Philly Shipyard — Capital/Financing Update 2014

Jun 10, 2014

Aker Philadelphia Shipyard and financial sponsors, including American Shipping Company and funds affiliated with Apollo Global Management, create pure play Jones Act shipping company, Philly Tankers

Aker Philadelphia Shipyard and financial sponsors, including American Shipping Company and funds affiliated with Apollo Global Management, create pure play Jones Act shipping company, Philly Tankers

Highlights

* Philly Tankers established to provide pure play exposure toward Jones Act

shipping market with firm contracts for two eco-design product tanker

newbuilds and options for two additional vessels

* Vessels will be built by Aker Philadelphia Shipyard with deliveries of the

initial two vessels in Q4 2016 and Q1 2017 and deliveries of the two option

vessels in Q3 2017 and Q4 2017

* Philly Tankers has ambitions to grow through a combination of additional

newbuilds, acquisitions of existing vessels, and participation in expected

market consolidation

* Corporate structure suitable for future transformation to a Master Limited

Partnership (MLP), potentially offering significant value enhancement

* Philly Tankers to be listed on the Norwegian OTC by mid-July 2014 with goal

of a U.S. listing by mid-2016

* Aker Philadelphia Shipyard to invest USD 58.5 million in Philly Tankers for

54% of the company, gaining additional shipping exposure in-line with Aker

Philadelphia Shipyard's previously communicated strategy

* Philly Tankers' sponsors to invest USD 59.0 million in Philly Tankers for

the remaining 46% of the company, and include American Shipping Company

(OSE: AMSC), funds managed by affiliates of Apollo Global Management, LLC

(NYSE: APO) and other U.S. institutional investors

Aker Philadelphia Shipyard ASA (OSE: AKPS) is pleased to announce the planned

establishment of Philly Tankers AS, a Norwegian limited liability company, and

its wholly-owned subsidiary, Philly Tankers LLC, a Delaware limited liability

company (together "Philly Tankers"). Philly Tankers has successfully secured

equity commitments necessary to finance the purchase of two product tankers from

AKPS with deliveries in 2016 and 2017 (the "Transaction"), and will have a post-

money market capitalization of USD 127.5 million. Together with best-in-class

partners, Philly Tankers will operate and charter the vessels in the Jones Act

market.

"We are delighted to see so much interest in Philly Tankers. The company offers

pure-play exposure to an increasingly strong market and is targeting growth

through a combination of newbuilds, acquisitions of existing vessels, and

potentially through market consolidation," says Kristian Rokke, Chairman of

AKPS. "There are two key trends currently shaping the Jones Act market - the

tight oil revolution, which has increased demand for product tankers, and a

surge in containership orders, which has constrained shipyard capacity. Philly

Tankers is well positioned to benefit from the effects of these trends by

offering customers modern tonnage in a supply constrained market, as well as

reliable operations and substantially improved fuel-efficiency versus the

existing fleet."

As part of the Transaction, AKPS will invest USD 58.5 million for 54% of the

shares, which AKPS expects to fund through existing cash and proceeds from

operations. The remaining sponsors will invest USD 59.0 million for 46% of the

shares at a subscription price of USD 1,000.00 per share.

AKPS and Philly Tankers, through their U.S. subsidiaries, will enter into

binding shipbuilding contracts for the first two product tankers, designated as

AKPS Hulls 025-026. The total contract value is approximately USD 250 million,

excluding construction period financing, initial owner expenses, G&A, and

transaction costs. The anticipated profitability of the shipbuilding project for

AKPS is in-line with previous guidance for AKPS Hulls 021-030. An option

agreement will also be signed for two identical product tankers with deliveries

in 2017, designated as AKPS Hulls 027-028, on substantially the same terms and

conditions as AKPS Hulls 025-026.

The vessels will be 50,000 dwt product tankers based on a proven Hyundai Mipo

Dockyards (HMD) design that incorporates numerous fuel efficiency features,

flexible cargo capability, and the latest regulatory requirements. The vessels

will be constructed with consideration for the use of LNG for propulsion in the

future. The vessels will be identical to the vessels currently under

construction at AKPS that will be included in the AKPS-Crowley joint venture.

Philly Tankers expects to hire a best-in-class technical operator prior to

delivery of the first vessel to arrange for maintenance and crewing of the

vessels, and to ensure that the vessels satisfy all regulatory requirements,

among other things. Philly Tankers has a number of attractive options for

commercial management and will consider all its alternatives when seeking and

arranging employment for the vessels.

Prior to delivery of the first vessel, Philly Tankers will have an ownership and

corporate structure that is fully compliant with all applicable Jones Act

requirements.  Philly Tankers will explore value-enhancing initiatives such as

the establishment of a Master Limited Partnership. Philly Tankers will have a

Board of Directors comprised of independent and investor-designated members.

Philly Tankers will initially list its shares on the Norwegian OTC, with a

target of a U.S. listing by mid-2016.

Closing of the Transaction remains subject to satisfaction of customary

conditions precedent, including the execution and delivery of satisfactory

definitive documentation, and the approval by the general meeting of American

Shipping Company of its participation in the Transaction. It is expected the

Transaction will be closed in mid-July 2014.

Arctic Securities and Pareto Securities have acted as Joint Lead Managers for

the Transaction. Advokatfirmaet BA-HR DA and Blank Rome LLP have acted as legal

adviser to AKPS in connection with the private placement. Wiersholm has acted as

the legal adviser to the Joint Lead Managers.

Aker Philadelphia Shipyard is a leading U.S. commercial shipyard constructing

vessels for operation in the Jones Act market.  It possesses a state-of-the-art

shipbuilding facility and has earned a reputation as the preferred provider of

oceangoing merchant vessels with a track record of delivering quality ships.

Aker Philadelphia Shipyard is listed on the Oslo Stock Exchange and is majority-

owned by Converto Capital Fund, which in turn is majority-owned by Aker ASA.

Aker is a Norwegian industrial investment company that creates value through

active ownership. Aker's investment portfolio is concentrated on key Norwegian

industries that are  international in  scope: oil  and  gas,  fisheries  and

biotechnology,  and marine assets. Aker's industrial holdings comprise ownership

interests in Aker Solutions, Kvaerner, Det norske oljeselskap, Aker BioMarine,

Ocean Yield and Havfisk.

Important information about this release

This information is subject to disclosure under the Norwegian Securities Act,

Section 5-12.

This release includes and is based, inter alia, on forward-looking information

and statements that are subject to risks and uncertainties that could cause

actual results to differ. Such forward-looking information and statements are

based on current expectations, estimates and projections about global economic

conditions, the economic conditions of the regions and industries that are major

markets for Aker Philadelphia Shipyard ASA and its subsidiaries and affiliates

(the "Aker Philadelphia Shipyard Group") lines of business. These expectations,

estimates, and projections are generally identifiable by statements containing

words such as "expects", "believes", "estimates" or similar expressions.

Important factors that could cause actual results to differ materially from

those expectations include, among others, economic and market conditions in the

geographic areas and industries that are or will be major markets for the Aker

Philadelphia Shipyard Group's businesses, oil prices, market acceptance of new

products and services, changes in governmental regulations, interest rates,

fluctuations in currency exchange rates and such other factors as may be

discussed from time to time.

Although Aker Philadelphia Shipyard ASA believes that its expectations and the

information in this press release were based upon reasonable assumptions at the

time when they were made, it can give no assurance that those expectations will

be achieved or that the actual results will be as set out in this press release.

Neither Aker Philadelphia Shipyard ASA nor any other company within the Aker

Philadelphia Shipyard Group is making any representation or warranty, expressed

or implied, as to the accuracy, reliability or completeness of the information

in the press release, and neither Aker Philadelphia Shipyard ASA, any other

company within the Aker Philadelphia Shipyard Group nor any of their directors,

officers or employees will have any liability to you or any other persons

resulting from your use of the information in the press release.

Aker Philadelphia Shipyard ASA undertakes no obligation to publicly update or

revise any forward-looking information or statements in the press release, other

than what is required by law.

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