Hunter Group ASA

Share Issue/Capital Change • Feb 5, 2024

Hunter Group ASA - Management update ahead of subsequent offerings

Hunter Group ASA - Management update ahead of subsequent offerings

Oslo, 5 February 2024

Hunter Group ASA (the "Company"), a publicly listed maritime focused investment

company, today published information about two upcoming subsequent equity

offerings expected to commence on or about 16 February 2024 and 19 February

2024, respectively (the "Offerings"). For detailed information on each Offering,

please refer to the separate stock exchange notices released on 30 November

2023, 10 January 2024 and today. Please also refer to the stock exchange release

regarding the minutes from the Extraordinary General Meeting ("EGM") of the

Company that was held on Friday 2 February 2024. Further information about the

Company will be made available in the prospectus, which will be published prior

to the subsequent offerings, following approval from the Financial Supervisory

Authority of Norway (Finanstilsynet). This update is intended to serve as a

summary of the rationale behind recent key Company events and as an information

supplement ahead of the Offerings.

VLCC for it.

Tanker rates in most segments are currently at or near all-time high. The

exception is the Very Large Crude Carrier ("VLCC") segment, which has not yet

experienced the same increase in rates as other vessel segments. We believe it

is only a matter of time before VLCC rates will advance as well, initiating what

we believe to be a multiyear bull-cycle.

Supply: A VLCC orderbook at its lowest level since the 1980s combined with

little or no available yard capacity should lead to very limited fleet growth.

Globally, the VLCC fleet consists of more than 850 vessels. On average 39 new

vessels have been delivered annually over the past 20 years. However, in 2024,

only one more vessel is scheduled for delivery. For 2025 and 2026, the numbers

are just five and eleven, respectively. With shipyards fully booked, and

focusing on higher margin segments, new VLCC orders are unlikely to be delivered

before 2027. The fact that more than 80 vessels will turn twenty years old or

more in 2024, which is historically the average retirement age for VLCCs, is

further strengthening the case for a more limited supply side going forward.

Demand: Demand for VLCCs is expected to grow as global oil demand is increasing.

This is further magnified by increasing geographical distances between oil

production and consumption growth. Leading forecasters anticipate global oil

demand to rise by 1-2 million barrels per day annually for the next few years,

primarily driven by Asia. The majority of oil production growth is expected in

regions far away from Asian markets, notably the U.S., Brazil and Guyana. With

more ships tied up on longer voyages, the crude tanker fleet will effectively be

reduced.

In conclusion, a significant imbalance between demand for and supply of crude

oil tankers looks increasingly likely. This has led analysts to predict that

scrubber-fitted eco VLCCs could earn an average of around USD 85,000 per day

over the next three years, more than 50% above the 20-year average. Share prices

and asset values have reflected this supply/demand imbalance for some time,

making it challenging for investors and shipowners to obtain reasonably priced

exposure to the crude tanker market. Currently, a newbuild scrubber-fitted VLCC

is priced at around USD 130 million, 26% above the historical average. To

achieve a 10% return on invested capital, this newbuild would require dayrates

of around USD 56,000 per day on average for the lifetime of the vessel (20

years). By comparison, Hunter Group invested in similar vessels in 2018 at an

average cost of approx. USD 85 million per ship. However, the three-year time

-charter ("TC") market has not experienced a similar price increase and is

currently 11% below the 20-year historical spot average. We believe this

combination represents a unique opportunity, with a risk/reward profile rarely

seen in the shipping markets.

To capitalize on this opportunity, the Company has recently secured two three

-year back-to-back TC contracts for scrubber-fitted eco VLCCs. These vessels are

chartered in at an average fixed rate of USD 51,750 per day, compared to the 20

-year average rate of USD 58,240, and analyst expectations of around USD 85,000

per day for the next three years.

The vessels are chartered out for the same period on a floating spot index

-linked TC. This structure, based on the recognized VLCC benchmark TD3C, enables

the Company to capture every daily VLCC spot market movement with maximum

utilization.

1. The first vessel, chartered in at USD 52,500 per day, became effective on 1

December 2023 and has so far earned approx. USD 54,200 per day and USD 48,260

per day for December 2023 and January 2024, respectively.

2. The second vessel will be chartered in at USD 51,000 per day from

March/April 2024.

We believe these transactions, and potential upcoming transactions like this,

will provide significant cashflow and value creation for the Company and its

shareholders over the coming years.

Despite our confidence in a robust tanker market in the coming years, we

acknowledge the inherent volatility of the VLCC market, which may include

periods of relative softness. To withstand these potential periods, we have

strengthened the Company's balance sheet by raising approximately USD 14 million

through two equity issues, totaling 85,190,476 new shares. Following these

equity issues, but prior to the upcoming Offerings, the Company has

approximately USD 18m in cash and working capital, and 113,958,577 shares

outstanding.

To facilitate swift and effective capital raises in connection with the TCs,

these equity issues were conducted as private placements. To ensure equal

treatment of eligible shareholders who were not allocated shares in the private

placements, the Company plans to conduct two subsequent offerings.

1. The first subsequent offering will be available to shareholders as of 30

November 2023, offering up to 6,666,666 shares at NOK 1.50 per share. The

subscription period is expected to commence on 16 February 2024.

2. The second subsequent offering will be available to shareholders as of 10

January 2024, offering up to 14,200,000 shares at NOK 1.75 per share, with the

subscription period expected to begin on 19 February 2024.

Both subscription periods will last for two weeks. Oversubscription is

permitted, and subscribing shareholders are guaranteed a minimum allocation of

their pro-rata shareholding and will also be allocated any oversubscription on a

pro-rata basis. Current shareholders that did not own any shares on the

aforementioned dates will not be eligible to participate in the respective

subsequent offerings. For more information on the two subsequent offerings,

please refer to the separate stock exchange releases today.

Contact:

Erik A.S. Frydendal, CEO, ef@huntergroup.no, Ph.: +47 957 72 947

Lars M. Brynildsrud, CFO, lb@huntergroup.no, Ph.: +47 932 60 882

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and subject to the disclosure requirements pursuant to

section 5-12 of the Norwegian Securities Trading Act.

Forward looking statements: This announcement includes forward-looking

statements, relating to the TCs, VLCC rates, prices, and values, the Issues, the

use of proceeds from the Issues, and other non-historical statements. These

forward-looking statements are subject to numerous risks, uncertainties and

assumptions, changes in market conditions and other risks. Forward-looking

statements reflect knowledge and information available at, and speak only as of,

the date they are made. Except as required by law, the Company undertakes no

obligation to update or revise publicly any forward-looking statements, whether

as a result of new information, future events or otherwise, after the date

hereof or to reflect the occurrence of unanticipated events. Readers are

cautioned not to place undue reliance on such forward-looking statements.