Solstad Offshore ASA — M&A Activity 2017

Mar 1, 2017

Solstad Offshore

Oslo, 1 March 2017

Creating the leading high end OSV company through merger of Farstad Shipping and Deep Sea Supply with Solstad Offshore

ESTIMATED KEY FINANCIALS

• 2016 revenues: NOK 6.2 bln
• 2016 EBITDA: NOK 1.7 bln
• 2016 YE Cash position: NOK 3 bln
• 2016 YE Gross interest bearing debt: NOK 32 bln¹

1 Excluding Solstad share of JVs but including Ship Finance sale leaseback SOURCE: Broker reports; Aker analysis

• Number three globally in number of vessels. Clearly number 1 within CSV, AHTS and PSV
• Complementary strengths
• Deep Sea Supply's cost leading PSV operating model
• Solstad's world leading subsea operation
• Farstad's AHTS experience

Transaction structure designed to limit process risk and create an efficient and shareholder friendly structure

CORPORATE STRUCTURE

Run as one company - work to simplify corporate and financial structure over time • Creates top structure that is largely

HIGHLIGHTS

• Farstad restructured through combination of debt conversion and new equity fully funded by Hemen/Aker
• Farstad and Deep Sea Supply merged with Solstad using statutory triangular mergers
• Key bank terms (amortization and covenants) across all three companies
• Significant strengthening and diversification of shareholder base

KEY BENEFITS

• non-recourse
• Highly liquid share for investors on Oslo Børs – no controlling shareholder

1) Shareholding assumes a NOK 50 mln repair, NOK 50 mln issue towards Tyrholm and Farstad and NOK 150 mln issue towards bondholders. Aker and Hemen will normalize ownership following completion of the transaction

Strong fundamentals underlying transaction

		DESCRIPTION
COMPLEMENTARY STRENGTHS		• Highly complementary combination • DESSC's cost leading PSV operating model • Solstad's world leading subsea operation • Farstad's AHTS experience
T S N E A GI C R FI E N N G Y SI S	COST	• Onshore SG&A cost • Reduced opex through tailoring operating model to each segment • Total NOKm 400-650 towards 2016 cost base
	REVENUES	• Efficient deployment of fleet across geographies and segments to increase utilization • Fleet rationalization based on common principles across group
VEHICLE FOR FURTHER CONSOLIDATION		• Scalable operating model allowing to add vessels/fleet swiftly and efficiently • Corporate and financial structure set up to accomodate further transactions

Strategic agenda aims ensure company remain largest high-end OSV company

CLOSING AND INTEGRATION 1

• Ensure FAR and DESSC processes remain on track
• Refinance harmonize key terms across companies and facilities
• Run ambitious integration process with amble potential

MAXIMIZE VALUE OF CURRENT SETUP 2a

• Required fleet rationalization
• Optimize financing structure across group
• Run initiatives to strengthen position in key geographies and segments

PARTICIPATE IN CONSOLDATION 2b

• Play active role in consolidation
• Draw on benefits from industrial owners

• Leverage scalable corporate and operational structure

• World's largest high-end OSV company

• Most attractive public OSV share

Value proposition

• Long history and solid track record in OSV market
• Three companies with strong heritage
• Leading company in global high end OSV industry
• Successful refinancing, strong industrial partners
• Secured solution through 2021with creditors for all companies
• Hemen and Aker contribute significant capital and support the company industrially

• Leading operator

• World leading operational capabilities in PSV, ATHS and CSV
• Ambition to create lean organization with strong commercial, operational and technical capabilities
• Well positioned
• Open to participate in industry restructuring
• Well positioned for market recovery