Havila Shipping ASA

Capital/Financing Update • Jan 5, 2016

Havila Shipping ASA : Havila Shipping ASA - Financial restructuring - Amendments to existing loan agreements, proposed bond amendments and intended equity issue

Havila Shipping ASA : Havila Shipping ASA - Financial restructuring - Amendments to existing loan agreements, proposed bond amendments and intended equity issue

Havila Shipping ASA - Financial restructuring - Amendments to existing loan

agreements, proposed bond amendments and intended equity issue

Fosnavåg, 5 January 2016

Havila Shipping ASA (the "Company") has entered into an agreement with its

secured and unsecured bank lenders to reduce amortisation for three years,

postpone maturities and replace all existing covenants, subject to bondholder

approval and a minimum NOK 200 million equity issue.

The downturn in the offshore market has, as for other major players in the

sector, had a significant impact on the Company. The market for offshore vessels

is characterized by supply far exceeding demand. As a consequence of low fleet

utilization and rates achieved, many vessels in this segment have generated

revenues below operating expenses. Further, vessel valuations are expected in

general to extend its decline. The Company has taken measures to adapt to the

prevailing market conditions, including as previously reported by lay up of

vessels and other cost reducing efforts which will have full effect in the

financial statements from Q1 2016 and onwards.

The Company foresees severe financial challenges for the period 2016-2018, and

has several debt maturities coming up over the next months, of which it has no

readily available means of refinancing. Further, cash flow from operations is

not sufficient to serve the current amortisation schedules, and the Company does

not expect that the market will improve materially in the short to medium term.

On this basis the Company has worked towards a refinancing solution (the

"Refinancing") which will allow the Company to maintain a sufficient liquidity

buffer to operate through 2018 despite the current downturn. The Company has

over the last months been in discussions with its secured and unsecured bank

lenders and has entered into a restructuring agreement (the "Master Agreement")

setting out the main terms and conditions of the Refinancing.

The Master Agreement consists of the following main elements:

* Reduced amortisation for 2016, 2017 and 2018:

* Annual amortisation reduced from current run rate of approx. NOK 530

million p.a. to NOK 150 million p.a.

* Free liquidity in excess of NOK 400 million swept in 2017 and 2018 and

applied on a pro-rata basis according to the cumulative deferred

instalments of secured debt.

* Secured lenders (including bondholders) to be entitled to a "back-end

fee" of 1% on the aggregated deferred instalments, to be paid on 30 June

* Amended maturities:

* All secured debt with final maturity date and balloon payment prior to

30 June 2020 to mature on 30 June 2020.

* All secured debt with no balloon payment extended to reflect postponed

amortisation.

* All unsecured debt to mature on 31 December 2020.

* Unsecured debt - interest expenses and payment in kind:

* The credit margin set to 550 bps.

* Interest payments for the period 2016-2018 to be paid in kind.

* Interest payments for the period 2019-2020 to be paid in cash if a cash

flow budget demonstrates sufficient cash flow to cover interest and

instalments on secured debt, otherwise in kind.

* Replacement of all existing financial covenants:

* 100% fair market value covenant for each secured facility from 1 January

2017 (one year cure period).

* Minimum cash covenant of NOK 150 million.

* Positive working capital covenant (current interest bearing debt to be

excluded from calculation).

* New equity:

* Minimum NOK 200 million in gross proceeds.

* The Sævik family intends to maintain its current proportionate

shareholding and Havila Holding AS has guaranteed a subscription of NOK

102 million, subject to completion of the Refinancing.

The main principle of the Refinancing is for each creditor group to be treated

equally and to contribute based on its contractual seniority, regardless of

whether such creditor group consists of banks or bondholders. The minimum NOK

200 million equity issue will imply a significant contribution also from

shareholders taking into account the current market capitalisation.

The Master Agreement is effective as of 31 December 2015 and subject to the

following main conditions to be subsequently satisfied;

* Approval by bondholders of corresponding amendments to the Company's bond

agreements no later than 31 January 2016,

* New equity in the minimum amount of NOK 200 million no later than 15 March

2016, and

* Acceptable renegotiation of payment of the bareboat charter hire for "Havila

Troll" no later than 31 January 2016.

If and when implemented, the Refinancing will reduce interest payments and

amortisations to a more manageable level considering the prevailing

circumstances. The Refinancing is intended to be sufficiently robust to sustain

also a low case scenario with a minimal risk to covenants through 2018, and more

manageable risk of covenant breach thereafter. Postponement of maturities until

30 June 2020 ensures sufficient time for the Company to refinance in an expected

recovering market. While the Company is pleased to have reached agreement with

its bank lenders and present an outline for the Refinancing, it is also clear

that the conditions set out herein reflect the extremely challenging conditions

now facing the Company and all its stakeholders.

The Company will, in a separate announcement, summon the bondholders in the

Company's outstanding bonds Havila Shipping ASA 11/17 8,60% C - ISIN

NO0010605025 (HAVI06), Havila Shipping ASA 11/17 FRN C - ISIN NO0010605033

(HAVI07), Havila Shipping ASA 10/16 FRN C - ISIN NO0010590441 (HAVI04) and

Havila Shipping ASA 12/16 FRN - ISIN NO0010657174 (HAVI08 PRO) (the "Bond

Issues") to bondholder meetings on or about 20 January 2016 for the approval of

the Refinancing and the appurtenant amendments to the bond terms. Attached to

the summons will be a company presentation outlining the Refinancing.

As part of the Refinancing, the Company intends to carry out an equity issue

with minimum gross proceeds of NOK 200 million (the "Equity Issue"). The Equity

Issue will either be carried out as a guaranteed rights offering (the "Rights

Offering") or a private placement (the "Private Placement") with a subsequent

repair offering (the "Repair Offering"). The Board will propose to the

extraordinary general meeting two alternative resolutions for the Equity Issue,

and the completion of the Equity Issue by way of a Rights Offering will depend

on whether or not the Board is successful in establishing a guarantee consortium

for the full NOK 200 million amount. The Company's largest single shareholder

Havila Holding AS has guaranteed an amount of NOK 102 million in accordance with

a guarantee and subscription agreement (the "Guarantee Agreement") entered into

between the Company and Havila Holding AS. The remaining NOK 98 million will be

sought guaranteed by a consortium consisting of existing shareholders and new

investors prior to the date of the extraordinary general meeting.

The guarantee obligation of Havila Holding AS pursuant to the Guarantee

Agreement is conditional upon (i) the affirmative vote with requisite majority

of the bondholders in the Bond Issues for the proposed amendments; (ii)

completion of the Share Capital Reduction (as described below), including

registration of the Share Capital Reduction in the Norwegian Register of

Business Enterprises and (iii) a minimum amount of NOK 200 million (including

the Guarantee Amount) being raised and allocated in the Equity Issue.

In the event that the Board is not able to secure a full guarantee consortium

for the Rights Offering the Rights Offering will not be undertaken and the Board

will instead seek to carry out the Equity Issue as a Private Placement directed

towards Havila Holding AS (which, in accordance with the Guarantee Agreement,

will subscribe for a minimum amount of NOK 102 million), and other existing

shareholders and new investors. The completion of such Private Placement, and

consequently the subscription and guarantee obligation of Havila Holding AS,

will be conditional upon the successful allocation of a minimum amount of NOK

200 million. Such Private Placement will result in a substantial dilution of

existing shareholders not participating in the equity issue. Having considered

available alternatives, the Board is however of the opinion that such deviation

from the equal treatment principle will be fair and necessary, given the

challenging financial situation of the Company, the prevailing market

conditions, the agreed Refinancing terms and the Company's need for flexibility

when seeking to secure the additional equity. The Board will, in order to

facilitate equal treatment of the shareholders, to the extent possible under due

consideration of prevailing market conditions, seek to carry out a subsequent

Repair Issue targeted towards shareholders not invited to subscribe for shares

in the Private Placement and on similar terms.

The Company will in due time revert with further details concerning the Equity

Issue and the structure thereof.

The Company's shares are currently trading below their par value of NOK 12.50

per share. In order to facilitate for the Rights Offering, or alternatively the

Private Placement and the Repair Issue, the Company needs to carry out a share

capital reduction prior to the issuance of shares in such transactions (the

"Share Capital Reduction"). The Board will propose that the par value of the

Company's shares is set to NOK 0.50 per share. The Board proposes that the

amount which the share capital is reduced by is allocated to a fund to be used

at the general meeting's discretion.

The planned Share Capital Reduction will trigger a notification period of 6

weeks in accordance with the Norwegian Public Limited Liability Companies Act

section 12-6. Binding application for shares to be issued in the Equity Issue

may be made, however issuance and formal subscription of shares in the Equity

Issue can therefore not take place before expiry of the notification period and

registration of the Share Capital Reduction in the Norwegian Register of

Business Enterprises. The Share Capital Reduction is expected to be effectuated

on or about 10 March 2016.

The Equity Issue and the Share Capital Reduction (the "Equity Resolutions") are

subject to approval by the Company's general meeting, of which each item will

require approval from at least two thirds of both the votes cast and the share

capital represented at the general meeting. Havila Holding AS has on certain

conditions undertaken to vote in favour of all matters. The Board will issue a

notice of an extraordinary general meeting which shall conclude on the Equity

Resolutions. The extraordinary general meeting will be held on 26 January 2016

at 2 PM CET at Havilahuset in Fosnavåg. Please see separate notice of

extraordinary general meeting.

Swedbank Norway is engaged as the Company's financial advisor in connection with

the Refinancing and Wikborg Rein & Co Advokatfirma DA is engaged as the

Company's legal advisor.

For further information, please contact:

Havila Shipping ASA:

Njål Sævik, CEO                                        Arne Johan Dale, CFO

Tel: +47 909 35 722                                       Tel: +47 909 87 706

E-mail: njaal@havila.no                                 E-mail: ajd@havila.no

Swedbank Norway:

Niels Bugge, Corporate Finance                     Anders Håkonsen, Debt

Advisory

Tel: +47 99 30 93 93                                      Tel: +47 91 80 49 17

E-mail: niels.bugge@swedbank.no                      E-mail:

anders.hakonsen@swedbank.no

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1976635]