AF Gruppen — M&A Activity 2010

Nov 5, 2010

AF Miljø AS made implementation of the offer conditional upon receiving orders for at least 50% of outstanding shares in the Company (i.e. at least 100 000 Shares) and signing of the loan agreement with Handelsbanken. Both conditions are now met and the Board of AF Miljø AS has decided to implement the offer.

AF Miljø AS will sell a total of 120 000 Shares in the Company and retains an ownership of 40% after implementation. Gross proceeds to AF Miljø AS will be NOK 120 million. Payment of Shares is expected by 11. November 2010 and registered in the physical share register of Miljøbase Vats AS by 12. November 2010.

Miljøbase Vats includes an 9.8 hectare site owned by Miljøbase Vats AS and two sites totaling 19.65 hectares that are leased from Vindafjord Municipality. The lease with Vindafjord Municipality was signed in 2004 and has a term of 30 years, with an option for an extension of an additional 20 years. Miljøbase Vats AS re-leases the properties to AF Decom Offshore AS, a fully-owned subsidiary of the AF Group.

Mr. Robert Haugen, who is the general manager of Miljøbase Vats AS, is formally employed in AF Gruppen Norge AS as EVP, Environmental business area. Other services have been and will be performed by AF Gruppen Norge AS as business manager for Miljøbase Vats AS

The Board of Directors of Miljøbase Vats AS as of today:

Navn	Styreposisjon	Utløpsdato for påværende valgperiode
Pål Egil Rønn	Chairman of the board	31.08.2012
Sverre A. Hærem	Board member	31.08.2012
Robert Haugen	Board member	31.08.2012
Tore Fjukstad	Board member	31.08.2012
Arild Moe	Board member	31.08.2012

The composition of the board of directors could change after the transaction due to significant changes in the shareholder structure.

The company started operations in 2009. Reported numbers for 2009 reflect approximately six months of operations.

Miljøbase Vats AS - selected financial information (profit and loss):

| (NOK thousand) | 31August 10
(unaudited)
(NGAAP) | 31August 09
(unaudited)
(NGAAP) | 2009
(audited)
(NGAAP) | 2008
(audited)
(NGAAP) |
| --- | --- | --- | --- | --- |
| Operating revenues | 32,753 | 9,333 | 24,00 | 0 |
| Operating costs | 2.306 | 395 | 1,261 | 0 |
| Depreciation | 13,462 | 4,288 | 10,364 | 0 |
| Operating profit | 16,985 | 4,650 | 12,874 | 0 |
| Net financials | -10,503 | -3,601 | -4,441 | 5 |
| Profit before tax | 6,482 | 1,049 | 2,361 | 5 |
| Profit after tax | 4,667 | 756 | 6,072 | 4 |

---

Miljøbase Vats AS - financial information (balance sheet):

| (NOK thousand) | 31August 10
(unaudited)
(NGAAP) | 31August 09
(unaudited)
(NGAAP) | 2009
(audited)
(NGAAP) | 2008
(audited)
(NGAAP) |
| --- | --- | --- | --- | --- |
| Sum assets | 656,986 | 500,835 | 580,388 | 105 |
| Sum debt | 501,815 | 450,076 | 521,884 | 1 |
| Sym equity | 155,171 | 50,759 | 58,504 | 104 |
| Sum debt and equity | 656,986 | 500,835 | 580,388 | 105 |

Miljøbase Vats AS - financial information (key metrics):

| (NOK thousand) | 31August 10
(unaudited) | 31August 09
(unaudited) | 2009 | 2008 |
| --- | --- | --- | --- | --- |
| Key metrics for solidity and interest coverage | | | | |
| Equity ratio (Equity/Sum balance) * 100% | 24 % | 10 % | 10 % | 99 % |
| Interest coverage ratio= (Pre tax profit + financial expenses) / financial expenses | 1.6 | 1.3 | 2.9 | NA |

Miljøbase Vats AS lets all the properties to AF Decom Offshore AS, a fully-owned subsidiary of the AF Group. This ensures that AF Decom Offshore AS can continue demolishing and recycling decommissioned oil platforms at Miljøbase Vats, while ensuring Miljøbase Vats AS rental income. In connection with the sale, AF Decom Offshore AS has signed a new 15-year lease. The strategic effect on the AF Group from selling 60% of the shares in Miljøbase Vats AS is limited since the AF Group will continue to use the area.

In addition to the lease agreement mentioned above, Miljøbase Vats AS has entered into a business manager agreement with AF Gruppen Norge AS for taking care of day to day operations of Miljøbase Vats AS.

Additional information can be found in the prospectus, dated 14. October 2010, published on www.afgruppen.com.

For further information:

EVP / CFO: Sverre Hærem, tel. +47 952 45 167