Viking Supply Ships

Legal Proceedings Report • Jul 4, 2016

Update on lender dialogue in Viking Supply Ships A/S

Update on lender dialogue in Viking Supply Ships A/S

Press release

As previously communicated, Viking Supply Ships A/S (VSS) has for some time been

engaged in a dialogue with its creditors with a view to agreeing on a financial

restructuring of the company. As part of this process, VSS has made repeated

attempts to engage in a dialogue with the bondholders in the bond issue "Viking

Supply Ships A/S 2012-17 FRN". The process towards the banks has been very

constructive and a framework for a solution is agreed in all material respects

subject to agreement with the bondholders. The discussions with the bondholders,

however, have been quite challenging.

There has been contact between VSS and a committee of three core bondholders.

VSS has on several occasions offered a solution which has involved a deferral of

the maturity of the bonds, as demanded by the secured creditors, and part of the

interest payments being made in-kind as a part of a global solution for the

restructuring of the Group balance sheet. Since the recovery of the unsecured

creditors in the event of a bankruptcy is likely to be extremely limited, or in

effect zero, VSS believes this proposal, which does not involve any reduction of

any part of the bondholders' claim, to be a fair and attractive offer. This

offer has, however, on several occasions been flatly rejected by the above

-mentioned committee of bondholders.

They have expressed that the only solution they are willing to discuss is one

where the bonds are redeemed in cash, albeit at a somewhat discounted price. The

amount of new equity raised, as demanded by the secured creditors, will allow

for necessary working capital and early repayment of secured loans in exchange

for eased amortization over the next four years. If the bondholders do not move

from this position, it will not be possible to arrive at a restructuring which

will allow VSS to survive as a going concern.

VSS would therefore strongly encourage the bondholders to engage in a

constructive dialogue on realistic premises to seek to find a solution which

will allow a financial restructuring of VSS. VSS is willing to explore various

alternatives, including a conversion of bonds into shares in Viking Supply Ships

AB, listed on NASDAQ OMX Stockholm segment Small Cap, at present market values,

respectively 36% of par value and SEK 1.70 per share, but is not in a position

to offer redemption for cash. However, shares received can be freely sold by the

recipients. Should a solution not be reached the only realistic outcome is

bankruptcy of VSS.

VSS will shortly summon to a bondholder meeting to provide an updated status of

the company, as well as present a restructuring proposal to the holders of the

bond. To secure your interests, we strongly urge you to participate and engage

in the process.

For further information please contact:

Christian W. Berg, CEO, ph. +45 41 77 83 80, e-mail

christian.berg@vikingsupply.com

Morten G. Aggvin, IR & Treasury Director, ph. +47 41 04 71 25, e-mail

ir@vikingsupply.com

Viking Supply Ships AB (publ) is a Swedish company with headquarter in

Gothenburg, Sweden. Viking Supply Ships A/S is a subsidiary of Viking Supply

Ships AB (publ). In addition Viking Supply Ships AB (publ) has the subsidiary

TransAtlantic AB. The operations are focused on offshore and icebreaking

primarily in Arctic and subarctic areas as well as on Shipping services mainly

between the Baltic Sea and the Continent. The company has in total about 500

employees and the turnover in 2015 was MSEK 1,977. The company's B-shares are

listed on the NASDAQ Stockholm, Small Cap segment. For further information,

please visit: www.vikingsupply.com

This information is information that Viking Supply Ships AB is obliged to make

public pursuant to the EU Market Abuse Regulation. The information was submitted

for publication, through the agency of the contact person set out above, at

17:30 CET on 3 July 2016.