REM OFFSHORE ASA ANNOUNCES COMPREHENSIVE FINANCIAL RESTRUCTURING

As discussed in Rem Offshore ASA's ("Rem Offshore" or the "Company") financial report for Q1 2016, the Company is working on an overall restructuring plan to strengthen the Company's balance sheet and liquidity position going forward (the "Restructuring").

The Company has over the past months been in dialogue with its bank lenders, larger bondholders, and main stakeholders. Based on this, the Company has agreed in-principle on the main terms for a Restructuring with those stakeholders.

The Restructuring will create a financial runway for the Company through 2019, even in a low case scenario with limited or no utilisation for the vessels without long term contract. The combined effect of the Restructuring described below is expected to improve the Company's liquidity by around NOK 3.6 billion over a 3.5 year period, and reduce the net interest bearing debt by approximately NOK 900m. At the end of 2019, the Company will continue to have a strong competitive position, with one of the youngest fleets in the market with an average age of less than nine years.

The Restructuring includes the following main terms;

-          New equity: A private placement of NOK 150 million at an issue price of NOK 0.87 per share, by the largest shareholder Åge Remøy (the "New Equity"). NOK 60 million of the proceeds planned used to buy-back part of the new bond issue (the "New 2^nd Lien Bond Issue"), as described below.

The Company will, subject to inter alia market conditions, consider to conduct a Subsequent Equity Offering (the "Subsequent Offering") of up to NOK 20 million for the purpose of facilitating equal treatment by inviting existing shareholders not invited to participate in the New Equity the opportunity to subscribe for new shares in the Company. New investors may be allowed to subscribe in such Subsequent Offering, but existing shareholders will be given preference. The subscription price in the Subsequent Offering shall be the same as for the New Equity, NOK 0.87 per share. 

The Subsequent Offering will, if executed, be launched following the necessary approval of the Restructuring by the Company's banks, bondholders, creditors and shareholders, and subject to regulatory approval of an offering and listing prospectus as well as the requisite corporate resolutions. The further terms and particulars of the Subsequent Offering will be announced in due course, and described in the prospectus to be prepared in connection therewith.

Prior to implementation of the Equity Offering, the Subsequent Offering and the issuance of shares to Vard (as further described below) the par value of the Shares, currently NOK 1 per share, will need to be reduced to allow for issuance of new share at NOK 0.87 per share. The Board of Directors will propose to the general meeting that such reduction is approved in connection with the decision to implement the Equity Offering and the Subsequent Offering. Further details will be announced in due course in connection with the notice for such extraordinary general meeting.

-          Unsecured bonds: NOK 513.5 million in aggregate face value of the senior unsecured bonds (NOK 188.5 million of REM 04 PRO (ISIN NO 001 067283.5) after cancellation of the NOK 60m held by the Company as treasury bonds and NOK 325 million of REM 05) (ISIN NO 001072023.8) to be converted into shares in Rem Offshore (the "Debt Conversion"). Post Restructuring (incl. for the avoidance of doubt, the New Equity, but before the Subsequent Offering), the Bondholders will own 40% of the issued Shares of the Company.

After completion of the Debt Conversion, the remaining Bonds (NOK 276.5 million in aggregate par value) shall be exchanged into bonds in the New 2^nd Lien Bond Issue. The bond will have an 8 year tenor, a fixed coupon of 5.0% p.a. payable as PIK interest and no financial covenants. The bond will be secured by a second lien mortgage over the vessel "Rem Star" and a first lien pledge over all shares issued by Rem Maritime AS.

The Company will allocate NOK 60 million of the New Equity (as defined above) to carry out a buy-back of the New 2nd Lien Bonds. The buy-back will be carried out as a reverse Dutch auction within 30 days after the closing of the Restructuring.

-          Bank lenders: Reduction of amortisations on all bank facilities for 3.5 years from second half of 2016 to the end of 2019, with a total positive liquidity effect for the Company of NOK 1.3 billion. All bank maturities will be extended by 42 months in addition to amended financial covenants for all facilities.

-          Cancellation of newbuilding: The existing new-building contract with Vard is to be cancelled. Vard shall as compensation for the cancellation receive Shares equal to 4 % of the total issued Shares post the Restructuring (incl. for the avoidance of doubt, the New Equity, but before the Subsequent Equity Offering).

-          The Company has obtained support from large bondholders in its two bonds, REM04 PRO and REM05. Effectuation of the proposal to the bondholders is subject to approval by a Bondholder Meeting which will be summoned soon.

-          The Restructuring will result in a substantial dilution of existing shareholders not participating in the New Equity, and the contemplated Subsequent Offering will, if implemented, not fully compensate the dilutive effect for the remaining shareholders. Having considered available alternatives, the Board is however of the opinion that such deviation from the equal treatment principle will be fair and necessary, given the challenging financial situation of the Company, the prevailing market conditions, the agreed terms of the Restructuring and the Company's need for flexibility when seeking to secure the New Equity.

-          All relevant banks have in-principle agreed to the Restructuring, subject to relevant credit committee approvals and customary closing conditions.

-          Prior to completion of the transactions described above, the main shareholder of Rem Offshore contemplates to restructure its ownership in Rem Offshore. Further details will be provided in due course.

The Restructuring is conditional on requisite approval from all concerned stakeholders as detailed above.

ABG Sundal Collier ASA is acting as financial advisor to the Company in connection with the Restructuring. Wikborg, Rein & Co Advokatfirma DA is acting as Norwegian legal advisor to the Company.

27 June 2016

Fosnavåg, Norge

Board of Directors

Rem Offshore ASA

Questions should be directed to:

Arild Myrvoll, CEO ([phone])

Ola Beinnes Fosse, CFO ([phone])

Åge Remøy, Chairman of the Board ([phone])

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: REM Offshore ASA via Globenewswire

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