Hunter Group ASA

M&A Activity • Apr 10, 2018

HUNTER GROUP ASA - NON-BINDING INDICATIVE OFFER FROM APOLLO ASSET LIMITED

HUNTER GROUP ASA - NON-BINDING INDICATIVE OFFER FROM APOLLO ASSET LIMITED

Oslo, 10 April 2018

This stock exchange announcement is made pursuant to section 5-2 of the

Norwegian Securities Trading Act.

NON-BINDING INDICATIVE OFFER FROM APOLLO ASSET LIMITED

The Board of Hunter Group ASA (the "Company") has today received a non-binding

indicative offer (the "Offer") from Apollo Asset Limited (the "Offeror").  T

he ultimate owner of the Offeror, Mr. Arne Fredly, is appointed as board member

in the Company, and has accepted to not participate in the Company's decisions

in connection with the transfer, pursuant to the Norwegian Public Limited

Companies Act section 6-27.

The Offer outlines the principal terms and conditions upon which the Offeror

would consider transferring four (4) VLCC newbuilding contracts and three (3)

VLCC options (the "Newbuilding Contracts" and the "Options") to the Company. The

Offeror is prepared to transfer the Newbuilding Contracts and the Options (or

the rights and obligations thereunder) to the Company on a back-to-back basis as

contracted with the Daewoo Shipbuilding Marine Engineering Co., Ltd (the

"Shipyard"), whereby the Company will assume the obligations towards the

Shipyard (directly or indirectly).

The Offeror offers the Newbuilding Contracts to the Company on the following

terms, without any mark-up or additional fees to the Offeror other than as set

out herein:

Shipbuilding Contr.          Contract amount         Scrubber          Tot.

contract amount    Delivery

No. 1                                        MUSD 82.5          MUSD

2.7            MUSD 85.2                  Oct./Nov. 2019

No. 2                                        MUSD 82.5          MUSD

2.7            MUSD 85.2                  Oct./Nov. 2019

No. 3                                        MUSD 82.5          MUSD

2.7            MUSD 85.2                  Dec. 2019

No. 4                                        MUSD 82.8          MUSD

2.7            MUSD 85.5                  Dec. 2019

The Offeror offers the Options to the Company on the following terms, without

any mark-up or additional fees to the Offeror other than as set out herein:

Option                           Contract amount           Scrubber

Tot. contract amount     Delivery

No. 1                                        MUSD 82.8          MUSD

2.7            MUSD 85.5                      Q2 2020

No. 2                                        MUSD 82.8          MUSD

2.7            MUSD 85.5                      Q2 2020

No. 3                                        MUSD 82.8          MUSD

2.7            MUSD 85.5                      Q2 2020

Expiry date for exercising the Options towards the Shipyard is 27 May 2018.

The Offeror has also entered into a building supervision agreement with V.Ships,

pursuant to which V.Ships shall undertake the building supervision at the

Shipyard against a building supervision fee of USD 180,000 per vessel (the

"Newbuilding Supervision Agreement"). Provided the Newbuilding Contracts and the

Options are transferred to the Company as provided for herein, the Offeror will

transfer the Newbuilding Supervision Agreement to the Company on a back-to-back

basis, without any mark-up or additional fees. The Offeror assumes that several

minor out-of-pocket expenses, fees to Norwegian legal advisors etc. shall be

credited the Offeror from the Company in connection with the transfer.

The first instalments under the Newbuilding Contracts, of 10% of the total

contract amount per vessel, are due three (3) banking days after Offeror's

receipt of the refund guarantee from the Shipyard's bank (expected mid- to late

April, latest 27 April 2018), and the Company must have sufficient funds

available to fund such instalments. The remaining instalment structure is

additional 10% in February 2019 (average in the four Newbuilding Contracts), and

thereafter additional 10%, 10% and 60%.

Owing to the suggested back-to-back arrangement, the Offeror will, for a period

following the transfer, maintain the payment obligations of the total contract

amounts under the Newbuilding Contracts (MUSD 341.1) towards the Shipyard (the

"Apollo Contractual Obligation"). As of the date hereof, the Shipyard does not

accept releasing the Offeror under the Apollo Contractual Obligation in

connection with the Transfer.

Before entering into final legally binding transfer agreements, the following

conditions must have been satisfied, or waived by the Offeror in its absolute

discretion (the "Conditions Precedent"):

(i)            Final transfer agreement: The Offeror reserves the right to agree

on the final content of the legally binding transfer arrangements, including the

arrangements in the legal and commercial terms.

(ii)           Dwellop transactions: The Board and general meeting of the

Company shall have resolved: (1) contribution of MNOK 10 in cash to the

subsidiary Dwellop AS; and (2) distribution of all shares in Dwellop AS to the

shareholders of the Company.

(iii)          Private placement: The Board and general meeting of the Company

shall have approved a private placement towards certain co-investors in the

Newbuilding Contracts, with proceeds of minimum MNOK 150 and maximum MNOK 172.5,

directed investors as designated by the Offeror, at a subscription rate of NOK

2.30 per share in the Company.

(iv)          Warrants: The Board and general meeting of the Company shall have

approved issuance of warrants to the Offeror, whereby the Offeror shall be

entitled to subscribe for new shares in the Company, with a subscription amount

of 0.8% of the total contract amount under the Newbuilding Contracts, and

Options (if applicable, and as exercised). The warrants shall be issued without

any consideration, not have a duration of less than 5 years, and be convertible

into shares at a rate between NOK 2.60 and NOK 3.20 (NOK 2.90 on an average

basis).

The warrants (as referred to under (iv)), shall be issued to the Offeror to

partly compensate the Offeror for not being released the Apollo Contractual

Obligation under the Newbuilding Contracts in connection with the transfer.

Owing to the Apollo Contractual Obligation, the Offeror will in a period

following the transfer maintain the credit risk towards the Shipyard, and,

accordingly, will the warrants constitute a fair minimum compensation to the

Offeror in connection with the transfer.

***

Both the Offeror and the Board of the Company believe that the Offer is made in

the best interests of the Company and its shareholders.

***

www.huntergroup.no

For further information, please contact:

Henrik A. Christensen, Chairman, +47 909 67 683, henrik@rosom.no