Nordic Shipholding — Share Issue/Capital Change 2013

Nov 22, 2013

November 22, 2013

NORDIC SHIPHOLDING A/S

Company announcement no. 9/2013

NORDIC SHIPHOLDING SIGNS RESTRUCTURING AGREEMENT

Nordic Shipholding A/S ("Nordic Shipholding" or the "Company") has today entered into a conditional restructuring agreement with Nordic Maritime S.à r.l. ("Nordic Maritime"), an entity managed by PAG, one of Asia's largest alternative investment managers.

Highlights of the restructuring

• Nordic Maritime will acquire debt totalling approx. USD 58 million from the Company's lending banks and convert the debt acquired to new shares in the Company; representing approximately 75% of the shares issued in the Company post transaction;
• The Company's lending banks will convert debt totalling approximately USD 12 million to new shares in the Company; representing approximately 15 % of the shares issued in the Company post transaction;
• Current shareholders retain approximately 10% share ownership post transaction;
• Nordic Maritime will have an option to invest up to an additional USD 2 million under certain conditions against issue of additional shares. If such option is exercised, the existing shareholders will be further diluted;
• The group's vessels will be transferred to new 100% owned subsidiaries of the Company established in Singapore;
• As a result of the conversions of debt, the Company's bank debt will be reduced from USD 172 million to USD 100 million and new facilities agreements will be entered into with respect to such debt;
• A temporary working capital facility in an amount of up to USD 2 million will be made available under certain conditions to bridge finance certain outstanding insurance payments in respect of one of the group's vessels;
• Maturities for the existing bank debt are extended and the final maturity date of the bank debt will be 7 years after the restructuring. A cash sweep of any excess cash will apply;
• Closing is among other conditional upon (i) a preliminary dispensation issued to Nordic Maritime by the Danish Financial Supervisory Authority from the obligation to submit a mandatory take-over offer, (ii) approval from the Company's general meeting to decrease the Company's share capital and authorize the issue of new shares in connection with the debt conversion and the option granted to Nordic Maritime to invest additional funds and (iii) a certain minimum net working capital level of the Nordic Shipholding group being in place up until the holding of the general meeting mentioned. A notice convening an extraordinary general meeting at which the capital decrease and authorization to issue of new shares will be presented for approval, is expected to be sent out on or about 25 November 2013;
• Provided the conditions are fulfilled, closing is anticipated to occur before year-end;
• Following closing, a prospectus relating to the new shares issued to Nordic Maritime and the Company's lending banks will be released with a view to admit the new shares for trading and official listing on NASDAQ OMX Copenhagen A/S.

Context

The restructuring is viewed as the best available solution for Nordic Shipholding and its stakeholders considering the high debt position and continuing low freight rates. The restructuring will allow Nordic

Shipholding to continue to be a tonnage provider with a current fleet of six product tankers in the range 37,000-73,000 dwt.

The period with very low and non-compensatory freight rates has regrettably lasted much longer than anticipated by most observers. The financial and economic crisis and the prevailing freight market conditions have eroded the capital base required to further implement the Company's strategy. Since 2011 the Company's liquidity situation has been tight and the bank facilities could have been called at any time due to breaches of certain financial covenants. The board has therefore, with the support of the lending banks, continuously worked on identifying sources of new equity to strengthen the capital base and see the Company through the prolonged period of non-sustainable rates.

Unfortunately, at that time it was not possible to determine viable ways to attract equity and in March 2012, the Company entered into an agreement with Triton to sell its chemical tanker vessels and the organisation managing it. This transaction was completed in April 2012.

In March 2013, the Company announced that it was in dialogue with the lending banks about a prolongation of the moratorium granted by the Company's banks on instalment-payments with respect to the group's loans by another 12 months and on that basis the Company's lending banks have extended the moratorium by three months at a time, allowing the Company to continue to search for a long-term solution for the Company. It was also announced, that in case the search for a new investor proved futile, the Company's banks desired to carry out a controlled winding up of the Company.

The contemplated restructuring

The contemplated restructuring will imply that Nordic Maritime will subscribe to new shares in the Company equal to approximately 75% of the Company's shares by conversion of USD 58 million in debt, acquired by Nordic Maritime from the Company's lending banks. Concurrently, the Company's lending banks will convert debt of approximately USD 12 million to new shares in the Company; representing approximately 15% of the shares issued in the Company. Following such debt conversions, the aggregate shareholding of the existing shareholders of the Company will be reduced to approximately 10%.

The conversion to new share capital will take place in connection with the completion of the restructuring, after which the ownership structure is expected to be:

Shareholders expected ownership share Existing shareholders 10%

Company's lending banks	15%
Nordic Maritime	75%

In connection with completion of the restructuring, it is expected that the Company's existing share capital will be decreased by decreasing the nominal amount per share (denomination) from DKK 1.00 to DKK 0.01.

In addition, Nordic Maritime will have an option to invest up to an additional USD 2 million under certain conditions against issue of additional shares which option if exercised will lead to a further dilution of the existing shareholders.

As part of the restructuring, the Company will make changes to the legal group structure, involving transfer of the group's vessels to new 100% owned subsidiaries of the Company established in Singapore.

Provided the conditions are fulfilled, closing is anticipated to occur before year-end.

As a result of the conversions of debt, the Company's bank debt will be reduced from USD 172 million to USD 100 million and new facilities agreements will be entered into with respect to such debt providing for a final maturity date of 7 years after closing of the restructuring. A cash sweep of any excess cash will apply. The new facilities will include standard covenants and conditions precedent.

A temporary working capital facility in an amount of up to USD 2 million is expected to be made available under certain conditions to bridge finance certain outstanding insurance payments in respect of one of the group's vessels.

Completion of the restructuring is subject to certain conditions, terms and deliveries, including among others completion of new loan documentation and documentation required for issuance of new shares. Further, completion is conditional upon (i) a preliminary dispensation issued to Nordic Maritime by the Danish Financial Supervisory Authority from the obligation to submit a mandatory take-over offer, (ii) approval from the Company's general meeting to decrease the Company's share capital and authorize the issue of new shares in connection with the debt conversion and the option granted to Nordic Maritime to invest additional funds and (iii) a certain minimum net working capital level of the Nordic Shipholding group being in place up until the holding of the general meeting mentioned. A notice convening an extraordinary general meeting at which the capital decrease and authorization to issue of new shares will be presented for approval, is expected to be sent out on or about 25 November 2013.

Following completion, a prospectus relating to the new shares issued to Nordic Maritime and the Company's lending banks will be released with a view to admit the new shares for trading and official listing on NASDAQ OMX Copenhagen A/S. The new shareholders have not undertaken any lock-up obligations with respect to the Company's shares.

The future direction of the listed Company

After the restructuring the Company will be a tonnage provider in the product tanker segment and the objective is to grow the fleet. The five 37,000 dwt handy-size vessels will remain in commercial management with Maersk, where they participate in the Handytankers Pool, while the technical management of these vessels will remain with TB Marine in Hamburg. The 73,000 dwt LR1 Nordic Anne will remain commercially managed by Hafnia in the Straits Tankers Pool, while its technical management will remain with TB Marine. All existing commercial and technical management agreements will be subject to a detailed strategic review by the Company following completion of the restructuring with a view to maximizing shareholder returns.

Future management and administration of the listed Company

Following the completion of the restructuring the Company will enter into a new corporate management agreement with Singapore-based Transport Capital Pte. Ltd., an investment management firm founded by former key senior management of FSL Trust Management Pte. Ltd., headed by Philip Clausius. Transport Capital will take over the corporate management responsibilities from Hafnia Tankers (formerly Tankers Inc.), subject to a three month orderly transition period. Philip Clausius will succeed Thomas Andersen as CEO of the Company with effect from January 2, 2014. Knud Pontoppidan will remain independent Chairman of the Board of Directors.

Outlook

The Company believes that the restructuring results in a sustainable capital structure that allows the Company to once again look forward and capture the opportunities arising from stabilising supply-demand fundamentals for product tankers.

About Nordic Maritime and PAG

Nordic Maritime is a wholly owned subsidiary of one of the funds managed by PAG. PAG is one of the largest Asia-focused alternative investment managers with over USD 10 billion in funds under management.

PAG operates three distinct strategies: Private Equity; Real Estate and Absolute Return. This structure allows the group to leverage powerful synergies combining public market, distressed, real estate and private equity insights and expertise, supported by one of the most robust infrastructures with a strong commitment to best in class risk management, governance and transparency.

PAG has over 340 people working across Asia in offices in Hong Kong, Singapore, Shanghai, Beijing, Tokyo and Sydney, with a presence in Seoul and Delhi.

DNB Markets, the investment banking arm of DNB Bank ASA is acting as financial adviser to PAG.

For further information, please contact:

Knud Pontoppidan, chairman of the board of directors, Nordic Shipholding A/S: +45 3369 9083