Havila Shipping ASA

Capital/Financing Update • Nov 9, 2016

Havila Shipping ASA: Financial Restructuring Plan

Havila Shipping ASA: Financial Restructuring Plan

Havila Shipping ASA ("Havila Shipping" or the "Company") today announces a

financial restructuring plan (the "Restructuring Plan") which is supported by

the secured bank lenders and Havila Holding AS ("Havila Holding"), its largest

shareholder.  The Restructuring Plan has also obtained support from the

Company's unsecured bank lenders. The Restructuring Plan will enable Havila

Shipping to endure the severe market downturn and to continue safe operations of

its fleet to the benefit of all stakeholders.

The Restructuring Plan will provide Havila Shipping with a financial runway

until November 2020, replacing approx. NOK 3.2bn of debt maturities in the

period 2017-2019 with around NOK 67 million of minimum fixed amortization.

Furthermore, the net interest bearing debt will be reduced by approx. NOK 1.6bn

through injection of new risk capital, sale of non-core vessels, discounted debt

repurchase and conversion of debt to equity.

The Restructuring Plan is subject to approval from the bondholders in the

Company's bond loans HAVI 04, HAVI 06/07 and HAVI 08. A summons to bondholders'

meetings will be sent today, and the respective meetings will be summoned to

take place on 23 November 2016 (the "Bondholders' Meetings"). The Company has

maintained a close dialogue with representatives of key secured and unsecured

bondholders through the process of developing the Restructuring Plan. However,

no pre-approval for the Restructuring Plan from any of the bondholders exists.

Given the current situation, the Company's Board of Directors perceives this

plan to be the only available and final alternative to obtain a consensual

restructuring solution that is likely to be accepted by its largest group of

creditors. Pursuant thereto, a contingency plan supported by the secured bank

lenders is in place if the required approval of the Restructuring Plan fails.

Subject to approval by the bondholders in the Bondholders' Meetings, the Board

of Directors of the Company intends to send notice to the shareholders for an

extraordinary general meeting to approve the necessary corporate resolutions

required to implement the Restructuring Plan, including (i) reduction of the par

value of the shares, (ii) conversions of debt to shares, (iii) a private

placement of shares directed to the Company's main shareholder Havila Holding

(the "Private Placement"), (iv) approval of convertible loan from Havila

Holding, (v) issuance of warrants to the Company's unsecured lenders, (vi) a

subsequent repair issue directed towards the Company's shareholders not invited

to participate in the Private Placement, and (vii) such other corporate

resolutions required to implement the Restructuring Plan.

The Restructuring Plan will result in a substantial dilution of all existing

shareholders, including those not invited to subscribe for shares in the Private

Placement. The contemplated repair offering will not compensate for the dilutive

effect for the remaining shareholders, but will be offered on terms equal to the

terms offered to Havila Holding for subscription in the Private Placement. In

addition, shareholders, including those shareholders participating in the repair

offering, are facing further dilution through subsequent share issues inherent

in and as a consequence of the Restructuring Plan, involving conversion of debt

to equity and exercise of warrants. Having duly considered available

alternatives and previously failed initiatives and attempts to find a viable

solution for the immediate need for a financial restructuring of the Company,

the Board of Directors is of the opinion that the deviation from the principle

of equal treatment is an appropriate remedy strictly necessary and required, and

in the common interest of the Company and the shareholders, given the

increasingly challenging financial situation of the Company, the prevailing

market conditions, the terms of the Restructuring Plan and the recognition by

the Board of Directors that the described plan is the only available opportunity

to complete a financial restructuring of the Company in order to protect the

interest of the creditors and to preserve remaining shareholder value.

The Restructuring Plan is comprehensive, and the Company encourages all affected

stakeholders to refer to the enclosed restructuring term sheet for a detailed

description. The main elements of the Restructuring Plan are as follows:

On the Restructuring Implementation Date the following shall take place:

New Equity

* NOK 118.2 million of new equity and NOK 46.2 million of convertible

shareholder loan to be provided from current main shareholder Havila Holding

(new equity to benefit from certain anti-dilution protection going forward

initially securing 51% ownership). The estimated subscription price for the

new equity corresponds to NOK 0.125 per share.

* Secured Creditors to convert to new shares approximately NOK 135 million of

accrued interest from and including 16 February 2016 up to and including 30

September 2016 at NOK 0.24 per share.

* The present shareholders will after the equity transactions as set out above

be holding 2.5 % of the shares in the Company. A repair issue of NOK 30

million will be offered towards existing shareholders (excluding Havila

Holding) at NOK 0.125 per share.

Unsecured Debt

* All unsecured debt (totalling NOK 950 million) will be offered (a) 15% of

outstanding principal amount and (b) 500 million warrants which may be

exercised for shares in a period of 5 years at NOK 0.156  per share in cash

(25 % premium to the subscription price of the new equity).

Divestment of Non-Core Vessels

* Vessels divided into two categories labelled "core vessels" and "non-core

vessels", with the latter category divided into three sub-groups (named I,

II and III). All non-core vessels to be marketed for sale going forward.

* Secured Creditors on the Non-Core Vessels 'Group I' Debt will receive NOK

44 million of already pledged cash.

Amendments to surviving debt implemented on the Restructuring Implementation

Date:

Amortization and maturities

* All fixed amortisations on Secured Debt to be cancelled, except for certain

fixed amortisation on certain vessels. Cash sweep of 50% of cash flow on

core vessels net of inter alia costs and fixed amortisation.

* All Secured Debt shall mature on 7 November 2020.

Interest rates

* No change in credit margins, save for the Subsea Bonds to be merged into one

tranche with an interest rate of 3M NIBOR + 450 bps p.a. and Non-Core

Vessels 'Group I' Debt to accrue interest at 5% PIK.

Covenants

* Financial covenants suspended except minimum cash of NOK 50 million

(consolidated on group level).

Subsequent conversions and amendments:

Non-Core Vessels

* Non-Core Vessels 'Group I' Debt and Non-Core Vessels 'Group III' Debt not

fully repaid after sale of the relevant vessels is converted to shares at a

conversion price of NOK 0.981 per share (which equals a conversion rate of

12.7%).

* If vessels in the Non-Core Vessel "Group I" are not sold within 18 months

commencing on the date the Restructuring Plan is implemented (the

"Restructuring Implementation Date"), a fixed amount of NOK 250 million will

be converted at a conversion price of NOK 0.981 per share (which equals a

conversion rate of 12.7%) and the remaining debt to be left until such

vessels are sold.

* Non-Core Vessels 'Group II' Debt not fully repaid on a sale of the relevant

vessels will be secured by 2(nd) lien collateral in the vessel Havila Venus.

* Relevant Secured Creditors to cover all costs relating to respective non-

core vessels from the date falling 18 months after the Restructuring

Implementation Date.

Non-Performing Vessels

* Core vessels which, in the period of 18 to 24 months after the Restructuring

Implementation Date, generates less EBITDA than 2% of Secured Debt, will be

declared 'Non-Performing' and may, by the relevant Secured Creditor:

* be taken over (against discharge of all secured debt); or

* be sold (against conversion of any deficit to shares at a conversion

price of NOK 0.981 per share (which equals a conversion rate of 12.7%)).

* If such right is not exercised, interest on such vessel shall be paid as PIK

and, from the date falling 30 months from the Restructuring Implementation

Date, the relevant Secured Creditor shall cover all net costs relating to

such vessel.

* Upon payment of outstanding interest and a portion of outstanding principal

debt (which amount shall be raised as new equity), a Non-Performing Vessel

may be re-declared as a Core Vessel.

The Restructuring Plan is subject to (i) relevant credit committee approvals

from the secured and unsecured bank lenders, (ii) approval from the relevant

corporate bodies in Havila Shipping and Havila Holding in respect of the equity

issues and the debt conversions as set out in the term sheet, and (iii) further

subject to final documentation and customary closing conditions.

The contributions of all parties are mutually conditional upon each other.

Enclosures

The summons for the Bondholders' Meetings and a company presentation are

enclosed to this announcement.

Advisors

Swedbank Norway and Fearnley Securities are acting as financial advisors to the

Company in connection with the Restructuring. Wikborg, Rein & Co Advokatfirma DA

is acting as legal advisor to the Company.

Contact persons for further information are:

Njål Sævik

Chief Executive Officer

+47 909 35 722

njaal@havila.no

Arne Johan Dale

Chief Financial Officer

+47 909 87 706

ajd@havila.no

This information is subject to the disclosure requirements pursuant to section

5 -12 of the Norwegian Securities Trading Act.