GC Rieber Shipping — M&A Activity 2016

Oct 13, 2016

GC Rieber Shipping - Detailed announcement regarding the establishment of Shearwater GeoServices AS

GC Rieber Shipping - Detailed announcement regarding the establishment of Shearwater GeoServices AS

Reference is made to the stock exchange announcement made earlier today

regarding the agreement between GC Rieber Shipping ASA and RASMUSSENGRUPPEN AS

to establish Shearwater GeoServices AS ("Shearwater") as a 50/50 owned marine

geophysical company.

Shearwater will become an integrated provider of marine geophysical services to

oil and gas and multi-client companies worldwide. The company will have a fleet

of four modern, high capacity seismic vessels and fully operational business

lines (including on- and offshore processing capacities) managed by  highly

experienced support teams. Shearwater's core strategy will be to provide high

quality marine geophysical services and utilize the company's attractive cost

position.

Shearwater will take over the four modern seismic vessels; Polar Empress, Polar

Duke, Polar Duchess, and Polar Marquis from GC Rieber Shipping, and the

corresponding vessel loans will be transferred from GC Rieber Shipping to

Shearwater. The total value of the four seismic vessels is set to USD 228.5

million. The current outstanding balance of these vessel loans is USD 198.5

million. GC Rieber Shipping will inject USD 15 million and Rasmussengruppen USD

45 million in liquidity through new equity into Shearwater. The total of USD 60

million in liquidity will be injected to fund operations and provide Shearwater

with a solid platform in the current challenging market. As a part of the loan

agreement to be entered into between Shearwater and the Lenders, GC Rieber

Shipping will be issuing a parent company guarantee of 50% of the outstanding

loans.

Terms have been renegotiated with the lending banks for the four vessels. The

new terms include a 75% reduction in installments compared to the original

repayment profile until June 2019 and an extension of the term of the loans

until year end 2022. Shearwater has also agreed on the main terms to purchase

the seismic equipment (including streamers) and the processing business from the

former lending banks of Dolphin Geophysical ASA. This acquisition is financed by

DNB and SpareBank1 SR-Bank.

GC Rieber Shipping will use the equity method of accounting, and the company's

seismic segment will be reported as discontinued operation with effect from the

interim report of the third quarter 2016.

The sale of the vessels to Shearwater implies an impairment charge of

approximately NOK 130 million, which will be booked in third quarter 2016. The

sale will have significant impact on GC Rieber Shippings` balance sheet, whereby

total assets, equity and liabilities will be reduced by approximately NOK 1 750

million, NOK 200 million and NOK 1 550 million as per 30 September 2016. At the

end of second quarter 2016, the sale would have reduced operating revenue by NOK

19 million and increased EBITDA by NOK 54 million. The effect of the transaction

will be included in the third quarter 2016 report including notes, which will be

published on the 9 November 2016.

After the sale the long-term debt of GC Rieber Shipping will be approximately

NOK 1 200 million and the book equity ratio of the company will be around 50%.

The agreement between GC Rieber Shipping and Rasmussengruppen is conditional

upon final loan documentation with the lending banks in line with agreed term

sheets, as well as entering into final sales and purchase agreements for the

seismic equipment. Closing of the transaction is expected to be in place during

fourth quarter of 2016.

Following the establishment the board of Shearwater will constitute of Irene

Waage Basili and Einar Ytredal from GC Rieber Shipping and Stein Vidar Håland

and Trygve Lauvdal from Rasmussengruppen. In addition, the parties will elect an

independent chair of the board.

Irene Waage Basili will act as interim CEO for Shearwater for a period until a

permanent CEO is in place and Andreas Hveding Aubert will act as interim CFO

until a permanent CFO is in place. Peter Hooper will be Chief Operating Officer

of Shearwater while Bjarne Stavenes will take the position as Vice President

Marine Acquisition. In total approximately 140 people are employed by Shearwater

and its subsidiaries as of October 13, 2016

Through the transaction, GC Rieber Shipping again becomes an active owner in a

geophysical services company. For the two remaining segments within GC Rieber

Shipping, Subsea and Ice/support there will be no direct effects or changes

following the establishment of Shearwater.

Shearwater is established with a strategy to provide high-quality, low-cost

marine geophysical services based on a fleet of modern, high-capacity vessels,

in-house processing, both onshore and offshore, and a strong operational set-up.

Shearwater will focus on building a contract backlog within the contract seismic

market. The company will have an attractive cost structure and aims to maintain

a conservative capital structure. Based on its competitive advantages,

Shearwater will evaluate strategic opportunities.

The new company will have headquarter in Bergen, Norway. GC Rieber Shipping will

provide technical support to Shearwaters four vessels with regard to its marine

operations.

An analyst and investor presentation will be held today at 10.30 CET at

Carnegie, Grundingen 2, 5(th) floor, Aker Brygge, Oslo.

Carnegie has been financial advisor to GC Rieber Shipping and Shearwater in

connection with the transaction.

For further information:

Irene Waage Basili, CEO, GC Rieber Shipping, phone:  +47 55 60 68 67, or

+47 90 09 86 88

About GC Rieber Shipping:

GC Rieber Shipping's business within offshore/shipping includes ownership in

specialized vessels, high quality marine ship management and project development

within the segments subsea, ice/support and marine seismic. The group has a

specialized competence in offshore operations in harsh environments as well as

design, development and maritime operation of offshore vessels.

GC Rieber Shipping currently operates 13 advanced special purpose vessels for

defined markets within the subsea, ice/support and marine seismic segments, of

which the company owns 11.

The company has its headquarter and a ship management office in Bergen, and an

additional ship management company in Yuzhno-Sakhalinsk (Russia). The company is

listed on Oslo Børs with ticker RISH.

Further information is available on the company's website www.gcrieber-

shipping.com.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.