Solstad Offshore ASA — M&A Activity 2023

Mar 7, 2023

Exit from PSV segment through a strategic sale of its PSV-fleet

Exit from PSV segment through a strategic sale of its PSV-fleet

Skudeneshavn, Norway, 7 March 2023 - Subsidiaries of Solstad Offshore ASA

("Solstad", OSE: SOFF) have today signed an agreement with U.S. based Tidewater

Inc. ("Tidewater", NYSE: TDW) for the sale of 37 platform supply vessels (the

"PSV Fleet") (the "Transaction").

The total cash consideration payable for the PSV Fleet is approximately USD 577

million.

HIGHLIGHTS:

· This strategic move reduces Solstad's debt by approximately NOK 6 billion and

will considerably strengthen Solstad's balance sheet, debt service ability and

liquidity position.

· The transaction repositions Solstad as one of the main global owners and

operators of high-end AHTS and Subsea vessels that are essential to realise the

energy transition.

· It further enables Solstad to increase its presence in the renewable energy

segment, and expand its service offering, including ROV services, tooling and

project support, in cooperation with strategic partners

· Exiting the PSV segment will significantly reduce Solstad's capex program in

2023 and 2024.

"The sale of the PSVs represents a shift in our strategy in a changing market.

The PSVs mainly support the oil and gas industry, while the AHTSs and CSVs can

service all offshore energy sectors, including oil and gas and renewables. This

move is therefore in line with our strategy of being a key enabler in the energy

transition. Further, the transaction will give Solstad greater financial leeway

and a significantly improved debt and cash position going forward," says Lars

Peder Solstad, CEO of Solstad Offshore.

After the transaction has been completed, Solstad's fleet* in operation will

consist of 41 high-end offshore vessels. In addition, six vessels are non

-operational and considered to be sold.

Solstad's fleet will continue to support clients that operate in the offshore

energy sector. Both offshore renewables and oil and gas are predicted to see

significant investments in the coming years.

Solstad has one of the most sophisticated fleets of offshore vessels in the

world and will maintain its global footprint in all key offshore regions,

including the North Sea, Brazil and Asia Pacific.

"Following the transaction, the core competence of future Solstad will be even

better applied to further developing the CSV and AHTS segments, including

building up our service division and capitalizing on a stronger position in the

renewable energy market. The generally higher margins for AHTS and CSVs will

allow us to improve our financials, strengthen our renewable energy presence,

and put us in a position to, over time, renew our fleet" Lars Peder Solstad

adds.

The Transaction will considerably strengthen Solstad's balance sheet by

facilitating a repayment of approximately NOK 6 billion of the group's total

outstanding debt. The Transaction will improve Solstad's debt servicing

abilities and liquidity position.

Key pro forma financial effects of the Transaction as per 31 December 2022 can

be summarised as follows (unaudited preliminary numbers):

Indicators (amounts in NOK million) 2022* Excl. PSV Fleet**

Revenue 6,493 4,711

Firm backlog 9,200 6,300

EBITDA adjusted 1,995 1,687

EBITDA margin 31% 36%

Renewable % of income 17% 23%

Vessels*** 86 49

Cash 2,170 2,170

Net interest-bearing debt 21,117 15,400

* P&L figures are YTD 4Q22 whereas balance sheet figures are per 4Q22

** Pro forma figures based on 4Q reporting

*** Two additional vessels are sold after quarter end

The Transaction will facilitate an exit from the PSV segment and in line with

Solstad's strategy going forward with focus on high-end CSV and AHTS vessel and

project related work. The AHTS and the CSV segments increasingly generate its

EBITDA from the renewable energy market. An enhanced focus on these segments

signals a strong commitment to the green transition and enables the group to

pursue investments to further reduce its carbon footprint.

Ongoing charter parties will, subject to the necessary consents from the

charterer, be transferred/novated to Tidewater. Absent such consents in time for

completion of the Transaction, the economic interest in the charter party will

be transferred to Tidewater and until the necessary consents are given or the

charter party expires. Solstad will offer management services to Tidewater in a

transition period to facilitate a smooth transfer for the parties and the

customers.

The offshore employees associated with the PSV Fleet will be offered employment

with Tidewater.  Tidewater will also offer employment to certain of the onshore

employees.

The transaction will have a minor accounting effect to be reflected upon

closing.

Completion of the Transaction is contingent on third party approvals such as

certain charterers and competition authorities, buyers financing and fulfilment

of conditions precedent. The Parties may abandon the Transaction if it is not

completed within the longstop date 30 June 2023.

***

This release is considered to contain inside information related to the listed

securities of SOFF pursuant to the EU Market Abuse Regulation (MAR) and is

subject to the disclosure requirements pursuant to MAR and Section 5-12 the

Norwegian Securities Trading Act. The announcement is made by Finance

Coordinator, Liv Karina Døsen on 7 March 2023 at 08:44 CET.

For further information, please contact:

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

Kjetil Ramstad CFO, at +47 90 75 94 89