Prosafe SE

Capital/Financing Update • Jul 7, 2016

Prosafe SE: Announces comprehensive refinancing

Prosafe SE: Announces comprehensive refinancing

Reference is made to Prosafe SE's ("Prosafe" or the "Company") financial report

for Q1 2016 where it was reported that the Company was in dialogue with its key

stakeholders for the purpose of improving the Company's financial situation.

Reference is further made to the Company update on 1 June 2016, where it was

reported that the ongoing discussions were based on a balanced solution

involving new capital, amortization relief and covenant ease from senior lenders

and conversion (equitization) of all or parts of the outstanding unsecured bond

debt.

Based on these discussions, which have involved key stakeholders, including

secured bank lenders, major bondholders and shareholders, the Company is today

announcing the terms of a proposed comprehensive refinancing (the

"Refinancing"). The Refinancing will, if completed, provide greater financial

flexibility for the Company throughout the period until the end of 2020

including a solid liquidity buffer to weather a prolonged market downturn. The

combined effect of the Refinancing, as further described below, is expected to

improve the Company's liquidity by approximately USD 478 million over a five

year period, and reduce the net interest bearing debt by approximately USD 395

million through 100% conversion of senior unsecured bonds, in addition to the

contribution of new equity. At the end of 2020, the Company will continue to

have a strong global competitive position, with a large modern fleet of

accommodation vessels to service its worldwide operations.

The Refinancing includes the following main terms:

* New Equity: A private placement of minimum USD 130 million and maximum USD

150 million at an issue price of NOK 0.25 per share (the "New Equity"), of

which NOK 712 million (approx. USD 85 million) is pre-subscribed by

Prosafe's two largest shareholders, North Sea Strategic Investments AS and

M&G (the "Anchor shareholders"), but always on condition that the Anchor

shareholders' individual shareholdings post the Refinancing are never

greater than 29.9% of the enlarged share capital of the Company post-

Refinancing. The Anchor shareholders will be allocated minimum

1,500,000,000 and 1,348,000,000 shares, representing 29.76% and 26.75% of

the Private Placement respectively (assuming issue size of USD 150 million).

Between USD 40 million and USD 60 million of the proceeds from the New

Equity will be used to buy-back part of the Company's bonds. The private

placement will be carried out through an accelerated book-building, with

minimum order and allocation level equal to the NOK equivalent of EUR

100,000 in accordance with relevant prospectus rules. The further terms and

timeline for the private placement will be announced separately. Existing

shareholders will receive preferred allocation for the first USD 130

million, and existing bondholders will receive preferred allocation for the

remaining USD 20 million.

* Subsequent equity offering: The Company plans to conduct a subsequent equity

offering (the "Subsequent Offering") of up to USD 15 million for the purpose

of facilitating subscription by existing shareholders who are not able to

participate in the private placement. New investors may be allowed to

subscribe in such Subsequent Offering, but existing shareholders as of the

date of close of the book-building for the private placement will be given

non-tradable subscription rights with preference on allocation. The

subscription price in the Subsequent Offering shall be the same as for the

New Equity, NOK 0.25 per share. The Subsequent Offering is contemplated to

be launched following fulfilment of the conditions for the Refinancing,

including the necessary approvals of the Refinancing by the Company's banks,

bondholders and shareholders, and subject to approval and publication of an

offering and listing prospectus. The further terms and particulars of the

Subsequent Offering will be announced in due course, and described in the

prospectus to be prepared in connection therewith.

* Senior unsecured bonds: NOK 2.4 billion (equivalent to approx. USD 290

million) in aggregate face value of the Company's outstanding senior

unsecured bonds in PRS08, PRS09, PRS10 and PRS11 (the "Senior Unsecured

Bonds") will be converted into new shares at 30% of the face value and/or

cash at the option of each bondholder. The shares to the bondholders will be

issued at NOK 0.25. The bondholders will receive a cash-out offer to tender

bonds for cash. The cash-out offer will be of minimum USD 40 million and

maximum USD 60 million. The cash-out offer will be structured as a reverse

book-building whereby bondholders will apply for their preferred cash

redemption in the range 25%-35% of the face value. Bondholders that cannot

hold shares due to restrictions in their mandates will have an option to

choose a convertible bond as an alternative to conversion to shares. The

convertible bond will be a subordinated, zero coupon, 5 year bond that will

be settled with shares at maturity (or at certain earlier conversion times

at the option of the Company) at a conversion price of NOK 0.25.

* Bank Lenders: Reduction of amortisation on all bank facilities for 4 years

from Q1 2017 until and including Q4 2020, with a total positive liquidity

effect for the Company of USD 478 million. Significant financial covenant

relief on all facilities to provide the Company with sufficient headroom to

operate. A cash sweep mechanism will also be included and effective from Q1

2018 with payments being made only if there is available excess cash (as

defined the detailed refinancing term sheet) which will be shared between

Company and the bank lenders. Interest margins on the bank facilities will

be calculated based on the existing leverage-based margin ratchet with

additional flexibility introduced to allow the Company to pay part of the

interest in PIK until and including Q2 2019.

* The current nominal value of Prosafe's ordinary shares is EUR 0.25. As part

of the Refinancing, the Company will carry out a capital reduction in order

to reduce the nominal value of the ordinary shares to EUR 0.001. This

reduction will be carried out as a reduction of share capital without

distribution, and will be proposed resolved by an extraordinary general

meeting of the Company.

* Cosco: As part of and subject to the Refinancing, the Company has negotiated

and agreed with Cosco deferred delivery of Safe Eurus to Q4 2019 (or such

earlier time required by the Company) and a limitation on any further

liability in the event Prosafe does not take delivery of the vessel, giving

the Company increased flexibility and reduced financing risk. In addition,

Prosafe and Cosco have also agreed a deferral of the repayment of the USD

29 million seller's credit to Q4 2019.

* The Refinancing remains conditional inter alia upon approval by bondholders'

meeting in the Senior Unsecured Bonds and by the shareholders in an

extraordinary general meeting. In addition, the Refinancing remains

conditional upon relevant approvals by the bank lenders, definitive

agreement with Cosco as outlined herein and customary closing conditions.

The Company has obtained support from large bondholders in all bond series

and from the Company's largest shareholders.

* The Refinancing will result in a substantial dilution of existing

shareholders not participating in the New Equity, and the contemplated

Subsequent Offering will not fully compensate the dilutive effect for the

remaining shareholders. Having considered available alternatives, the Board

is however of the opinion that such deviation from the equal treatment

principle is fair and necessary, given the challenging financial situation

of the Company, the prevailing market conditions, the agreed terms of the

Refinancing and the Company's need for certainty and flexibility when

seeking to secure the New Equity.

For further details on the Refinancing, please refer to the detailed Refinancing

term sheet and the company presentation, both dated 7 July 2016 and attached

hereto.

The actions contemplated in the Refinancing require approval by the Company's

shareholders in an extraordinary general meeting, credit committee approval from

Bank Lenders and by the Company's bondholders in bondholders' meetings for each

of the PRS08, PRS09, PRS10 and PRS11 bonds (the "Bondholders' Meetings"). Notice

of such meetings and further details will be issued in due course.

ABG Sundal Collier ASA, DNB Markets (a part of DNB Bank ASA), Nordea Markets, a

part of Nordea Bank Norge ASA, Moelis & Company, Pareto Securities AS and

Skandinaviska Enskilda Banken AB (publ.) Oslo Branch are acting as financial

advisors to the Company in connection with the Restructuring. Clarkson Platou

Securities AS has provided independent fairness advice to the Company's board.

Schjødt is acting as Norwegian legal advisor to the Company. Fearnley Securities

AS act as financial advisor to bondholders.

Prosafe is the world's leading owner and operator of semi-submersible

accommodation vessels. The company operates globally and is headquartered in

Larnaca, Cyprus. Prosafe is listed on the Oslo Stock Exchange with ticker code

PRS. For more information, please refer to www.prosafe.com

Larnaca, 7 July 2016

Georgina Georgiou, General Manager

Prosafe SE

For further information, please contact:

Stig Harry Christiansen, Acting CEO and CFO

Prosafe Management AS

Phone: +47 51 64 25 17 / +47 478 07 813

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This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#2027066]