Havila Shipping ASA

Capital/Financing Update • Apr 7, 2020

Havila Shipping ASA: Agreement with lenders about restructuring of the Groups debt

Havila Shipping ASA: Agreement with lenders about restructuring of the Groups debt

Reference is made to Stock Exchange releases on 01.03.19 and 25.03.19 and later

updates in the quarterly reports about the ongoing negotiations with lenders.

The company has now agreed with lenders a restructuring of the debt conditional

upon approval from formal bodies.  Necessary bondholder meetings and an

Extraordinary General Meeting to decide on the proposal of restructuring of the

Group's debt, and other elements of the restructuring, will be summoned.

Duration

The agreement is for a period of five years, starting 02.01.2020 and ending

31.12.2024.  Each lender can extend the period with one year until 31.12.2025.

Liquidity

The agreements require new liquidity.  In a market where new capital is scarce,

the company has agreed with Havila Holding AS payment of a convertible liquidity

loan of NOK 100 million. The loan can or shall be converted to shares in order

to maintain the relative shareholding in the company.

The restructuring agreements will contribute to maintaining a liquidity position

of NOK 175 million throughout the duration of the agreement.

Reduction of interest-bearing debt

At 01.01.2020 outstanding debt was NOK 4,222 million, which  for each vessel

will be split into an interest-bearing tranche and a non interest-bearing

tranche.  The sizing of the interest-bearing tranche is based on the expected

debt service capacity of each vessel during the restructuring period  Debt

higher than the expected interest-bearing tranche will be  non interest-

bearing.  The total amount of interest-bearing debt will be NOK 3,103 million as

of 02.01.2020 and the non interest-bearing tranche will be NOK 1,119 million.

Investments

The company can make necessary vessel investments as part of its ordinary course

of business.  The company can also make investments to comply with requirements

of applicable law or classification society and in order to comply with

requirements of an employment contract.

Debt service

Payment of interest and instalments will, for each vessel, be limited by the

respective vessel profit and will be paid quarterly.  If a vessels' income is

insufficient to serve the interest-bearing tranche, the calculated interest and

missing instalment will be transferred to the non-interest-bearing tranche.

Vessel profit above accrued interest will serve the interest-bearing tranche

according to a predefined payment profile.  Any surplus cash beyond this will be

swept by the non interest-bearing tranche for the respective vessel.

There will be quarterly downward adjustment of the interest -bearing tranche

according to a twelve year repayment profile (one vessel has a profile of eleven

years). For the entire fleet the interest bearing debt will be reduced by

approximately NOK 65 million each quarter.  The downward adjustment will be

independent of the vessel profit.

If the profit for each vessel during the period starting eighteen months and

ending six months prior to the expiration of the restructuring period is higher

than a predefined level, a limited amount will be transferred from non-interest-

bearing tranche to interest-bearing tranche.

Outstanding debt at expiration of restructuring period

At the end of the restructuring period all interest-bearing debt will fall due.

Non-interest-bearing debt will be converted to shares in the company.

Conversion of non-interest-bearing tranche will have the effect that lenders

will receive shares maximum representing 47% ownership of the company, but

reduced relatively following any upward adjustment as referred to above.

Conversion of liquidity loan

Simultaneously with the lenders conversion of non-performing- tranche, Havila

Holding has the right and obligation to convert the liquidity loan in full or in

part to shares to maintain its shareholding in the company.

Cash contribution

To safeguard the company's liquidity position, each vessel's positive cash flow

after payment of interest will support the liquidity with a 10% cash

contribution withheld before payment of any quarterly instalment.  Cash

contribution will be payable only for periods where the company's liquidity

position is below NOK 175 million.

Covenant

The company shall during the restructuring period, on a consolidated basis, have

no less than NOK 50 million in free and available cash.  There are no other

financial covenants.

Dilution

Shareholders will be diluted following the lenders right to convert non-

interest-bearing debt to 47% of the shares and Havila Holding's right and

obligation to convert the liquidity loan in full or in part to maintain their

ownership of 50.96%.  Shareholder dilution will be limited of lenders right to

have upward adjustment of interest-bearing tranche transferred from non-interest

bearing tranche based on vessel performance.

Repair issue

The restructuring agreement give the company the opportunity to implement a

repair issue after the expiry of the restructuring period.  If one or more

lenders use their option to extend the restructuring period with one year, a

repair issue will be postponed by one year.  A repair issue will be sized based

on the actual dilution that will be the effect of the agreement-

Other restructuring elements

The restructuring agreements contain regulations where the company guarantees

operational expenses for each vessel for a period of six months and lay-up costs

for a period eighteen months.  For vessels with insufficient income to cover

operating expenses and that have no firm contract, the lender can if certain

criteria are fulfilled, assume ownership of such vessels at a value of the

remaining interest-bearing debt.  One option for the lender is to offer

financing of the vessel's operational and/or lay-up costs for a period.  Such

financing, will at the end of the restructuring period, be converted to equity.

Such conversion will not increase the lenders combined ownership after

conversion of non-interest-bearing debt to equity.

Accounting effects of the restructuring agreement

According to IFRS the substantially changed terms shall be accounted for as an

extinguishment of original financial liability and the recognition of new

financial liability.

The net present value of the calculated cash flow throughout the period of

agreement, is calculated separately for each vessels interest bearing tranche

and non interest bearing tranche.  It is also made an assessment of the value of

the lenders right to convert the remaining amount of the non interest bearing

tranche to shares.  Preliminary calculations shows a net positive effect on the

P&L account of NOK 986 million that will be booked in second quarter 2020

accounts depending on approval of the agreement in Bondholders Meetings and

Extraordinary General Meeting.

Stock Exchange Listing

The company shall remain listed at Oslo Stock Exchange throughout the

restructuring period.  This obligation shall extend to the shares as well as to

the Bonds.

Support from bondholders

The company has received support to the proposed solution from holders

representing more than 2/3 of the outstanding bonds in HAVI 04 (Havila Clipper)

and about 45% of the outstanding bonds in HAVI 07 (Havila Subsea).

Contacts:

Adm dir Njål Sævik, +47 909 35 722

Finansdir Arne Johan Dale, +47 909 87 706

Financial advisor:

Arctic Securities

Truls Wiel, +47 484 03 212

Tord Aasen Augestad, +47 484 03 237

This information is subject to the disclosure requirements pursuant to Section

5-12 the Norwegian Securities Trading Act