Aker — Capital/Financing Update 2017

Feb 6, 2017

Aker ASA: Fully funded restructuring plan for Farstad Shipping agreed

Aker ASA: Fully funded restructuring plan for Farstad Shipping agreed

Key stakeholders to seek combination of Solstad Offshore, Farstad Shipping and

Deep Sea Supply, creating a world leading OSV company.

Ålesund, Skudeneshavn and Grimstad, 6 February 2017

Farstad Shipping ASA ("Farstad Shipping"), Aker Capital AS ("Aker"), a wholly

owned subsidiary of Aker ASA, Hemen Holding Limited ("Hemen") (a company

indirectly controlled by trusts established by Mr. John Fredriksen for the

benefit of his immediate family), as well as Farstad Shipping's senior lenders,

substantial parts of its bondholders, and F-Shiplease AS (a subsidiary of Ocean

Yield ASA), have entered into an agreement (the "Restructuring Agreement") for a

fully-funded financial restructuring of Farstad Shipping (the "Farstad

Restructuring"). Furthermore, the parties to the Restructuring Agreement,

together with Soff Invest AS and Ivan II AS (jointly the "Solstad Family

Companies") and Tyrholm & Farstad AS, have agreed to work for a combination of

Solstad Offshore ASA ("Solstad Offshore"), Farstad Shipping and Deep Sea Supply

Plc ("Deep Sea Supply") following completion of the Farstad Restructuring,

creating a world class OSV company (the "Combination").

As repeatedly expressed by a range of industry experts, the fragmented Norwegian

OSV industry requires consolidation. By agreeing to complete the Farstad

Restructuring and to work for the proposed Combination, senior lenders,

bondholders and long-standing family owners supported by industrial investors

are making a collective effort to secure a successful refinancing of Farstad

Shipping and to create a new and robust OSV company operating out of Norway in

the high-end segments of the global OSV industry.

"With this solution, we provide Farstad, Solstad and Deep Sea Supply with an

industrial platform to sustain the current downturn in the OSV market and be

well positioned to exploit a market recovery. We are pleased to have reached an

agreement with our banks, bondholders and other stakeholders", says CEO Karl

Johan Bakken of Farstad Shipping.

A successful completion of the Combination will create the largest company in

the high-end  global offshore supply vessel industry with a fleet of 154

vessels. When including all vessel classes and lower spec vessels, the company

ranks fourth globally. The company will operate a fleet of 33 CSV, 66 PSV and

55 AHTS vessels deployed globally in all deep water hubs.

"For over a year we have advocated strongly for consolidation in the OSV

industry. One step was taken through the merger of REM Offshore ASA into Solstad

Offshore in 2016. With a successful completion of the Combination we would take

further steps to build the world's leading OSV company", Lars Peder Solstad, CEO

of Solstad Offshore comments.

Following a successful completion of the proposed Combination, it is proposed

that Solstad Offshore will be the parent company in the consolidated group, and

will have support of two of the strongest participants in the shipping and

offshore sector through Hemen and Aker.

"The proposed Combination is a necessary structural measure in today's OSV

market, which will enable the combined company to achieve significant synergies

through more efficient operations and a lower cost base", Jon Are Gummedal, CEO

of Deep Sea Supply comments.

" We are excited by this opportunity to work closely with the Fredriksen group

and other stakeholders to realize our ambition to establish an efficient global

leader in the OSV segment. The proposed combination of Solstad's, Farstad's and

Deep Sea Supply's operational experience, high quality fleet and global network

together with the Fredriksen group's and Aker's industrial expertise, M&A

capabilities and financial strength will provide a powerful platform through

Solstad Offshore", says Øyvind Eriksen, President and CEO of Aker.

The new consolidated group, "Solstad Farstad", will build on the complementary

strengths of the three companies, combining the existing Solstad Offshore's CSV

capabilities with Farstad Shipping's AHTS experience, international presence and

good, long-standing position in Brazil and Australia, together with Deep Sea

Supply's cost efficient PSV operating model. The Combination will enable

realization of substantial cost and revenue synergies in the range of NOK

400-650 mln annually that will further contribute to strengthen the combined

company.

Lars Peder Solstad will be proposed as the Chief Executive Officer of the

combined company, which will be headquartered out of Skudeneshavn, Norway. The

focus of the initial discussions between the parties has been to create a

company with a strong industrial position. The process to define the operating

model and organizational structure of the combined company will be based on the

competitive strengths of Farstad Shipping, Deep Sea Supply and Solstad Offshore.

The companies will until further continue to operate as-is in their current

organizational structure.

The Farstad Restructuring

The Farstad Restructuring will be undertaken as follows:

(i) Farstad Shipping's creditors will convert existing and future debt claims to

equity (the "Debt Conversion")

Under the Debt Conversion, Farstad Shipping's senior lenders, bondholders and F-

Shiplease AS (a subsidiary of Ocean Yield ASA) will complete a debt to equity

conversion as follows:

a) Farstad Shipping will assume debt owing by its subsidiaries to certain senior

lenders in the amount of NOK 940,000,000 and the senior lenders will then

convert those NOK 940,000,000 into 752,000,000 new shares of Farstad Shipping at

a price of NOK 1.25 per share.

b) The senior lenders will release Farstad Shipping's subsidiaries of their

obligation to pay NOK 332,000,000 in future interest in exchange for a NOK

271,000,000 claim against Farstad Shipping (equaling the net present value of

such future interest payments), and the NOK 271,000,000 claim will be converted

into 774,285,714 new shares of Farstad at a share price of NOK 0.35.

c) The outstanding bond debt in FAR03 and FAR04 with a total outstanding amount

of NOK 1,406,895,444.44, representing a principal of NOK 1,400,000,000 plus

interest in the amount of NOK 6,895,444.44, shall be converted into

1,125,516,355 new shares of Farstad at share price NOK 1.25.

d) F-Shiplease AS (a wholly owned subsidiary of Ocean Yield ASA) will release

Farstad Supply AS of its obligation to pay NOK 70,000,000 of the "amortization"

element and NOK 109,036,299 of the "interest" element of its two bare-boat

leasing agreements with F-Shiplease, in exchange for a NOK 160,858,516 claim

against Farstad Shipping (equaling the sum of the NOK 70,000,000 "amortization"

element and the net present value of the "interest" element being NOK

90,858,516). The NOK 70,000,000 "amortization" element of the claim will be

converted into 56,000,000 new shares of Farstad at a price of NOK 1.25 per

share, whereas the NOK 90,858,516 "interest" element of the claim will be

converted into 259,595,760 new shares of Farstad Shipping at a share price of

NOK 0.35.

(ii) The existing financing agreements of Farstad Shipping will be amended (the

"Farstad Amended Financing Terms")

The terms and conditions of the existing financing agreements for Farstad

Shipping (except for financing agreements with Westpac and BNDES) will be

amended and harmonized, including by adding the following features:

a) The amortization profile of the loans (after adjustment for the amounts

converted to equity) shall be reduced to 10% of the original profile from Q1

until 31 December 2021. Commencing in Q1 2022 the balance of amortizing senior

debt will become amortizing in linear instalments of 20% per year, whereas

senior loans with a bullet repayment profile will receive an extraordinary

repayment of 4% in Q2 2019. The final maturity date for all loans (with maturity

date prior to the new maturity date) will be extended to Q4 2023;

b) A cash sweep mechanism will be introduced;

c) In addition to certain financial covenants, restrictions will be introduced

with respect to Farstad's ability to pay dividends, incur new debt, carry out

equity issues and make capital expenditures;

d) Minimum value clause at 100% across the group's fleet (but suspended

throughout 2019);

e) Removal of current ownership covenants;

f) Pre-approval of sale of older vessels at prices below secure debt using

agreed mechanisms.

For the F-Shiplease lease agreements, a part of the lease payments will be

deferred from Q1 2017 and until Q4 2021. Commencing in Q1 2022, the lease

payments will revert to the original levels and in addition all deferred

payments will become repayable in linear instalments of 20% per year, with a

bullet repayment of deferred payments in Q4 2023. The maturity dates of the

leases remain unchanged, being March and June 2025, and a new cash sweep

mechanism will be introduced in the leases.

(iii) Farstad Shipping will issue NOK 650 mln of new equity fully underwritten

by Aker and Hemen (the "Equity Issue")

The Equity Issue, which is fully underwritten by Aker and Hemen on a 50:50

basis, will consist of a NOK 450 mln share issue to Hemen and Aker ("Private

Placement 1"), a NOK 150 mln share/convertible bond issue to Farstad Shipping's

bondholders and Tyrholm & Farstad Invest AS (an affiliate of Farstad Shipping's

main shareholder) ("Private Placement 2") and a NOK 50 mln repair issue to

existing Farstad Shipping shareholders who are not allocated shares in Private

Placement 2 (the "Repair Issue"). The subscription price in the Equity Issue

will be NOK 0.35 per share. Aker and Hemen will each subscribe for shares for

NOK 225 mln in Private Placement 1, and will subscribe for and be allocated any

remaining part of the Equity Issue that is offered to but not subscribed by

bondholders or Farstad Shipping's shareholders. As of today's date, Farstad's

bondholders have in aggregate undertaken to subscribe for NOK 50 mln in Private

Placement 2, and Tyrholm & Farstad Invest AS has undertaken to subscribe for

shares for a total amount of NOK 50 mln in the Equity Issue. In case Tyrholm &

Farstad Invest AS' subscription cannot be fully covered under Private Placement

2 due to additional bondholder subscriptions, Aker and Hemen's allocations in

Private Placement 1 will be reduced correspondingly on a 50:50 basis as needed

to ensure that Tyrholm & Farstad Invest AS is allocated shares for a total

amount of NOK 50 mln.

(iv) Aker and Hemen have agreed to participate in the take-out financing of the

newbuild "FAR Superior"

As part of the Farstad Restructuring, Aker and Hemen have agreed with Farstad

Shipping's senior lenders that each of Aker and Hemen will, subject to certain

conditions, participate with up to NOK 50 mln (in total 100 mln) in a NOK 300

mln take-out facility for the financing of the final instalment payable by

Farstad Shipping to Vard Singapore upon delivery of the newbuild "FAR Superior"

expected be delivered from Vard Singapore's Vietnamese shipyard in February

2017. Any such participation by Aker and Hemen shall be considered an advance on

their subscription obligations in Private Placement 1 and reduce their remaining

subscription obligations NOK for NOK.

Upon completion of the Farstad Restructuring, assuming that Hemen and Aker

combined subscribe for NOK 550 mln being the entire remaining part of the Equity

Issue which is not already allocated to Tyrholm & Farstad Invest AS (NOK 50 mln)

and subscribing bondholders (NOK 50 mln), Aker will hold 785,714,285 shares

representing approximately 16.2% of the shares and votes in Farstad Shipping, F-

Shiplease AS, a wholly owned subsidiary of Ocean Yield ASA, a subsidiary of Aker

ASA, will hold 315,595,760 shares representing approximately 6.5% of the shares

and votes in Farstad Shipping, and Aker and F-Shiplease AS will in the aggregate

hold 1,101,310,045 shares representing approximately 22.6% of the shares and

votes in Farstad Shipping. Hemen will hold 785,714,285 shares representing

approximately 16.2% of the shares and votes in Farstad Shipping.

If however Aker and Hemen combined subscribe for only NOK 400 mln as a result of

not being allocated any shares issued in Private Placement 2 or Repair Issue and

Tyrholm & Farstad Invest AS being allocated its full subscription of

142,857,142 shares under Private Placement 1, Aker will hold 571,428,571 shares

representing approximately 11.7% of the shares and votes in Farstad Shipping and

F-Shiplease AS will hold 315,595,760 shares representing approximately 6.5% of

the shares and votes in Farstad Shipping, and Aker and F-Shiplease AS will in

the aggregate hold 887,024,331 shares representing approximately 18.2% of the

shares and votes in Farstad Shipping. Hemen will hold 571,428,571 shares

representing approximately 11.7% of the shares and votes in Farstad Shipping.

Assuming a subscription of NOK 50 mln (142,857,142 shares) by Tyrholm & Farstad

Invest AS, Sverre A. Farstad and his affiliated companies Tyrholm & Farstad AS

and Tyrholm & Farstad Invest AS will hold in aggregate 159,653,342 shares

representing approximately 2.9% of the shares and votes in Farstad Shipping

after the Farstad Restructuring.

The Farstad Restructuring is expected to be completed during first half of

2017. Closing is dependent on, among other things, final loan documentation,

approval by the bondholders in Farstad Shipping's two outstanding bond loans

FAR03 and FAR04, and the approval of the credit committees of the senior

lenders. Completion of the Farstad Restructuring is not dependent on the

Combination being completed.

Large Bondholders in FAR03 and FAR04 have undertaken to vote in favor of the

Farstad Restructuring. Further, Tyrholm & Farstad AS, Farstad Shipping's largest

shareholder holding 15,796,199 shares representing 40.5% of the shares and votes

in the company, has undertaken to vote in favor of the Farstad Restructuring.

The same applies to Sverre A. Farstad (1,000,000 shares, or 2.56%) and Jan H.

Farstad (1,050,000 shares, or 2.69%).

A prospectus will be published in connection with the new shares issued in

Farstad Shipping pursuant to the Farstad Restructuring in accordance with

applicable regulations.

The Combination of Solstad Offshore, Farstad Shipping and Deep Sea Supply

The Combination is proposed to be structured as follows:

(i) Deep Sea Supply and Farstad Shipping will merge into and be established as

individual subsidiaries under Solstad Offshore, with shareholders of Deep Sea

Supply and Farstad Shipping receiving shares in Solstad Offshore as

consideration (the "Mergers").

Under the Mergers, Farstad will merge with a newly incorporated subsidiary of

Solstad Offshore and Farstad's former shareholders will receive shares in

Solstad Offshore as merger consideration. The exchange ratio in the Solstad

Offshore / Farstad merger will be 0.35:12.50 Farstad shares per Solstad Offshore

share.

Contemporaneously with the Solstad Offshore / Farstad merger, Deep Sea Supply

will combine with Solstad Offshore in a merger or merger-like transaction

whereby all of Deep Sea Supply's assets, rights and obligations will ultimately

be transferred to a subsidiary of Solstad Offshore against consideration in the

form of Solstad Offshore shares. The amount of Solstad Offshore consideration

shares issued will be based on an agreed exchange ratio of 1.32:12.50 Deep Sea

Supply shares per Solstad Offshore share.

(ii) The existing financing agreements of Solstad Offshore and Deep Sea Supply

will be sought amended and harmonized with the Farstad Amended Financing Terms.

(iii) In connection with the Combination, Solstad Offshore will complete a NOK

200 mln private placement directed towards Hemen at a subscription price of NOK

12.50 per share. The proceeds from the private placement will passed on by

Solstad Offshore to the part of the new group comprising the former Deep Sea

Supply operations.

(iv) Aker will convert its NOK 250 mln convertible loan to Solstad Offshore in

exchange for shares, such convertible loan having originally been granted to

Solstad Offshore in 2016 together with a NOK 250mln equity investment by Aker in

Solstad Offshore.

(v) Solstad Offshore's dual share class structure will be collapsed, and all

Class A and Class B shares will be converted to common shares on a 1:1 basis.

(vi) Solstad Offshore will assume Farstad Shipping's obligations under any

convertible bond issued as part of the Equity Issue (with logical amendments to

the convertible bond issue).

The transaction elements listed above are interdependent and will become

effective simultaneously upon completion of the Combination. The Combination has

not been considered or approved by the respective boards of directors of Solstad

Offshore and Deep Sea Supply, and remains subject to, among other things, their

review and approval. Further, the Combination is subject to, among other things,

agreement on final transaction documentation, competition authority approvals

and relevant corporate resolutions.

The senior lenders in Farstad Shipping have undertaken to vote in favour of and

otherwise support the Combination, including by voting in favour of any changes

to the board of directors of Farstad Shipping as Aker and Hemen may jointly

propose. Further, the senior lenders have undertaken a lockup obligation

preventing them from selling their shares in Farstad Shipping until such time as

the Combination is finally approved or until 30 September 2017, unless otherwise

agreed with Aker and Hemen.

The total issued number of shares and votes of Solstad Offshore upon completion

of the Combination is expected to be 292,524,298.

If Hemen and Aker combined has subscribed for NOK 550 mln in the Farstad

Restructuring Equity Issue, Aker will hold 63,668,050 shares representing

approximately 21.8% of the shares and votes in Solstad Offshore, F-Shiplease AS,

a wholly owned subsidiary of Ocean Yield ASA, a subsidiary of Aker ASA, will

hold 8,836,681 shares representing approximately 3.0% of the shares and votes in

Solstad Offshore, and Aker and F-Shiplease combined will hold 72,504,731 shares

representing approximately 24.9% of the shares and votes in Solstad Offshore.

Following the conversion of the NOK 250 mln convertible loan, Aker will no

longer hold any rights to shares in Solstad Offshore. Under the same

assumptions, Hemen will hold 52,133,037 shares, representing approximately

17.9% of the shares and votes in Solstad Offshore.

If Hemen and Aker combined has subscribed for only NOK 400 mln in the Farstad

Restructuring Equity Issue, Aker will hold 57,668,050 shares representing

approximately 19.8 % of the shares and votes in Solstad Offshore, F-Shiplease

AS, a wholly owned subsidiary of Ocean Yield ASA, a subsidiary of Aker ASA, will

hold 8,836,681 shares representing approximately 3.0% of the shares and votes in

Solstad Offshore, and Aker and F-Shiplease combined will hold 66,504,731 shares

representing approximately 22.8% of the shares and votes in Solstad Offshore.

Following the conversion of the NOK 250 mln convertible loan, Aker will no

longer hold any rights to shares in Solstad Offshore. Under the same

assumptions, Hemen will hold 46,133,037 shares, representing approximately

15.8% of the shares and votes in Solstad Offshore

Aker and Hemen have agreed to adjust their shareholdings following completion of

the Combination so that they end up as approximately equal shareholders in the

combined company.

The Solstad Family Companies will following the Combination hold 21,066,965

shares representing approximately 7.2% of the shares and votes in Solstad

Offshore.

Sverre A. Farstad and his affiliated companies Tyrholm & Farstad AS and Tyrholm

& Farstad Invest AS will following the Combination hold in aggregate 4,470,294

shares representing approximately 1.5% of the shares and votes in Solstad

Offshore.

The final shareholdings will depend on the take-up of the Farstad Shipping

Equity Issue and any amendments that may be made to the proposed terms of the

Combination.

Further details of the proposed Combination will be presented in due course and

in accordance with applicable regulations. Subject to agreement on final

transaction documentation and the other conditions mentioned above, the

Combination is expected to be completed during 2017.

***

Aker ASA's Chief Financial Officer Frank Reite is a member of the board of

directors of Solstad Offshore.

Ellen Solstad and Lars Peder Solstad of the Solstad family, who through their

related companies Soff Invest AS and Ivan II AS hold shares in Solstad Offshore

are a member of the board of directors and the chief executive officer,

respectively, of Solstad Offshore.

Sverre A. Farstad is the chairman of the board of Farstad Shipping.

***

A joint press briefing will be hosted at Aker's offices at Fornebu today at

14:00 CET.

Contact:

Karl Johan Bakken, Chief Executive Office of Farstad Shipping at +47 901 05 697

Atle Kigen, Head of corporate communications of Aker ASA at +47 9078 4878.

Lars Peder Solstad, Chief Executive Officer of Solstad Offshore ASA at

+47 913 18 585 or Sven Stakkestad, Deputy Chief Executive Officer of Solstad

Offshore ASA at +47 905 15 802.

Anders Hall Jomaas, Chief Financial Officer of Deep Sea Supply Plc at

+47 400 42 918

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[1] PSVs over 3,200 dwt , AHTS with more than 15,000 bhp, all CSVs

This information is subject to the disclosure requirements pursuant to section

5 -12 of the Norwegian Securities Trading Act.