3 August 2018

Reshaping Prosafe

Transforming agreement with COSCO and Lenders

Disclaimer

All statements in this presentation other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may not prove accurate. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as "believe", "may", "will", "should", "would be", "expect" or "anticipate" or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation as anticipated, believed or expected. Prosafe does not intend, and does not assume any obligation to update any industry information or forward-looking statements set forth in this presentation to reflect subsequent events or circumstances

The Prosafe transformation 2018

The COSCO agreement
Debt facilities enhancements
Market update
Summary

The Prosafe transformation 2018

Positioning for the next phase

Legacy fleet		TSV	Modern (2005)	Modern (2015+)	Cosco (2017+)
Regency	Caledonia	Scandinavia	Concordia	Notos	Eurus
Lancia	Regalia			Zephyrus	Nova
Hibernia	Astoria			Boreas	Vega
Britannia	Bristolia
Jasminia

Modern/Core fleet: the most modern and versatile accommodation fleet globally

Legacy fleet

Scrapped since 2016

1 2 3

o New financing of USD 431.2m for the takeout of the 3 new Cosco units
o Low minimum debt service scalable with rig earnings
o Interest free first two years after delivery, thereafter interest is based on dayrates achieved
o Flexible delivery up to 5 years and ultimately option to not take delivery of rigs

Continuation of fleet modernisation Yard financing raise Debt Facilities Enhancements

o Liquidity: Amortization relief of USD 156m (in addition to amortization relief agreed in 2016)
o Option for Prosafe to extend final maturity of existing USD 1.3 billion by 1 year to February 2023
o Covenant ease for both existing loan agreements
o Consent to COSCO agreement and use of Prosafe's existing cash and cash flow in connection with delivery of the COSCO units
o Ability to scrap 3 legacy units without loan repayment

The Prosafe transformation 2018

Results of the set of agreements

1	Modernize the fleet	o Add three versatile units with global reach o 50% of the fleet will be less than 4 years old
2	Secure very attractive financing for Cosco newbuilds	o Limited debt service and interest expenses until market recovery o Take-out flexibility up to 5 years and options to take out up to three modern units
3	Enhance runway	o USD 156m amortization relief and covenant ease o Option to extend final maturity of USD 1.3 billion facility by one year to 2023
4	Reduce cash leakage	o Cost savings from option to retire legacy units
5	Improve attractiveness for consolidation and partnership	o Renewed fleet and long-term financing makes Prosafe an attractive company for partners and stakeholders

The Prosafe transformation 2018

The COSCO agreement

Debt facilities enhancements
Market update
Summary

The Cosco agreement – in short

	Deal highlights	Rigs
Delivery terms	o Option to take delivery of three vessels  Safe Eurus – before 31 Dec 2019  First of Safe Vega/Nova – delivery within 3+1 years  Second of Safe Vega/Nova – delivery within 5 years	Safe Eurus
	o Payment on delivery: Eurus USD 50m, Nova/Vega USD 25m each (total of USD 100m) o Prosafe pays no layup cost or financing cost until delivery	Safe Nova

Yard financing
o Financing of USD 431.2m on delivery of the three vessels
o Interest cost and debt repayment dependent on dayrates and earnings achieved. Interest free for the first 2-5 years from delivery of each vessel
o Layup (option period) + financing duration of up to 10 years

Attractive purchase price and yard financing

Combination of cash discount, attractive yard financing, and optionality

Attractive pricing through a package deal		Discount and sources and uses
1. Cash discount of USD 55m	(mill USD)	Safe Eurus	Safe Nova	Safe Vega	Sum
2. Attractive yard financing with below-market terms (debt	Initial contract price	217	241	243	701
repayment and interest costs)	Compliance / variation orders	2	-	-	2
3. Take-out flexibility and options to take out up to three modern units	Uses	219	241	243	703
	Pre paid instalments & waived interest	55	31	30	116
	Discount	15	20	20	55
	Payment at delivery	50	25	25	100

Sellers credit 99 165 168 432

Sources 219 241 242 703

Key transaction terms

Item	Description
Delivery Window and	1. Safe Eurus – Delivery before 31st December 2019 2. Nova/Vega; 1. Delivery of one vessel within 3 years from agreement with COSCO, plus 1 year option (subject to certain conditions) 2. For the other vessel, delivery within 5 years of agreement
Down Payment	1. Payment at delivery: USD 50m for Safe Eurus / USD 25m each for Safe Nova/Vega, total USD 100m 2. Mobilisation and stock-up costs: USD 10m-15m (pending contract duration and location) to be repaid with priority from the EBITDA split
Yard financing	1. USD 98.7m for Eurus, USD 164.7m for Nova and USD 167.8m for Vega, total USD 431.2m
PCG	1. Parent Company Guarantee limited to USD 60m per vessel provided the vessel is delivered (i.e. maximum of USD 180m)
Financing Duration	1. Yard financing period plus lay-up at yard shall in no circumstance exceed 10 years for each of the 3 vessels 2. Mandatory refinancing of the yard financing once outstanding amount is down to USD 50m for Safe Eurus, and about USD 83/\$84m for Safe Nova and Safe Vega
Distributions to Prosafe and COSCO	1. Guaranteed Minimum Payment (see below) to be paid to COSCO on a quarterly basis 2. Interest and remaining annual debt repayment on yard financing (promissory notes), plus Prosafe calendar year 3. Operational cash flow priority to be repaid in the following order; 1. Guaranteed minimum annual repayment 2. Repayment of mobilisation and stock-up costs financed by Prosafe, up to USD 20 million 3. 50% EBITDA split to COSCO (adjusted for minimum payment, item 1 above)	share of EBITDA to be paid on or before 31st March of the following
EBITDA* Split	1. Taxes triggered by operation of the vessel subtracted from EBITDA before split 2. 50% to COSCO / 50% to Prosafe (post repayment of mobilisation and stock-up costs) 3. COSCO EBITDA share to be applied, in full, towards amortization of promissory note 4. Interest to be paid out of Prosafe share of EBITDA	* EBITDA to be split is calculated after deduction of all maintenance and repair related costs (both capitalized and expensed) and after deduction of
Minimum Payment to COSCO	1. Per vessel, year after delivery, amortization and interest o USD 2 million per year – First 3 years o USD 6 million per year – Years 4-6 o USD 7 million per year – Years 7-maturity	any local taxes triggered by the operation of a vessel
Interest	1. No interest expenses first two years after delivery, thereafter linked to dayrates achieved (see next slide)

Attractive interest rate – linked to dayrates achieved

Average dayrate	Year 1-2	Year 3-5	Year 6 to maturity
< USD 99k	-	-	2 %
USD 100k - 124k	-	2 %-3%	3 %-5%
USD 125k - 149k	-	3 %-4%	5 %-8%
> USD150k	-	4 %	8 %

o Interest linked to average dayrates achieved
o Annual average dayrate shall be calculated as the average of i) on a 365 days basis (i.e contract dayrate times contract days divided by 365 days). and ii) average contractual dayrates in the year.
- o Rigs contracted on the NCS shall enter the average dayrate calculation with a discount of USD 20,000 per day.
o Step up in year 3 and 6 after delivery of each vessel (i.e. not after signing)

*Maximum interest margin under the new loan agreement (does not reflect impact on margin of exercising extension option or delivery of Nova/Vega)

Illustrative example of key commercial terms in the COSCO deal

Note: Illustration based on \$143 million in yard financing (i.e. average of Safe Eurus, Safe Vega and Safe Vega)

o 3 year contract with annual EBITDA USD 20 million yielding cumulative EBITDA of USD 60 million over the contract period
o Stock-up costs USD 12 million
o Basis for EBITDA split; contract EBITDA less mobilisation and stock-up costs, USD 48 million
o EBITDA split to COSCO;
o 50% of USD 48m, USD 24m
o In this example EBITDA split is > minimum annual repayment
o Share of EBITDA kept by Prosafe;
o Contract EBITDA less EBITDA split to COSCO, USD 36 million
o Repayment of yard financing;
o EBITDA split to COSCO excluding interest, USD 24 million
o No interest costs in this example

COSCO units have a very competitive cash break-even

o Illustration shows minimum cash cost elements with COSCO financing package (assuming USD 40k/day OPEX)
o Significantly lower cash break even rates than with a conventional debt financing structure
o The delivery of Safe Vega and Safe Nova would increase the margin with 22.5 bps each (45 bps in total) of the USD 1.3 billion facility and/or issuing of warrants (see lender chapter)
o Assuming no interest apply under the yard financing

Comment Cash break even – cost per day