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