Belships — AGM Information 2018

Oct 26, 2018

Belships ASA Extraordinary general meeting 26 October 2018

Agenda

III

Q&A

1) Reported revenue for 2017

2) Based on USDNOK of 8.1921 (3 October 2018) and excluding treasury shares 2

Transaction highlights

Transaction summary

• On 4 October 2018, Belships and Kontrari signed a merger plan, pursuant to which Belships Chartering AS, a wholly owned subsidiary of Belships, will assume the assets, rights and obligations of the Lighthouse companies, against consideration shares in Belships
• The assets include four Supramax and five Ultramax dry bulk vessels and a controlling stake in Lighthouse Navigation, a commercial management company based in Bangkok with annual turnover of USD ~96m1
• The shareholders of the Lighthouse companies will upon completion of the merger receive a total of 127,765,993 consideration shares
• The exchange ratio in the merger is based on an equity value of Belships of USD 37.66 million, corresponding to a price per share of NOK 6.62
• The completion of the merger is subject to approval by the EGM of Belships:
• Sonata, holding 67.05% of shares in Belships at the time of the EGM, has undertaken to support the resolution to approve the merger and issue the consideration shares
• The completion of the merger is expected to take place before year-end 2018
• On 12 October 2018, the general meetings of the Lighthouse companies approved the merger
• Other closing conditions include, but are not limited to, Oslo Børs' approval for a continued listing, expiry of the creditor notice period, absence of material adverse changes, completion of the share sale from Sonata, and that the statement from Oslo Børs dated 28 September 2018 stating that a mandatory offer obligation not will be imposed as a consequence of the transaction has not been withdrawn or amended and that no legal steps to challenge the statement have been taken
• A share sale of 14,285,714 shares from Sonata to Kontrari for a total consideration of NOK 100 million will be completed three business days after the approval of the merger plan and share capital increase by EGM, subject to certain conditions being fulfilled
• Transaction fees
• Total fees payable by Belships to its advisors (ABG Sundal Collier, Thommessen, EY) is approximately USD 1.36m
• Lighthouse will cover all costs related to its advisors (Fearnleys, Wikborg Rein, PwC)
• Sonata will cover all costs related to the share sale

¹⁾ Reported revenue for 2017

²⁾ Based on USDNOK of 8.1921 (3 October 2018) and excluding treasury shares 3

Transaction structure

Strategic rationale

Strategic rationale

• Consolidation of matching fleets increases the fleet size from seven to 16 vessels, significantly strengthening Belships' position within the Supramax and Ultramax segments
• Increased earnings potential
• Realisation of operational synergies
• Improved commercial negotiation position
• Optimised mix of multi-year charter backlog and spot exposure
• Complementing management activities create a complete in-house operational structure, ideally positioning Belships as a platform for further growth
• Technical management through Belships' Singapore operations
• Commercial management through Lighthouse's Bangkok operations
• Increased free float and potentially improved liquidity in the stock
• Improved access to capital markets
• Ambitious sponsors targeting further expansion

Exchange ratio and valuation

Valuation applied in the merger

Valuation principles

• All vessels (Lighthouse and Belships) have been valued by Fearnleys in connection with the merger
• −Same valuation methodologies have been applied for both fleets
• In the due diligence process, independent fleet valuations from Grieg Shipbrokers and Oslo Shipbrokers has also been obtained to confirm the fleet values from Fearnleys
• The net fleet valuation adjusts for outstanding debt and remaining lease obligations, and for the net value of current charter contracts related to the vessels
• The management companies have been valued based on normalised EBITDA (average of last five years) multiplied by an EV/EBITDA multiple of 5x

Detailed overview of Belships ASA valuation

I te m	U S Dm
Ve ls lue ( lu d ing T C ) tra ts ss e va s ex c co n c	9 1. 0
Ne lue T C t v tra ts a co n c	8. 0
F lee t v lue to ta l a	9 9. 0
Ne t de b t	6 2. 3 -
Tr t ion ts an sa c co s	1. 8 -
f S Va lue Be ls h ip Ma t ing P te L t d o s na g em en ap or e	2. 8
f S Eq i ty lue Be ls h ip A A u va o s	3 7. 7

Ownership following the transaction

S ha ho l de re r	Nu be f s ha m r o re s	%
Ko i / Ko i tra tra n r n z	1 2 0, 4 2, 2 4 6 5	6 8. 8 % 7
So ta na	1 7, 4 6 1, 7 7 8	% 9. 9 7
Ne p a	1 3, 3 3 0, 8 3 4	7. 6 1 %
L H N loy em p ee s	8, 2 6 8, 6 2 8	4. 7 2 %
Tr ha ea su ry s res	5 4 8, 0 0 0	% 0. 3 1
O t he ha ho l de r s re rs	1 5, 0 5 6, 5 0 7	8. 6 0 %

¹⁾ Reported revenue for 2017

²⁾ Based on USDNOK of 8.1921 (3 October 2018) and excluding treasury shares

Agenda

The transaction

IIIQ&A

1) Reported revenue for 2017

2) Based on USDNOK of 8.1921 (3 October 2018) and excluding treasury shares 7

Belships ASA – Key investment highlights

Experienced owner and operator of high quality ships on long-term charters and spot contracts to highly reputable customers

2

Optimised mix of charter backlog and spot market exposure – USD 40m multi-year charter backlog providing predictable revenue base

6

Founded in 1918 and listed on the Oslo stock exchange since 1937; one of the longest listed companies in Oslo

1

3

Continued focus on fleet expansion of modern dry bulk tonnage – supported by ambitious sponsors

5

Widely anticipated improving dry bulk market represents attractive window of opportunity for earnings and asset value recovery

4

All services and key functions in-house, and a management team with proven operational track record

Modern uniform fleet with average age of ~5 years

	Ve l ss e	Ty p e	Bu i l t	D W T	Ya d r	Ow h ip ne rs	Em lo t p y m en
n o ti u b ri	Im ba i Ne bu i l d a r w	U l tra ma x	2 0 2 0	6 3, 0 0 0	Im ba i a r	1 T C- in	Op en
	Be ln ip p on	U l tra ma x	2 0 1 8	6 3, 0 0 0	Im ba i a r	2 T C- in	T C Ca i l l to rg
	Be l is lan d	U l tra ma x	2 0 1 6	6 1, 0 0 0	Im ba i a r	3 B B- in	T C to Ca tex np o
	Be l fo t res	U l tra ma x	2 0 1 5	6 1, 0 0 0	Im ba i a r	4 B B- in	T C to Ca i l l rg
t n o	Be loc ea n	Su p ra ma x	2 0 1 1	8, 0 0 0 5	Da y an g	Ow d ne	T C Ca i l l to rg
c	Be lno r	Su p ra ma x	2 0 1 0	5 8, 0 0 0	Da y an g	Ow d ne	C Ca T to tex np o
	Be ls ta r	Su p ra ma x	2 0 0 9	5 8, 0 0 0	Da y an g	Ow d ne	T C to Ca tex np o
n o ti u b ri t n o c	In d ian L ig h t	U l tra ma x	2 0 1 6	6 3, 2 0 0	Ha to n ng	Ow d ne	Sp t o
	Ba l t ic L ig h t	U l tra ma x	2 0 1 6	6 3, 2 0 0	Ha to n ng	Ow d ne	Sp t o
	A t lan t ic L ig h t	U l tra ma x	2 0 1 6	6 3, 2 0 0	Ha to n ng	Ow d ne	Sp t o
	No he L ig h t t r rn	U l tra ma x	2 0 1 5	6 3, 2 0 0	Ha to n ng	Ow d ne	Sp t o
	So t he L ig h t u rn	U l tra ma x	2 0 1 5	6 3, 2 0 0	Ha to n ng	Ow d ne	Sp t o
	Or ien t L ig h t	Su p ra ma x	2 0 0 8	5 0, 2 9 2	P T Pa l	Ow d ne	Sp t o
	Be ing L ig h t r	Su p ra ma x	2 0 0 8	5 0, 2 9 2	P T Pa l	Ow d ne	Sp t o
	Pa i f ic L ig h t c	Su p ra ma x	2 0 0 7	0, 1 9 8 5	P T Pa l	Ow d ne	Sp t o
	Ea te L ig h t s rn	Su p ra ma x	2 0 0 6	5 0, 2 2 3	P T Pa l	Ow d ne	Sp t o

Belships

• 1) Time charter period of 8+1+1 years from Feb-20 with purchase options after the fourth year
• 2) Time charter period of 8+1+1+1 years from Jan-18 with purchase options after the fourth year
• 3) Bareboat charter lease period of 15 years from Mar-16 with purchase options after the fifth year
• 4) Bareboat charter lease period of 12 years from Sep-15 with purchase options after the third year

Optimised mix of charter and spot market exposure

C h b k t a r e r a c	l o g					S l i d h t t t o c a r e r c o n e r p a r u	i e s
	C ha te io d r r p er				C Ne t T te ra
Ve l ss e Be ln ip p on Be ls ta r fo Be l t res Be loc ea n Im ba i bu i l d a r ne w Be lno r Be l is lan d In d ian L ig h t Ba l ic L ig h t t A t lan t ic L h	2 0 1 8 Ca i l l rg Ca tex np o Ca i l l rg Ca i l l rg Sp t o Sp t o	2 0 1 9 Un de ion tru t r c on s c Ca tex np o Ca tex np o	2 0 2 0	2 0 2 1	U S D k / d 1 1. 1 U S D k / d 1 6. 0 S / 1 U D 1 3. 0 k d U S D 1 1. 6 k / d 2 Op en S / U D 1 6. 0 k d S / U D 1 7. 3 k d nm nm	O f he l d 's lar t t p  ne o w or g es o t h ir d f g lo ba l c i ty on e- o ap ac Ca te is j in t v tu t  np o x a o en re du M ic d Nu tr p ro ce rs os a an , 	h ta s ha t is ien te
ig t No t he L ig h t r rn So t he L ig h t u rn Or ien L ig h t t Be ing L ig h t r Pa i f ic L ig h t c Ea te L ig h t s rn	Sp t o Sp t o Sp t o Sp t o Sp t o Sp t o Sp t o				nm nm nm nm nm nm nm	La iva U S t p te rg es r co m p an y in 2 0 1 7 d ~1 5 0, 0 0 0 an em p l dw i de wo r M j bu ine i t h in a or s ss a re as w  f ina ia l r is k m t nc an ag em en	in loy ee ag r

• One of the world's largest potash exporters, selling over 10 million tonnes of potash every year, representing about one-third of global capacity

• Canpotex is a joint venture that is wholly owned by the two Saskatchewan potash producers, Mosaic and Nutrien

• Largest private US company in terms of revenue, with USD 109.7bn in revenues in 2017 and ~150,000 employees worldwide

• Major business areas within agricultural services, crop and livestock, food, health and pharmaceuticals, and industrial and financial risk management

1) USD 10.0k/day until 1 Nov 2018, USD 13.0k/day thereafter

2) USD 9.8k/day until 15 October 2018, USD 11.6k/day thereafter 10

Complete in-house technical and commercial management

T h i l t – B l h i M t e c n c a m a n a g e m e n e s p s a n a g e m e n	C i l t – L i h t h N i t i o m m e r c a m a n a g e m e n g o u s e a v g a o n
Be ls h ip is d in te hn ica l m t  s en g ag e c an ag em en T h i l e c n c a : t iv i t ies t hr h Be ls h ip Ma t in ac ou g s na g em en S ing inc lu d ing T ian j in d S ha ha i in C h ina ap or e an ng 1 0 T he ies ha d le hn ica l m i im ion te t t co m p an n c ar e o p er a  fo Be ls h ip ' o h ip d o be ha l f o f o he t r s wn s s a n n r h i s p s h ip ing ies s p co m p an	L ig h t ho Na ig t ion f fe to ise d tra ta t ion ice fo dr  us e v a o rs cu s m ns p or se rv s r y bu l k c ha te t ing f U S D 9 6m in 2 0 1 7 r re rs g en er a re ve nu es o , L ig h t ho Na ig t ion ha im te ly 5 0 e loy i t h o t ion us e v a s a p p ro x a m p ee s, w p er a s  ia l ly l le d by in ion l f e ien d tro te t te co m me rc co n a n rn a a am o xp er ce fe ion ls fro he f f ice in Ba ko k a d Du ba i t p ro ss a m o s ng n
Co fo t i t ive t, ia l ly  m p e c re w ma na g em en es p ec r C i r e n g w : C h ine d Bu t hr h J Vs in C h ina se a n rm es e c re w ou g d My bu lso Ma lay ian In do ian t a 2 7 an an ma r, s ne s , , In d ian d Ea Eu t a n s ro p ea n. h i In d d i ion Be ls h ip ha ia in t te s p s  a s s a n a ss oc co m p an y , f fe Ma i la ing F i l ip ino t n o r c re w ma na g em en	L ig h ho Na ig ion ia l ly L ig h ho 's f lee t t t t  us e v a co mm erc ma na g es us e f fou Su d f ive U l ls tra o r p ram ax an ma x v es se T hro h a k r d a d r l ia b le ice L ig h ho tra t  ug p rov en c ec or n e se rv s, us e Co ia l mm erc Na ig ion ha de lop d a k o f s la ion h ip i h t tw tro t t v a s ve e ne or ng re s s w t ma na g em en ha d s do ter t a ts tev c r ers , p or g en an e res f In d d i t ion to t he L ig h t ho lee t, L ig h t ho Na ig t ion a us e us e v a  tes ig i f ica t n be f c ha ter d- in Su / U l tra op era a s n n um r o r e p ram ax ma x
C l i t b e n a s e	ton ire d by l ien ts na g e a s r eq u c S h ip to op era r T he ha ter i tm ts in ly ho t- ter tra ts c r co mm en are m a s r m co n c 
Ma lay ian s C l ie t n ow ne r	L ig h t ho Na ig t ion 's l ine ice Or ien t As ia L ine ( O A L )  us e v a r s erv s , lar ice fro So t h Ea t As ia to M i d d le- Ea t a d run s a re g u se rv m u s s n
Ty f Te hn ica l & Te hn ica l & Te hn ica l & p e o c c c Cr ing Cr ing ew ew ice ing ing ing se rv cre cre cre w w w	Ea ter Me d i ter s n ran ea n Co t ing nn ec S h ip d r ive l l lon ter l ien ts, bo k ing ls  p ers an ec e rs are a g- m c o p arc e ts p or f v iou i ies lar ba is t t o ar s q ua n on a ve ry reg u s
Nu be f m r o 1 4 4 1 3 5 ls ve ss e
C l ien t 1 9 9 6 2 0 1 1 1 9 8 4 2 0 1 8 2 0 0 4 inc s e	L ig h ho Na ig ion f fer fu l l a d c he ive t t t  us e v a o s a n om p re ns p or ice t hro ho t T ha i lan d, inc lu d ing bro ke ag en cy se rv ug u ca rg o rag e S d log is t ics t hro h t he iam T ha an ug ag en cy co mp an y ra , Ag ice en cy se rv s

Agenda

II

The transaction

"New" Belships ASA

1) Reported revenue for 2017 2) Based on USDNOK of 8.1921 (3 October 2018) and excluding treasury shares 12

Disclaimer

This presentation has been prepared by Belships ASA (the "Company"). The contents of this presentation shall not be construed as legal, business or tax advice, and the furnishing of this presentation should not be considered as the giving of investment advice by the Company or any of its directors, officers, agents, employees or advisers. Prospective investors should consult its own legal, business or tax advisor as to legal, business or tax advice.

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