Farstad Shipping ASA – Private placement fully subscribed

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA 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.

Ålesund, Norway, 13 February 2017 – With reference to the announcement on 7 February 2017, Farstad Shipping ASA ("Farstad" or the "Company") announces today that the private placement of 428,571,428 new shares (the "Private Placement") was fully subscribed. The Private Placement was fully subscribed at a subscription price per share of NOK 0.35, for a total subscription amount of NOK 150 million in cash.

As further announced by the Company on 7 February 2017, the Company shall also conduct a private placement (the "Hemen/Aker Private Placement") of new shares towards Aker Capital AS ("Aker") and Hemen Holding Limited ("Hemen") for a total subscription amount of NOK 450 million at the same subscription price as in the Private Placement, of which each of Aker and Hemen will subscribe for and be allocated shares for an amount of NOK 225 million.

As part of the Private Placement, holders of bonds in the Company's bond loans (ISIN NO 001 0679871 and NO 001 0635964) were alternatively offered to subscribe for convertible bonds. As the aggregate amount of convertible bonds subscribed for in the Private Placement was less than NOK 80 million, no convertible bonds will be issued by the Company.

Holders of bonds in the Company's bond loans were conditionally allocated all of the 428,571,428 shares allocated in the Private Placement for the total amount of NOK 150 million.

As the Private Placement was fully subscribed by bondholders, Tyrholm & Farstad Invest AS (an affiliate of the Company's principal existing shareholder, Tyrholm & Farstad AS) was not allocated shares in the Private Placement. In order to facilitate a total subscription of NOK 50 million, Tyrholm & Farstad Invest AS will subscribe for a total amount of NOK 50 million in the Hemen/Aker Private Placement. Aker and Hemen's subscriptions in the Hemen/Aker Private Placement will be reduced correspondingly on a pro rata basis.

The full subscription of NOK 150 million was guaranteed by Aker and Hemen with NOK 75 million each. As the Private Placement was oversubscribed, no shares will be subscribed under the guarantee.

The new shares are planned to be issued as part of the comprehensive restructuring announced on 6 February 2017 (the "Restructuring"). The completion of the Private Placement and issuance of the new shares remains subject to the fulfilment of the conditions for the Restructuring within 30 June 2017. These conditions include, amongst other things, approval by the bondholders in the Company's two outstanding bond loans FAR03 and FAR04, the approval of the credit committees of senior lenders, and relevant corporate resolutions, including approval by the Company's shareholders meeting.

For further details on the Restructuring, please refer to the Restructuring press release and the detailed Restructuring term sheet, both dated 6 February 2017, as well as to the Private Placement press release dated 7 February 2017, and the company presentation attached thereto.

The new shares issued in the Private Placement will not be tradable before the shares have been fully paid and the new shares have been registered with the Norwegian Central Securities Depository (the "VPS"). The new shares will when issued rank equal in all respects to the existing shares of the Company. The current nominal value of the Company's ordinary shares is NOK 1.00. As part of the Restructuring, the Company will carry out a share capital reduction in order to reduce the nominal value of the ordinary shares to NOK 0.05. The new shares issued in the Private Placement will following approval and publication of a listing prospectus be listed on Oslo Børs. Pending such listing, the new shares will be registered on a separate ISIN and not be listed or tradable on Oslo Børs. The Company may seek an interim registration of the new shares on N-OTC or Merkur Market.

In order to be able to complete the Private Placement, the Company's Board of Directors has proposed to the shareholders' meeting to be held on 3 March 2017 that existing shareholders' pre-emptive rights to subscribe the new shares are set aside. The Company's Board of Directors believes that this is necessary and in the best interest of the Company and its shareholders and other stakeholders as it secures the financing required by the Restructuring.

Further, the Company's Board of Directors has proposed that the shareholders' meeting to be held on 3 March 2017 authorise the Board of Directors to carry out a subsequent repair offering for a total subscription amount of NOK 50 million. Eligible shareholders and bondholders as per the end of the last day of the subscription period (10 February 2017, as recorded in the VPS on 14 February 2017) will, subject to completion of the Restructuring, be granted non-transferable rights to subscribe for and, upon subscription, be allocated new shares in the Company of which the eligible shareholders will be granted subscription rights for shares with a subscription amount of NOK 45 million and the eligible bondholders will have a right to subscribe for a subscription amount of NOK 5 million. Shareholders and bondholders being allocated shares in the Private Placement will not be entitled to participate in the repair offering. The subscription price in the repair offering will be equal to the subscription price in the Private Placement. Tyrholm & Farstad AS, the Company's principal existing shareholder, Sverre A. Farstad and Jan H. Farstad have waived their rights to participate in the repair offering. Each of Aker and Hemen have guaranteed the full subscription of NOK 25 million of the repair offering, such that the aggregate amount thereof guaranteed is NOK 50 million.

A separate announcement will be made today setting out key information for the repair offering.

ABG Sundal Collier ASA and Pareto Securities AS have acted as managers for the Private Placement.

For further information, please contact:

CEO Karl-Johan Bakken, tel. +47 901 05 697

CFO Olav Haugland, tel. +47 915 41 809

Farstad Shipping's fleet currently consists of 56 vessels (27 AHTS, 22 PSV and 7 SUBSEA). The Company's operations are managed from Aalesund, Melbourne, Perth, Singapore, Macaé and Rio de Janeiro with a total of 1,500 employees engaged onshore and offshore. The Company's strategy is to be a leading quality provider of large, modern offshore service vessels to the oil industry.

www.farstad.com  

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IMPORTANT INFORMATION

This press release is for information purposes only and shall not constitute or be construed as an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Copies of this announcement are not being made and may not be distributed or sent into the Australia, Canada, Japan, the United States or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.

The securities referred to herein have not been and will not be registered under the U.S. Securities Act, or any state securities laws, and will be sold within the United States only to qualified institutional buyers ("QIB"), as defined in Rule 144A under the U.S. Securities Act ("Rule 144A"), through affiliates of the managers, in reliance upon the exemption from the registration requirements provided by section 4(2) of the U.S. Securities Act Rule 144A, and to certain non-U.S. persons in offshore transactions in reliance on Regulation S under the U.S. Securities Act. The securities to be offered will be subject to certain restrictions on transfer.

Certain statements contained herein that are not statements of historical fact, may constitute forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results or events concerning the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. None of the Company, the managers or any of their affiliates or advisors provide any assurance that the assumptions underlying such forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of the opinions expressed in this press release or the actual occurrence of the forecasted developments. Except as may be required by applicable law or stock exchange regulation, neither the Company nor the managers, or any of their affiliates or advisors, assume any obligation to update any forward-looking statements or to confirm these forward-looking statements to actual results.

This information is subject of the disclosure requirements set out in Section 5-12 of the Norwegian Securities Trading Act.

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