TGS ASA — Delisting Announcement 2021

Mar 3, 2021

NTS ASA: FRØY INTENDS TO LAUNCH AN INITIAL PUBLIC OFFERING AND LISTING ON THE OSLO STOCK EXCHANGE

NTS ASA: FRØY INTENDS TO LAUNCH AN INITIAL PUBLIC OFFERING AND LISTING ON THE OSLO STOCK EXCHANGE

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, HONG KONG, OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

FRØY INTENDS TO LAUNCH AN INITIAL PUBLIC OFFERING AND LISTING ON THE OSLO STOCK EXCHANGE

Oslo, 3 March 2021: Frøy ASA (“Frøy” or the “Company”, and together with its consolidated subsidiaries, the “Group”) today announces its intention to launch an initial public offering of its shares and to apply for a listing on the Oslo Stock Exchange (the “Offering").

Frøy is a Norwegian provider of business-critical salmon farming services with an operational track-record of more than 20 years. The Group’s service offering includes installation and maintenance of salmon farming sites, biological treatments and transportation of live fish. The service offerings build on Frøy’s fully-integrated platform of competence and infrastructure services, and are delivered via a modern and well invested fleet of wellboats, service and transport vessels. The Group has more than 670 specialized aqua service professionals and 13 local offices along the Norwegian coast.

The Group is the result of a merger between Frøy Gruppen AS (and subsidiaries) and one of NTS ASA's subsidiaries, effective from 3 April 2020. Frøy has since been reorganized to include all the aqua service businesses within NTS ASA. The respective companies carry substantial in-house competence, being led by management groups with significant seafood sector experience. The merger positioned Frøy as the largest fully-integrated provider of competence and infrastructure services to the Norwegian aquaculture industry. The Company’s vision is to take advantage of the rapidly growing aquaculture industry by being the preferred provider of efficient and sustainable aqua services to salmon farmers. Frøy’s board of directors is of the opinion that the Offering and listing of the Company’s shares on the Oslo Stock Exchange represents an important step in the development of the Company as it will (i) enable the Group to take an active role in developing and realizing the growth potential in the aqua service industry, with NTS ASA serving as an industrial sponsor and long-term owner, (ii) support the Group’s ambition to expand scale and scope of operations in Norway by building on existing client relationships and expand into new clients, and (iii) allow for potential international expansion by building on the Norwegian track-record and expanding into new salmon farming regions.

Company highlights

•Operating in the fast-growing aquaculture industry, supported by strong global mega-trends such as population growth, sustainability and service outsourcing.

•Positioned as the largest fully-integrated provider of competence and infrastructure services to the Norwegian aquaculture industry.

-Modern and well invested fleet of wellboats, service and transport vessels complemented by dedicated aqua service professionals.

-Local knowledge combined with broad geographic exposure, enabling maximum utilisation of people and assets through relocating assets and crews to areas with the highest demand.

-Integrated solutions partner for salmon farmers with capabilities to handle entire sites and the biomass lifecycle at sea, enabling Frøy to be the clear choice as a trusted expansion partner.

•Proven industry track-record with a highly professional and experienced organization, comprising more than 670 employees and 13 local offices along the Norwegian coast.

•Resilient business profile supporting an attractive dividend policy for shareholders.

-Stable historical return on capital.

-Disciplined focus on long-term contracts on all new wellboats and large service vessels resulting in a resilient revenue model with high earnings visibility.

-Revenue backlog of NOK 5.4bn including options per 2020 year-end.

-High cash conversion enabling a combination of growth and dividends.

-Strategic priority to deliver stable and growing dividends to shareholders.

•Tangible growth plan backed by long-term contracts in addition to multiple future growth prospects.

-Frøy has entered into long-term time charter contracts for 5 – 8 years, with large Norwegian salmon farmers, for 6 new wellboats expected to be delivered in 2021, 2022 and 2023. In addition, the Company will take delivery of 8 new service vessels in the same period that will operate in the spot market and on framework agreements.

-Continue to expand through long-term partnerships with Norwegian clients, utilizing scale and scope.

-Expand internationally in regions with predictable regulatory frameworks, following existing customers abroad and leveraging strong knowledge base from Norwegian operations.

-Continue to improve and expand existing service offering organically, and through bolt on acquisitions or acquisition of specialists’ environments.

Helge Gåsø, Chief Executive Officer of Frøy, commented:

“Over the last 20 years Frøy has developed into a market leading aqua service provider to the Norwegian salmon farming industry. Going forward, we see several paths for continued growth for Frøy, and believe an IPO of Frøy is now a natural next step to enable the next phase of the company´s development. We see continued strong demand for servicing the aquaculture site infrastructure and biomass, and look forward to continuing our hard work to meet the needs of our customers. With the backing of NTS ASA as a long-term owner, I trust we will continue to be the integrated solutions partner of choice for the fast growing aquaculture industry.”

Financial highlights

The Company continues to experience strong growth in revenues primarily attributable to new vessels entering the fleet and new sales across the client base. The Company reported proforma revenues in 2020 of NOK 1,561m with an EBITDA of NOK 585m, resulting in an EBITDA margin of 37.5% for the year.

Frøy Gruppen AS | Frøy Gruppen AS | Frøy ASA

(audited) | (audited) | (unaudited pro forma)

NOKm 2018 | 2019 | 2020

Revenue 933 | 1,100 | 1,561

EBITDA* 329 | 459 | 585

EBIT 177 | 274 | 319

Adj. Net income** 115 | 198 | 219

* Earnings before interest, tax, depreciations and amortizations (EBITDA) defined as operating profit before tax with addition of depreciations and amortizations.

** Pro forma net income excludes change in real value of shares in Norway Royal Salmon ASA of -NOK 319m. Following the reorganization completed in December 2020, Frøy is no longer a shareholder in Norway Royal Salmon ASA. Unadjusted pro forma 2020 net income would be -NOK 100m including the change in real value of shares.

*** NTS ASA and Frøygruppen AS merged in April 2020. 2018 and 2019 financial figures for Frøygruppen AS do not include the former NTS aqua service entities (Norsk Fisketransport AS and NTS Shipping AS).

The Offering in brief

The Offering is expected to comprise an offering of new shares in the Group to raise gross proceeds of approximately NOK 1.0bn. In addition, the Offering is expected to include a sale of shares by the existing shareholder, NTS ASA. The net proceeds from the Offering received by the Company will be used to establish a sustainable long-term financial platform, to pursue growth opportunities, organizational development and general corporate purposes, in line with the Company’s strategy.

Subject to receiving the relevant approvals from the Oslo Stock Exchange and the Norwegian Financial Supervisory Authority, as well as prevailing equity capital market conditions, the Company is expected to have its first day of trading on the Oslo Stock Exchange in Q1 2021. Further announcements relating to the Offering will be made in due course.

Advisors

Danske Bank, Norwegian branch, Nordea Bank Abp, filial i Norge, and SpareBank 1 Markets are acting as Joint Global Coordinators and Joint Bookrunners in the Offering (together the “Joint Global Coordinators”). Arntzen de Besche Advokatfirma AS is acting as legal advisor to the Company. Advokatfirmaet Thommessen AS is acting as legal advisor to the Joint Global Coordinators.

For further information, please contact:

Helge Gåsø, CEO

+47 724 46 334

Arne Rødsjø, CFO

+47 954 12 340

Sondre Vevstad, IR

+47 936 54 555

Important notices

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering or its securities in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation 2017/1129 as amended together with any applicable implementing measures in any Member State.

This announcement does not constitute a prospectus and nothing herein contains an offering of securities. No one should purchase or subscribe for any securities in the Company, except on the basis of information in any prospectus published by the Company in connection with the potential offering and admission of such securities to trading and listing on the Oslo Stock Exchange. Copies of any such prospectus will, following publication, be available from the Company's registered office.

The Joint Global Coordinators and their affiliates are acting exclusively for the Company and no-one else in connection with the intended offering. They will not regard any other person as their respective clients in relation to the intended offering and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the intended offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control.

Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in investment levels and need for the Company’s services, changes in the general economic, political and market conditions in the markets in which the Company operates, the Company’s ability to attract, retain and motivate qualified personnel, changes in the Company’s ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not provide any guarantees that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this document.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

Neither of the Joint Global Coordinators nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities in the Company. Neither the Joint Global Coordinators nor any of their respective affiliates accepts any liability arising from the use of this announcement.