Solstad Offshore ASA — M&A Activity 2020

May 8, 2020

Restructuring Implementation Agreement

Restructuring Implementation Agreement

Reference is made to the stock exchange notice 31 March 2020 where Solstad

Offshore ASA (the "Company") and its subsidiaries ("SOFF" or the "Group")

informed that it had agreed on a plan with key stakeholders to finalise the

negotiations for an agreement for the financial restructuring of the Group.

In accordance with the said plan, SOFF has today signed a Restructuring

Implementation Agreement (the "RIA") for a restructuring of the Group (the

"Restructuring"). The key features of the Restructuring are:

· Debt to equity conversion of approximately NOK 10,9 billion

· New fleet loan maturing after 4 years

· Financing of additional liquidity

· Industrial shareholders to retain ownership of up to 33.34%

· Streamlining of corporate structure

The RIA has been entered into with a majority of the Restructuring's key

stakeholders, including all of its secured finance providers except for three

financial providers in the Solship Invest 3 AS and Farstad Shipping AS silos

(the "Senior Finance Parties")

The RIA reconfirms the key elements of the Restructuring as described in the

notice dated 31 March 2020:

1. The Group's balance sheet and liquidity will be notably strengthened.

2. Debt in an amount equivalent to approximately 10,9 billion (based on fixed

foreign exchange rates) will be converted into equity. The debt converted to

equity consists of secured debt, leasing obligations, bond obligations and other

unsecured debt. All debt converted to equity will have the same conversion rate.

3. The Group's fleet will be refocused, and 37 vessels of the older and less

sophisticated vessels are envisaged to be sold or scrapped over a period of

time. The long-term business of the Group will be based on a core fleet of

approximately 90 vessels.

4. The Group's financial and company structure will be simplified. Apart from

certain ring-fenced structures, surviving secured debt of the Company will be

included in a fleet loan maturing after four years. The fleet loan will be made

available in NOK and USD. At prevailing foreign exchange rates, the consolidated

surviving debt of the Group will be in an amount equivalent to approximately NOK

9,058 million and USD 886 million.

A part of the new fleet loan in an amount equivalent to approximately

NOK 0,9 billion, will be secured by the non-core vessels that are likely to be

sold or scrapped within a limited period of time following completion of the

Restructuring. The net proceeds from such sales will be used to repay the

relevant part of the fleet loan, and any remaining amount will subsequently be

converted into equity at the same conversion rate as the debt being converted

into equity at completion of the restructuring.

5. The SOFF 04 bonds will receive a fee of NOK 50 million financed by new

equity, and the residual claim will be converted to equity in the Company. A

bondholder meeting to resolve the Restructuring will be convened as soon as

possible.

6. The bondholders in Solship Invest 1 AS will be repaid an amount equal to

Solship Invest 1 AS' corporate cash (which amounts to approximately NOK 26

million). The residual claim will be converted to equity in the Company.  A

bondholder meeting to resolve the Restructuring will be convened as soon as

possible.

7. The leasing agreements for five vessels owned by subsidiaries of SFL Corp

Ltd. have been terminated. The relevant lessors will receive a fee of NOK 10

million, and the residual claim will be converted into shares in the Company.

8. The leasing agreements for two vessels owned by a subsidiary of Ocean Yield

ASA, F-Shiplease AS will be replaced by new lease agreements on amended terms.

Claims under the existing lease agreements will be converted into shares in the

Company. The charter rate payable under the new lease agreements shall be a

reference rate equal to the average per vessel EBITDA in a pool of seven similar

vessels. F-Shiplease AS will carry all upside/downside from the operation of its

vessels during the charter period.

9. Upon completion of the restructuring, the existing shares will represent

0.4%, and the converted debt will represent at least 64-75% of the Company's

shares.

10. Existing industrial shareholders including Lars Peder Solstad and companies

controlled by him ("LPS") will continue to support the Company, and will be

offered to subscribe for shares so as to retain an ownership of up to 1/3 of the

shares in the Company upon completion of the restructuring. The industrial

shareholders will also be offered to subscribe for a convertible loan in the

Company which will be converted into shares in so far as necessary for them to

maintain their shareholding following the conversion of the part of the new

fleet loan that will be converted into equity upon the sale or scrapping of the

Group's non-core vessels (cf. item 4 above).

The remaining shareholders will be offered to subscribe for shares so as to

retain a total ownership of up to 2%.

The Chairman of the Board Mr. Harald Espedal will be offered to

subscribe for shares representing 0,9% of the shares in the Company. Fausken

Invest AS, a company controlled by board member Frank O. Reite, will enter into

a put/call agreement with Aker for shares with a subscription amount of NOK 1

million.

The shares to be subscribed by the industrial shareholders and Harald

Espedal will be subject to a three year lock up period.

The total subscription amount for the shares and convertible loan to be issued

in consideration for cash (to represent up to approximately 36% of the shares of

Company upon completion of the restructuring) will be up to approximately NOK

72,5 million.

11. LPS will be granted warrants through an incentive program, to achieve up to

a 10% share of the Company (based on the shares outstanding, and including LPS'

shares, in the Company at completion of the Restructuring).

The effectiveness of the RIA is conditional on credit committee approvals with

the Senior Finance Parties, to be obtained within 29 May 2020 or such later date

that may be agreed with the Company.

The implementation of the Restructuring is further subject to the approval of

the general meeting of the Company and relevant bondholders meetings, agreement

on long form documentation with relevant stakeholders and related customary

condition precedent documentation.

The closing of the Restructuring is expected to take place in July 2020, however

the RIA has a long stop date which can be extended to 8 November 2020 if more

time is required.

Some creditors in subsidiaries of Farstad Shipping AS and Solship Invest 3 AS

have not yet acceded to the RIA. The inclusion in the restructuring of these

companies and their debtors in the Group remains subject to further negotiations

between the stakeholders. The Company expects that the Restructuring can be

consummated in all material respect even if these creditors ultimately decide

not to accede to the RIA.

All liabilities towards the financial creditors will be subject to standstill

provisions in the period leading up to the closing of the Restructuring. Until

the Restructuring is implemented, the Group continues its unilateral standstill

towards certain creditors. In the bondholder meetings to be held in May, the

bondholders will be asked to waive the current defaults in SOFF 04 and the

Solship Invest 1 AS bond loan as were advised in the notice by the Company 31

March 2020.

To make the board quorate when deciding on the Restructuring, Mrs. Ellen Solstad

has today stepped down from her board position.

CEO Lars Peder Solstad says in a comment:

"We are very pleased to announce this restructuring agreement today. It has been

a long process leading up to this important milestone, and we are grateful to

the stakeholders for their continued support and trust in our company. This

agreement will be important for our clients, employees, financial creditors and

shareholders, as it reduces uncertainty and will allow us to focus even more on

our core activities which are delivering high quality services to our clients.

Our industry is facing challenging times in light of the Covid-19 pandemic and

the reduced oil price, but a restructured Solstad Offshore ASA will be in a much

better position to handle these challenges."

Skudeneshavn, May 8th 2020

Contacts

Lars Peder Solstad CEO, at +47 91 31 85 85

Anders Hall Jomaas CFO, at +47 40 04 29 18

Solstad Offshore ASA

www.solstad.com

This information is subject of the disclosure requirements according to the

Norwegian Securities Trading Act section § 5-12.