Solstad Offshore ASA — Capital/Financing Update 2016

Nov 29, 2016

BOA OFFSHORE - INITIATES FINANCIAL RESTRUCTURING

BOA OFFSHORE - INITIATES FINANCIAL RESTRUCTURING

The financial situation of Boa Offshore AS and its

subsidiaries (the "Boa Group", the "Group" or

the "Company") has become significantly worse than

anticipated only a few months ago, mainly attributable

to i) the OCV market having weakened much more than

anticipated, ii) the sales process of the Company's

two AHTSs not progressing as planned, and iii) weaker

performance of the Company's tug fleet. Consequently

the Group's liquidity position is now severe, and

certain liquidity covenants are expected to be

breached by the end of 4Q16 or during 1Q17.

Although a net refund related to the cancellation of

two MPSVs ordered at Nantong Mingde Heavy Industry of

NOK 445 million was received during 1Q16, the main

portion of this cash has been spent on servicing the

Group's debt obligations and running the Group's

business.

The Boa Group has during the last weeks worked on a

proposal for a restructuring of the Group's business

and balance sheet, which will be presented to and

discussed with the Group's largest financial

creditors, being banks and bondholders

(the "Creditors"), going forward.

While such discussions will be ongoing with the

Creditors, the Group will continue to operate normally

in all material respects, upholding the highest level

of service to all its customers and continue to honor

all its external suppliers and trade creditors.

However, during the restructuring process no interest

and amortization will be paid to bondholders and

intercompany creditors. Regarding service of financial

debt in other group companies, this will depend on the

financial position of the relevant group company.

«Boa Offshore is now deeply affected by the market

situation. The outlook continued to weaken throughout

this fall, and our financial situation is such that we

have to go to our financial creditors. We will strive

to carry out such discussions in an open and

constructive way" comments Helge Kvalvik, CEO of Boa

Offshore AS.

Boa Offshore AS is owned by Taubatkompaniet AS, which

is controlled by Ole T. Bjornevik and his family.

Bjornevik comments to the financial estructuring: "The

offshore market has developed weaker than expected and

we need to prepare for the time it will take before it

improves. As a consequence, the Group has to make

major changes and adapt to the demanding market

conditions, and this unfortunately also means that we

now need to discuss with our financial creditors".

The Company has retained Pareto Securities AS and

SpareBank 1 Markets AS as financial advisors and Ro

Sommernes as legal advisor to assist the Company in

this process.

The Company will hold a presentation of the 3Q 2016

figures in a conference call in due course. Further

notice will be given in a separate notice.

For further information, please contact:

Helge Kvalvik, CEO: Tel +47 97 97 97 72, or

Albert Strand, Director Finance and Risk:

Tel +47 90 74 44 61

About Boa Offshore:

Boa Offshore is a Norwegian-based global offshore

supply vessel owner and operator with a well-

diversified fleet of 35 units focused on subsea,

barges, tugs, seismic, AHTS, engineering and project

management. The company has the most sophisticated

semi-submersible barge fleet in the world and holds

the global market-leading position for heavy lift

barges. The Boa group is an experienced and focused

operator with more than 40 years of history.