Dolphin Drilling AS — Capital/Financing Update 2019

Apr 12, 2019

Dolphin Drilling ASA - Company update

Dolphin Drilling ASA - Company update

Reference is made to previous market communication with regards to the

refinancing efforts of Dolphin Drilling ASA (the "Company") and its subsidiaries

(together the "Group").

Lenders under the Company's USD 2,000 million secured credit facility holding

more than 78% of the principal amount outstanding under such facility (the

"Majority Lenders") have entered into an agreement for the reorganisation and

recapitalisation of the drilling business of the Group (the "Drilling

Recapitalisation"). The Majority Lenders include Danske Bank, DNB, SEB and

Swedbank, as well as funds advised by Strategic Value Partners LLC and its

affiliates ("SVP Global").

As agreed among the Majority Lenders, the Drilling Recapitalisation will include

the following key elements:

· The drilling unit Bolette Dolphin will be sold to refocus the Group's

drilling business on its mid-water fleet. Pareto Offshore AS and ABG Sundal

Collier ASA are appointed as the Company's brokers in the sale process. The

proceeds from such sale will be used to repay the Company's debt to the secured

lenders.

· The mid-water drilling business of the Group will be transferred to a new

holding company, controlled by the secured lenders ("NewCo").

· In consideration of the mid-water drilling business of the Group, NewCo will

assume all secured debt of the Company that is not repaid through the sale of

Bolette Dolphin, and issue shares in NewCo to the Company. Such shares will

represent 1.5% of the share capital of NewCo, post restructuring. The Company

will have the right to sell such shares to SVP Global for a total cash amount of

approximately USD 2 million.

· All secured debt assumed by NewCo from the Company will be converted into

equity in NewCo, save for USD 30 million. As such, the balance sheet of the

drilling business will be significantly deleveraged.

· The secured lenders will also provide NewCo with new liquidity in the form

of a USD 45 million revolving credit facility.

· On this basis, the Drilling Recapitalisation is expected to provide the

Group's current mid-water drilling business with a stable platform to support

its future development.

Following completion of the Drilling Recapitalisation, the key assets of the

Company will be the 1.5% shareholding in NewCo, and the assets related to the

Harland Wolff shipyard.

As set out above, the shareholding in NewCo may be sold to SVP Global at a cash

price of approximately USD 2 million. As set out in the annual report of the

Company for 2018, the financial situation of the Harland Wolff shipyard is

challenging and the Harland Wolff business may be sold or be subject to

insolvency proceedings. The board does not expect that any of these alternatives

will yield notable value to the Company. On this background, the board may

propose that the Company is to be liquidated upon completion of the Drilling

Recapitalisation.

A solvent completion of the Drilling Recapitalisation by the Company will

require the consent of all secured lenders, a resolution by the bondholder

meeting in the Company's bond issue with ISIN NO0010704125 (supported by at

least 2/3 of the voting bonds), as well as a resolution by the Company's

shareholder meeting (supported by at least 2/3 of the voting shares). The

Drilling Recapitalisation is currently under consideration by representatives of

the relevant stakeholders.

The Majority Lenders have informed the Company that they will take steps to

implement the Drilling Recapitalisation with or without the consent of the other

stakeholders, through a solvent liquidation or through a bankruptcy in the

Company.

Contact: Ivar Brandvold, CEO, (+47) 22 34 10 00 Hjalmar Krogseth Moe, CFO, (+47)

22 34 10 00

This information is subject of the disclosure requirements according to the

Norwegian Securities Trading Act section §5-12.