HUNTER GROUP ASA - NON-BINDING INDICATIVE OFFER FROM APOLLO ASSET LIMITED
Oslo, 10 April 2018
This stock exchange announcement is made pursuant to section 5-2 of the Norwegian Securities Trading Act.
NON-BINDING INDICATIVE OFFER FROM APOLLO ASSET LIMITED
The Board of Hunter Group ASA (the "Company") has today received a non-binding indicative offer (the “Offer”) from Apollo Asset Limited (the “Offeror”). T
he ultimate owner of the Offeror, Mr. Arne Fredly, is appointed as board member in the Company, and has accepted to not participate in the Company’s decisions in connection with the transfer, pursuant to the Norwegian Public Limited Companies Act section 6-27.
The Offer outlines the principal terms and conditions upon which the Offeror would consider transferring four (4) VLCC newbuilding contracts and three (3) VLCC options (the “Newbuilding Contracts” and the “Options”) to the Company. The Offeror is prepared to transfer the Newbuilding Contracts and the Options (or the rights and obligations thereunder) to the Company on a back-to-back basis as contracted with the Daewoo Shipbuilding Marine Engineering Co., Ltd (the “Shipyard”), whereby the Company will assume the obligations towards the Shipyard (directly or indirectly).
The Offeror offers the Newbuilding Contracts to the Company on the following terms, without any mark-up or additional fees to the Offeror other than as set out herein:
Shipbuilding Contr. Contract amount Scrubber Tot. contract amount Delivery
No. 1 MUSD 82.5 MUSD 2.7 MUSD 85.2 Oct./Nov. 2019
No. 2 MUSD 82.5 MUSD 2.7 MUSD 85.2 Oct./Nov. 2019
No. 3 MUSD 82.5 MUSD 2.7 MUSD 85.2 Dec. 2019
No. 4 MUSD 82.8 MUSD 2.7 MUSD 85.5 Dec. 2019
The Offeror offers the Options to the Company on the following terms, without any mark-up or additional fees to the Offeror other than as set out herein:
Option Contract amount Scrubber Tot. contract amount Delivery
No. 1 MUSD 82.8 MUSD 2.7 MUSD 85.5 Q2 2020
No. 2 MUSD 82.8 MUSD 2.7 MUSD 85.5 Q2 2020
No. 3 MUSD 82.8 MUSD 2.7 MUSD 85.5 Q2 2020
Expiry date for exercising the Options towards the Shipyard is 27 May 2018.
The Offeror has also entered into a building supervision agreement with V.Ships, pursuant to which V.Ships shall undertake the building supervision at the Shipyard against a building supervision fee of USD 180,000 per vessel (the “Newbuilding Supervision Agreement”). Provided the Newbuilding Contracts and the Options are transferred to the Company as provided for herein, the Offeror will transfer the Newbuilding Supervision Agreement to the Company on a back-to-back basis, without any mark-up or additional fees. The Offeror assumes that several minor out-of-pocket expenses, fees to Norwegian legal advisors etc. shall be credited the Offeror from the Company in connection with the transfer.
The first instalments under the Newbuilding Contracts, of 10% of the total contract amount per vessel, are due three (3) banking days after Offeror's receipt of the refund guarantee from the Shipyard's bank (expected mid- to late April, latest 27 April 2018), and the Company must have sufficient funds available to fund such instalments. The remaining instalment structure is additional 10% in February 2019 (average in the four Newbuilding Contracts), and thereafter additional 10%, 10% and 60%.
Owing to the suggested back-to-back arrangement, the Offeror will, for a period following the transfer, maintain the payment obligations of the total contract amounts under the Newbuilding Contracts (MUSD 341.1) towards the Shipyard (the “Apollo Contractual Obligation”). As of the date hereof, the Shipyard does not accept releasing the Offeror under the Apollo Contractual Obligation in connection with the Transfer.
Before entering into final legally binding transfer agreements, the following conditions must have been satisfied, or waived by the Offeror in its absolute discretion (the “Conditions Precedent”):
(i) Final transfer agreement: The Offeror reserves the right to agree on the final content of the legally binding transfer arrangements, including the arrangements in the legal and commercial terms.
(ii) Dwellop transactions: The Board and general meeting of the Company shall have resolved: (1) contribution of MNOK 10 in cash to the subsidiary Dwellop AS; and (2) distribution of all shares in Dwellop AS to the shareholders of the Company.
(iii) Private placement: The Board and general meeting of the Company shall have approved a private placement towards certain co-investors in the Newbuilding Contracts, with proceeds of minimum MNOK 150 and maximum MNOK 172.5, directed investors as designated by the Offeror, at a subscription rate of NOK 2.30 per share in the Company.
(iv) Warrants: The Board and general meeting of the Company shall have approved issuance of warrants to the Offeror, whereby the Offeror shall be entitled to subscribe for new shares in the Company, with a subscription amount of 0.8% of the total contract amount under the Newbuilding Contracts, and Options (if applicable, and as exercised). The warrants shall be issued without any consideration, not have a duration of less than 5 years, and be convertible into shares at a rate between NOK 2.60 and NOK 3.20 (NOK 2.90 on an average basis).
The warrants (as referred to under (iv)), shall be issued to the Offeror to partly compensate the Offeror for not being released the Apollo Contractual Obligation under the Newbuilding Contracts in connection with the transfer. Owing to the Apollo Contractual Obligation, the Offeror will in a period following the transfer maintain the credit risk towards the Shipyard, and, accordingly, will the warrants constitute a fair minimum compensation to the Offeror in connection with the transfer.
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Both the Offeror and the Board of the Company believe that the Offer is made in the best interests of the Company and its shareholders.
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www.huntergroup.no
For further information, please contact:
Henrik A. Christensen, Chairman, +47 909 67 683, henrik@rosom.no
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