending
services. We have a five-year contract (subject to renewal for an additional
 
                                       61
term of 5 years at the customer's discretion) with Bolanter Corporation, a
subsidiary of Saudi Aramco, for 5.0 million barrels of dedicated crude oil
storage. Bolanter uses this storage to service a number of its customers in the
Western Hemisphere. The terminal enables Bolanter to transport various grades of
crude oil closer to market, at competitive transportation rates.
 
     Recognizing the strategic advantage of its location in the Caribbean near
major shipping lanes, we deliver bunker fuel to vessels at our St. Eustatius
facility. The bunkering business has evolved from offering fuels to ships at the
berth to a delivery system utilizing specially modified barges that provide fuel
to vessels at anchorage. The location of the terminal on the leeward side of the
island, which provides natural protection for ships, generally favorable
year-round weather conditions and deep navigable water at an anchorage
relatively close to shore, attracts ships to this facility for their bunker fuel
requirements. Four of our barges support the bunker fuel sales operation.
 
     During 1998, we commissioned an atmospheric distillation unit at St.
Eustatius. The unit is capable of processing up to 15,000 barrels per day of
feedstock ranging from condensates to heavy crude oil. This distillation unit
can produce naphtha, distillate (heating oil) and residual fuel oil. We believe
that the capability to process feedstock for third parties may create
opportunities for us.
 
     We own and operate all of the berthing facilities at our St. Eustatius
terminal for which we charge vessels a dock charge. Vessel owners or charterers
may incur separate charges for facilities use and associated services such as
pilotage, tug assistance, line handling, launch service, emergency and spill
response and ship services.
 
  POINT TUPPER, NOVA SCOTIA, CANADA
 
     The Point Tupper terminal is located in the Strait of Canso, near Port
Hawkesbury, Nova Scotia, Canada which is located at a point of minimal deviation
from major shipping routes. Point Tupper is approximately 700 miles from New
York City, 850 miles from Philadelphia and 2,500 miles from Mongstad Terminal in
Norway. This facility operates the deepest independent ice-free marine terminal
on the North American Atlantic coast, with access to the U.S. East coast, Canada
and the Midwestern U.S. via the St. Lawrence Seaway and the Great Lakes system.
The Point Tupper facility can accommodate substantially all of the largest fully
laden very-large and ultra-large crude carriers for loading and discharging.
 
     We renovated our facilities at Point Tupper and converted a former oil
refinery site into an independent storage terminal. This work, performed
primarily by a subsidiary of CBI Industries, began in 1992 and was completed in
1994. The tanks were renovated to comply with construction standards that meet
or exceed American Petroleum Institute, National Fire Prevention Association and
other material industry standards.
 
     We believe that our dock at Point Tupper is one of the premier dock
facilities in North America. The south berth of the Point Tupper facility's
dock, Berth One, can handle fully laden vessels of up to 400,000 dead weight
tons with a draft of up to 84 feet. At Berth One, approximately 75,000 barrels
per hour of crude oil, approximately 40,000 barrels per hour of diesel or
gasoline, or 12,000 barrels per hour of fuel oil can be discharged or loaded.
Berth Two can accommodate vessels of up to 80,000 dead weight tons with drafts
of up to 40 feet. At Berth Two, approximately 25,000 barrels per hour of crude
oil, approximately 25,000 barrels per hour of diesel or gasoline, or
approximately 25,000 barrels per hour of fuel oil can be discharged or loaded.
Liquid movement at the terminal is fully automated. The Point Tupper facility
can accommodate two vessels simultaneously. We charge separately for the use of
the dock facility as well as associated services, including pilotage, tug
assistance, line handling, launch service, spill response and ship services.
 
     The berths at the dock at the Point Tupper facility connect to a 7.4
million barrel tank farm. The terminal has the capability of receiving and
loading crude oil, petroleum products and certain petrochemicals. This facility
has eight tanks with a combined capacity of 3.6 million barrels dedicated to
multigrade crude oil storage, two tanks with a combined capacity of 0.5 million
barrels dedicated to fuel oil storage and 24 tanks with a combined capacity of
3.3 million barrels dedicated to petroleum products (including gasoline,
gasoline blend components, diesel and distillates) storage. During 1997,
approximately two-thirds of the petroleum products storage tanks were converted
to crude oil storage. The facility also has a 55,000 barrel butane storage
sphere. This sphere is one of the largest of its kind in North America and we
expect it to enhance our petroleum products
 
                                       62
blending operations. The average capacity leased at the Point Tupper facility
over each of the last three years ended 1996, 1997, and 1998 was 55%, 70% and
93%, respectively.
 
     In order to comply with our safe handling procedures and Canadian
environmental laws, we own and operate two fully equipped spill response vessels
on Cape Breton Island, one located at Point Tupper and the other located in
Sydney. In addition to these vessels, we have the capability to respond to
spills on land or water with a combined spill response capability of over 2,500
metric tons at this terminal location. An additional 7,500 metric ton spill
response capability is immediately available at Point Tupper by agreement with
another response organization. Our customers benefit by ready access to the
equipment. In 1995, one of our subsidiaries was granted Canadian Coast Guard
certification as a response organization with spill response capabilities.
Consequently, vessels calling in the Strait of Canso are required to pay us a
subscription fee for access to the services provided by the spill response
organization, even if they do not dock at our terminal.
 
     There are two truck racks at the Point Tupper facility. The north truck
rack has the capability to load 550 barrels per hour of fuel oil and the south
truck rack has the capability to load 550 barrels per hour of fuel oil or up to
550 barrels per hour of diesel.
 
     In 1994, a predecessor to one of our subsidiaries entered into a long term
storage contract with a large oil refiner, Tosco Corporation. The contract
contains two five-year renewal options at the customer's discretion. The
contract commits 3.6 million barrels of crude oil storage at the Point Tupper
facility, representing approximately 48% of the terminal's total capacity. A
portion of the remaining tanks at the Point Tupper facility, initially designed
for the storage of gasoline, distillates, aviation fuel and other petroleum
products, was converted during 1997 to crude oil storage and leased. Currently,
71% of this facility's tankage is dedicated to crude oil, 23% to clean, refined
products and 6% to residual fuel oil.
 
     In the first quarter of 1996, we initiated the offering of bunkering
services at Point Tupper. Delivery of bunker fuel at Point Tupper is currently
being made via pipeline to vessels transferring cargo at the berths and via
truck to vessels in the surrounding area.
 
     We entered into a lease and storage agreement in 1998 with Sable Offshore
Energy, Inc. with regard to a 25 year lease (with two 25 year options) of a
portion of our land and a 12 year agreement for the storage and throughput of
Sable's products. Sable is leasing the site, building a natural gas liquids
fractionation plant, storage and rail handling facilities on the site, and
leasing over 500,000 barrels of our existing storage capacity. The fractionation
plant will process an average of 20,000 barrels per day of natural gas liquids
extracted from the Sable Island region of Nova Scotia, Canada, and delivered via
pipeline for the fractionation plant from Sable's Goldboro Gas Processing Plant
in Guysborough County, Nova Scotia. While the natural gas liquid volumes will
vary according to field source and production rates, the fractionation plant is
expected to produce about 10,300 barrels per day of condensate (light oil),
6,250 barrels a day of propane, and about 3,250 barrels per day of butane. The
fractionation plant is currently under construction and is expected to be
completed by November 1999.
 
     We are finalizing a land exchange agreement with the Province of Nova
Scotia conveying certain land (principally the approximately 1,296 acres
comprising Lake Landrie and certain adjacent watershed lands) we own at the
Point Tupper terminal site to the Province of Nova Scotia in exchange for the
conveyance by the Province of Nova Scotia of certain unused road rights-of-way
on our remaining property at Point Tupper.
 
                                  COMPETITION
 
     The main competition to crude oil storage at our facilities is from
lightering. Under current market conditions, lightering in most instances costs
less than terminaling. The price differential between lightering and terminaling
is primarily driven by the charter rates for vessels of various sizes because
terminaling generally occupies a very-large or ultra-large crude carrier for a
shorter period of time than lightering. A very-large crude carrier can be
lightered in approximately four days if lightering vessels are available for
continuous back to back operations and the weather is good. However, if fewer
lightering vessels are available or bad weather interrupts, it can take longer
to load or
 
                                       63
discharge product. Depending on charter rates, the longer charter period
associated with lightering is generally offset by various costs associated with
terminaling including storage costs, dock charges and spill response fees. In
addition, terminaling reduces the risk of environmental damage associated with
lightering.
 
     The independent terminaling industry is fragmented and includes both large,
well-financed companies that own many terminal locations, and smaller companies
that may own a single terminal location. We are a member of the Independent
Liquid Terminals Association, which among other functions, publishes a directory
of terminal locations of its members throughout the world. Customers with
specific geographic and other logistical requirements may use the ILTA directory
to identify the terminals in the region available for specific needs and to
select the preferred providers on the basis of service, specific terminal
capabilities and environmental compliance.
 
     In addition to the terminals owned by independent terminal operators, many
state-owned oil producers and major energy and chemical companies also own
extensive terminal facilities, and these terminals often have the same
capabilities as terminals owned by independent operators. While the purpose of
such terminals is to serve the operations of their owners, and they do not
customarily offer terminaling services to third parties, these terminals
occasionally are made available to the market when they have unused capacity on
a short term and irregular basis. Such terminals lack certain competitive
advantages of independent operators, the most important of which is
confidentiality.
 
     In many instances, major energy and chemical companies that own storage and
terminaling facilities are also significant customers of independent terminal
operators. Such companies typically have strong demand for terminals owned by
independent operators when independent terminals have more cost-effective
locations near key transportation links such as deep-water ports. Major energy
and chemical companies also need independent terminal storage when their captive
storage facilities are inadequate, either because of size constraints, the
nature of the stored material or specialized handling requirements.
 
     Independent terminal owners compete based on the location and versatility
of their terminals, service and price. A favorably located terminal will have
access to cost-effective transportation both to and from the terminal. Possible
transportation modes include waterways, railroads, roadways and pipelines.
 
     Terminal versatility is a function of the operator's ability to offer safe
handling for a diverse group of products with potentially complex handling
requirements. The primary service function provided by the terminal is the safe
storage and return of all of the customer's product while maintaining product
integrity. Terminals may also provide additional services, such as heating,
blending, water removal and processing with assurance of proper environmental
handling procedures or vapor control to reduce evaporation.
 
                                       64
We believe our competitors to our terminals include:
STORAGE CAPACITY
                                  NAME(1)                                            LOCATION           (BARRELS)
----------------------------------------------------------------------------   --------------------   ----------------
ST. EUSTATIUS
  Baprovin (BORCO)..........................................................   Bahamas                    10,475,000(3)
  Bonaire Petroleum Corp. N.V...............................................   Bonaire, N.A.              10,100,000(3)
  Commonwealth Oil Refining Company (CORCO).................................   Puerto Rico                12,000,000(2)
  South Riding Point Holding, Ltd...........................................   Bahamas                     5,200,000
 
POINT TUPPER
  International-Matex Tank Terminals........................................   Bayonne, NJ                14,000,000
  GATX Terminals Corporation................................................   Carteret, NJ                6,652,000
  South Riding Point Holding, Ltd...........................................   Bahamas                     5,200,000
  Stolthaven Perth Amboy Inc................................................   Perth Amboy, NJ             2,146,000(4)
  International-Matex Tank Terminals........................................   Quebec City, Canada         1,270,000
  Multiple..................................................................   NY/NJ Harbor               35,000,000
------------------
 
Source: OPIS Directories Petroleum Terminal Encyclopedia 1999, Tenth Edition,
unless otherwise specified.
 
(1) Does not include captive terminals other than those which provide to third
    parties a significant amount of their capacity on a somewhat regular basis.
    Captive terminals are generally used almost exclusively for the operations
    of the producers, refiners or pipeline operators who own them and are only
    occasionally made available to the market on a short term basis. Captive
    terminals lack certain competitive advantages of independent operations, the
    most important of which is confidentiality. See "Industry."
 
(2) We believe such storage capacity to be less than fully useable.
 
(3) Information provided to us by a source we believe to be reliable.
 
(4) Source: OPIS Petroleum Terminal Encyclopedia, Ninth Edition.
 
     In our bunkering business, we compete with the ports to which or from which
each vessel travels or bypasses.
 
                                   CUSTOMERS
 
     Our customers include many of the world's largest producers of crude oil,
integrated oil companies, oil traders, refiners, petrochemical companies and
ship owners.
 
     We presently have several significant long term contracts at St. Eustatius,
including a five-year contract (with a five-year renewal option at the
customer's discretion) with Bolanter Corporation, N.V., which became effective
in early 1995. Bolanter Corporation is a subsidiary of Saudi Aramco. This
storage and throughput contract commits all of the St. Eustatius facility's
current crude oil storage capacity to Bolanter, which represents approximately
44% of the terminal's total capacity and 7.4% of our 1998 revenues, with an
additional 7.7% of our 1998 revenues derived from parties unaffiliated with
Bolanter but generated by the movement of Bolanter's products through the St.
Eustatius terminal. In addition, revenues from another affiliate of Saudi Aramco
which received bunker fuels at our St. Eustatius facility accounted for 1.5% of
our total 1998 revenues.
 
     In addition, we presently have several significant long term contracts at
Point Tupper, including a five-year contract with two five-year renewal options
(at the customer's discretion) with a major refiner, a subsidiary of Tosco
Corporation. This contract became effective in August 1994 and commits
approximately 49% of the present tank capacity at Point Tupper. It represented
approximately 7.1% of our 1998 revenues, with an additional 1.9% of our 1998
revenues being derived from parties unaffiliated with Tosco but generated by the
movement of Tosco's products through the Point Tupper terminal.
 
     In addition, we have another terminaling services customer which
represented 5.2% of our 1998 revenues. We also supply bunker fuel to a customer
which represented 8.5% of our 1998 revenues.
 
     No other customer accounted for more than 5% of our total 1998 revenues.
 
                                       65
SUPPLIERS
 
     We presently have a bunker fuel supply contract at St. Eustatius with a
major state-owned oil producer, which became effective in 1992 and was
periodically renewed until it expired on December 31, 1998. We are presently
continuing this supply relationship on a month-to-month basis. We are discussing
renewal of this contract with our present supplier as well as opportunities with
other potential suppliers. This contract presently provides us with the majority
of the fuel oil necessary to support our bunker and bulk product sales
requirements. We procure the balance of our fuel oil and other supplies
necessary for our operations from various sources. We believe that suitable
alternate sources of supply are readily available from which we can procure fuel
oil should deliveries under our current contract be interrupted or are not
renewed. However, such alternative sources of supply are subject to changing oil
market conditions and prices.
 
     At Point Tupper, we are attempting to secure an adequate source of supply
for our bunker fuel sales business to enable significant increases in volumes
for delivery to vessels calling at this facility.
 
                    ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
 
     Our subsidiaries are subject to comprehensive and periodically changing
environmental, health and safety laws and regulations within the jurisdictions
of our operations, including those governing oil spills, emissions of air
pollutants, discharges of wastewater and storm waters, and the disposal of
non-hazardous and hazardous waste. We believe we are presently in substantial
compliance with applicable laws and regulations governing environmental, health
and safety matters. We have taken measures to mitigate our exposure to
environmental risks including automation and monitoring equipment, employee
training, maintaining our own emergency and spill response equipment at each
terminal and maintaining liability insurance for certain accidental spills. The
following table shows our capital expenditures in millions of dollars for
compliance with environmental laws and regulations and routine operational
compliance costs for the periods indicated.
CAPITAL         ROUTINE OPERATIONAL
                                    PERIOD                                        EXPENDITURES       COSTS
-------------------------------------------------------------------------------   ------------    -------------------
1996...........................................................................       $1.3               $ 0.4
1997...........................................................................        1.3                 0.2
1998...........................................................................        2.7                 0.9
ST. EUSTATIUS
 
     Until recently, the St. Eustatius terminal has not been subject to
significant environmental, health and safety regulations, and health, safety and
environmental audits have not been required by law. No environmental or health
and safety permits are required for the St. Eustatius terminal except under the
St. Eustatius Nuisance Ordinance. A license under the St. Eustatius Nuisance
Ordinance was issued to us in February 1997 subject to compliance with certain
requirements. The requirements established by the license set forth certain
environmental standards for operation of the facility, including monitoring of
air emissions, limits on and monitoring of waste-water discharges, establishment
of a waste-water treatment system, standards for above-ground storage tanks and
tank pits, reporting and clean-up of any soil or water pollution and certain
site security measures. To date, we have complied with the license requirements
and do not expect further compliance to have a material adverse effect on our
business and financial condition, results of operations or our ability to pay
the minimum quarterly dividend. We will address future improvements to the
facility that may be necessary to comply with new environmental, health and
safety laws and regulations, if any, as they arise.
 
     The St. Eustatius terminal management and consultants supervise the on and
off-site disposal and storage of hazardous waste materials. The nature of our
business is such that spills of crude oil or petroleum products may occur at the
terminal periodically. Over the past three years, all spills at
 
                                       66
the St. Eustatius terminal were reported to the appropriate environmental
authorities and have not resulted in any citations by such authorities for
violations of law. We have remediated all such spills.
 
     Two government inspections were performed during each of 1997 and 1998 with
no citations issued.
 
  POINT TUPPER
 
     The Point Tupper terminal is subject to a variety of environmental, health
and safety regulations administered by the Canadian federal government and the
Nova Scotia Department of Environment. While air emission monitoring is not
required by the NSDOE, surface water discharge outfall and groundwater
monitoring are required and are performed on a routine basis in accordance with
current requirements of the permit issued by NSDOE. We believe we have all
requisite environmental permits in place. The principal permit is the Industrial
Waste Treatment Works Permit issued by the NSDOE in 1992. That permit is
presently being amended by the NSDOE, but we do not expect the amendments to
significantly change our obligations under the permit. The nature of our
business is such that spills of crude oil or refined products may occur at the
terminal periodically. Over the past three years, all spills at the Point Tupper
terminal were reported and remediated to the satisfaction of the applicable
agencies and have not resulted in any citations by such authorities. Statia
Terminals Canada has recently discovered a leak in one tank, has emptied the
tank and is in the process of repairing it and remediating the spillage.
 
     Past uses of the facility by others, including its past operation by others
as an oil refinery, have resulted in certain on-site areas of known and
potential contamination, as described under "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Environmental, Health
and Safety Matters."
 
                                   EMPLOYEES
 
     As of November 30, 1998, excluding contract labor, we employed 211 people.
Forty employees were located in the U.S., 98 on St. Eustatius, and 73 at Point
Tupper. A majority of our employees at both the St. Eustatius and Point Tupper
facilities are unionized. We believe that our relationships with our employees
are good. We have never experienced a material labor related business
disruption.
 
  ST. EUSTATIUS
 
     The Windward Islands Federation of Labor represents the majority of hourly
workers at St. Eustatius. We entered into an agreement with WIFOL on June 1,
1993, which extended to May 31, 1996. The agreement provided for automatic one
year extensions if neither party requested an amendment. We have not requested
or received any requests for an extension. We believe that the agreement no
longer binds us, but we continue to provide pay and benefits to the hourly
workers as if the agreement was still in effect. In early 1997, management and a
select group of supervisory and office personnel at St. Eustatius discussed
organizing into a collective bargaining group. We believe these matters will not
materially impact our business and financial condition, results of operations or
ability to pay the minimum quarterly dividend.
 
  POINT TUPPER
 
     The Communications, Energy and Paperworkers Union represents a majority of
Point Tupper's hourly work force. During 1995, we signed a three-year agreement
with CEPU that expired on September 30, 1998. We are currently negotiating with
CEPU and continuing our operations without an agreement. We believe these
matters will not materially impact our business and financial condition, results
of operations or ability to pay the minimum quarterly dividend.
 
     We have experienced two minor work stoppages in the last four years. In
April 1994, employees stopped working for approximately one-half of a day to
protest alleged inadequate safety conditions at the facility. The following
April, electricians picketed for approximately two hours to protest the
employment of non-union workers on one project. Most of the workers at the
facility were unaffected by the activity.
 
                                       67
LEGAL PROCEEDINGS
 
     See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Legal Proceedings."
 
                                   INSURANCE
 
     Our property insurance covers damage to the real and personal property
located at our two terminals and administrative offices. The property loss limit
is $150 million with a $0.1 million deductible, except for a $0.5 million
deductible for certain losses (wind, flood, earthquake, etc.) at St. Eustatius.
We carry various layers of liability coverage of up to $200 million with a
deductible of approximately $0.3 million (including coverage for liabilities
associated with certain accidental spills). We carry $30 million of coverage on
the offshore single point mooring system at St. Eustatius with a deductible of
approximately $0.3 million. We have coverage up to scheduled values for damage
to our marine vessels with a $50,000 deductible. We also carry other insurance
customary in the industry.
 
     Our current insurance program commenced January 1, 1999 and generally
extends 15 months.
 
     We believe that the cost of business interruption insurance does not
warrant carrying it under current market conditions. Therefore, we do not have,
and do not plan to carry, business interruption insurance except with respect to
the offshore single point mooring system.
 
                                       68
MANAGEMENT
                        DIRECTORS AND EXECUTIVE OFFICERS
 
     At the closing, the board of directors of the issuer will be divided into 3
classes. The directors serve six year terms which are staggered such that
approximately one-third of the directors are elected every two years. The board
of directors of the issuer duly elects the executive officers to serve until
their respective successors are elected and qualified.
     The following table sets forth certain information with respect to the
directors and executive officers of the issuer:
TERM
                     NAME                          AGE         POSITION        EXPIRES
-----------------------------------------------    ---     ----------------    -------
James G. Cameron(3)............................    52      Director
John K. Castle(2)(3)...........................    58      Director
Admiral James L. Holloway, III(1)..............    76      Director
Francis Jungers(2).............................    72      Director
David B. Pittaway(1)(2)(3).....................    47      Director
Jonathan R. Spicehandler(1)....................    50      Director
Ernest "Jackie" Voges..........................    67      Director
Justin B. Wender(1)............................    29      Director
Thomas M. Thompson, Jr.........................    53      Vice President
Robert R. Russo................................    43      Vice President
James F. Brenner...............................    40      Vice President
                                                             and Treasurer
Jack R. Pine...................................    59      Secretary
------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
(3) Member of Executive Committee.
 
     The directors of Statia Terminals, Inc., an indirect subsidiary of the
issuer, are currently elected annually by their shareholders to serve during the
ensuing year or until a successor is duly elected and qualified. The board of
directors of Statia Terminals, Inc. duly elects the executive officers to serve
until their respective successors are elected and qualified.
 
     The following table sets forth certain information with respect to certain
directors and executive officers of Statia Terminals, Inc.:
NAME                       AGE                    POSITION
-------------------------------------------   ---   -------------------------------------------
James G. Cameron...........................   52    Director, Chairman of the Board and
                                                      President
Thomas M. Thompson, Jr.....................   53    Director and Executive Vice President
Robert R. Russo............................   43    Director and Senior Vice President
Jack R. Pine...............................   59    Senior Vice President, General Counsel and
                                                      Secretary
John D. Franklin...........................   42    Vice President--Marine Fuel Sales
James F. Brenner...........................   40    Vice President--Finance, Treasurer and
                                                      Assistant Secretary
James F. Brenner. Mr. Brenner has been Vice President and Treasurer of the
issuer since December 23, 1996. Mr. Brenner joined us in 1992, as our
Controller, and was promoted to his present position in May, 1996. Immediately
prior to joining us, he served three years as Vice President, Finance and Chief
Financial Officer of Margo Nursery Farms Inc., a publicly traded agribusiness
firm with European and Latin American operations. From 1986 to 1990,
Mr. Brenner was Treasurer of Latin American Agribusiness Development Corp., a
company providing debt and equity financing to
 
                                       69
agribusinesses throughout Latin America. His duties included serving as director
for several of its corporate investments. From 1981 to 1986, Mr. Brenner held
various positions with the international accounting firm of
PricewaterhouseCoopers (formerly Price Waterhouse LLP). Mr. Brenner is a
licensed Certified Public Accountant in Florida (inactive status).
 
     James G. Cameron. Mr. Cameron has been a director of the issuer since
February 6, 1997. Mr. Cameron has been with us since 1981. From 1981 to 1984,
Mr. Cameron served as the Project Manager spearheading the design and
construction of the St. Eustatius terminal facility. Mr. Cameron was promoted in
1984 to Executive Vice President of Statia Terminals, Inc. Since being named
President and Chairman of the Board of Statia Terminals, Inc. in 1993,
Mr. Cameron has served on the board of directors of Tankstore (a joint venture
company of CBI Industries, GATX Corporation and Paktank International B.V.).
Mr. Cameron has also served on the board of directors of Petroterminal de
Panama, where he represented CBI Industries' ownership in the pipeline
traversing the isthmus of Panama. His prior experience in the petroleum industry
dates back to 1969 when he joined Cities Service Company as a marine engineer.
Mr. Cameron subsequently joined Pakhoed USA, Inc., where he served in a variety
of positions including Project Engineer, Manager of Engineering & Construction,
Maintenance Manager and Terminal Manager, which included the management of
Paktank's largest facility in Deer Park, Texas.
 
     John K. Castle. Mr. Castle has been a director of the issuer since
February 6, 1997. Mr. Castle is Chairman and Chief Executive Officer of Branford
Castle, Inc., an investment company formed in 1986. Since 1987, Mr. Castle has
been Chairman of Castle Harlan, Inc., a private merchant bank in New York City.
Mr. Castle is Chief Executive Officer of Castle Harlan Partners II, G.P. Inc.,
the general partner of the general partner of Castle Harlan Partners II L.P.,
which is our controlling stockholder. Immediately prior to forming Branford
Castle, Inc. in 1986, Mr. Castle was President and Chief Executive Officer and a
director of Donaldson Lufkin & Jenrette, Inc., which he joined in 1965.
Mr. Castle is a director of Sealed Air Corporation, Morton's Restaurant Group,
Inc., Commemorative Brands, Inc. and Universal Compression, Inc. He is a trustee
of the New York Medical College (for 11 years he was Chairman of the Board), a
member of The New York Presbyterian Hospital's Board of Trustees, a member of
the board of the Whitehead Institute for Biomedical Research and is a member of
the Corporation of the Massachusetts Institute of Technology. Mr. Castle has
also served as a director of The Equitable Life Assurance Society of the United
States.
 
     John D. Franklin. Mr. Franklin joined us in March, 1992 as Manager, Marine
Sales and has been the Vice President--Marine Fuel Sales since 1996. He also
serves as a director of Petroterminal de Panama. Immediately prior to joining
us, he was employed for 14 years with The Coastal Corporation, and its former
subsidiary, Belcher Oil Co. Inc. His duties with Coastal included management of
the company's marine sales division; Manager, National Accounts, and Terminal
Manager at Coastal's New Orleans facility. He has extensive experience in
marketing, terminal operations, and technical sales support.
 
     Admiral James L. Holloway III, U.S.N. (Ret.). Adm. Holloway has been a
director of the issuer since April 29, 1997. Adm. Holloway is a retired Naval
Officer who served as Chief of Naval Operations and a member of the Joint Chiefs
of Staff from 1974 to 1978. After his retirement, from 1981 to 1989 he was
President of the Council of American Flag Ship Operators, a national trade
association representing the owners and operators of U.S. flag vessels in
foreign trade. From 1985 to 1989 he was a member of the President's Blue Ribbon
Commission on Merchant Marine and Defense, and the Commission for a Long Term
Integrated Defense Strategy. In 1986, Admiral Holloway was appointed Special
Envoy of the Vice President to the Middle East and from 1990 to 1992 he served
in a presidential appointment as U.S. Representative to the South Pacific
Commission. Admiral Holloway is currently Chairman of the Naval Historical
Foundation, Chairman of the Naval Academy Foundation, a Governor of St. Johns
College and chairman of the Board of Trustees of Saint James School.
 
     Francis Jungers. Mr. Jungers has been a director of the issuer since
April 29, 1997. Mr. Jungers is a private investor and business consultant in
Portland, Oregon. Mr. Jungers has been a consultant since January 1, 1978. From
1973 to 1978, he was Chairman and Chief Executive Officer of Arabian American
Oil Company which
 
                                       70
is the largest producer of crude and liquified gas in the world and holds the
concession for all of Saudi Arabia's oil production. Mr. Jungers is a director
of Georgia Pacific Corporation, Thermo Ecotek Corporation, Thermo Electron
Corporation, ThermoQuest Corporation, ONIX Systems Corporation, Donaldson,
Lufkin & Jenrette, Inc., The AES Corporation and ESCO Corporation. Mr. Jungers
is Chairman of the Advisory Board of Common Sense Partners, L.P., a hedge fund.
Mr. Jungers is a member of the Visiting Committee, The University of Washington.
Mr. Jungers is Advisory Trustee of the Board of Trustees, The American
University in Cairo and Trustee of the Oregon Health Sciences University
Foundation.
 
     Jack R. Pine. Mr. Pine has been the issuer's Secretary since December 23,
1996. Mr. Pine has been involved with our legal affairs since our inception and
was formally transferred to Statia Terminals, Inc. from CBI Industries, Inc. in
May 1996 as Senior Vice President, General Counsel and Secretary. Mr. Pine also
serves as a director of Petroterminal de Panama. He has over 30 years of
combined experience with Liquid Carbonic Industries Corporation and CBI
Industries. Mr. Pine joined the legal staff of CBI Industries in 1974 as
Assistant Counsel and was appointed Associate General Counsel in 1984. Prior to
joining CBI Industries, Mr. Pine practiced law in the private sector.
 
     David B. Pittaway. Mr. Pittaway has been a director of the issuer since
September 3, 1996. Mr. Pittaway has been Vice President and Secretary of Castle
Harlan, Inc. a private merchant bank in New York City, since February 1987 and
Director since February 1992. Mr. Pittaway is an executive officer of Castle
Harlan Partners II, G.P. Inc., the general partner of the general partner of
Castle Harlan Partners II L.P., our controlling stockholder. Mr. Pittaway has
been Vice President and Secretary of Branford Castle, Inc., an investment
company, since October 1986 and Vice President, Chief Financial Officer and a
director of Branford Chain, Inc., a marine wholesale company, since June 1987.
Mr. Pittaway is also a director of Morton's Restaurant Group, Inc., Charlie
Brown's Holdings, Inc., and Commemorative Brands, Inc. Prior to 1987,
Mr. Pittaway was Vice President of Strategic Planning and Assistant to the
President of Donaldson Lufkin & Jenrette, Inc.
 
     Robert R. Russo. Mr. Russo has been a Vice President of the issuer since
December 23, 1996. Mr. Russo joined us in 1990 as Manager, Sales, and was
promoted to his present position in May, 1996. His prior experience in the
petroleum industry dates back to 1979 when he joined Belcher Oil Co. Inc., a
subsidiary of The Coastal Corporation. Mr. Russo was Coastal's Vice President,
Heavy Products Trading, from 1987 until his departure to join us in 1990.
 
     Jonathan R. Spicehandler, M.D. Dr. Spicehandler has been a director of the
issuer since April 29, 1997. Since 1993, Dr. Spicehandler has been President of
Schering-Plough Research Institute, the pharmaceutical research arm of
Schering-Plough Corporation, a research based company engaged in the discovery,
development, manufacturing and marketing of pharmaceutical and health care
products worldwide. Dr. Spicehandler is a diplomat of the American Board of
Internal Medicine. He was also elected to the Alpha Omega Alpha Honor Society.
He serves as president emeritus, board of managers, of the New Jersey division
of Cancer Care, Inc. Dr. Spicehandler is a member of the boards of trustees of
the Kessler Institute for Rehabilitation, Inc. and Montclair State University.
He also serves on the board of directors of the National Foundation of
Infectious Diseases and on the Science Policy Board of the Liberty Science
Center. Dr. Spicehandler is a member of the board of associates of the Whitehead
Institute for Biomedical Research.
 
     Thomas M. Thompson, Jr. Mr. Thompson has been a Vice President of the
issuer since December 23, 1996. Mr. Thompson has been with us since 1985 when he
joined as Vice President, Sales & Marketing. He has also held the position of
Senior Vice President, with full responsibility for our Houston, Texas, sales
and operations and President of JASTATIA, Inc., a marine vessel operating joint
venture between Jahre Ship Services A/S and us. Mr. Thompson became Executive
Vice President in May, 1996. His prior experience in the petroleum and chemical
industry dates back to 1968 when he joined GATX Corporation as a sales
representative. He subsequently worked as both a sales manager and General
Manager with Pakhoed USA, Inc.
 
     Ernest "Jackie" Voges. Mr. Voges has been a director of the issuer since
February 2, 1998. From 1982 to 1996, Mr. Voges was General Managing Director of
the Curacao Ports Authority. From 1977
 
                                       71
to 1982, Mr. Voges held various positions including Dean of the Law School of
the University of the Netherlands Antilles, permanent lecturer for the history
of law and a member of the International Advisory Council of Florida
International University. From 1973 to 1977, he served in various positions
within the government for Land Territory of the Netherlands Antilles including
Vice Prime Minister, Minister of Justice and Minister of Transport and
Communications. From 1967 to 1969 Mr. Voges served as Minister of Public Health.
From 1959 to 1967, he was a member of the Island Council of the Island Territory
of Curacao and from 1966 to 1967 he was Commissioner of the Island Territory of
Curacao. Mr. Voges is Managing Director of Leeward News Holding N.V., Chairman
of the Foundation Stichting Monumentenzorg Curacao and Supervisory Director of
Stadsherstel Corporation N.V. He is also Chairman of the Foundation Stichting
JEKA, Supervisory Director of Smit International Corporation N.V., and Managing
Director of Voges Inc. Corporation N.V. In 1979, Mr. Voges was Knighted in the
Order of the Dutch Lion.
     Justin B. Wender. Mr. Wender has been a director of the issuer since
September 3, 1996. Since 1993, he has been employed by Castle Harlan, Inc. He
currently serves as Director. From 1991 to 1993, Mr. Wender worked in the
Investment Banking Group of Merrill Lynch & Co. He is a board member of Charlie
Brown's Holdings, Inc. and Land 'N' Sea Holdings, Inc.
 
                             EXECUTIVE COMPENSATION
 
     The following table sets forth information concerning the compensation paid
or accrued for the year ended December 31, 1998 for our chief executive officer
and each of our five other most highly compensated executive officers (the
"named executive officers").
LONG TERM COMPENSATION AWARDS
                                                                            ------------------------------------------
                                ANNUAL COMPENSATION                                            SHARES        LONG-TERM
                                                                            RESTRICTED        UNDERLYING     INCENTIVE
NAME AND PRINCIPAL              --------------------   OTHER ANNUAL            STOCK          OPTIONS/SARS     PLAN
POSITION(1)               YEAR  SALARY($)   BONUS($)   COMPENSATION($)(2)   AWARDS($)(3)(4)   (#SHARES)(5)   PAYOUTS($)
------------------------- ----  ---------   --------   ------------------   ---------------   ------------   ---------
James G. Cameron......... 1998   275,482     211,875              --                 --            615             --
                          1997   248,655      97,050              --                 --            630             --
                          1996   215,000          --              --            919,000             --             --
 
Thomas M.
  Thompson, Jr........... 1998   241,549     173,750              --                               490             --
                          1997   208,434      79,000              --                 --            500             --
                          1996   169,260          --              --            695,000             --             --
 
Robert R. Russo.......... 1998   199,232     145,000              --                               425             --
                          1997   178,883      68,400              --                 --            430             --
                          1996   150,936          --              --            625,000             --             --
 
Jack R. Pine............. 1998   161,929      97,500              --                 --            185             --
                          1997   129,450      51,550              --                 --            190             --
                          1996   115,190      11,500              --            311,000             --             --
 
John D. Franklin......... 1998   139,616      97,500              --                 --            185             --
                          1997   128,653      49,250              --                 --            190             --
                          1996    94,967       4,500              --            238,000             --             --
 
James F. Brenner......... 1998   130,289      91,250          57,587                 --            175             --
                          1997   108,895      43,400              --                 --            165             --
                          1996    81,252          --              --            212,000             --             --
NAME AND PRINCIPAL           ALL OTHER
POSITION(1)                COMPENSATIONS($)(6)
-------------------------  -------------------
James G. Cameron.........         69,525
                                  68,077
                                  52,229
Thomas M.
  Thompson, Jr...........         16,677
                                  15,449
                                   1,440

Robert R. Russo..........         13,816
                                  12,680
                                     510

Jack R. Pine.............         11,410
                                  10,648
                                     450

John D. Franklin.........         10,784
                                  10,059
                                     479

James F. Brenner.........         10,941
                                   9,033
                                      43
------------------
 
(1) James G. Cameron became President and Chairman of the Board of Statia
    Terminals, Inc. on July 27, 1993. Thomas M. Thompson, Jr. became Executive
    Vice President of Statia Terminals, Inc. on May 6, 1996. Robert R. Russo
    became Senior Vice President of Statia Terminals, Inc. on May 6, 1996. Jack
    R. Pine became Senior Vice President, General Counsel and Secretary of
                                                Statia Terminals, Inc. on May 6,
 
                                              (Footnotes continued on next page)
 
                                       72
(Footnotes continued from previous page)
    1996. James F. Brenner became Vice President Finance, Treasurer and
    Assistant Secretary of Statia Terminals, Inc. on May 6, 1996.
 
(2) The compensation reported for 1998 represents $35,923 of relocation expenses
    and $21,664 of tax reimbursements paid to Mr. Brenner.
 
(3) In November 1996, Statia Terminals N.V. awarded a total of $3.0 million in
    its preferred stock to James G. Cameron (919 shares), Thomas M.
    Thompson, Jr. (695 shares), Robert R. Russo (625 shares), Jack R. Pine (311
    shares), John D. Franklin (238 shares) and James F. Brenner (212 shares).
    This award of Statia Terminals N.V. preferred stock was subject to a
    specified restriction period which commenced on the date of the award, and
    other conditions set forth in the restricted stock award agreement between
    Statia Terminals N.V. and the recipient of such stock. Each recipient
    surrendered each of his shares of Statia Terminals N.V. preferred stock in
    exchange for a unit consisting of one share of the issuer's common stock and
    one share of Series E Preferred Stock. The units were also subject to
    substantially similar restrictions and conditions as the Statia
    Terminals N.V. preferred stock, as set forth in a restricted unit award
    agreement between the issuer and each such recipient. Prior to the
    expiration of the restriction period, recipients could not sell, transfer,
    pledge, assign, encumber or otherwise dispose of their units. Such
    restriction periods applicable to the issuer's stock comprising such units
    lapsed, pursuant to the award agreements, in November 1998.
 
(4) The table does not include loans to executive officers by the issuer secured
    by restricted units of the issuer's preferred and common stock. (See
    "Stockholder Loans" below.)
 
(5) Represents options to purchase issuer common stock awarded under the 1997
    Stock Option Plan. The fair values at the dates of grant, November 21, 1997
    and December 3, 1998, were determined by the compensation committee of the
    issuer's board of directors to be $0.10 per share and $0.10 per share for
    the 1997 and 1998 grants. The award agreement specifies that after two years
    of employment after the date of grant and after each of the following three
    years, 25% of the option shall become exercisable unless a liquidation event
    occurs (as defined in the award agreement). If a liquidation event occurs,
    the option shall become fully exercisable. The option will terminate upon
    the employee's termination of employment except in the event of death,
    permanent disability or termination by us other than for substantial cause.
    Each option shall expire ten years after the date of grant.
 
(6) The compensation reported for 1998 represents: (a) the dollar value of split
    dollar life insurance benefits paid by us, (b) matching and discretionary
    contributions made to our 401(k) plan and (c) the cost of life insurance in
    excess of limits prescribed by the Internal Revenue Code. These benefits,
    expressed in the same order as listed in the preceding sentence, amounted to
    $50,789, $16,000 and $2,736 for Mr. Cameron; $0, $14,200 and $2,477 for
    Mr. Thompson; $0, $13,000 and $816 for Mr. Russo; $0, $10,600 and $810 for
    Mr. Pine; $0, $10,600 and $184 for Mr. Franklin; and $0, $10,400 and $541
    for Mr. Brenner.
 
                                       73
OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 1998
 
     The following table sets forth certain information regarding options
granted to the named executive officers during 1998. We have not granted any
stock appreciation rights.
INDIVIDUAL GRANTS
                           ----------------------------------------------------
                                        % OF
                                        TOTAL
                           NUMBER OF   OPTIONS                                    POTENTIAL REALIZABLE VALUE AT ASSUMED
                           SHARES      GRANTED                                     ANNUAL RATES OF STOCK APPRECIATION
                           UNDERLYING    TO                                                  FOR OPTION TERM
                           OPTIONS     EMPLOYEES  EXERCISE  MARKET   EXPIRATION  ---------------------------------------
NAME                       GRANTED     IN 1998     PRICE    PRICE(1)   DATE          0%           5%            10%
-------------------------- ----------  ---------  --------  -------  ----------  -----------  -----------  -------------
James G. Cameron..........     615        21.2%    $ 0.10   $810.00    12/3/08   $498,088.50  $811,372.36  $1,292,011.31
Thomas M.
  Thompson, Jr............     490        16.9%      0.10    810.00    12/3/08    396,851.00   646,459.28   1,029,407.38
Robert R. Russo...........     425        14.7%      0.10    810.00    12/3/08    344,207.50   560,704.48     892,853.34
Jack R. Pine..............     185         6.4%      0.10    810.00    12/3/08    149,831.50   244,071.36     388,653.81
John D. Franklin..........     185         6.4%      0.10    810.00    12/3/08    149,831.50   244,071.36     388,653.81
James F. Brenner..........     175         6.0%      0.10    810.00    12/3/08    141,732.50   230,878.31     367,645.49
------------------
 
(1) The market price on the date of grant, December 3, 1998, was determined
    based on a valuation performed at our request by an independent consulting
    firm which specializes in these matters.
 
OPTION EXERCISES AND YEAR-END VALUES
 
     The following table sets forth certain information concerning options to
purchase common stock exercised by the named executive officers during 1998 and
the number and value of unexercised options held by each of the named executive
officers at December 31, 1998.
 
        AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 1998
                           AND YEAR-END OPTION VALUES
NUMBER OF SHARES UNDERLYING          VALUE OF UNEXERCISED
                                      SHARES                      UNEXERCISED OPTIONS AT           IN-THE-MONEY OPTIONS AT
                                      ACQUIRED                      DECEMBER 31, 1998               DECEMBER 31, 1998(1)
                                       ON         VALUE       -------------------------------    ----------------------------
NAME                                  EXERCISE    REALIZED    EXERCISABLE    UNEXERCISABLE       EXERCISABLE    UNEXERCISABLE
-----------------------------------   --------    --------    -----------    ----------------    -----------    -------------
James G. Cameron...................       0           0            0               1,245              0          $983,425.50
Thomas M. Thompson, Jr.............       0           0            0                 990              0           782,001.00
Robert R. Russo....................       0           0            0                 855              0           675,364.50
Jack R. Pine.......................       0           0            0                 375              0           296,212.50
John D. Franklin...................       0           0            0                 375              0           296,212.50
James F. Brenner...................       0           0            0                 340              0           268,212.50
------------------
 
(1) There was no public trading market for the issuer's common stock as of
    December 31, 1998. The market price of the common stock on December 31, 1998
    was determined based on a valuation performed as of December 3, 1998 at our
    request by an independent consulting firm. The indicated market price as of
    December 3, 1998 of $810 per share was reduced to $790 per share as of
    December 31, 1998 primarily due to additional dividends accrued on the
    issuer's preferred stock during this period. Preferred stock dividends
    reduce the equity value of common stockholders.
 
                                       74
STOCK OPTION PLAN
 
     The issuer's 1997 Stock Option Plan will terminate at the closing of this
offering. Options to purchase an aggregate of 6,145 shares of common stock have
been issued under this plan. All of such options have an exercise price of $0.10
per share. None of such options have been exercised, but all of such options
will be exercised at or by the closing of this offering. No further options will
be issued under this plan.
     We intend to adopt a new stock option plan to become effective at the
closing of this offering. The terms of this new plan, which have not yet been
finally determined, will be described in an amendment to this prospectus to be
filed before this registration statement becomes effective.
 
                               STOCKHOLDER LOANS
 
     On November 27, 1996, Messrs. Cameron, Thompson, Russo, Pine, Franklin,
Brenner and certain other of our officers and managers were granted loans by the
issuer to purchase shares of the issuer's common stock and Series E Preferred
Stock. The loans totaled $1.5 million and were secured by pledges of such stock.
The loans bear interest at 6.49% annually and are due on the earlier of
(i) November 26, 2003, (ii) the sale of the pledged stock, and (iii) a "change
in control" (as defined in the loan agreement).
 
                             EMPLOYMENT AGREEMENTS
 
     We have entered into employment agreements with James G. Cameron,
Thomas M. Thompson, Jr., Robert R. Russo, Jack R. Pine, John D. Franklin and
James F. Brenner. These agreements provide for an annual base salary which is
subject to review at least annually by the board of directors or a committee
thereof. These agreements also provide for an annual cash incentive bonus to be
awarded based on the difference between a target EBITDA and actual EBITDA. The
employment agreements with Mr. Cameron, Thompson and Russo continue until
December 31, 2001 and are renewable for successive three-year periods
thereafter. The employment agreements with Messrs. Pine, Franklin and Brenner
continue until December 31, 1999 and are renewable for successive two-year
periods thereafter. Additional benefits include participation in an executive
life insurance plan for Mr. Cameron. In the event that we terminate any of these
employment agreements without substantial cause or the employee terminates for
good reason (as such terms are defined in each such employment agreement), the
employee shall be entitled to his current medical and dental benefits and his
current compensation. Such entitlements will last to the later of twelve months
or the remaining portion of the term of the relevant employment agreement. Such
entitlements will be payable in monthly installments for such period with the
addition of a pro rated portion of the employee's bonus compensation for the
year of termination. The bonus is only payable as and when ordinarily determined
for such year.
 
                                       75
SECURITY OWNERSHIP
 
     The following table sets forth the number and percentage of shares of
currently outstanding common stock of the issuer beneficially owned as of
December 31, 1998, and as adjusted to reflect the sale of the common shares
offered hereby and the issuance of the subordinated shares pursuant to the
restructuring, by (i) each person known to us to be a beneficial owner of more
than 5% of any class of our voting equity securities, (ii) each of our directors
and executive officers, and (iii) all of our directors and executive officers as
a group. The address of each owner is our principal office unless otherwise
indicated.
SHARES OF
                                                                COMMON STOCK
                                                            BENENFICIALLY OWNED
                                                           PRIOR TO THE OFFERING      SUBORDINATED SHARES BENEFICIALLY
                                                                    AND                 OWNED AFTER THE OFFERING AND
                                                               RESTRUCTURING                    RESTRUCTURING
                                                          ------------------------    ---------------------------------
                                                          NUMBER OF                   NUMBER OF    PERCENTAGES OF TOTAL
                        NAME(1)                           SHARES(4)    PERCENTAGES    SHARES(1)    VOTING SHARES
-------------------------------------------------------   ---------    -----------    ---------    --------------------
James G. Cameron.......................................     10,219(3)     21.69%        824,131             7.23%
Thomas M. Thompson, Jr.................................      1,890         4.01%        152,423             1.34%
Robert R. Russo........................................      1,662         3.53%        134,035             1.18%
Jack R. Pine...........................................        826         1.75%         66,614             0.58%
John D. Franklin.......................................        728         1.55%         58,711             0.52%
James F. Brenner.......................................        650         1.38%         52,420             0.46%
John K. Castle(2)......................................     33,750        71.63%      2,721,832            23.88%
  c/o Castle Harlan, Inc.
  150 East 58th Street
  New York, NY 10155
David B. Pittaway......................................        200         0.42%         16,129             0.14%
Justin B. Wender.......................................         10         0.02%            806             0.01%
Admiral James L. Holloway III..........................        150         0.32%         12,097             0.11%
Francis Jungers........................................        200         0.42%         16,129             0.14%
Dr. Jonathan R. Spicehandler...........................        200         0.42%         16,129             0.14%
Ernest Voges...........................................        100         0.21%          8,065             0.07%
All Officers and Directors(2)..........................     42,580         90.3%      3,433,943             30.1%
Castle Harlan Partners II L.P., affiliates and Castle
  Harlan employees(2)..................................     33,750        71.63%      2,721,832            23.88%
  c/o Castle Harlan, Inc.
  150 East 58th Street
  New York, NY 10155
[Newco]................................................         --           --       3,800,000             33.3%
------------------
(1) All of the shareholders listed, other than [Newco], are shareholders of
    [Newco] and therefore may be deemed beneficial owners of shares owned by
    [Newco], and all of the shares listed as being owned by such shareholders
    after the offering and restructuring will be owned by [Newco].
 
(2) Mr. Castle is the controlling shareholder of the general partner of the
    general partner of Castle Harlan Partners II L.P. He may therefore be deemed
    to be the beneficial owner of shares beneficially owned by Castle Harlan
    Partners II L.P., its affiliates and Castle Harlan employees. Mr. Castle
    disclaims beneficial ownership of the shares owned by Castle Harlan Partners
    II L.P., its affiliates and Castle Harlan employees other than such shares
    that represent his pro rata partnership interests in Castle Harlan Partners
    II L.P. and its affiliates.
 
(3) Includes 7,795 shares owned by certain of our employees who have granted to
    Mr. Cameron a proxy to vote such shares. Mr. Cameron disclaims beneficial
    ownership of these shares.
 
(4) Includes shares which will be acquired pursuant to the exercise of stock
    options at the closing in the amount of 1,245 shares for Mr. Cameron; 990
    shares for Mr. Thompson; 855 shares for Mr. Russo; 375 shares for Mr. Pine;
    375 shares for Mr. Franklin; 340 shares for Mr. Brenner; 100 shares for
    Adm. Holloway; 100 shares for Mr. Jungers; 100 shares for Dr. Spicehandler;
    and 100 shares for Mr. Voges.
 
                                       76
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
SALE OF BROWNSVILLE TERMINAL
 
     In July 1998, we sold our terminal in Brownsville, Texas. We used the net
proceeds from such sale to redeem 6,150 shares of Series D Preferred Stock owned
by Castle Harlan.
 
MANAGEMENT AGREEMENT
 
     As part of the acquisition by Castle Harlan of outstanding capital stock of
certain of the issuer's subsidiaries, the issuer entered into a management
agreement with Castle Harlan providing for the payment, subject to certain
conditions, of an annual management fee of $1,350,000 plus expenses for advisory
and strategic planning services. Under the indenture relating to the First
Mortgage Notes, (i) dividends from Statia Terminals International to the issuer
permitting the issuer to pay Castle Harlan's annual management fee, and (ii) a
dividend of the net proceeds of the sale of the Brownsville facility are
excepted from the limitation on restricted payments so long as no default or
event of default exists. In January 1997 and November 1997, Statia Terminals
International declared and subsequently paid on each declaration date a dividend
of $1,350,000 on its common stock to the issuer to enable it to pay management
fees to Castle Harlan, Inc. See note 12 to our consolidated financial statements
for information on preferred and common dividends paid prior to the acquisition
of capital stock by Castle Harlan. This management agreement will terminate at
the closing of this offering.
 
CONSULTING AGREEMENT
 
     Pursuant to an agreement between Castle Harlan and a consultant retained
for assistance with the structuring of the acquisition of capital stock by
Castle Harlan, we paid the consultant upon completion of the acquisition an
advisory fee (the consultant in turn paid a portion of such fee to certain
entities/persons which provided services to the consultant) of $2,500,000 in
cash and 1,500 shares of Series E Preferred Stock and 1,500 shares of common
stock of the issuer. The consultant is also a party to an agreement with Statia
Terminals N.V. dated as of January 1, 1993 pursuant to which the consultant
renders certain advisory and consulting services to the company and is
compensated therefor.
 
     Four of the issuer's directors, Admiral James L. Holloway III, Francis
Jungers, Jonathan R. Spicehandler, M.D. and Ernest Voges, have entered into
consulting agreements with Statia Terminals International for advisory and
consulting services related to investment and strategic planning, financial and
other matters. In consideration of services provided to Statia Terminals
International, each consultant receives a consulting fee of $6,250 per quarter
plus reimbursement of out-of-pocket expenses. The issuer pays each of the
foregoing directors $1,000 per meeting of the board of directors attended.
 
STOCKHOLDERS' AGREEMENTS
 
     The issuer and the current stockholders of the issuer have entered into two
stockholders' agreements which will be terminated at the closing of this
offering.
 
     At the closing of this offering the issuer will enter into an agreement
with [Newco], which will acquire all of the subordinated shares upon the
restructuring, pursuant to which the issuer will grant to [Newco] certain
rights, including demand rights, with respect to registration under the
Securities Act of the subordinated shares and the common shares issuable upon
conversion thereof.
 
LOANS TO MANAGEMENT
 
     On November 27, 1997, the issuer granted certain officers and managers,
including Messrs. Cameron, Thompson, Russo, Pine and Franklin, non-recourse
loans aggregating $1.5 million and secured by pledges of restricted stock. The
loans bear interest at 6.49% annually and are due on the earlier of
(i) November 26, 2003, (ii) the sale of the pledged stock and (iii) a "change in
control" (as defined in the loan agreement). These loans will be repaid at the
closing of this offering.
 
BOARD OF DIRECTORS
 
     Prior to the restructuring:
 
          o Castle Harlan or its affiliates hold 13,850 shares of Series D
            Preferred Stock, 33,750 shares of Series E Preferred Stock and
            33,750 shares of the currently outstanding common stock; and
 
          o certain directors and members of our management hold 4,724 shares of
            Series E Preferred Stock and 4,724 shares of the currently
            outstanding common stock and options to acquire an additional 6,145
            shares of common stock.
 
     Pursuant to the restructuring:
 
          o the issuer's Series E Preferred Stock will be redeemed at its
            liquidation preference;
 
                                       77
o all shares of outstanding common stock (47,119 shares, which
            includes an additional 6,145 shares of common stock to be issued
            upon exercise of options at or by the closing) will be reclassified
            as 471,190 subordinated shares;
 
          o the issuer will issue an additional 3,328,810 subordinated shares
            plus 38,000 incentive rights to the holders of the remaining
            outstanding common stock; and
 
          o all of the subordinated shares and incentive rights, and all of the
            shares of Petroterminal de Panama, S.A. currently owned by the
            issuer, will be transferred at the closing to [Newco].
 
     After the restructuring, certain affiliates of Castle Harlan and certain
members of our management will be directors of the issuer. Certain actions taken
by the board of directors may affect the amount of cash available for
distribution to holders of common and subordinated shares or accelerate the
conversion of subordinated shares. Decisions of the board of directors with
respect to the amount and timing of asset purchases and sales, cash
expenditures, borrowings, issuances of additional common shares and the
creation, reduction, cancellation or increase of reserves in any quarter will
affect whether, or the extent to which, there is sufficient available cash from
our operating surplus to meet the minimum quarterly distribution and target
distributions levels on all shares in a given quarter or in subsequent quarters.
 
                                       78
DESCRIPTION OF COMMON SHARES
 
     The common shares will be issued pursuant to the issuer's amended articles
of incorporation. This summary of certain provisions of the articles is not
complete and is qualified in its entirety by reference to the provisions of the
articles. We will make copies of the proposed form of the articles available as
described in "Available Information." The definitions of certain terms used in
the articles and in this summary are substantially the same as those used
elsewhere in this prospectus.
 
GENERAL
 
     The issuer was incorporated on September 4, 1996, in the Netherlands
Antilles as a public company with limited liability. The issuer will have an
authorized capital of $300,000 consisting of the following classes and number of
shares:
 
     o 20,000,000 common shares (referred to in the articles as Class A shares),
       of which at the closing 7,600,000 will issued and be outstanding
       (8,360,000 if the underwriters exercise their over-allotment option in
       full);
 
     o 7,800,000 subordinated shares (referred to in the articles as Class B
       shares), of which at the closing 3,800,000 will issued and be
       outstanding; and
 
     o 2,200,000 incentive rights (referred to in the articles as Class C
       shares), of which at the closing 38,000 will be issued and outstanding.
 
Each common and subordinated share and incentive right shall have a par value of
$0.01.
 
     Subject to the limitations described under "--Issuance of Additional
Securities" below, the issuer has the authority to issue additional common
shares or other equity securities for such consideration and on such terms and
conditions as are established by the issuer's board of directors in its sole
discretion and without the approval of the holders of the common shares,
subordinated shares or incentive rights. The issuer has reserved for issuance
12,400,000 common shares (11,640,000 if the underwriters exercise their
over-allotment option in full; 8,600,000 if all of the subordinated shares are
converted into common shares and the underwriters have not exercised their
over-allotment option, 7,840,000 if they have exercised in full), 4,000,000
subordinated shares, and 2,162,000 incentive rights.
 
DIVIDENDS; DISTRIBUTIONS UPON LIQUIDATION
 
     For a description of the relative rights and preferences of the common
shares, the subordinated shares and the incentive rights in and to dividends and
distributions upon liquidations, see "Cash Dividend Policy."
 
VOTING RIGHTS
 
     Holders of the common shares and holders of the subordinated shares, voting
together as one class, are entitled to one vote for each share on all matters to
be voted upon by shareholders, including the election of directors.
 
     The board of directors shall be divided into 3 classes. Of the initial
board of directors after this offering, one class will serve for two years, one
class will serve for four years and one class will serve for six years.
Thereafter, each director will serve a term of six years. In the case of a
vacancy, upon the expiration of a director's term or otherwise, directors shall
be appointed by the holders of common and subordinated shares upon nomination by
the board of directors through a non-binding resolution. Holders of common
shares and holders of the subordinated shares do not have cumulative voting
rights in the election of directors, which election is by absolute majority of
votes cast at a general meeting of shareholders, for which a quorum consists of
one-third of the aggregate outstanding common shares and subordinated shares.
Accordingly, holders of a majority of the common shares and the subordinated
shares, voting together as one class, may elect all of the directors standing
for election.
 
     In general, a majority of the common shares and the subordinated shares,
voting together as one class at a general meeting, for which a quorum consists
of the holders of one-third of the aggregate outstanding common and subordinated
shares, is required to pass any resolutions. In order to amend the issuer's
articles of incorporation, dissolve or liquidate the issuer or dispose of all or
substantially all of the assets of the issuer, however, sixty-six and two-thirds
percent of the common and subordinated shares, voting together as one class,
voted at a general meeting, for which a quorum
 
                                       79
consists of one-half of the aggregate outstanding common and subordinated
shares, is required.
 
     Shareholders meetings must be held in the Netherlands Antilles and may only
be called by the board of directors. One or more shareholders holding at least
10% of all outstanding shares may petition the board of directors to call a
meeting and, if the board fails to call a meeting, may petition a Netherlands
Antilles court to call a meeting.
 
ISSUANCE OF ADDITIONAL SHARES
 
     The issuer is authorized to issue up to 12,400,000 additional common shares
and 4,000,000 additional subordinated shares for such consideration and on such
terms and conditions as are established by its board of directors in its sole
discretion without the approval of any shareholders, except as set forth in the
next sentence. During the subordination period, it may not issue more than
4,000,000 additional common shares, and it may not issue any equity securities
ranking senior to the common shares without the prior approval of the holders of
a majority of the common shares and a majority of the subordinated shares, each
voting separately as a class, not including those common and subordinated shares
held by the holders of incentive rights and their affiliates.
 
     Even during the subordination period, the restrictions on issuance of
additional common shares are subject to the following exceptions (that is,
additional common shares may be issued in the following circumstances) if the
issuance occurs:
 
     o upon exercise of the underwriters' over-allotment option;
 
     o upon conversion of the subordinated shares;
 
     o pursuant to employee benefit plans;
 
     o in the event of a combination or subdivision of common shares; or
 
     o in connection with an acquisition or capital improvement that would have
       resulted, on a pro forma basis, in an increase in adjusted operating
       surplus on a per share basis pro forma for the preceding four-quarter
       period (or within 365 days of, and the net proceeds from such issuance
       are used to repay debt incurred in connection with, such an acquisition
       or capital improvement).
 
     The holders of common shares will not have preemptive rights to acquire
additional common shares or other securities that we may issue.
 
     Additional issuances of shares or other equity securities ranking junior to
the common shares may reduce the likelihood of, and the amount of, any
distributions above the minimum quarterly dividend.
 
TRANSFER AGENT AND REGISTRAR
 
     The transfer agent and registrar for the issuer with respect to the common
shares is            .
 
RESTRICTIONS ON OWNERSHIP AND TRANSFER
 
     A non-United States corporation will be classified as a "controlled foreign
corporation" (a "CFC") for United States federal income tax purposes in any
taxable year of such corporation in which more than 50% of either (i) the total
combined voting power of all of its classes of stock entitled to vote or
(ii) the total value of its stock, is owned or considered owned (after applying
certain attribution rules), on any day during such taxable year, by United
States persons who own or are considered to own 10% or more of the total
combined voting power of all of its classes of stock entitled to vote ("Ten
Percent Shareholders"). The CFC rules provide that each Ten Percent Shareholder
of a CFC is required to include in income each year their pro rata share of the
CFC's "Subpart F income" and investment of earnings in U.S. property. Although
the issuer currently is a CFC, it expects that, as a result of the offering, it
will not be classified as a CFC.
 
     Primarily to avoid becoming, or minimize the duration as, a CFC and to
prevent any ownership or transfer of the common shares which may result in such
a classification, any sale, transfer, assignment or other disposition of any
legal interest in or right to the common shares (a "Sale") or any other event
relating to the common shares (other than the conversion of subordinated shares
into common shares, any subsequent transfer of the common shares resulting from
such conversion or any pledge, encumbrance, transfer by operation of law, gift,
inheritance or marital law of any legal or beneficial interest in or right to
the common shares, as well as any sale, transfer, assignment or other
disposition (other than a Sale) of any beneficial, but not legal, interest in or
right to the common shares) that would result in a Violation of the Ownership
Limit is null and void to the extent that such Sale
 
                                       80
or event causes a Violation of the Ownership Limit. For purposes of this
prospectus, the "Ownership Limit" is 9.9% of the total combined voting power of
all of the issuer's classes of stock entitled to vote, and a "Violation of the
Ownership Limit" occurs when (1) any person would own or would be considered to
own by virtue of the attribution provisions of the CFC rules, or (2) any person
together with its "affiliates" and "associates" (as defined in Rule 12b-2 under
the U.S. Securities Exchange Act of 1934) and any group (within the meaning of
Section 13(d)(3) of such Securities Exchange Act) of which such person is a part
would own or would be considered to own by virtue of the beneficial ownership
provisions of Rule 13d-3 under such Securities Exchange Act, in either case more
than the Ownership Limit. In addition, any pledge, encumbrance, transfer by
operation of law, gift, inheritance or marital law of any legal or beneficial
interest in or right to the common shares, as well as any sale, transfer,
assignment or other disposition (other than a Sale) of any beneficial, but not
legal, interest in or right to the common shares (other than the conversion of
subordinated shares into common shares or any subsequent transfer of the common
shares resulting from such conversion) (a "Gift") that would result in a
Violation of the Ownership Limit is prohibited to the extent that such Gift
causes a Violation of the Ownership Limit. In order to establish these
restrictions, the articles of the issuer and the share certificates include
provisions to such effect. These include, in summary:
 
     o Any person who acquires or attempts or intends to acquire ownership
       (direct or indirect, actual or constructive ownership within the meaning
       of section 958 of the Internal Revenue Code of 1986, as amended (the
       "Code")) of common shares that will or may violate the foregoing
       restrictions on transferability and ownership is required to give notice
       immediately to the issuer and to provide the issuer with such other
       information as it may request in order to determine the effect of such
       Sale, Gift (a Sale and/or a Gift to be referred to as a "Transfer") or
       event on the classification of the issuer as a CFC or for any other
       purpose (the restrictions of transfer and ownership described herein may
       be waived by the board of directors with respect to a Transfer or any
       other event described above).
 
     o The issuer shall not recognize a holder of common shares as such until
       its common shares have been issued in the name of such holder of common
       shares (or in the case of a Transfer, until the common shares so
       transferred have been registered by or on behalf of the board of
       directors of the issuer in the name of such transferee); until such
       recognition, the holder of common shares or transferee cannot exercise
       any voting rights, dividend rights or distribution rights (the same will
       be suspended until such time).
 
     o The board of directors may set a record date for any general meeting of
       shareholders of the issuer in advance of such meeting to verify the
       eligibility of such shareholders to vote, as well as to verify the
       ownership level of each such shareholder.
 
     o The voting rights pertaining to the common shares cannot be transferred
       to a holder of a right of usufruct or pledge.
 
     o In case of a prohibited Gift, the issuer may for the number of common
       shares that exceeds the Ownership Limit ("Excess Common Shares") issue,
       or arrange for the issuance of, certificates, which carry no voting
       rights, evidencing the transfer of such Excess Common Shares as described
       below. The transferee shall be required to offer for transfer its Excess
       Common Shares to a specially created independent legal entity to hold any
       such Excess Common Shares for a certain period of time (see below), which
       entity shall be a Netherlands Antilles foundation having a board of
       directors and having no shareholders (the "Trust"). The Trust's board of
       directors (the "Trustee") shall be appointed by the issuer. If the
       Trustee fails to sell the Excess Common Shares as set forth below, the
       Trustee shall be irrevocably authorized to transfer the Excess Common
       Shares to the issuer. The restrictions described in this paragraph may be
       waived by the Trustee or the issuer with respect to a Gift. In addition,
       by acceptance or receipt of the relevant share certificate(s)
       representing any Excess Common Shares, the transferee shall be deemed to
       have agreed to offer for transfer such Excess Common Shares to the Trust
       as set forth below.
 
                                       81
In the event a transferee of Excess Common Shares (the "Prohibited
Transferee") has paid the purchase price for such shares to the transferor, but
has not become the owner of such shares because such transfer causes a Violation
of the Ownership Limit and is, if applicable, null and void, irrespective of the
delivery of share certificates representing such Excess Common Shares, then the
transferor of the Excess Common Shares (who shall have remained as the owner of
such shares) shall be deemed to have made an irrevocable offer to the Trust to
acquire such Excess Common Shares. The Trustee shall in such case notify the
transferor of its acceptance of the offer, and the Trustee shall be irrevocably
authorized to take all necessary steps in order to effectuate the transfer of
such Excess Common Shares. The consideration payable to the transferor by the
Trust for such shares shall be deemed paid and settled by the purchase price for
such shares paid by the Prohibited Transferee, notwithstanding any rights of the
Prohibited Transferee to reclaim any amounts paid to the transferor for such
Excess Common Shares. The issuer also shall be irrevocably authorized to cancel
any share certificates held by the Prohibited Transferee representing Excess
Common Shares and may issue new share certificates to the Trust representing the
Excess Common Shares. In the event that a person holds share certificate(s), or
receives the same, to any Excess Common Shares, other than as a result of a Sale
or other event that is null and void (the "Prohibited Owner"), the Prohibited
Owner shall be deemed to have made an irrevocable offer to the Trust to acquire
such Excess Common Shares. The Trustee shall in such case notify such Prohibited
Owner of its acceptance of the offer, and the Trustee shall be irrevocably
authorized to take all necessary steps in order to effectuate the transfer of
such Excess Common Shares. The consideration payable to the Prohibited Owner for
such shares shall be paid in accordance with the method set forth below. If the
Trustee has not exercised any of the rights of the Trust described in this
paragraph, the issuer shall be authorized to exercise the aforementioned rights
on its own behalf. The restrictions described in this paragraph may be waived by
the Trustee or the issuer with respect to a Transfer or any other event.
 
     The Trustee, who shall be unaffiliated with the issuer and, insofar as
possible, any Prohibited Transferee or any Prohibited Owner, will be required,
within twenty (20) days of the transfer of Excess Common Shares to the Trust, to
sell such Excess Common Shares to a person whose ownership of any such shares
would not violate the Ownership Limit (a "Qualified Person") and to distribute
to the Prohibited Transferee an amount equal to the lesser of (i) the price paid
by the Prohibited Transferee for such Excess Common Shares and (ii) the net
sales proceeds received by the Trust for such Excess Common Shares. In the case
of any Excess Common Shares resulting from any event other than a Sale, or from
a Transfer for no consideration (such as a gift), the Trustee will be required
to sell such Excess Common Shares to a Qualified Person and to distribute to the
Prohibited Owner an amount equal to the lesser of (i) the fair market value of
such Excess Common Shares as of the date of such event and (ii) the net sales
proceeds received by the Trust for such Excess Common Shares. In either case,
any proceeds in excess of the amount distributable to the Prohibited Transferee
or Prohibited Owner, as the case may be, will be required to be distributed to a
Netherlands Antilles charitable organization (which will be free to utilize the
same at its discretion) selected by the issuer that will be the beneficiary of
the Trust (the "Beneficiary"). Prior to a sale of any such Excess Common Shares
by the Trust, the Trustee will be entitled to keep, or receive, in trust for the
Beneficiary, any dividends and any other distributions paid by the issuer with
respect to such Excess Common Shares and also will be exclusively entitled to
exercise all voting rights with respect to such Excess Common Shares upon
acquisition thereof by the Trust.
 
     By acceptance of a share certificate, or upon receipt of any share
certificate, each Prohibited Transferee and Prohibited Owner shall agree and be
deemed to have agreed that any dividend or other distribution paid to such
Prohibited Transferee or Prohibited Owner (prior to the discovery by the issuer)
will be repaid to the Trustee for distribution to the Beneficiary.
 
     In addition, Excess Common Shares held in the Trust may, at all times, be
offered for sale to the issuer, or its designee, at a price per share equal to
the lesser of (i) the price per share in the transaction that resulted in such
transfer to the Trust (or, in the case of a devise or gift, the market value at
the time of such devise or gift) and (ii) the market value of such shares on the
date the issuer, or its designee, accepts such offer. The issuer will have the
right to accept such offer until the Trustee has sold the shares held in the
Trust. Upon any such sale to the issuer, the interest of the
 
                                       82
Beneficiary in the Excess Common Shares sold will terminate upon the Trustee
distributing the net proceeds of the sale to the Prohibited Transferee or
Prohibited Owner, as the case may be.
 
     All certificates representing common shares will bear a legend referring to
the restrictions described above, as follows:
 
     THE INTERESTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED, ACCEPTED AND HELD
SUBJECT TO THE TERMS OF THE PROSPECTUS, DATED                     , THE ARTICLES
OF THE ISSUER, AS THE SAME MAY BE AMENDED FROM TIME TO TIME (THE "ARTICLES") AND
THIS CERTIFICATE. A COPY OF THE ARTICLES IS AVAILABLE AT THE PRINCIPAL OFFICE OF
THE ISSUER. OWNERSHIP, SALE, ASSIGNMENT, TRANSFER, MORTGAGE, PLEDGE,
HYPOTHECATION OR OTHER ENCUMBRANCE OR DISPOSITION OF THIS CERTIFICATE AND THE
INTERESTS REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS SET FORTH IN THE
PROSPECTUS, THE ARTICLES AND THIS CERTIFICATE, AND THE HOLDER HEREOF, BY THE
ACCEPTANCE OF THIS CERTIFICATE, ACKNOWLEDGES NOTICE OF ALL THE PROVISIONS IN THE
PROSPECTUS, THE ARTICLES AND THIS CERTIFICATE AND AGREES TO BE BOUND THERETO.
OWNERSHIP AND ANY TRANSFER OF THIS CERTIFICATE OR THE SHARES REPRESENTED HEREBY
IN VIOLATION OF THE TERMS OF THE PROSPECTUS, THE ARTICLES AND THIS CERTIFICATE
SHALL BE PROHIBITED, AND SHALL BE NULL AND VOID AND OF NO FORCE AND EFFECT TO
THE EXTENT, AND INSOFAR AS SET FORTH IN THE PROSPECTUS, THE ARTICLES AND THIS
CERTIFICATE.
 
     In addition, each share certificate shall include:
 
     o a provision obligating a transferee to notify the issuer of any Transfer,
       failure of which the transferee shall not be recognized as a shareholder
       of the issuer (see above); and
 
     o a provision obligating a holder of Excess Common Shares to sell such
       shares to the Trust and/or issuer, failure of which the issuer is
       irrevocably authorized to purchase such Excess Common Shares.
 
     Pursuant to a Netherlands Antilles ordinance, a person who directly or
indirectly acquires shares representing 5% or more of all voting securities of
the issuer must notify us immediately of such acquisition. The board of
directors must publicly announce such notice and distribute it to all
shareholders. Failure to comply with the provisions of this ordinance may result
in the limitation of such shares' voting rights to 5% of all voting securities
and may lead to civil and/or criminal penalties.
 
                                       83
DESCRIPTION OF THE SUBORDINATED SHARES
 
     The subordinated shares are a separate class of shares of the issuer, and
the rights of holders of such subordinated shares to participate in dividends
and distributions on liquidation differ from, and are subordinated to, the
rights of the holders of common shares. For any given quarter, any available
cash will first be paid as dividends to the holders of common shares, and then
will be paid as dividends to the holders of subordinated shares depending upon
the amount of available cash for the quarter, the amount of common share
arrearages, if any, and the rights of the holders of incentive rights. Payment
of the first $6.8 million of dividends on the subordinated shares will be
deferred as described under "Cash Dividend Policy--Deferral of Dividends on
Subordinated Shares".
 
CONVERSION OF SUBORDINATED SHARES
 
     The subordination period will generally extend from the closing of this
offering until the first day of any quarter beginning after March 31, 2004 in
respect of which:
 
     o distributions of available cash from operating surplus on the common and
       subordinated shares with respect to each of the three consecutive
       four-quarter periods immediately preceding such day equaled or exceeded
       the sum of the minimum quarterly dividend on all of the outstanding
       common and subordinated shares during such periods;
 
     o the adjusted operating surplus generated during each of the three
       consecutive four-quarter periods immediately preceding such day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis; and
 
     o there are no outstanding common share arrearages.
 
     Prior to the end of the subordination period and to the extent the tests
for conversion described below are satisfied, a portion of the subordinated
shares may be eligible to convert into common shares prior to June 30, 2004.
Subordinated shares will convert into common shares on a one-for-one basis on
the first day after the record date established for the dividend in respect of
any quarter ending on or after (a) March 31, 2002 with respect to one-quarter of
the subordinated shares (950,000 subordinated shares) and (b) March 31, 2003
with respect to one-quarter of the subordinated shares (950,000 subordinated
shares), in respect of which:
 
     o dividends of available cash from operating surplus on the common and
       subordinated shares with respect to each of the three consecutive
       four-quarter periods immediately preceding such day equaled or exceeded
       the sum of the minimum quarterly dividend on all of the outstanding
       common and subordinated shares during such periods;
 
     o the adjusted operating surplus generated during each of the three
       consecutive four-quarter periods immediately preceding such day equaled
       or exceeded the sum of the minimum quarterly dividend on all of the
       common and subordinated shares that were outstanding on a fully diluted
       basis; and
 
     o there are no outstanding common share arrearages;
 
provided, however, that the early conversion of the second one-quarter of
subordinated shares may not occur until at least one year following the early
conversion of the first one-quarter of subordinated shares.
 
     Upon expiration of the subordination period, all remaining subordinated
shares will convert into common shares on a one-for-one basis and will
thereafter participate, pro rata, with the other common shares in distributions
of available cash.
 
DISTRIBUTIONS UPON LIQUIDATION
 
     If the issuer liquidates during the subordination period, under certain
circumstances holders of outstanding common shares will be entitled to receive
more per share in liquidating distributions than holders of outstanding
subordinated shares. Following conversion of the subordinated shares into common
shares, all common and subordinated shares will be treated the same upon
liquidation of the issuer.
 
                                       84
SHARES ELIGIBLE FOR FUTURE SALE
 
     Upon completion of this offering and conversion of the outstanding
subordinated shares into common shares, there will be 11,400,000 common shares
outstanding (12,160,000 common shares if the underwriters' over-allotment option
is exercised in full, in each case assuming no exercise of options or warrants
after January 1, 1999). The 7,600,000 common shares being sold in this offering
(8,360,000 common shares if the underwriters' over-allotment option is exercised
in full) will be freely tradeable in the U.S. without restriction under the U.S.
Securities Act of 1933, unless such common shares are acquired by our
"affiliates" (as defined in Rule 144 under the Securities Act). The 3,800,000
common shares to be outstanding upon conversion of the subordinated shares will
be "restricted securities" (as defined in Rule 144 and Rule 701 under the
Securities Act) and may not be sold unless they are either registered under the
Securities Act or sold pursuant to an exemption from registration, such as the
exemption provided by Rule 144.
 
     In general, under Rule 144 as currently in effect:
 
     o If one year has elapsed since the later of the date of the acquisition of
       the restricted common shares (or the subordinated shares from which they
       were converted) from either the issuer or any of its affiliates, the
       acquirer or subsequent holder thereof may sell, within any three-month
       period commencing 90 days after the date of this prospectus, a number of
       common shares that does not exceed the greater of one percent of the then
       outstanding common shares (approximately 7,600 common shares immediately
       after this offering), or the average weekly trading volume of the common
       shares on the New York Stock Exchange during the four calendar weeks
       preceding the date on which notice of the proposed sale is filed with the
       commission.
 
     o If two years have elapsed since the later of the date of the acquisition
       of the restricted common shares (or the subordinated shares from which
       they were converted) from the issuer or any affiliate of the issuer, a
       person who is not deemed to have been an affiliate of the issuer at any
       time for 90 days preceding a sale would be entitled to sell such common
       shares under Rule 144 without regard to the volume limitations, manner of
       sale provisions or notice requirements.
 
     The one-year and two-year periods may in some circumstances include the
holding period of a prior owner. The one-year and two-year holding periods
described above do not begin until the full purchase price or other
consideration is paid by the person acquiring the restricted common shares (or
subordinated shares) from the issuer or an affiliate of the issuer. Sales under
Rule 144 are also subject to certain manner of sale provisions, notice
requirements and the availability of current public information about the
issuer.
 
     Pursuant to an agreement between the issuer and [Newco], [Newco] has the
right to require the issuer to use its best efforts to register up to all of the
subordinated shares and common shares issuable upon conversion thereof under the
Securities Act. [Newco] also has certain "piggyback" registration rights to
compel the inclusion of such subordinated and common shares in registration
statements filed by the issuer under the Securities Act.
 
     Prior to this offering, there has been no public market for the common
shares. Trading of the common shares on the New York Stock Exchange is expected
to commence immediately following completion of this offering. No prediction can
be made as to the effect, if any, that future sales of common shares or the
availability of common shares for future sale, will have on the market price
prevailing from time to time. Sales of substantial amounts of common shares
(including common shares issued upon conversion of the subordinated shares), or
the perception that such sales could occur, could adversely affect prevailing
market prices of the common shares.
 
                                       85
TAXATION
                         NETHERLANDS ANTILLES TAXATION
 
     In the opinion of PricewaterhouseCoopers, special Netherlands Antilles tax
advisor to the issuer, the following is a description of the principal
Netherlands Antilles tax consequences relating to the ownership and disposition
of the common shares. Under the laws of the Netherlands Antilles as currently in
effect, a holder of common shares who is not a resident or deemed a resident of,
and during the taxable year has not engaged in trade or business through a
permanent establishment, permanent representative or agent in, the Netherlands
Antilles will not be subject to Netherlands Antilles income tax on dividends
paid with respect to the common shares or on gains realized during that year on
sale or disposal of such shares; the Netherlands Antilles do not impose a
withholding tax on dividends paid by the issuer. There are no gift or
inheritance taxes levied by the Netherlands Antilles when at the time of such
gift or at the time of death, the relevant holder of common shares was not
domiciled or deemed domiciled in the Netherlands Antilles. A person is not
deemed a resident or deemed domiciled in the Netherlands Antilles merely on the
basis of being a holder of common shares.
 
                          U.S. FEDERAL INCOME TAXATION
 
     In the opinion of White & Case LLP, special U.S. tax counsel to the issuer,
the following is a description of the principal U.S. federal income tax
consequences relating to the ownership and disposition of the common shares.
This description is based on (1) the Code, (2) income tax regulations (proposed
and final) issued under the Code and (3) administrative and judicial
interpretations of the Code and regulations, each as in effect and available on
the date of this prospectus.
 
     These income tax laws, regulations, and interpretations, however, may
change at any time, and any change could be retroactive to the date of this
prospectus. These income tax laws and regulations are also subject to various
interpretations, and the Internal Revenue Service or the courts could later
disagree with the explanations or conclusions contained in this description.
 
     This description deals only with the U.S. federal income tax considerations
of holders that are initial purchasers of the common shares and that will hold
common shares as capital assets (as defined in the Code). We do not, however,
address all of the tax consequences that may be relevant to a holder of common
shares.
 
     A "United States Holder" is a beneficial owner of common shares, who for
U.S. federal income tax purposes is:
 
     o a citizen or resident of the U.S.;
 
     o a partnership or corporation created or organized in or under the laws of
       the U.S. or any state thereof (including the District of Columbia);
 
     o an estate if its income is subject to U.S. federal income taxation
       regardless of its source; or
 
     o a trust if such trust validly has elected to be treated as a United
       States person for U.S. federal income tax purposes or if (1) a U.S. court
       can exercise primary supervision over its administration, and (2) one or
       more United States persons have the authority to control all of its
       substantial decisions.
 
     A "Non-United States Holder" is a beneficial owner of common shares other
than a United States Holder.
 
     We also do not address, except as stated below, any of the tax consequences
to (1) holders of common shares that may be subject to special tax treatment
such as financial institutions, real estate investment trusts, tax-exempt
organizations, regulated investment companies, insurance companies, and brokers
and dealers or traders in securities or currencies, (2) persons who acquired
common shares pursuant to an exercise of employee stock options or rights or
otherwise as compensation, (3) persons whose functional currency is not the U.S.
dollar, (4) persons that hold or will hold common shares as part of a
 
                                       86
position in a straddle or as part of a hedging or conversion transaction and
(5) holders of common shares that own (or are deemed to own) 10% or more (by
voting power or value) of the outstanding stock of the issuer.
 
     Further, we do not address any state, local or foreign tax consequences
relating to the ownership and disposition of the common shares.
 
     PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS
REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE OWNERSHIP AND
DISPOSITION OF THE COMMON SHARES AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR
FOREIGN TAX LAWS.
 
UNITED STATES HOLDERS
 
     DISTRIBUTIONS
 
     If you are a United States Holder, the gross amount of any distribution to
you by the issuer with respect to common shares will be includible in your
income as dividend income to the extent such distributions are paid out of the
current or accumulated earnings and profits of the issuer as determined under
U.S. federal income tax principles. Such dividends will not be eligible for the
dividends received deduction generally allowed to corporate United States
Holders. To the extent that the amount of any distribution by the issuer exceeds
the issuer's current and accumulated earnings and profits as determined under
U.S. federal income tax principles, it will be treated first as a tax-free
return of your adjusted tax basis in the common shares and thereafter as capital
gain.
 
     CONSTRUCTIVE DISTRIBUTIONS
 
     In the event of any combination or subdivision of the common shares
(whether effected by a dividend payable in common shares or otherwise), but not
by reason of the issuance of additional common shares for cash or property, the
minimum quarterly dividend, the target dividend levels, the unrecovered initial
price, the amount of common shares issuable upon conversion of the subordinated
shares, and certain other amounts are all subject to adjustment. Although the
issuer expects that any such adjustments will be made to avoid its application,
Section 305 of the Code and the income tax regulations thereunder may treat a
United States Holder as having received a constructive distribution from the
issuer, resulting in dividend income to the extent of the issuer's current and
accumulated earnings and profits, but only to the extent that any such
adjustments increase the United States Holder's proportionate interest in the
assets or earnings and profits of the issuer.
 
     TAXES WITHHELD ON DIVIDENDS
 
     Dividends received by you with respect to common shares will be treated as
foreign source income, which may be relevant in calculating your foreign tax
credit limitation. Subject to certain conditions and limitations, any
Netherlands Antilles' tax withheld on dividends may be deducted from your
taxable income or credited against your U.S. federal income tax liability. The
limitation on foreign taxes eligible for credit is calculated separately with
respect to specific classes of income. For this purpose, dividends distributed
by the issuer generally will constitute passive income or, in the case of
certain United States Holders, financial services income.
 
     SALE OR EXCHANGE OF COMMON SHARES
 
     If you are a United States Holder, generally you will recognize gain or
loss on the sale or exchange of common shares equal to the difference between
the amount realized on such sale or exchange and your adjusted tax basis in the
common shares. Your adjusted tax basis in the common shares will equal the
amount you paid for the common shares reduced by the amount of any distributions
you received on such common shares that are treated as a tax-free return of your
basis. Such gain or loss will be capital gain or loss. If you are a noncorporate
United States Holder, generally the maximum U.S. federal income tax rate
applicable to such gain will be lower than the maximum U.S. federal income tax
rate applicable to ordinary income if your holding period for such common shares
exceeds one year. For example, generally the maximum rate applicable to ordinary
income in 1999 for a United States Holder who is an individual would be 39.6%,
whereas, generally, net capital gains of such a holder from the disposition of
common shares held for more than one year at the time of disposition would be
subject to a maximum rate of 20%. Any gain recognized by you generally will be
treated as U.S. source income for U.S. foreign tax credit purposes. The
deductibility of capital losses is subject to limitations.
 
                                       87
SPECIAL TAX RULES
 
         PASSIVE FOREIGN INVESTMENT
          COMPANY CONSIDERATIONS
 
     A non-U.S. corporation will be classified as a passive foreign investment
company (a "PFIC") for U.S. federal income tax purposes in any taxable year in
which, after applying certain look-through rules, either (1) at least 75% of its
gross income is passive income, or (2) on average at least 50% of the gross
value of its assets is attributable to assets that produce passive income or are
held for the production of passive income. Passive income for this purpose
generally includes dividends, interest, royalties, rents and gains from
commodities and securities transactions.
 
     Based on its estimated gross income, the average value of its gross assets
and the nature of its business, the issuer believes that it will not be
classified as a PFIC for its current taxable year. The issuer's status in future
years will depend on its assets and activities in those years. The issuer has no
reason to believe that its assets or activities will change in a manner that
would cause it to be classified as a PFIC. If the issuer were a PFIC, a United
States Holder of common shares generally would be subject to imputed interest
charges and other disadvantageous tax treatment with respect to any gain from
the sale or exchange of, and certain distributions with respect to, the common
shares.
 
          CONTROLLED FOREIGN CORPORATION
          CONSIDERATIONS
 
     A non-U.S. corporation will be classified as a controlled foreign
corporation (a "CFC") for U.S. federal income tax purposes in any taxable year
of such corporation in which more than 50% of either (1) the total combined
voting power of all classes of stock of such corporation entitled to vote, or
(2) the total value of the stock of such corporation is owned or considered
owned (after applying certain attribution rules) on any day during such taxable
year, by United States persons who own or are considered to own 10% or more of
the total combined voting power of all classes of stock entitled to vote of such
corporation ("Ten Percent Shareholders"). The CFC rules provide that, even if
the CFC has made no distributions to its shareholders, each Ten Percent
Shareholder of a CFC is required to include in income each year such Ten Percent
Shareholder's pro rata share of the CFC's Subpart F income and investment of
earnings in U.S. property. Although the issuer currently is a CFC, the issuer
expects that, as a result of the offering, it will not be classified as a CFC.
In addition, the issuer's articles contain provisions primarily adopted to avoid
becoming, or minimize the duration as, a CFC and to prevent any ownership or
transfer of the common shares which may result in such classification.
 
NON-UNITED STATES HOLDERS
 
     DISTRIBUTIONS
 
     If you are a Non-United States Holder of common shares, generally you will
not be subject to U.S. federal income or withholding tax on dividends received
on common shares, unless such income is effectively connected with the conduct
by you of a trade or business in the U.S.
 
     SALE OR EXCHANGE OF COMMON SHARES
 
     If you are a Non-United States Holder of common shares, generally you will
not be subject to U.S. federal income or withholding tax on any gain realized on
the sale or exchange of such shares unless (1) such gain is effectively
connected with the conduct by you of a trade or business in the U.S. or (2) in
the case of any gain realized by an individual, you are present in the U.S. for
183 days or more in the taxable year of such sale or exchange and certain other
conditions are met.
 
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING REQUIREMENTS
 
     U.S. backup withholding tax and information reporting requirements
generally apply to certain payments to certain noncorporate holders of stock.
Information reporting generally will apply to payments of dividends on, and to
proceeds from the sale or redemption of, common shares by a payor within the
U.S. to a holder of common shares (other than an exempt recipient, including a
corporation, a payee that is a Non-United States Holder that provides an
appropriate certification and certain other persons). A payor within the U.S.
will be required to withhold 31% of any payments of the proceeds from the sale
or redemption of common shares within the U.S. to you (unless you are an exempt
recipient) if you fail to furnish your correct taxpayer identification number or
otherwise fail to comply with such backup withholding tax requirements.
 
                                       88
Income tax regulations issued on October 6, 1997, and amended on
December 30, 1998, would modify certain of the rules discussed above generally
with respect to payments on common shares made after December 31, 1999. In
particular, a payor within the U.S. will be required to withhold 31% of any
payments of dividends on, or proceeds from the sale of, common shares within the
U.S. to you (unless you are an exempt recipient such as a corporation or a
Non-United States Holder that provides an appropriate certification) if you fail
to furnish your correct taxpayer identification number or otherwise fail to
comply with, or establish an exemption from, such backup withholding tax
requirements. In the case of such payments by a payor within the U.S. to a
foreign partnership (other than payments to a foreign partnership that qualifies
as a withholding foreign partnership within the meaning of such income tax
regulations and payments to a foreign partnership that are effectively connected
with the conduct of a trade or business in the U.S.), the partners of such
partnership will be required to provide the certification discussed above in
order to establish an exemption from backup withholding tax and information
reporting requirements. Moreover, a payor may rely on a certification provided
by a Non-United States Holder only if such payor does not have actual knowledge
or a reason to know that any information or certification stated in such
certificate is unreliable.
 
     THE ABOVE DESCRIPTION IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF
ALL TAX CONSEQUENCES RELATING TO THE OWNERSHIP AND DISPOSITION OF COMMON SHARES.
PROSPECTIVE PURCHASERS OF COMMON SHARES ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR
PARTICULAR SITUATIONS, AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE
LAWS OF ANY FOREIGN, STATE, LOCAL OR OTHER TAXING JURISDICTION.
 
                                       89
PLAN OF DISTRIBUTION
 
     Upon the terms and subject to the conditions stated in the underwriting
agreement dated      , 1999, the issuer has agreed to sell to each of the
underwriters named below, and each of the underwriters has severally agreed to
purchase from the issuer, the number of common shares set forth opposite its
name below:
Number of
Underwriter                             Common Shares
-------------------------------------   -------------
Bear, Stearns & Co. Inc.
 
Morgan Stanley Dean Witter
 
Prudential Securities Incorporated
 
Dain Rauscher Wessels
a division of Dain Rauscher
Incorporated
 
                                          ---------
Total                                     7,600,000
                                          ---------
                                          ---------
The underwriting agreement provides that the obligations of the several
underwriters to pay for and accept delivery of the common shares offered hereby
are subject to approval of certain legal matters by their counsel and to certain
other conditions. The underwriters are obligated to take and pay for all common
shares offered hereby (other than those covered by the underwriters' over-
allotment option described below) if any such common shares are taken.
 
     The following table shows the per share and total underwriting discounts
and commissions to be paid by us to the underwriters. Such amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares
PAID BY THE ISSUER
                        ------------------
                         NO EXERCISE          FULL EXERCISE
                        ------------------    -------------
Per common share.....       $                   $
Total................       $                   $
The underwriters propose to offer part of the common shares directly to the
public at the offering price set forth on the cover page of this prospectus and
part of such common shares to certain dealers at such price less a concession
not in excess of $   per common share. The underwriters may allow, and such
dealers may reallow, a concession not in excess of $   per common share to other
underwriters or to certain other dealers. After the initial offering of the
common shares to the public, the offering price and other selling terms may from
time to time be varied by the underwriters. The underwriters have informed us
that they do not intend to confirm sales to accounts over which they exercise
discretionary authority.
 
     The issuer has granted to the underwriters an option, exercisable for
30 days from the date of this prospectus, to purchase up to 760,000 additional
common shares at the initial public offering price set forth on the cover page
of this prospectus, minus the underwriting discounts and commissions. The
underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, made in connection with the offering of the common
shares offered hereby. To the extent such option is exercised, each underwriter
will be obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional common shares as the number of common shares
set forth opposite such underwriter's name in the preceding table bears to the
total number of common shares listed in such table.
 
     In addition, certain persons participating in this offering may engage in
transactions that stabilize, maintain or otherwise affect the price of the
common shares during and after this offering. For instance, the underwriters may
over-allot or otherwise create a short position in the common shares for their
own account by selling more common shares than have been sold to them by the
issuer. The underwriters may then elect to cover any such short position by
purchasing common shares in the open market or by exercising the over-allotment
options granted to the underwriters. In addition, such persons may stabilize or
maintain the price of the common shares by bidding for or purchasing common
shares in the open market and may impose penalty bids, under which selling
concessions allowed to syndicate members or other broker-dealers participating
in this offering are reclaimed if shares previously distributed in this offering
are repurchased in connection with
 
                                       90
stabilization transactions or otherwise. The effect of these transactions may be
to stabilize or maintain the market price of the common shares at a level above
that which might otherwise prevail in the open market. The imposition of a
penalty bid may also affect the price of the common shares to the extent that it
discourages resales thereof. No representation is made as to the magnitude or
effect of any such stabilization or other transactions. Such transactions may be
effected on the New York Stock Exchange or otherwise, and if commenced, may be
discontinued at any time.
 
     The issuer and its affiliates and the officers and directors of the issuer
and its affiliates have agreed as follows:
 
     o they will not, pursuant to an effective registration statement under the
       Securities Act, offer, sell, contract to sell or otherwise dispose of any
       common or subordinated shares, any securities that are convertible into,
       or exercisable or exchangeable for, or that represent the right to
       receive, common or subordinated shares or any securities that are senior
       to or pari passu with common shares; or
 
     o the issuer will not register any subordinated shares under the Securities
       Act, purchase any subordinated shares or grant any options or warrants to
       purchase common shares
 
in each case, for a period of 180 days after the date of this prospectus,
without the prior written consent of Bear, Stearns & Co. Inc. and Morgan Stanley
Dean Witter, except for issuances of common shares in connection with certain
acquisitions or capital improvements that are accretive on a per common or
subordinated share basis or pursuant to employee benefit plans.
 
     Prior to this offering, there has been no public market for the common
shares of the issuer. Consequently, the initial public offering price has been
determined by negotiations between the issuer and the underwriters. Among the
factors considered in determining the initial public offering price were the
history of and prospects for our business and the industry in which we compete,
an assessment of our management and the present state of our development, our
past and present revenues, earnings and cash flows, the prospects for growth of
our revenues, earnings and cash flows, the current state of the U.S. economy and
the current level of economic activity in the industry in which we compete and
in related or comparable industries, and currently prevailing conditions in the
securities markets, including current market valuations of publicly traded
companies which are comparable to us.
 
     We estimate that the total expenses of this offering, excluding
underwriting discounts and commissions, will be approximately $           .
 
     We have agreed to pay to Bear, Stearns & Co. Inc. a financial advisory fee
in connection with the restructuring described herein in an amount of
$1.5 million. In addition, certain of the underwriters may from time to time
perform investment banking and other financial services for the issuer and its
affiliates for which they may receive advisory or transaction fees, as
applicable, plus out-of-pocket expenses, of the nature and in amounts customary
in the industry for such services.
 
     The issuer has agreed to indemnify the underwriters against certain civil
liabilities, including liabilities under the Securities Act.
 
     We intend to apply to list the common shares on the New York Stock
Exchange, under the symbol "STV."
 
                                       91
EXPERTS
 
     The consolidated financial statements of the issuer and its subsidiaries as
of December 31, 1997 and 1998 and for the period from January 1, 1996 through
November 27, 1996, the period from inception through December 31, 1996 and the
years ended December 31, 1997 and 1998, included in this prospectus have been
audited by Arthur Andersen LLP, independent certified public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
 
     The opinion set forth under "Taxation--Netherlands Antilles Taxation"
referred to in this prospectus and elsewhere in the registration statement has
been rendered by PricewaterhouseCoopers (Netherlands Antilles), independent
public accountants, and has been referred to herein in reliance upon the
authority of such firm as experts in giving said opinion.
 
                                    LEGAL MATTERS
 
     The validity of the issuance of the common shares offered hereby and
certain U.S. federal income tax consequences will be passed upon for the issuer
by White & Case LLP, New York, New York, with respect to matters of U.S. federal
and state law. A partner at White & Case LLP, through his interest in a holding
company, beneficially owns 93.75 shares of the issuer's currently outstanding
common stock and 93.75 shares of the issuer's currently outstanding Series E
Preferred Stock.
 
     The validity of the issuance of the common shares offered hereby will be
passed upon for the issuer by Smeets Thesseling van Bokhorst Spigt, Curacao,
Netherlands Antilles, with respect to Netherlands Antilles law and Stewart
McKelvey Stirling Scales, Halifax, Nova Scotia, with respect to Canadian and
Nova Scotia law.
 
     Certain legal matters in connection with this offering will be passed upon
for the underwriters by Andrews & Kurth L.L.P., New York, New York.
 
                             AVAILABLE INFORMATION
 
     The issuer has filed with the Securities and Exchange Commission a
registration statement on Form S-1 (together with all amendments, exhibits,
schedules and supplements thereto, the "registration statement") under the
Securities Act and the rules and regulations thereunder, for the registration of
the common shares offered through this prospectus. This prospectus, which forms
a part of the registration statement, does not contain all the information set
forth in the registration statement, certain parts of which have been omitted as
permitted by the commission rules and regulations. Statements made in this
prospectus as to the contents of any contract or other document referred to
herein are not necessarily complete. Where such contract or other document is an
exhibit to the registration statement, each such statement is qualified in all
respects by the provisions of such exhibit, to which reference is hereby made.
 
     The registration statement may be inspected and copied at the public
reference facilities maintained by the commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the following
regional offices of the commission: Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be obtained by mail
from the Public Reference Section of the commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 at prescribed rates. Electronic
registration statements filed through the Electronic Data Gathering Analysis and
Retrieval system are publicly available through the commission's web site at
http://www.sec.gov. All amendments thereto and subsequent periodic reports
required to be filed under the Securities Exchange Act of 1934, as amended, have
been and will be filed through EDGAR.
 
     Although the issuer is not subject to the periodic reporting and other
informational requirements of the Exchange Act, two of the issuer's
subsidiaries, Statia Terminals International N.V. and Statia Terminals Canada,
Incorporated, jointly file (as co-issuers of certain First Mortgage Notes)
reports and other information with the commission in accordance therewith. Such
reports and information may be inspected and copied at the public reference
facilities referred to above or obtained from the address or web sites specified
above.
 
                                       92
APPENDIX A
                           GLOSSARY OF OFFERING TERMS
Available cash.......................  For any quarter prior to liquidation, available cash is:
 
                                       (a) the sum of:
 
                                       (1) all of our cash and cash equivalents on hand at the end of that
                                           quarter, and
 
                                       (2) all of our additional cash and cash equivalents on hand on the date of
                                           determination of available cash for that quarter resulting from
                                           working capital borrowings for working capital purposes made after the
                                           end of that quarter;
 
                                       less
 
                                       (b) the amount of any cash reserves necessary or appropriate in the
                                           reasonable discretion of our board of directors to:
 
                                       (1) provide for the proper conduct of our business, including reserves for
                                           future capital expenditures and for our anticipated future credit
                                           needs, after that quarter,
 
                                       (2) provide funds for minimum quarterly dividends and cumulative common
                                           share arrearages for any one or more of the next four quarters, or
 
                                       (3) comply with applicable law or any loan agreement, security agreement,
                                           mortgage, debt instrument or other agreement or obligation to which we
                                           are a party or by which we are bound or our assets are subject.
 
                                       Our board of directors may not establish cash reserves pursuant to (3)
                                       above if the effect of those reserves would be that we are unable to
                                       distribute the minimum quarterly dividend on all common shares, plus any
                                       cumulative common share arrearage on all common shares for that quarter;
                                       and disbursements made by us or cash reserves established, increased or
                                       reduced after the end of that quarter but on or before the date of
                                       determination of available cash for that quarter will be deemed to have
                                       been made, established, increased or reduced for purposes of determining
                                       available cash within that quarter if our board of directors so
                                       determines. However, "available cash" for the quarter in which our
                                       liquidation occurs and any quarter after that will equal zero.
 
Interim capital transactions.........  The following transactions, if they occur prior to liquidation, are
                                       interim capital transactions:
 
                                       o our borrowings and sales of debt securities (other than for working
                                         capital borrowings and other than for items purchased on open account in
                                         the ordinary course of business);
 
                                       o sales of equity interests (other than the common shares sold to the
                                         underwriters for the exercise of their over-allotment option); and
A-1
o sales or other voluntary or involuntary dispositions of our assets,
                                         except for:
 
                                       (a) sales or other dispositions of inventory in the ordinary course of
                                           business,
 
                                       (b) sales or other dispositions of other current assets, such as
                                           receivables and accounts, and
 
                                       (c) sales or other depositions of assets as a part of normal retirements
                                           or replacements.
 
Operating expenditures...............  All expenditures, such as taxes, debt service payments and capital
                                       expenditures, are operating expenditures, except payments or prepayments
                                       of principal and premium on indebtedness if the payment is:
 
                                       o required in connection with the sale or other disposition of assets; or
 
                                       o made in connection with the refinancing or refunding of indebtedness
                                         with the proceeds from new indebtedness or from the sale of equity
                                         interests.
 
                                       At the election and in the reasonable discretion of our board of
                                       directors, any payment of principal or premium will be deemed to be
                                       refunded or refinanced by any indebtedness incurred or to be incurred by
                                       us within 180 days before or after that payment to the extent of the
                                       principal amount of that indebtedness.
 
                                       Operating expenditures do not include:
 
                                       o capital expenditures made for acquisitions or for capital improvements;
 
                                       o payment of transaction expenses relating to interim capital
                                         transactions; or
 
                                       o dividends.
 
                                       Where capital expenditures are made partially for acquisitions or capital
                                       improvements and partially for other purposes, our board of directors'
                                       good faith allocation between the amounts paid for each will be
                                       conclusive.
 
Operating surplus....................  For any period prior to liquidation on a cumulative basis, operating
                                       surplus is:
 
                                       (a) the sum of:
 
                                       (1) $7.5 million,
 
                                       (2) any net positive working capital on hand as of the close of business
                                           on the closing of this offering,
 
                                       (3) all cash receipts for the period beginning on the closing of this
                                           offering and ending on last day of that period, other than cash
                                           receipts from interim capital transactions, and
 
                                       (4) all cash receipts after the end of that period but on or before the
                                           date of determination of Operating Surplus for that period resulting
                                           from working capital borrowings;
A-2
less
 
                                       (b) the sum of:
 
                                       (1) operating expenditures for the period beginning on the closing of this
                                           offering and ending with the last day of that period, and
 
                                       (2) the amount of cash reserves that is necessary or advisable in the
                                           reasonable discretion of our board of directors to provide funds for
                                           future operating expenditures.
 
                                       Disbursements made or cash reserves established, increased or reduced
                                       after the end of this period but on or before the date of determination of
                                       available cash for this period will be deemed to have been made,
                                       established, increased or reduced for purposes of determining operating
                                       surplus, within this period if our board of directors so determines.
                                       However, "operating surplus" for the quarter in which the liquidation
                                       occurs and any subsequent quarter will be equal to zero.
 
Unrecovered initial price............  At any time, the unrecovered initial price of a common share is the
                                       Initial Price of that share, after:
 
                                       o subtracting all dividends from interim capital transactions made on that
                                         common share;
 
                                       o subtracting any dividends of cash made in connection with our
                                         dissolution and liquidation made on that common share; and
 
                                       o adjusting as our board of directors determined is needed to reflect any
                                         distribution, subdivision or combination of the common shares.
 
Working capital borrowings...........  Working capital borrowings are borrowings made exclusively for working
                                       capital purposes and made pursuant to a credit facility or other
                                       arrangement which requires all borrowings under that arrangement to be
                                       reduced to a relatively small amount each year for an economically
                                       meaningful period of time.
A-3
APPENDIX B
                PRO FORMA AVAILABLE CASH FROM OPERATING SURPLUS
 
     The following table shows the calculation of pro forma available cash from
operating surplus and should be read in conjunction with "Cash Available for
Payment of Dividends", the issuer's consolidated financial statements and the
issuer's unaudited pro forma consolidated condensed financial statements.
YEAR ENDED
                                                                 DECEMBER 31, 1998
                                                                 ----------------------
                                                                      (UNAUDITED)
                                                                 (DOLLARS IN THOUSANDS)
Pro forma net income..........................................          $  9,698
 
Add: Depreciation, amortization and non-cash charges(a).......            11,260
 
Less: Maintenance capital expenditures(b).....................            (8,906)
                                                                        --------
 
Pro forma available cash from operating surplus(c)(d).........          $ 12,052
                                                                        --------
                                                                        --------
(a) Reflects historical depreciation, amortization and non-cash charges for the
    issuer less the historical depreciation, amortization and non-cash charges
    for Statia Terminals Southwest, Inc.
 
(b) Represents the actual level of maintenance capital expenditures less actual
    maintenance capital expenditures for Statia Terminals Southwest. We estimate
    that our maintenance capital expenditures will average approximately
    $7.0 million over each of the next three years. See "Management's Discussion
    and Analysis of Financial Condition and Results of Operations--Capital
    Expenditures".
 
(c) The pro forma adjustments in the unaudited pro forma financial statements
    are based upon currently available information and certain estimates and
    assumptions. The unaudited pro forma consolidated condensed financial
    statements do not purport to present our financial position or results of
    operations had the transactions to be effected at the closing of this
    offering actually been completed as of the date indicated. The amount of pro
    forma available cash from operating surplus shown above should only be
    viewed as a general indication of the amounts of available cash from
    operating surplus that may have been generated by us had the transactions
    occurred in earlier periods.
 
(d) The amount of available cash from operating surplus needed to distribute the
    minimum quarterly dividend for four quarters on the common and subordinated
    shares to be outstanding immediately after this offering will be
    $20.5 million (approximately $13.7 million for the common shares and
    approximately $6.8 million for the subordinated shares). The pro forma
    amounts reflected above would not have been sufficient to cover the minimum
    quarterly dividend during the year ended December 31, 1998 on all of the
    common and the subordinated shares.
 
   The amount of available cash from operating surplus needed to distribute the
   minimum quarterly dividend for four quarters on the common and subordinated
   shares to be outstanding immediately after this offering, assuming the
   underwriters exercise their over-allotment option in full, will be
   $21.8 million (approximately $15.0 million for the common shares and
   approximately $6.8 million for the subordinated shares). The pro forma
   amounts reflected above would not have been sufficient to cover the minimum
   quarterly dividend during the year ended December 31, 1998 on all of the
   common and the subordinated shares.
 
                                      B-1
INDEX TO
                              FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants.........................................................    F-2
 
Consolidated Balance Sheets as of December 31, 1997 and December 31, 1998..................................    F-3
 
Consolidated Statements of Income (Loss) for the period from January 1, 1996 through November 27, 1996,
  the period from Inception to December 31, 1996, the year ended December 31, 1997 and the year ended
  December 31, 1998........................................................................................    F-4
 
Consolidated Statements of Stockholders' Equity for the period from Inception to December 31, 1996, the
  year ended December 31, 1997 and the year ended December 31, 1998........................................    F-5
 
Consolidated Statements of Cash Flows for the period from January 1, 1996 through November 27, 1996, the
  period from Inception to December 31, 1996, the year ended December 31, 1997 and the year ended
  December 31, 1998........................................................................................    F-6
 
Notes to Consolidated Financial Statements.................................................................    F-7
F-1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
To the Board of Managing Directors of
  Statia Terminals Group N.V. and Subsidiaries:
 
We have audited the accompanying consolidated balance sheets of Statia Terminals
Group N.V. (a Netherlands Antilles corporation) and Subsidiaries (the "Company")
as of December 31, 1997 and 1998, and the related consolidated statements of
income (loss), stockholders' equity and cash flows for the period from Inception
through December 31, 1996 and for the years ended December 31, 1997 and 1998. We
have also audited the related combined statements of income (loss) and cash
flows of Statia Terminals, Inc. and Subsidiaries and Affiliates (the
"Predecessor Company") for the period from January 1, 1996 through November 27,
1996. 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 audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company as of
December 31, 1997 and 1998, and the results of its operations and its cash flows
for the period from Inception through December 31, 1996 and for the years ended
December 31, 1997 and 1998 and the results of operations and cash flows of the
Predecessor Company for the period from January 1, 1996 through November 27,
1996, in conformity with generally accepted accounting principles.
 
ARTHUR ANDERSEN LLP
 
West Palm Beach, Florida,
  February 1, 1999
 
                                      F-2
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
DECEMBER 31,
                                                                                             --------------------
                                                                                               1997        1998
                                                                                             --------    --------
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents...............................................................   $  6,113    $ 14,061
  Accounts receivable--
     Trade, less allowance for doubtful accounts of $830 and $785
     in 1997 and 1998, respectively.......................................................     10,092       7,562
  Other...................................................................................      2,348       2,328
  Inventory...............................................................................      1,247       4,528
  Prepaid expenses........................................................................      1,489       1,417
                                                                                             --------    --------
       Total current assets...............................................................     21,289      29,896
PROPERTY AND EQUIPMENT, net...............................................................    218,529     209,970
OTHER NONCURRENT ASSETS, net..............................................................      6,661       5,744
                                                                                             --------    --------
       Total assets.......................................................................   $246,479    $245,610
                                                                                             --------    --------
                                                                                             --------    --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable........................................................................   $  7,732    $  9,306
  Accrued interest payable................................................................      2,027       2,027
  Other accrued expenses..................................................................     11,099      15,946
                                                                                             --------    --------
       Total current liabilities..........................................................     20,858      27,279
LONG-TERM DEBT............................................................................    135,000     135,000
                                                                                             --------    --------
       Total liabilities..................................................................    155,858     162,279
REDEEMABLE PREFERRED STOCK:
     Series A, $0.10 par value, 20,000 shares authorized, issued and outstanding..........   $ 20,000    $ 20,000
     Series B, $0.10 par value, 10,000 shares authorized, issued and outstanding..........     10,000      10,000
     Series C, $0.10 par value, 10,000 shares authorized, issued and outstanding..........     10,000      10,000
STOCKHOLDERS' EQUITY:
  Preferred stock--
     Series D, $0.10 par value, 20,000 shares authorized and issued,
       20,000 shares outstanding at December 31, 1997,
       13,850 shares outstanding at December 31, 1998.....................................     20,000      13,850
     Series E, $0.10 par value, 209,500 shares authorized, 41,000 shares issued,
       41,000 shares outstanding at December 31, 1997 and
       40,974 shares outstanding at December 31, 1998.....................................     41,000      40,974
                                                                                             --------    --------
       Total preferred stock..............................................................     61,000      54,824
  Notes receivable from stockholders......................................................     (1,500)     (1,474)
  Common stock, $0.10 par value, 100,500 shares authorized, 41,000 shares issued and
     outstanding at December 31, 1997, 40,794 shares outstanding at December 31, 1998.....          4           4
  Additional paid-in-capital..............................................................         --         363
  Accumulated deficit.....................................................................     (8,883)    (10,386)
                                                                                             --------    --------
       Total stockholders' equity.........................................................     50,621      43,331
                                                                                             --------    --------
  Total liabilities and stockholders' equity..............................................   $246,479    $245,610
                                                                                             --------    --------
                                                                                             --------    --------
The accompanying notes are an integral part of these financial statements.
 
                                      F-3
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                             (DOLLARS IN THOUSANDS)
      The Financial Statements of the Company and the Predecessor Company
              are not comparable in certain respects (See Note 1).
THE COMPANY
                                                               PREDECESSOR       ----------------------------------------------
                                                                 COMPANY         PERIOD FROM
                                                            -----------------    INCEPTION
                                                            JANUARY 1, 1996       THROUGH           YEAR ENDED DECEMBER 31,
                                                               THROUGH           DECEMBER 31,    ------------------------------
                                                            NOVEMBER 27, 1996       1996            1997              1998
                                                            -----------------    ------------    --------------    ------------
REVENUES.................................................       $ 140,998          $ 14,956         $142,499         $136,762
COST OF SERVICES AND PRODUCTS SOLD.......................         129,915            12,803          122,939          106,688
                                                                ---------          --------         --------         --------
    Gross profit.........................................          11,083             2,153           19,560           30,074
ADMINISTRATIVE EXPENSES..................................           8,282               664            7,735            9,500
                                                                ---------          --------         --------         --------
    Operating income.....................................           2,801             1,489           11,825           20,574
LOSS (GAIN) ON DISPOSITION OF PROPERTY AND EQUIPMENT.....             (68)               --             (109)           1,652
INTEREST EXPENSE.........................................           4,187             1,613           16,874           16,851
INTEREST INCOME..........................................              57                40              555              684
                                                                ---------          --------         --------         --------
    Income (loss) before provision for income taxes and
      preferred stock dividends..........................          (1,261)              (84)          (4,385)           2,755
PROVISION FOR INCOME TAXES...............................             629               132              780              320
                                                                ---------          --------         --------         --------
    Income (loss) before preferred stock dividends.......          (1,890)             (216)          (5,165)           2,435
PREFERRED STOCK DIVIDENDS................................             792               306            3,196            3,938
                                                                ---------          --------         --------         --------
    Net income (loss) available to common stockholders...       $  (2,682)         $   (522)        $ (8,361)        $ (1,503)
                                                                ---------          --------         --------         --------
                                                                ---------          --------         --------         --------
The accompanying notes are an integral part of these financial statements.
 
                                      F-4
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
PREFERRED          PREFERRED         NOTES
                                  STOCK--SERIES D    STOCK--SERIES E    RECEIVABLE      COMMON STOCK     ADDITIONAL
                                  ----------------   ----------------      FROM        ---------------   PAID-IN      ACCUMULATED
                                  SHARES   AMOUNT    SHARES   AMOUNT    STOCKHOLDERS   SHARES   AMOUNT   CAPITAL       DEFICIT
                                  ------   -------   ------   -------   ------------   ------   ------   ----------   -----------
Issuance of common and
  preferred stock..............   20,000   $20,000   41,000   $41,000     $ (1,500)    41,000     $4        $ --       $      --
 
Net income (loss) available to
  common stockholders..........       --        --       --        --           --         --     --          --            (522)
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
 
BALANCE, December 31, 1996.....   20,000    20,000   41,000    41,000       (1,500)    41,000      4          --            (522)
 
Net income (loss) available to
  common stockholders..........       --        --       --        --           --         --     --          --          (8,361)
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
 
BALANCE, December 31, 1997.....   20,000    20,000   41,000    41,000       (1,500)    41,000      4          --          (8,883)
 
Net income (loss) available to
  common stockholders..........       --        --       --        --           --         --     --          --          (1,503)
 
Compensation expense related to
  issuance of options..........       --        --       --        --           --         --     --         363              --
 
Retirement of preferred
  stock........................   (6,150)   (6,150)      --        --           --         --     --          --              --
 
Other..........................       --        --      (26)      (26)          26        (26)    --          --              --
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
 
BALANCE, December 31, 1998.....   13,850   $13,850   40,974   $40,974     $ (1,474)    40,974     $4        $363       $ (10,386)
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
                                  ------   -------   ------   -------     --------     ------     --        ----       ---------
TOTAL
                                 -------
Issuance of common and
  preferred stock..............  $59,504
Net income (loss) available to
  common stockholders..........     (522)
                                 -------
BALANCE, December 31, 1996.....   58,982
Net income (loss) available to
  common stockholders..........   (8,361)
                                 -------
BALANCE, December 31, 1997.....   50,621
Net income (loss) available to
  common stockholders..........   (1,503)
Compensation expense related to
  issuance of options..........      363
Retirement of preferred
  stock........................   (6,150)
Other..........................       --
                                 -------
BALANCE, December 31, 1998.....  $43,331
                                 -------
                                 -------
The accompanying notes are an integral part of these financial statements.
 
                                      F-5
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                             (DOLLARS IN THOUSANDS)
      The Financial Statements of the Company and the Predecessor Company
              are not comparable in certain respects (See Note 1).
PREDECESSOR
                                                                      COMPANY
                                                                 -----------------                THE COMPANY
                                                                   POST PRAXAIR       -----------------------------------
                                                                    ACQUISITION       PERIOD FROM
                                                                 -----------------     INCEPTION          YEAR ENDED
                                                                 JANUARY 1, 1996        THROUGH          DECEMBER 31,
                                                                    THROUGH           DECEMBER 31,    -------------------
                                                                 NOVEMBER 27, 1996       1996          1997        1998
                                                                 -----------------    ------------    -------    --------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Income (loss) before preferred stock dividends..............       $  (1,890)        $     (216)    $(5,165)   $  2,435
  Adjustments to reconcile net income (loss) before preferred
    stock dividends to net cash provided by operating
    activities:
    Depreciation, amortization, and noncash charges...........          12,296              1,011      10,911      12,383
    Provision for bad debts...................................             406                 --          11          72
    Loss (gain) on disposition of property and equipment......             (68)                --        (109)      1,652
    (Increase) decrease in accounts receivable--trade.........          (1,585)            (1,311)      2,060       2,458
    (Increase) decrease in other accounts receivables.........           3,237             (1,530)        747          20
    (Increase) decrease in inventory..........................          (5,033)             1,950       3,722      (3,281)
    (Increase) decrease in prepaid expense....................             (64)              (809)       (453)         72
    (Increase) decrease in other noncurrent assets............             319                 (2)       (123)          6
    Increase (decrease) in accounts payable...................           3,577                283      (2,202)      1,574
    Increase (decrease) in accrued expenses...................            (811)             2,859         371         799
    Increase (decrease) in payable to affiliates..............          (1,276)                --          --          --
                                                                     ---------         ----------     -------    --------
         Net cash provided by operating activities............           9,108              2,235       9,770      18,190
                                                                     ---------         ----------     -------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment..........................       $ (14,490)        $   (1,203)    $(5,344)   $(10,714)
  Proceeds from sale of property and equipment................             111                 --         112         122
  Proceeds from sale of Statia Terminals Southwest, Inc.......              --                 --          --       6,500
  Buyout of First Salute Leasing, L.P. assets.................         (88,511)                --          --          --
  Acquisition of Statia Operations, net of $185 of cash
    acquired..................................................              --           (173,961)         --          --
  Acquisition of Petroterminal de Panama, S.A.................              --             (1,000)         --          --
  Transaction costs...........................................              --             (9,572)         --          --
  Accrued transaction costs and purchase price adjustments....              --              7,703      (7,703)         --
                                                                     ---------         ----------     -------    --------
         Net cash used in investing activities................        (102,890)          (178,033)    (12,935)     (4,092)
                                                                     ---------         ----------     -------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in advances from Parent............................         203,767                 --          --          --
  Retirement of preferred stock...............................         (18,577)                --          --      (6,150)
  Bank borrowings.............................................          66,000                 --          --          --
  Bank repayments.............................................        (132,400)                --          --          --
  Dividends paid to affiliates................................         (25,792)                --          --          --
  Issuance of 11 3/4% First Mortgage Notes....................              --            135,000          --          --
  Debt costs paid.............................................              --             (6,428)         --          --
  Issuance of preferred stock.................................              --             56,500          --          --
  Issuance of common stock....................................              --                  4          --          --
                                                                     ---------         ----------     -------    --------
         Net cash provided by (used in) financing
           activities.........................................          92,998            185,076          --      (6,150)
                                                                     ---------         ----------     -------    --------
         Increase (decrease) in cash and cash equivalents.....            (784)             9,278      (3,165)      7,948
CASH AND CASH EQUIVALENTS, at beginning.......................           1,469                 --       9,278       6,113
                                                                     ---------         ----------     -------    --------
CASH AND CASH EQUIVALENTS, at end.............................       $     685         $    9,278     $ 6,113    $ 14,061
                                                                     ---------         ----------     -------    --------
                                                                     ---------         ----------     -------    --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for taxes.........................................       $     823         $        9     $   513    $    369
                                                                     ---------         ----------     -------    --------
                                                                     ---------         ----------     -------    --------
  Cash paid for interest......................................       $   4,455         $       --     $15,334    $ 15,940
                                                                     ---------         ----------     -------    --------
                                                                     ---------         ----------     -------    --------
The accompanying notes are an integral part of these financial statements.
 
                                      F-6
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
1. ORGANIZATION AND OPERATIONS
 
     Statia Terminals Group N.V. was formed on September 4, 1996 by Castle
Harlan Partners II, L.P. ("Castle Harlan"), a private equity investment fund
managed by Castle Harlan, Inc., a private merchant bank, certain members of
management and others and commenced operations on November 27, 1996
("Inception"). Statia Terminals Group N.V. and Subsidiaries (the "Company") own
and operate petroleum blending, transshipment and storage facilities located on
the island of St. Eustatius, Netherlands Antilles and at Point Tupper, Nova
Scotia, Canada. The Company's terminaling services are furnished to many of the
world's largest producers of crude oil, integrated oil companies, oil traders,
refiners, petrochemical companies and ship owners. In addition to storage, the
Company provides a variety of related terminal services including bunkering,
crude oil and petroleum product blending and processing, and emergency and spill
response. A subsidiary of the Company provides administrative services for the
Company from its office in Deerfield Beach, Florida.
 
     The Company includes the following primary entities (collectively, the
"Statia Operations"): Statia Terminals Group N.V., Statia Terminals
International N.V. ("Statia"), Statia Terminals N.V. (each incorporated in the
Netherlands Antilles), Statia Terminals Canada, Inc. (incorporated in Nova
Scotia, Canada) and Statia Terminals Southwest, Inc. (incorporated in Texas--the
"Brownsville Facility") which was sold in July 1998 (see Note 15). Significant
intercompany balances and transactions have been eliminated.
 
     The Company was formed during 1996 to acquire the capital stock of Statia
Terminals, Inc. and its subsidiaries and affiliates (the "Predecessor Company")
from Praxair, Inc. ("Praxair"). The combined statements of income (loss) and
cash flows from January 1, 1996 through November 27, 1996 ("the period ended
November 27, 1996"), included the accounts of the Predecessor Company. The
Predecessor Company includes primarily the combination of the following commonly
owned companies: Statia Terminals, Inc. (incorporated in Delaware); Statia
Terminals N.V.; Statia Terminals Point Tupper, Inc. (incorporated in Nova
Scotia, Canada); and Statia Terminals Southwest, Inc. Significant intercompany
balances and transactions have been eliminated.
 
     Prior to January 12, 1996, the Predecessor Company was a wholly owned
subsidiary of CBI Industries, Inc. ("CBI"). On January 12, 1996, pursuant to the
Merger Agreement dated December 22, 1995 (the "Merger"), CBI became a wholly
owned subsidiary of Praxair. This Merger transaction was reflected in the
Predecessor Company's combined financial statements as a purchase effective
January 1, 1996 (see Note 3).
 
     On November 27, 1996, Castle Harlan, members of our management and others
acquired from Praxair all of the outstanding capital stock of Statia Terminals
N.V., Statia Terminals, Inc., their subsidiaries and certain of their affiliates
(the "Castle Harlan Acquisition"). The adjusted purchase price of the Castle
Harlan Acquisition totaled approximately $218,146. The Castle Harlan Acquisition
was paid, in part, by funds received by the Company from the issuance of
$135,000 of 11 3/4% First Mortgage Notes (the "Notes") described in Note 6 and
from the sale of the Company's preferred and common stock. The Castle Harlan
Acquisition has been accounted for under the purchase method of accounting. The
purchase price has been allocated to the assets and liabilities of the Company
based on their fair values as of the date of the Castle Harlan Acquisition. The
investment in Petroterminal de Panama, S.A. is carried at cost and is included
in other noncurrent assets.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Use of Estimates
 
     These consolidated financial statements have been prepared in conformity
with generally accepted accounting principles as promulgated in the United
States which require management to make estimates and assumptions that affect
the reported amounts of assets and liabilities. Management is also required to
make judgments regarding disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.
 
                                      F-7
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Revenue Recognition
 
     Revenues from terminaling operations are recognized ratably as the services
are provided. Revenues and commissions from bunkering services,
terminaling-related services and bulk product sales are recognized at the time
of delivery of the service or product.
 
Foreign Currency Translation and Exchange
 
     The consolidated financial statements include the financial statements of
foreign subsidiaries and affiliates translated in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 52 "Foreign Currency Translation."
The assets and liabilities are translated into U.S. dollars at year end exchange
rates. Income and expense items are converted into U.S. dollars at average rates
of exchange prevailing during the year. Substantially all of the Company's
transactions are denominated in U.S. dollars.
 
Stock-Based Compensation Plans
 
     SFAS No. 123, "Accounting for Stock-Based Compensation," allows for either
the adoption of a fair value method for accounting for stock-based compensation
plans or for the continuation of accounting under Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations with supplemental disclosures.
 
     The Company has chosen to account for its stock options using the intrinsic
value based method prescribed in APB Opinion No. 25 and, accordingly, does not
recognize compensation expense for stock option grants made at an exercise price
equal to or in excess of the fair market value of the stock at the date of grant
to employees. SFAS No. 123 does not impact the Company's results of operations,
financial position or cash flows.
 
Cash and Cash Equivalents
 
     The Company's and the Predecessor Company's excess cash is invested in
short-term, highly liquid investments with maturities of three months or less.
Such short-term investments are carried at cost, which approximates market, and
are classified as cash and cash equivalents.
 
Financial Instruments
 
     The Company uses various methods and assumptions to estimate the fair value
of each class of financial instrument. Due to their nature, the carrying value
of cash and cash equivalents, accounts receivable and accounts payable
approximates fair value. The Company's other financial instruments are not
significant.
 
Inventory
 
Inventory of oil products is valued at the lower of weighted average cost or
estimated market value.
 
Property and Equipment
 
     Property and equipment are stated at cost less accumulated depreciation.
Depreciation expense is computed using the straight-line method over the
estimated useful lives of the respective assets. Additions to property and
equipment, replacements, betterments and major renewals are capitalized. Repair
and maintenance expenditures which do not materially increase asset values or
extend useful lives are expensed.
 
     SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," requires that long-lived assets and
certain identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of
 
                                      F-8
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
any asset may not be recoverable. SFAS No. 121 also requires that long-lived
assets and certain identifiable long-lived assets to be disposed of be reported
at the lower of carrying amount or fair value less cost to sell. The Company
continually evaluates factors, events and circumstances which include, but are
not limited to, its historical and projected operating performance, specific
industry trends and general economic conditions to assess whether the remaining
estimated useful lives of long-lived assets may warrant revision or that the
remaining balance of long-lived assets may not be recoverable. When such
factors, events or circumstances indicate that long-lived assets should be
evaluated for possible impairment, the Company uses an estimate of undiscounted
cash flow over the remaining lives of the long-lived assets in measuring their
recoverability.
 
Other Noncurrent Assets
 
     Other noncurrent assets primarily consist of deferred financing costs and
an investment in PTP carried at cost in the amounts of $5,432 and $1,000
respectively, as of December 31, 1997, and $4,521 and $1,000, respectively, as
of December 31, 1998. The deferred financing costs related to establishing debt
obligations are amortized ratably over the life of the underlying obligation.
Debt cost amortization expense was $911 for the years ended December 31, 1997
and 1998.
 
Income Taxes
 
     The Company and the Predecessor Company determine their tax provision and
deferred tax balances in compliance with SFAS No. 109, "Accounting for Income
Taxes." Under this approach, the provision for income taxes represents income
taxes paid or payable for the current year adjusted for the change in deferred
taxes during the year. Deferred income tax assets and liabilities reflect the
net tax effects of temporary differences between the financial statement bases
and the tax bases of assets and liabilities and are adjusted for changes in tax
rates and tax laws when changes are enacted.
 
Comprehensive Income
 
     In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components in the
financial statements. SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997. Reclassification of financial statements for earlier periods
provided for comparative purposes is required. The following types of items are
to be considered in computing comprehensive income: foreign currency translation
adjustments, pension liability adjustments, and unrealized gain/loss on
securities available for sale. For all periods presented herein, there were no
differences between net income and comprehensive income.
 
Segment Information
 
     In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." SFAS No. 131 establishes standards for
the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about product and services, geographic areas, and major customers.
The adoption of SFAS No. 131 had no impact on consolidated results of
operations, financial position or cash flow.
 
                                      F-9
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Reclassifications
 
     Certain reclassifications were made to the 1996 and 1997 financial
statements in order to conform to the 1998 presentation.
 
     A statement of stockholders' equity for the Predecessor Company is not
presented because the information would not be comparable to that of the
Company.
 
3. PRAXAIR PURCHASE ACCOUNTING
 
     As discussed in Note 1, prior to January 12, 1996, the Predecessor Company
was a wholly owned subsidiary of CBI. On January 12, 1996, pursuant to the
Merger Agreement dated December 22, 1995, CBI became a wholly owned subsidiary
of Praxair. This Merger transaction was reflected in the Predecessor Company's
combined financial statements as a purchase effective January 1, 1996. The fair
value assigned to the Predecessor Company as of the Merger date was $210,000,
excluding bank borrowings, Praxair and CBI intercompany and advance accounts and
the buyout of certain off-balance-sheet financing ("Merger Value").
 
     The allocation of the Merger Value to the assets and liabilities acquired,
based on the estimated fair value assigned, was as follows:
Merger Value..................................................   $210,000
Less--
  Debt acquired...............................................     66,000
  Intercompany/advance accounts...............................     44,000
  Off-balance sheet obligations...............................     89,000
                                                                 --------
                                                                 $ 11,000
                                                                 --------
                                                                 --------
 
Allocation of merger value--
  Total current assets........................................   $ 17,000
  Property and equipment......................................    111,000
  Other noncurrent assets.....................................      4,000
  Liabilities assumed.........................................   (121,000)
                                                                 --------
                                                                 $ 11,000
                                                                 --------
                                                                 --------
In addition, $10,000 of Praxair debt was pushed down to the Predecessor
Company's books effective January 1, 1996. This debt was eliminated in
connection with the Castle Harlan Acquisition.
 
4. ACQUISITION
 
     As discussed in Note 1, on November 27, 1996, the Company acquired from
Praxair all of the outstanding capital stock of Statia Terminals N.V., Statia
Terminals, Inc., their subsidiaries and certain affiliates. The Castle Harlan
Acquisition has been accounted for under the purchase method of accounting.
Accordingly, the purchase price was allocated to the assets and liabilities of
the Company based on their respective fair values as of the date of the Castle
Harlan Acquisition. No adjustments were made to the allocated fair values during
1997 or 1998.
 
                                      F-10
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
4. ACQUISITION--(CONTINUED)
 
The allocation of the total purchase price to the assets and liabilities
acquired was as follows:
Purchase Price--
  Cash paid...................................................   $175,146
  Stock issued................................................     43,000
  Commissions, fees and expenses..............................     16,000
                                                                 --------
     Total purchase price.....................................   $234,146
                                                                 --------
                                                                 --------
 
Allocation of Purchase Price--
  Current assets..............................................   $ 19,570
  Property and equipment......................................    222,907
  Other non-current assets....................................      7,524
  Liabilities assumed.........................................    (15,855)
                                                                 --------
     Total purchase price.....................................   $234,146
                                                                 --------
                                                                 --------
F-11
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
5. PROPERTY AND EQUIPMENT
 
Property and equipment consisted of the following as of December 31:
USEFUL LIVES
                                                                                 1997        1998       IN YEARS
                                                                               --------    --------    ------------
Land........................................................................   $  1,291    $  1,291
Land improvements...........................................................      7,964       7,679           5-20
Buildings and improvements..................................................      2,178       3,303          20-40
Plant machinery.............................................................    216,322     215,017           4-40
Field and office equipment..................................................      1,677       2,497           3-15
                                                                               --------    --------
     Total property and equipment, at cost..................................    229,432     229,787
Less--Accumulated depreciation..............................................     10,903      19,817
                                                                               --------    --------
     Property and equipment, net............................................   $218,529    $209,970
                                                                               --------    --------
                                                                               --------    --------
Pursuant to the Castle Harlan Acquisition, the Company agreed with
stockholders to sell the Brownsville Facility and the M/V Statia Responder. The
M/V Statia Responder is still in operation, and the revenues and costs,
including depreciation, associated with operating this asset are included in the
accompanying financial statements. If the Company sells this asset in the
future, the net proceeds from this sale may be required to be used to redeem
certain of the Company's preferred stock. On July 29, 1998, the Company sold the
Brownsville Facility.
 
                                      F-12
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
6. DEBT
 
     The Notes due November 15, 2003 were issued by subsidiaries of the Company
(the "Issuers") on November 27, 1996 in connection with the Castle Harlan
Acquisition and pay interest on May 15 and November 15 of each year. The Notes
are redeemable, in whole or, in part, at the option of the Issuers at any time
on or after November 15, 2000, at the following redemption prices (expressed as
percentages of principal amount), together with accrued and unpaid interest, if
any, thereon to the redemption date, if redeemed during the 12-month period
beginning November 15, in the year indicated:
OPTIONAL
YEAR                                                  REDEMPTION PRICE
---------------------------------------------------   ----------------
2000                                                       105.875%
2001                                                       102.938%
2002                                                       100.000%
Notwithstanding the foregoing, any time on or prior to November 15, 1999,
the Issuers may redeem up to 35% of the aggregate principal amount of the Notes
with the proceeds of one or more Equity Offerings (as defined in the Indenture
to the Notes) at a redemption price equal to 111.75% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of redemption,
provided that after giving effect to such redemption, at least 65% of the
aggregate principal amount of the Notes remains outstanding.
 
     The Notes are guaranteed on a full, unconditional, joint and several basis
by each of the indirect and direct active subsidiaries of Statia. The Notes are
also subject to certain financial covenants as set forth in the Indenture, the
most restrictive of which include, but are not limited to the following: (i) a
consolidated fixed charge coverage ratio for the prior four full fiscal quarters
of less than 2.0:1, which, if met, will permit the Company to make additional
borrowings above the Company's revolving credit facility discussed below,
(ii) other limitations on indebtedness and (iii) restrictions on certain
payments. In addition, the Notes place restrictions on the Company's ability to
pay dividends other than distributions from the proceeds of assets held for sale
as discussed above and certain management fees as discussed in Note 12 below.
Except with the occurrence of an event of default, subsidiaries of Statia have
no restrictions upon transfers of funds in the form of dividends, loans or cash
advances.
 
     The Company has a revolving credit facility (the "Credit Facility") which
allows certain of the Company's subsidiaries to borrow up to $17,500 or the
limit of the borrowing base as defined in the Credit Facility. The Credit
Facility calls for a commitment fee of 0.375% per annum on a portion of the
unused funds. The Credit Facility bears interest at a rate of prime plus 0.5%
(8.25% at December 31, 1998). The Credit Facility constitutes senior
indebtedness of the Company and is secured by a first priority lien on certain
of the Company's accounts receivable and inventory. The Credit Facility is
subject to certain restrictive covenants; however, it is not subject to
financial covenants. The Credit Facility does not restrict the Company's
subsidiaries from transferring funds to the Company in the form of dividends,
loans or cash advances; however, the failure to pay interest when due
constitutes an event of default under the Credit Facility and such event of
default, until cured, prohibits upstream dividend payments to be made to the
Company. The Credit Facility expires on November 27, 1999. At December 31, 1997
and 1998, the Company had approximately $8,058 and $7,982, respectively,
available for borrowing under the Credit Facility as limited by the borrowing
base computation and had no outstanding balance.
 
7. PREFERRED STOCK
 
     The Company has authorized preferred stock of $26,950 divided into 269,500
shares with a par value of $0.10 consisting of the following shares: (i) 20,000
shares of 8% Series A Cumulative Preferred Stock (the "Series A Preferred
Stock"); (ii) 10,000 shares of 8% Series B Cumulative Preferred Stock (the
"Series B Preferred Stock"); (iii) 10,000 shares of 8% Series C Cumulative
Preferred Stock (the "Series C Preferred
 
                                      F-13
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
7. PREFERRED STOCK--(CONTINUED)
Stock"); (iv) 20,000 shares of 2% Series D Preferred Stock (the "Series D
Preferred Stock"); and (v) 209,500 shares of 2% Series E Preferred Stock (the
"Series E Preferred Stock"). Under certain circumstances as defined in the
Articles of Incorporation and Preferred Stock Agreements (defined below), the
dividend rates on the Series A, Series B and Series C Preferred Stock may
increase from 8% to 14.75%.
 
     The terms of the Series A, Series B and Series C Preferred Stock contain
provisions for redemption beyond the control of the Company and certain
restrictions on the purchase, redemption, defeasance or retirement of the Notes
unless such action is effected (i) at the stated maturity of the Notes, (ii) in
connection with an event of default, (iii) pursuant to the mandatory purchase
offer provisions of the Indenture governing the Notes relating to asset sales or
(iv) pursuant to the redemption provisions of the Indenture relating to
withholding taxes. Other than as permitted by the foregoing provisions, the
Company may not, directly or indirectly, cause or permit Statia or any of its
subsidiaries to, directly or indirectly, purchase, redeem, defease or retire any
Notes if: (i) in the case of the Series A Preferred Stock, (a) the Company shall
not have declared full cash dividends on such series or, if the Indenture
restricts such declaration, full cash dividends on such series to the extent
permitted by the Indenture, or (b) the Company fails to redeem such series when
such redemption is mandatory, (ii) in the case of the Series B Preferred Stock,
the Company fails to redeem such series when such redemption is mandatory,
(iii) in the case of the Series C Preferred Stock, the Company fails to redeem
such series when such redemption is mandatory, (iv) following the occurrence of
certain events set forth in the Preferred Stock Agreements in which the dividend
rate on the Series A, Series B or Series C Preferred Stock is not 8% per annum,
or (v) such purchase, redemption, defeasance or retirement would reduce the
Consolidated Fixed Charge Coverage Ratio (as defined in the Indenture) that, in
certain circumstances, the Series C Preferred Stock may not be redeemed. The
Series A, B and C Preferred Stock in the aggregate of $40,000 was contributed
from Praxair as non-cash equity.
 
     The Series A and Series C Preferred Stock is non-voting stock with a
liquidation preference of one thousand dollars per share. The Company must
redeem these series on the earliest of (i) one year following the maturity date
of the Notes, (ii) one year from the date on which not more than $10,000
aggregate principal amount of the Notes is outstanding (other than those Notes
held or beneficially owned by the Company or any of its affiliates), (iii) the
date on which a holder or beneficial owner of any equity interest in the Company
(other than Praxair) or any option, warrant, convertible security or synthetic
or derivative product related to such equity interest sells, assigns, pledges or
otherwise transfers any such equity interest, except in limited circumstances,
or (iv) 30 days following receipt of notice from the holders of any such series
that the Company has failed to cure a material breach under the Company's Senior
Preferred Stock Agreement or Shareholder Agreement (together the "Preferred
Stock Agreements").
 
     The Series B Preferred Stock is non-voting stock with a liquidation
preference of one thousand dollars per share. The Company must redeem this
series on the earliest of (i) the second anniversary of the initial issuance of
this series of stock, (ii) one year from the date on which not more than $10,000
aggregate principal amount of the Notes is outstanding, (iii) the date on which
a holder or beneficial owner of any equity interest in the Company (other than
Praxair) or any option, warrant, convertible security or synthetic or derivative
product related to such equity interest sells, assigns, pledges or otherwise
transfers any such equity interest, except in limited circumstances, or
(iv) 30 days following receipt of notice from the Series B Preferred
Stockholders that the Company has failed to cure a material breach under the
Preferred Stock Agreements. To the extent that the Company or one of its
affiliates shall have received proceeds from the sale of the M/V Statia
Responder, an emergency and oil spill response vessel owned by a subsidiary, the
Company must redeem the Series B Preferred Stock at the applicable redemption
price therefor out of such proceeds. The Indenture permits the sale of the M/V
Statia Responder and, in the event of such sale, will permit a payment from
Statia to the Company equal to the amount of the liquidation preference plus
accrued and unpaid dividends on the then outstanding Series B Preferred Stock.
 
                                      F-14
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
7. PREFERRED STOCK--(CONTINUED)
     If the Company has not redeemed the Series B Preferred Stock by
November 27, 1998, the Company may, following the exercise of any option to
exchange the Series B Preferred Stock into common equity of the Company (which
option must be exercised by the holders of the Series B Preferred Stock prior to
the third anniversary of the closing date, November 27, 1996), either redeem the
shares for cash or exchange them for common equity of the Company. If the shares
are not redeemed for cash or exchanged for common equity of the Company then the
dividend rate on the Company's Series A, Series B and Series C Preferred Stock
increases from 8% to 14.75% effective November 28, 1998. As the Series B
Preferred Stock was not redeemed by the Company prior to November 27, 1998, the
dividend rate on the Company's Series A, Series B and Series C Preferred Stock
increased from 8% to 14.75% effective November 28, 1998, in accordance with the
Company's Preferred Stock Agreements and its Articles of Incorporation.
 
     If Statia or one of its subsidiaries is permitted, under the terms of the
Consolidated Fixed Charge Coverage Ratio test in the Limitation on Additional
Indebtedness covenant in the Indenture, to issue indebtedness in an amount up to
or greater than the liquidation preference of the Series C Preferred Stock plus
accrued but unpaid dividends thereon, and the Company does not redeem the Series
C Preferred Stock at the applicable redemption price under certain conditions,
then the management fees payable to Castle Harlan, Inc. (see Note 12) thereafter
accrue and will not be paid in cash until such redemption occurs. The Indenture
permits one or more restricted payments from Statia to the Company when such
Consolidated Fixed Charge Coverage Ratio tests permits the incurrence of
indebtedness in an amount up to the liquidation preference plus accrued and
unpaid dividends on the then outstanding Series C Preferred Stock.
 
     The Series D Preferred Stock is non-voting stock, has a liquidation
preference of one thousand dollars per share for which the dividends have been
waived. The Indenture permits the sale of the Brownsville facility and permits a
restricted payment from Statia to the Company equal to the net proceeds from
such sale. Such amounts are required to be applied to redeem the Series D
Preferred Stock. On July 29, 1998 the Company sold the Brownsville Facility and
a restricted payment of $6,150 was made from Statia to the Company to redeem a
portion of the Series D Preferred Stock.
 
     The Series E Preferred Stock is voting stock which has a liquidation
preference of one thousand dollars per share for which the dividends have been
waived.
 
     For the period ended December 31, 1996, the Company accrued dividends of
$152, $77 and $77 for Series A, Series B, and Series C Preferred Stock,
respectively. For the year ended December 31, 1997, the Company accrued
dividends of $1,598, $799 and $799 for Series A, Series B and Series C Preferred
Stock, respectively. For the year ended December 31, 1998, the Company accrued
dividends of $1,970, $984 and $984 for the Series A, Series B and Series C
Preferred Stock, respectively.
 
8. NOTES RECEIVABLE FROM STOCKHOLDERS
 
     Notes receivable from stockholders represent nonrecourse loans made by the
Company to certain members of management and are secured by pledges of the
Company's common stock. The loans bear interest at 6.49% and are due on the
earlier of (i) November 26, 2003, or (ii) sale of the Company's common stock.
These loans have been classified as a reduction to preferred stock in the
accompanying financial statements.
 
9. LEASES
 
     The Company and the Predecessor Company rent certain facilities, land and
marine equipment under cancelable and noncancelable operating leases. Rental
expense on operating leases was $13,854 (of which $9,870 including $4,270 for
recognition of lease residual value guarantee, relates to the lease described
below), $491, $3,763 and $3,409 for the period ended November 27, 1996, the
period ended December 31, 1996, the year ended
 
                                      F-15
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
9. LEASES--(CONTINUED)
December 31, 1997 and the year ended December 31, 1998, respectively. Future
rental commitments during the years ending 1999 through 2003 are $3,619, $2,569,
$2,504, $2,518 and $837, respectively.
 
     On November 17, 1993, Statia Terminals N.V. and a subsidiary entered into
an agreement with a third-party financier (First Salute Leasing, L.P.) pursuant
to which a portion of its land on St. Eustatius was leased to this third party
for the purpose of construction and operation of five million barrels of crude
oil storage tanks and a single point mooring system. Statia Terminals N.V. acted
as agent for the third party with regard to the construction of the facilities.
Statia Terminals N.V. leased the facility from the third party for a minimum
period of five years beginning February 1, 1995. The aggregate construction cost
incurred for these leased assets totaled $88,513. At the completion of the
initial five year term, Statia Terminals N.V. had the option to extend the
lease, purchase the facility from the lessor, or arrange for the leased
properties to be sold to a third party. In the event of purchase or sale of
these properties, Statia Terminals N.V. was obligated to the lessor for any
shortfall between the purchase or sales price and the lease residual value
guarantee. In connection with the Castle Harlan Acquisition, Praxair terminated
the above First Salute Leasing, L.P. off-balance-sheet financing arrangement and
paid in full all obligations related to this lease.
 
                                      F-16
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
10. INCOME TAXES
 
     The sources of income (loss) by jurisdiction before the provision for
income taxes and preferred stock dividends are:
PREDECESSOR                        THE COMPANY
                                                          COMPANY        -----------------------------------------------
                                                      ----------------   PERIOD FROM
                                                      JANUARY 1, 1996     INCEPTION          YEARS ENDED DECEMBER 31,
                                                        THROUGH            THROUGH
                                                      NOVEMBER 27,       DECEMBER 31,       ----------------------------
                                                          1996              1996               1997           1998
                                                      ----------------   ----------------   ------------    ------------
U.S.................................................      $    134            $ (300)         $ (1,823)        $ (362)
Non-U.S.............................................        (1,395)              216            (2,562)         3,117
                                                          --------            ------          --------         ------
                                                          $ (1,261)           $  (84)         $ (4,385)        $2,755
                                                          --------            ------          --------         ------
                                                          --------            ------          --------         ------
The provision for income taxes consisted of:
PREDECESSOR                       THE COMPANY
                                                             COMPANY        ----------------------------------------------
                                                         ----------------   PERIOD FROM
                                                         JANUARY 1, 1996    INCEPTION           YEARS ENDED DECEMBER 31,
                                                           THROUGH           THROUGH
                                                         NOVEMBER 27,       DECEMBER 31,      ----------------------------
                                                            1996               1996             1997            1998
                                                         ----------------   ---------------   ------------    ------------
Current:
  U.S..................................................       $  215             $  --           $ (128)         $   --
  State................................................          (25)               --              (42)             --
  Non-U.S..............................................         (487)             (132)            (610)           (320)
                                                              ------             -----           ------          ------
                                                                (297)             (132)            (780)           (320)
                                                              ------             -----           ------          ------
Deferred:
  U.S..................................................         (332)               --               --              --
                                                              ------             -----           ------          ------
     Total provision...................................       $ (629)            $(132)          $ (780)         $ (320)
                                                              ------             -----           ------          ------
                                                              ------             -----           ------          ------
The components of the deferred income provision relate primarily to book
versus tax differences in computing depreciation expense.
 
     A reconciliation of income taxes at the U.S. statutory rate of 35% to the
Company's provision for income taxes follows:
PREDECESSOR                       THE COMPANY
                                                          COMPANY        ----------------------------------------------
                                                      ----------------   PERIOD FROM
                                                      JANUARY 1, 1996    INCEPTION           YEARS ENDED DECEMBER 31,
                                                        THROUGH           THROUGH
                                                      NOVEMBER 27,       DECEMBER 31,      ----------------------------
                                                          1996              1996              1997            1998
                                                      ----------------   ---------------   ------------    ------------
Income (loss) before income taxes and preferred
  stock dividends...................................      $ (1,261)           $ (84)         $ (4,385)       $  2,755
                                                          --------            -----          --------        --------
Tax (provision) benefit at U.S. statutory rate......           440               29             1,535            (964)
State income taxes..................................            --               --               (14)             --
Non-U.S. tax rate differential and losses without
  tax benefit.......................................        (1,069)            (119)           (2,301)            644
                                                          --------            -----          --------        --------
Other, net..........................................            --              (42)               --              --
                                                          --------            -----          --------        --------
                                                          $   (629)           $(132)         $   (780)       $   (320)
                                                          --------            -----          --------        --------
                                                          --------            -----          --------        --------
F-17
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
10. INCOME TAXES--(CONTINUED)
     For 1996, the Company's effective tax rate exceeds the foreign tax
statutory rates as a result of Canadian large corporation tax and losses
incurred by certain subsidiaries for which the Company has not recognized any
benefit.
 
     The principal temporary differences included on the balance sheets net of
effective tax rates are:
THE COMPANY
                                                                              ----------------------------
                                                                              DECEMBER 31,    DECEMBER 31,
                                                                                 1997            1998
                                                                              ------------    ------------
Net operating loss and ITC carryforwards...................................     $ 30,054        $ 28,080
Valuation allowance........................................................      (30,054)        (28,080)
                                                                                --------        --------
                                                                                $     --        $     --
                                                                                --------        --------
                                                                                --------        --------
The Company's net deferred tax assets primarily relate to Canadian
investment tax credits and net operating loss carryforwards. The Company has
provided a full valuation allowance against these tax assets, because it is not
certain that the deferred tax assets will be utilized in the future.
 
     The Company's Canadian subsidiaries are subject to a federal large
corporation tax based on 0.225% of the subsidiaries' total equity. As of
April 1, 1997, Nova Scotia enacted a provincial capital tax based on 0.25% of
the subsidiaries' total equity (prorated to 0.1888% for the 1997 calendar year).
Additionally, the Company's Canadian subsidiaries have benefited from taxable
loss and investment tax credit carryforwards, which are available for
utilization over a seven-to-ten-year period to offset future taxable income. The
combined net operating loss and investment tax credit carryforward available to
offset Canadian taxable income was $66,786 as of December 31, 1997, and $62,399
as of December 31, 1998, and expires in varying amounts though 2005.
 
     On June 1, 1989, the governments of the Netherlands Antilles and St.
Eustatius approved a Free Zone and Profit Tax Agreement retroactive to
January 1, 1989 and concluding on December 31, 2000. This agreement requires a
subsidiary of the Company to pay a 2% rate on taxable income, as defined, or a
minimum payment of 500 Netherlands Antilles guilders ($282). This agreement
further provides that any amounts paid in order to meet the minimum annual
payment will be available to offset future tax liabilities under the agreement
to the extent that the minimum annual payment is greater than 2% of taxable
income. At December 31, 1998, the amount available to offset future tax
liability under the agreement was approximately $1,412. Currently, the
subsidiary is renegotiating a new agreement with the governments of the
Netherland Antilles and St. Eustatius that will be effective from January 1,
1998, through December 31, 2010, with extension provisions to 2015.
 
     Certain of the Company's Netherlands Antilles subsidiaries are not part of
the Free Zone and Profit Tax Agreement and, accordingly, pay Netherlands
Antilles federal income tax at an effective tax rate of up to 45%. Approximately
$67 and $28 of profit tax is included in the Netherlands Antilles tax provision
for the periods ended December 31, 1997 and December 31, 1998, respectively.
 
11. STOCK OPTIONS
 
     During 1997, the stockholders of the Company approved the 1997 Stock Option
Plan (the "Plan") which allows up to 7,235 shares of $0.10 par value common
stock of the Company to be delivered pursuant to incentive stock option award
agreements or nonqualified stock option award agreements. The incentive stock
option award agreement specifies that after two years of employment from the
date of grant and after each of the following three years, 25% of the option
shares become exercisable unless a Liquidation Event occurs (as defined in the
award agreement) at which time the option becomes fully exercisable. The options
terminate upon termination of employment, except in the event of death,
permanent disability or Company termination other than for substantial cause.
Each option expires ten years after the date of grant.
 
                                      F-18
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
11. STOCK OPTIONS--(CONTINUED)
     During November 1997, 2,895 shares of common stock were granted to certain
employees of the Company pursuant to incentive stock option award agreements at
an exercise price of $0.10, which equaled the fair market value of the Company's
common stock. The Company applies APB Opinion No. 25 and related interpretations
in accounting for options granted to employees and directors. Accordingly, no
compensation costs have been recognized related to the stock options granted in
1997.
 
     During December 1998, 2,895 shares of common stock were granted to certain
employees of the Company pursuant to incentive stock option award agreements at
an exercise price of $0.10. The Company recorded the required compensation
expense under APB 25 on the date of grant representing the difference between
the estimated fair value of the options and the exercise price of $0.10 per
share amortized over the vesting period of five years. The fair value of such
options was determined based on an independent appraisal of the Company's common
stock on the date of grant of $810 per share. The total amount of compensation
expense recognized during 1998 related to such options was $39 and is included
in cost of services and products sold and administrative expenses.
 
     The Company also granted 400 options to purchase common stock to
non-employee directors of the Company. These options vested immediately on the
date of grant. The Company recorded $324 of compensation expense under
APB No. 25 on the date of grant. This amount represented the difference between
the fair value of $810 per share and the exercise price of $0.10 per share. The
compensation expense is included in administrative expenses.
 
     Had compensation cost been recorded for the Company's awards based on fair
value at the grant dates consistent with the methodologies of SFAS No. 123, the
Company's 1998 reported net income (loss) available to common stockholders would
have been reduced to the pro forma amounts indicated below:
Net income (loss) available to common stockholders:
  As reported.................................................................................   $(1,503)
  Pro forma...................................................................................   $(1,960)
Under SFAS 123, the value of each option granted is estimated on the date
of grant using the Black Scholes model with the following assumptions: Risk-free
interest rate--6.3%, dividend yield--0%, and expected life of the option--10
years.
 
12. RELATED PARTY TRANSACTIONS
 
     Prior to November 27, 1996, the Company engaged in various related-party
transactions with Praxair, CBI and their affiliates. Advances consisted
principally of funds loaned by Praxair/CBI for disbursements, debt service and
dividends offset by the transfer of the Predecessor Company's excess cash. The
advances were non-interest-bearing and did not have a specified maturity date.
 
     The Predecessor Company regularly contracted with affiliates of CBI for the
construction and expansion of its facilities and for certain repair and
maintenance work. During the period ended November 27, 1996, $4,828 was paid to
Praxair or CBI affiliates for these activities related to its property and
equipment. It is not possible to determine whether the results of operations and
financial position of the Predecessor Company would be significantly different
had the Predecessor Company contracted with independent third parties for its
construction, expansion, repair and maintenance needs.
 
     Praxair and CBI directly allocated certain corporate administrative
services to the Predecessor Company including certain legal services, risk
management, tax advice and return preparation, employee benefit administration,
cash management and other services. During the period ended November 27, 1996,
$138 was paid for these direct and indirect administrative services. All
intercompany balances owed to Praxair, CBI and their affiliates were fully paid
in connection with the Acquisition.
 
                                      F-19
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
12. RELATED PARTY TRANSACTIONS--(CONTINUED)
     The Company entered into a ten-year management agreement with Castle
Harlan, Inc., to pay an annual management fee of $1,350, plus out-of-pocket
expenses, advisory and strategic planning services subject to certain
conditions. In the event the net proceeds from the sale of the M/V Statia
Responder exceed a specified threshold, Castle Harlan, Inc. may be entitled to a
payment of up to $1,000. This agreement terminates upon a change in control.
 
13. COMMITMENTS AND CONTINGENCIES
 
  Environmental, Health and Safety Matters
 
     In connection with the Castle Harlan Acquisition, studies were undertaken
by and for Praxair to identify potential environmental, health and safety
matters. Certain matters involving potential environmental costs were identified
at the Point Tupper, Nova Scotia, Canada facility. Praxair has agreed to pay for
certain of these environmental costs subject to certain limitations. Praxair has
paid approximately $2,300 during the period from November 27, 1996 to
December 31, 1998 related to such costs. Based on investigations conducted and
information available to date, the potential cost of additional remediation and
compliance is estimated at $1,000, substantially all of which the Company
believes is the responsibility of Praxair per the Castle Harlan Acquisition
agreement. The Company has also identified certain other environmental, health
and safety costs not covered by the agreement with Praxair for which $1,500 was
accrued in 1996 ($10 of which has been expended through December 31, 1998). The
Company believes that these environmental, health and safety costs, subject to
reimbursements from Praxair, will not have a material adverse effect on the
Company's financial position, cash flows or results of operations.
 
  Litigation
 
     Global Petroleum Corp. ("Global") brought an action against the Company in
December 1993 in the Supreme Court of Nova Scotia seeking the release of certain
petroleum products owned by Global that the Company was holding to secure the
payment of certain invoices. Global secured the release of the products by
posting a $2,000 bond. Global claims damages of $1,200 for breach of contract
and the Company counter-claimed for breach of contract and payment of the
approximately $2,000 of unpaid invoices for product storage and other service.
In April 1996, Global, Scotia Synfuels Limited and their related companies
brought suit against CBI and the Company in the Supreme Court of Nova Scotia
alleging damages in the amount of $100,000 resulting from misrepresentation,
fraud and breach of fiduciary duty associated with the reactivation of the Point
Tupper facility and the sale of their shares in Point Tupper Terminals Company,
a predecessor to Statia Canada, to an affiliate of the Company and CBI.
 
     In May 1994, the U.S. Department of Justice brought an action in the U.S.
District Court for the District of the Virgin Islands against Statia Terminals,
Inc. and Statia Terminals, N.V. for $3,600 of pollution clean-up costs in
connection with the discharge of oil into the territorial waters of the U.S.
Virgin Islands and Puerto Rico by a barge that had been loaded by Statia
Terminals, N.V. at St. Eustatius but was not affiliated with the Company. On
April 16, 1998, the U.S. District Court ruled that it lacked jurisdiction over
Statia Terminals, N.V. and dismissed it from the case.
 
     The Company believes the allegations made in these proceedings are without
merit; therefore, the Company intends to vigorously contest these claims. In
connection with the Castle Harlan Acquisition, Praxair agreed to indemnify the
Company against damages relating to the foregoing proceedings. While no
estimates can reasonably be made of any ultimate liability at this time, the
Company believes the ultimate outcome of these proceedings will not have a
material adverse effect on the Company's business, financial condition or
results of operations.
 
                                      F-20
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
13. COMMITMENTS AND CONTINGENCIES--(CONTINUED)
     The Company is involved in various other claims and litigation arising in
the normal course of its business. Based upon analysis of legal matters and
discussions with legal counsel, the Company believes that the ultimate outcome
of these matters will not have a material adverse effect on the Company's
financial position, cash flows and results of operations.
 
  Accrued Expenses
 
     A summary of accrued expenses consists of the following as of December 31:
1997       1998
                                                                                     -------    -------
Dividends payable.................................................................   $ 3,502    $ 7,440
Personnel and related costs.......................................................     2,296      2,835
Professional fees.................................................................     1,079      1,175
Environmental expenses............................................................     1,500      1,490
Other.............................................................................     2,722      3,006
                                                                                     -------    -------
                                                                                     $11,099    $15,946
                                                                                     -------    -------
                                                                                     -------    -------
14. SEGMENT INFORMATION
 
     The Company is organized around several different factors the most
significant of which are products and services and geographic location. The
Company's primary products and services are bunker and bulk product sales and
terminaling services (consisting of storage, throughput, dock charges, emergency
response fees and other terminal charges).
 
     The primary measures of profit and loss utilized by the Company's
management to make decisions about resources to be allocated to each division
are earnings before interest, taxes, depreciation, amortization and certain
unallocated profits and losses ("Internal EBITDA") and earnings before interest
taxes and certain unallocated profits and losses ("Internal EBIT").
 
                                      F-21
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
14. SEGMENT INFORMATION--(CONTINUED)
     The following information is provided for the Company's bunker and bulk
products sales and terminaling services segments:
PREDECESSOR
                                                              PREDECESSOR
                                                                COMPANY
                                                                COMPANY                         THE COMPANY
                                                            ----------------   ----------------------------------------------
                                                              FOR THE            FOR THE
                                                            PERIOD FROM        PERIOD FROM
                                                            JANUARY 1, 1996     INCEPTION            FOR THE YEARS ENDED
                                                              THROUGH            THROUGH                 DECEMBER 31,
                                                            NOVEMBER 27,       DECEMBER 31,      ----------------------------
                                                                1996              1996              1997            1998
                                                            ----------------   ---------------   ------------    ------------
REVENUES:
  Terminaling services....................................      $ 44,119           $ 5,693         $ 53,165        $ 66,625
  Bunker and bulk product sales...........................        96,879             9,263           89,334          70,137
                                                                --------           -------         --------        --------
     Total................................................      $140,998           $14,956         $142,499        $136,762
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
INTERNAL EBITDA:
  Terminaling services....................................      $ 15,037           $ 2,351         $ 20,417        $ 30,845
  Bunker and bulk product sales...........................         3,277                14            2,699           2,965
                                                                --------           -------         --------        --------
     Total................................................      $ 18,314           $ 2,365         $ 23,116        $ 33,810
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
DEPRECIATION AND AMORTIZATION EXPENSE:
  Terminaling services....................................      $  8,832           $   868         $ 10,093        $ 10,923
  Bunker and bulk product sales...........................           541                66              818             498
                                                                --------           -------         --------        --------
     Total................................................      $  9,373           $   934         $ 10,911        $ 11,421
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
INTERNAL EBIT:
  Terminaling services....................................      $  6,205           $ 1,483         $ 10,324        $ 19,922
  Bunker and bulk product sales...........................         2,736               (52)           1,881           2,467
                                                                --------           -------         --------        --------
     Total................................................      $  8,941           $ 1,431         $ 12,205        $ 22,389
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
CAPITAL EXPENDITURES:
  Terminaling services....................................      $ 12,868           $ 1,147         $  4,735        $  8,274
  Bunker and bulk product sales...........................         1,234                --               58           1,212
  Other unallocated.......................................           388                56              551           1,228
                                                                --------           -------         --------        --------
     Total................................................      $ 14,490           $ 1,203         $  5,344        $ 10,714
                                                                --------           -------         --------        --------
                                                                --------           -------         --------        --------
DECEMBER 31,
                                                                                   --------------------
                                                                                     1997        1998
                                                                                   --------    --------
ASSETS:
  Terminaling services..........................................................   $220,591    $208,642
  Bunker and bulk product sales.................................................      8,964      12,058
  Unallocated assets............................................................     16,924      24,910
                                                                                   --------    --------
                                                                                   $246,479    $245,610
                                                                                   --------    --------
                                                                                   --------    --------
F-22
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
14. SEGMENT INFORMATION--(CONTINUED)
     A reconciliation of Internal EBIT to the Company's income (loss) before
provision for income taxes and preferred stock dividends is as follows:
PREDECESSOR                        THE COMPANY
                                                      COMPANY        -----------------------------------------------
                                                  ----------------   PERIOD FROM
                                                  JANUARY 1, 1996     INCEPTION             FOR THE YEARS ENDED
                                                    THROUGH            THROUGH                  DECEMBER 31,
                                                  NOVEMBER 27,       DECEMBER 31,       ----------------------------
                                                      1996               1996              1997            1998
                                                  ----------------   ----------------   ------------    ------------
Internal EBIT...................................      $  8,941           $  1,431         $ 12,205        $ 22,389
Unallocated operating and administrative
  expenses......................................          (472)               (30)          (1,182)         (2,726)
Interest expense excluding debt cost
  amortization expense..........................        (9,787)            (1,525)         (15,963)        (15,940)
Interest income.................................            57                 40              555             684
Loss on sale of Statia Terminals Southwest,
  Inc...........................................            --                 --               --          (1,652)
                                                      --------           --------         --------        --------
Income (loss) before provision for income taxes
  and preferred stock dividends.................      $ (1,261)          $    (84)        $ (4,385)       $  2,755
                                                      --------           --------         --------        --------
                                                      --------           --------         --------        --------
The following information is provided with respect to the geographic
operations of the Company:
PREDECESSOR                        THE COMPANY
                                                     COMPANY        -----------------------------------------------
                                                 ----------------   PERIOD FROM
                                                 JANUARY 1, 1996     INCEPTION             FOR THE YEARS ENDED
                                                   THROUGH            THROUGH                  DECEMBER 31,
                                                 NOVEMBER 27,       DECEMBER 31,       ----------------------------
                                                     1996               1996              1997            1998
                                                 ----------------   ----------------   ------------    ------------
REVENUES:
  Caribbean....................................      $126,557           $ 13,194         $122,042        $114,091
  Canada.......................................        11,724              1,631           18,586          21,058
  United States................................         2,717                131            1,871           1,613
                                                     --------           --------         --------        --------
     Total revenues............................      $140,998           $ 14,956         $142,499        $136,762
                                                     --------           --------         --------        --------
                                                     --------           --------         --------        --------
DECEMBER 31,
                                                                                   --------------------
                                                                                     1997        1998
                                                                                   --------    --------
LONG-TERM ASSETS:
  Caribbean.....................................................................   $185,702    $183,872
  Canada........................................................................     29,826      29,170
  United States.................................................................      8,662       1,672
  Panama........................................................................      1,000       1,000
                                                                                   --------    --------
                                                                                   $225,190    $215,714
                                                                                   --------    --------
                                                                                   --------    --------
Significant Customers
 
     The Company presently has long term storage and throughput contracts with
Bolanter Corporation N.V. (an affiliate of Saudi Aramco) and a subsidiary of
Tosco Corporation which expire in 2000 and 1999, respectively. The Company also
derives revenues from parties unaffiliated with either Saudi Aramco or Tosco,
because of the movement of Saudi Aramco and Tosco products through the Company's
terminals. Additionally, the Company sells bunker fuels to another affiliate of
Saudi Aramco at its St. Eustatius facility.
 
                                      F-23
STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
 
14. SEGMENT INFORMATION--(CONTINUED)
     The following table sets forth such revenues as a percentage of our total
revenue.
PREDECESSOR
                                                                   COMPANY                           THE COMPANY
                                                               ---------------    -------------------------------------------------
                                                               JANUARY 1, 1996                                YEARS ENDED 
                                                                THROUGH           PERIOD FROM                  DECEMBER 31,
                                                               NOVEMBER 27,       INCEPTION THROUGH    ----------------------------
                                                                  1996            DECEMBER 31, 1996      1997            1998
                                                               ---------------    -----------------    ------------    ------------
Saudi Aramco-related revenues
Storage and throughput contract.............................          6.2%                5.9%              7.0%            7.4%
Unaffiliated third parties..................................         11.7%                7.7%              6.4%            7.7%
Bunker sales................................................          1.7%                2.2%              2.1%            1.5%
                                                                    -----               -----              ----            ----
  Total.....................................................         19.6%               15.8%             15.5%           16.6%
                                                                    -----               -----              ----            ----
                                                                    -----               -----              ----            ----
Tosco-related revenues
Storage and throughput contract.............................          4.1%                3.2%              6.9%            7.1%
Unaffiliated third parties..................................          1.3%                4.7%              3.9%            1.9%
Bunker sales................................................          0.6%                0.8%              0.1%            0.0%
                                                                    -----               -----              ----            ----
  Total.....................................................          6.0%                8.7%             10.9%            9.0%
                                                                    -----               -----              ----            ----
                                                                    -----               -----              ----            ----
Although the Company has long-standing relationships and long-term
contracts with these customers, if such long-term contracts were not renewed or
replaced at the end of their terms, or if the Company otherwise lost any
significant portion of its revenues from these two customers, such
non-renewal/replacement or loss could have a material adverse effect on the
Company's business, financial condition and ability to pay dividends. The
Company also has long-term contracts with other key customers, and there can be
no assurance that these contracts will be renewed at the end of their terms or
that the Company will be able to enter into other long-term contracts on terms
favorable to it, or at all.
 
     No other customer accounted for more than 10% of the Predecessor Company's
or the Company's total revenues in 1996, 1997 or 1998.
 
15. LOSS ON SALE OF STATIA TERMINALS SOUTHWEST, INC.
 
     On July 29, 1998, the Company sold Statia Terminals Southwest, Inc.
("Southwest") for $6,500 in cash resulting in net proceeds of approximately
$6,150. The Company retained certain of the pre-closing assets and liabilities
of Southwest consisting primarily of accounts receivable and accrued expenses
and agreed to indemnify the purchaser for certain contingent legal and
environmental matters up to a maximum of $500. No provision has been made in the
Company's financial statements for these contingent matters as management
believes it is not probable the Company will ever be required to provide such
indemnification. The net book value of the assets and liabilities sold on
July 29, 1998, was $7,802. The loss on the sale of Southwest of $1,652 is
included in gain (loss) on sale of property and equipment since substantially
all of the value of Southwest was originally recorded in this account when the
Company was acquired.
 
                                      F-24
[LOGO]
PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
     The following table sets forth the cost and expenses, other than the
underwriting discount, payable by the Registrant in connection with the sale of
common shares being registered. All amounts are estimates except the SEC
registration fee, the National Association of Securities Dealers filing fees and
the New York Stock Exchange listing fee.
AMOUNT TO BE PAID
                                                                              -----------------
SEC registration fee.......................................................        $42,256
NASD filing fee............................................................
NYSE listing fee...........................................................
Printing and engraving.....................................................
Legal fees and expenses....................................................
Accounting fees and expenses...............................................
Blue sky fees and expenses (including legal fees)..........................
Transfer agent fees........................................................
Miscellaneous..............................................................
  Total....................................................................        $
                                                                                   -------
                                                                                   -------
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
Netherlands Antilles
 
     The Articles of Incorporation of the Issuer contain specific provisions
under which members of the board of directors, officers, and attorneys-in-fact
are indemnified against any liability which such person may incur in the
aforementioned capacity as such.
 
ITEM 15. RECENT SALES OF UNREGISTERED SHARES.
 
     In November 1996, the Registrant issued (i) $40 million of preferred stock
to Praxair, (ii) $55 million of preferred stock and common stock to Castle
Harlan and its affiliates, (iii) $4.5 million of preferred stock and common
stock to our senior management and (iv) $1.5 million of preferred stock and
common stock to a consultant of the registrant. Each of these securities were
issued pursuant to the exception provided by Section 4(2) of the Securities Act
of 1933, as amended.
 
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 
     (a)  Exhibits
EXHIBIT
 NUMBER                                                   DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
1+           --   Form of Underwriting Agreement
3.1          --   Articles of Incorporation Statia Terminals Group N.V.
3.2+         --   Proposed Articles of Incorporation of Statia Terminals Group N.V.
4.1*         --   Indenture, dated as of November 27, 1996, among and Statia Terminals International N.V., Statia
                  Terminals Canada, Incorporated, as Issuers, and Statia Terminals Corporation N.V., Statia
                  Terminals Delaware, Inc., Statia Terminals, Inc., Statia Terminals, N.V., Statia Delaware Holdco
                  II, Inc., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Terminals Southwest,
                  Inc., W.P. Company, Inc., Seven Seas Steamship Company, Inc., Seven Seas Steamship Company (Sint
                  Eustatius) N.V., Point Tupper Marine Services Limited, Statia Laboratory Services N.V., Statia
                  Tugs N.V. (collectively, the "Subsidiary Guarantors") and Marine Midland Bank.
4.1a***      --   First Amendment, dated as of August 14, 1997, to the Indenture, dated as of November 27, 1996,
                  among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia Terminals
                  Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada, the
                  Subsidiary Guarantors named therein and Marine Midland Bank.
II-1
EXHIBIT
 NUMBER                                                   DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
4.1b****     --   Second Amendment, dated as of February 25, 1998, to the Indenture, dated as of November 27, 1996,
                  among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia Terminals
                  Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada, the
                  Subsidiary Guarantors named therein and Marine Midland Bank.
4.2*         --   Form of Guarantee of shares issued pursuant to the Indenture (included in Exhibit 4.1 hereto).
4.3*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals
                  International N.V. and Marine Midland Bank.
4.4          --   Amendment, dated as of December 18, 1998, by and among Statia Terminals Delaware N.V., Marine
                  Midland Bank and Statia Terminals Delaware Inc. to Share Pledge Agreement, dated as of
                  November 27, 1996 by and between Statia Terminals International N.V. and Marine Midland Bank.
4.5*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals, N.V. and
                  Marine Midland Bank.
4.6*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals Corporation
                  N.V. and Marine Midland Bank.
4.7*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Seven Seas Steamship
                  Company, Inc. and Marine Midland Bank.
4.8*         --   Fiduciary Transfer of Tangible Assets Agreement, dated as of November 27, 1996, by and between
                  Statia Terminals, N.V., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia
                  Laboratory Services N.V., Statia Tugs N.V., Seven Seas Steamship Company (Sint Eustatius) N.V. and
                  Marine Midland Bank.
4.9*         --   Fiduciary Assignment of Intangible Assets Agreement, dated as of November 27, 1996, by and between
                  Statia Terminals International N.V., Statia Terminals Corporation N.V., Statia Terminals, N.V.,
                  Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Laboratory Services N.V., Seven
                  Seas Steamship Company (Sint Eustatius) N.V., Statia Tugs N.V. and Marine Midland Bank.
4.10*        --   Deed of Mortgage, dated as of November 27, 1996, by and among Statia Terminals, N.V., Statia
                  Laboratory Services N.V., Saba Trustcompany N.V. and Bicen Development Corporation N.V. as
                  mortgagors and Marine Midland Bank as mortgagee.
4.11*        --   Fixed and Floating Charge Debenture, made as of November 27, 1996, between Statia Terminals
                  Canada, Incorporated and Marine Midland Bank.
4.12*        --   Debenture Delivery Agreement, dated as of November 27, 1996, between Statia Terminals Canada,
                  Incorporated and Marine Midland Bank.
4.13*        --   Shares Pledge Agreement, made as of November 27, 1996, between Statia Terminals Canada,
                  Incorporated and Marine Midland Bank.
4.14*        --   Shares Pledge Agreement, dated as of November 27, 1996, between Statia Terminals Corporation N.V.
                  and Marine Midland Bank.
4.15*        --   Debt Allocation Agreement, dated as of November 27, 1996, between Statia Terminals International
                  N.V. and Statia Terminals Canada, Incorporated.
4.16*        --   United States Shares Pledge and Share Agreement, dated as of November 27, 1996, by and among
                  Statia Terminals International N.V., Statia Delaware Holdco II, Statia Terminals Delaware, Inc.,
                  Statia Terminals, Inc., W.P. Company, Inc. and Marine Midland Bank.
4.17+        --   Registration Rights Agreement between Statia Terminals Group N.V. and [Newco], dated
                                , 1999.
5.1+         --   Opinion of White & Case LLP regarding the legality of the common shares.
5.2+         --   Opinion of Smeets Thesseling van Bokhorst Spigt, special Netherlands Antilles counsel to the
                  Issuer, regarding the legality of the common shares.
8.1          --   Opinion of White & Case LLP regarding certain tax matters (contained in the opinion filed as
                  Exhibit 5.1 hereto).
II-2
EXHIBIT
 NUMBER                                                   DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
8.2+         --   Opinion of PricewaterhouseCoopers, special Netherlands Antilles tax adviser to the Issuers,
                  regarding certain tax matters.
10.1*        --   Storage and Throughput Agreement, dated as of May 6, 1993 ("Storage and Throughput Agreement").
10.2*        --   Marine Fuel Agreement, dated as of May 6, 1993 ("Marine Fuel Agreement").
10.3*        --   Amendment, dated as of January 1, 1996 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement.
10.3a****    --   Amendment, dated as of December 27, 1996 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement for the year ended December 31, 1997.
10.3b****    --   Amendment, dated as of December 28, 1997 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement for the year ended December 31, 1998.
10.4*        --   Storage and Throughput Agreement, dated as of August 20, 1993.
10.5*        --   Storage and Throughput Agreement, dated as of August 1, 1994.
10.6*        --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and James G. Cameron.
10.7**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Thomas M. Thompson, Jr.
10.8**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Robert R. Russo.
10.9**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and John D. Franklin.
10.10*       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and James F. Brenner.
10.11*       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Jack R. Pine.
10.12*       --   Loan and Share Agreement, dated as of November 27, 1996 between Congress Financial Corporation
                  (Florida) and Statia Terminals, N.V.
10.13*       --   Loan Agreement, dated as of November 27, 1996, by and among Congress Financial Corporation
                  (Canada), Statia Terminals Canada, Incorporated and Point Tupper Marine Services Limited.
10.14****    --   1997 Stock Option Plan with Award Agreements.
21.1         --   Subsidiaries of the Registrant.
23.1         --   Consent of Arthur Andersen LLP.
23.2         --   Consent of White & Case LLP (contained in the opinion filed as Exhibit 5.1 hereto).
23.3         --   Consent of Smeets Thesseling van Bokhorst Spigt (contained in the opinion filed as Exhibit 5.2
                  hereto).
23.4         --   Consent of PricewaterhouseCoopers (contained in Exhibit 8.2 hereto).
23.5         --   Consent of The Independent Liquid Terminals Association.
23.6         --   Consent of The New York Mercantile Exchange.
23.7         --   Consent of Oil Price Information Service.
27.1****     --   Financial Data Schedules (for electronic filing only).
(Footnotes on next page)
 
                                      II-3
(Footnotes from previous page)

------------------------
+    To be supplied by amendment.
 
*    Incorporated by reference to the Registration Statement of Statia Terminals
     International N.V. and Statia Terminals Canada, Incorporated on Form S-4,
     dated December 20, 1996, and amendments thereto filed with the U.S.
     Securities and Exchange Commission (Registration Statement No. 333-18455),
     which became effective on February 14, 1997.
 
**   Incorporated by reference to the December 31, 1996 Form 10-K, Dated
     May 13, 1997.
 
***  Incorporated by reference to the September 30, 1997 Form 10-Q, dated
     November 14, 1997.
 
**** Incorporated by reference to the December 31, 1997 Form 10-K, dated
     March 31, 1998.
 
ITEM 17. UNDERTAKINGS.
 
     The undersigned Registrant hereby undertakes to provide to the Underwriter
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.
 
     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation of the Registrant, the Underwriting Agreement, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the shares being registered hereunder, the Registrant will,
unless in the opinion of counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
 
     The undersigned Registrant hereby undertakes that:
 
          (1) For purposes of determining any liability under the Act, the
     information omitted from the form of Prospectus filed as part of this
     Registration Statement in reliance upon Rule 430A and contained in a form
     of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or
     497(h) under the Act shall be deemed to be part of this Registration
     Statement as of the time it was declared effective.
 
          (2) For the purposes of determining any liability under the Act, each
     post-effective amendment that contains a form of Prospectus shall be deemed
     to be a new Registration Statement relating to the shares offered therein,
     and the offering of such shares at that time shall be deemed to be the
     initial bona fide offering thereof.
 
          (3) That, for purposes of determining any liability under the
     Securities Act of 1933, each filing of the Registrant's annual report
     pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
     (and, where applicable, each filing of an employee benefit plan's annual
     report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
     that is incorporated by reference in this Registration Statement shall be
     deemed to be a new Registration Statement relating to the securities
     offered herein, and the offering of such shares at that time shall be
     deemed to be the initial bona fide offering thereof.
 
                                      II-4
SIGNATURES
 
     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Deerfield Beach, State of
Florida, on February 12, 1999.
 
                                          STATIA TERMINALS GROUP N.V.

                                          By:        /s/ JAMES G. CAMERON
                                             -----------------------------------
                                            Name: James G. Cameron
                                            Title: Director
 
                                          By:          /s/ JACK R. PINE
                                             -----------------------------------
                                            Name: Jack R. Pine
                                            Title: Secretary
 
                               POWER OF ATTORNEY
 
     Each person whose signature appears below constitutes and appoints and
hereby authorizes Jack R. Pine and James G. Cameron, and each of them, as
attorney-in-fact, to sign on such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this Registration Statement.
 
     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on February 12, 1999.
SIGNATURE                                      TITLE
------------------------------------------  -------------------------------------------
/s/ JAMES G. CAMERON                              Director
------------------------------------------
             James G. Cameron
 
            /s/ JOHN K. CASTLE                               Director
------------------------------------------
              John K. Castle
 
    /s/ ADMIRAL JAMES L. HOLLOWAY III                        Director
------------------------------------------
      Admiral James L. Holloway, III
 
           /s/ FRANCIS JUNGERS                               Director
------------------------------------------
             Francis Jungers
 
          /s/ DAVID B. PITTAWAY                              Director
------------------------------------------
            David B. Pittaway
 
       /s/ JONATHAN R. SPICEHANDLER                          Director
------------------------------------------
         Jonathan R. Spicehandler
 
             /s/ ERNEST VOGES                                Director
------------------------------------------
               Ernest Voges
 
           /s/ JUSTIN B. WENDER                              Director
------------------------------------------
             Justin B. Wender
 
           /s/ JAMES F. BRENNER               Vice President and Treasurer (Principal
------------------------------------------
             James F. Brenner                 Executive Officer, Principal Financial
                                             Officer and Principal Accounting Officer)
II-5
EXHIBIT INDEX
EXHIBIT
 NUMBER     DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
1+           --   Form of Underwriting Agreement
3.1          --   Articles of Incorporation Statia Terminals Group N.V.
3.2+         --   Proposed Articles of Incorporation of Statia Terminals Group N.V.
4.1*         --   Indenture, dated as of November 27, 1996, among and Statia Terminals International N.V., Statia
                  Terminals Canada, Incorporated, as Issuers, and Statia Terminals Corporation N.V., Statia
                  Terminals Delaware, Inc., Statia Terminals, Inc., Statia Terminals, N.V., Statia Delaware Holdco
                  II, Inc., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Terminals Southwest,
                  Inc., W.P. Company, Inc., Seven Seas Steamship Company, Inc., Seven Seas Steamship Company (Sint
                  Eustatius) N.V., Point Tupper Marine Services Limited, Statia Laboratory Services N.V., Statia
                  Tugs N.V. (collectively, the "Subsidiary Guarantors") and Marine Midland Bank.
4.1a***      --   First Amendment, dated as of August 14, 1997, to the Indenture, dated as of November 27, 1996,
                  among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia Terminals
                  Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada, the
                  Subsidiary Guarantors named therein and Marine Midland Bank.
4.1b****     --   Second Amendment, dated as of February 25, 1998, to the Indenture, dated as of November 27, 1996,
                  among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia Terminals
                  Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada, the
                  Subsidiary Guarantors named therein and Marine Midland Bank.
4.2*         --   Form of Guarantee of shares issued pursuant to the Indenture (included in Exhibit 4.1 hereto).
4.3*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals
                  International N.V. and Marine Midland Bank.
4.4          --   Amendment, dated as of December 18, 1998, by and among Statia Terminals Delaware N.V., Marine
                  Midland Bank and Statia Terminals Delaware Inc. to Share Pledge Agreement, dated as of November
                  27, 1996, by and between Statia Terminals International N.V. and Marine Midland Bank.
4.5*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals, N.V. and
                  Marine Midland Bank.
4.6*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals Corporation
                  N.V. and Marine Midland Bank.
4.7*         --   Share Pledge Agreement, dated as of November 27, 1996, by and between Seven Seas Steamship
                  Company, Inc. and Marine Midland Bank.
4.8*         --   Fiduciary Transfer of Tangible Assets Agreement, dated as of November 27, 1996, by and between
                  Statia Terminals, N.V., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia
                  Laboratory Services N.V., Statia Tugs N.V., Seven Seas Steamship Company (Sint Eustatius) N.V. and
                  Marine Midland Bank.
4.9*         --   Fiduciary Assignment of Intangible Assets Agreement, dated as of November 27, 1996, by and between
                  Statia Terminals International N.V., Statia Terminals Corporation N.V., Statia Terminals, N.V.,
                  Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Laboratory Services N.V., Seven
                  Seas Steamship Company (Sint Eustatius) N.V., Statia Tugs N.V. and Marine Midland Bank.
4.10*        --   Deed of Mortgage, dated as of November 27, 1996, by and among Statia Terminals, N.V., Statia
                  Laboratory Services N.V., Saba Trustcompany N.V. and Bicen Development Corporation N.V. as
                  mortgagors and Marine Midland Bank as mortgagee.
4.11*        --   Fixed and Floating Charge Debenture, made as of November 27, 1996, between Statia Terminals
                  Canada, Incorporated and Marine Midland Bank.
4.12*        --   Debenture Delivery Agreement, dated as of November 27, 1996, between Statia Terminals Canada,
                  Incorporated and Marine Midland Bank.
4.13*        --   Shares Pledge Agreement, made as of November 27, 1996, between Statia Terminals Canada,
                  Incorporated and Marine Midland Bank.
EXHIBIT
 NUMBER     DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
4.14*        --   Shares Pledge Agreement, dated as of November 27, 1996, between Statia Terminals Corporation N.V.
                  and Marine Midland Bank.
4.15*        --   Debt Allocation Agreement, dated as of November 27, 1996, between Statia Terminals International
                  N.V. and Statia Terminals Canada, Incorporated.
4.16*        --   United States Shares Pledge and Share Agreement, dated as of November 27, 1996, by and among
                  Statia Terminals International N.V., Statia Delaware Holdco II, Statia Terminals Delaware, Inc.,
                  Statia Terminals, Inc., W.P. Company, Inc. and Marine Midland Bank.
4.17+        --   Registration Rights Agreement between Statia Terminals Group N.V. and [Newco], dated             ,
                  1999.
5.1+         --   Opinion of White & Case LLP regarding the legality of the common shares.
5.2+         --   Opinion of Smeets Thesseling van Bokhorst Spigt, special Netherlands Antilles counsel to the
                  Issuer, regarding the legality of the common shares.
8.1          --   Opinion of White & Case LLP regarding certain tax matters (contained in the opinion filed as
                  Exhibit 5.1 hereto).
8.2+         --   Opinion of Coopers & Lybrand LLP, special Netherlands Antilles tax adviser to the Issuers,
                  regarding certain tax matters.
10.1*        --   Storage and Throughput Agreement, dated as of May 6, 1993 ("Storage and Throughput Agreement").
10.2*        --   Marine Fuel Agreement, dated as of May 6, 1993 ("Marine Fuel Agreement").
10.3*        --   Amendment, dated as of January 1, 1996 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement.
10.3a****    --   Amendment, dated as of December 27, 1996 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement for the year ended December 31, 1997.
10.3b****    --   Amendment, dated as of December 28, 1997 to (i) the Storage and Throughput Agreement and (ii) the
                  Marine Fuel Agreement for the year ended December 31, 1998.
10.4*        --   Storage and Throughput Agreement, dated as of August 20, 1993.
10.5*        --   Storage and Throughput Agreement, dated as of August 1, 1994.
10.6*        --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and James G. Cameron.
10.7**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Thomas M. Thompson, Jr.
10.8**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Robert R. Russo.
10.9**       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and John D. Franklin.
10.10*       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and James F. Brenner.
10.11*       --   Employment Agreement, dated as of November 27, 1996, between Statia Terminals Group N.V., Statia
                  Terminals, Inc. and Jack R. Pine.
10.12*       --   Loan and Share Agreement, dated as of November 27, 1996 between Congress Financial Corporation
                  (Florida) and Statia Terminals, N.V.
10.13*       --   Loan Agreement, dated as of November 27, 1996, by and among Congress Financial Corporation
                  (Canada), Statia Terminals Canada, Incorporated and Point Tupper Marine Services Limited.
10.14****    --   1997 Stock Option Plan with Award Agreements.
21.1         --   Subsidiaries of the Registrant.
23.1         --   Consent of Arthur Andersen LLP.
23.2         --   Consent of White & Case LLP (contained in the opinion filed as Exhibit 5.1 hereto).
23.3         --   Consent of Smeets Thesseling van Bokhorst Spigt (contained in the opinion filed as Exhibit 5.2
                  hereto).
EXHIBIT
 NUMBER     DESCRIPTION
---------   --------------------------------------------------------------------------------------------------------
23.4         --   Consent of Coopers & Lybrand LLP (contained in Exhibit 8.2 hereto).
23.5         --   Consent of The Independent Liquid Terminals Association.
23.6         --   Consent of The New York Mercantile Exchange.
23.7         --   Consent of Oil Price Information Service.
27.1****     --   Financial Data Schedules (for electronic filing only).
------------------------
 
+    To be supplied by amendment.
 
*    Incorporated by reference to the Registration Statement of Statia Terminals
     International N.V. and Statia Terminals Canada, Incorporated on Form S-4,
     dated December 20, 1996, and amendments thereto filed with the U.S.
     Securities and Exchange Commission (Registration Statement No. 333-18455),
     which became effective on February 14, 1997.
 
**   Incorporated by reference to the December 31, 1996 Form 10-K, Dated
     May 13, 1997.
 
***  Incorporated by reference to the September 30, 1997 Form 10-Q, dated
     November 14, 1997.
 
**** Incorporated by reference to the December 31, 1997 Form 10-K, dated
     March 31, 1998.