Eqva ASA

Capital/Financing Update • Nov 18, 2019

Update of financial situation

Update of financial situation

Reference is made to the stock exchange announcement by Havyard Group ASA ("HGR") on 25 October 2019 regarding notice of breach of new covenants when it comes to requirements for equity and working capital, due to further losses on the prototype projects with hull no. 131 and 135 under completion at the subsidiary Havyard Ship Technology AS ("HST").

In connection with the review of updated project forecasts for HST's vessels under construction, as well as an overall assessment of HST's financial position, the respective Boards of Directors of HGR and HST have noted further losses on the projects with hull no. 131 and 135, and now also for hull no. 141-145. As a result, HST's equity is lost and furthermore, there are now also breach of covenants as of Q3 2019.

As a consequence of the above, meetings have been held with banks and guarantors to ensure completion of ongoing projects at HST. Furthermore, a dialogue will immediately be initiated with customers and suppliers where the aim is to ensure outfitting of projects under completion at HST, and to find satisfactory solutions for other projects.

Work on continued operations will be maintained on a secured basis (cash settlement or bank guarantee), so that the creditor's current positions will not deteriorated. For debts accrued as of today, the Board of Directors of HST has introduced a payment suspension until further clarifications has been made.

As part of the further work, an analysis will also be made of the consequences that the loss of equity in HST will have for the consolidated Group, which is expected to be reported when presenting the accounts for Q3 2019.

The Board of Directors of HST is continuing its work along with its external advisors, and updated information on the implementation of measures will be provided as soon as possible.