Signed merger plan and notices of EGM in Solstad Offshore ASA and Rem Offshore ASA

Skudeneshavn and Fosnavåg, 9 September, 2016.

Solstad Offshore ASA ("SOFF" or "Solstad"), REM Offshore ASA ("REM") and Solship Invest 1 AS ("Solship Invest"), have on 8 September 2016 after close of the market entered into a merger plan regarding the merger of REM with Solship Invest, with Solship Invest being the surviving entity, against issuance of consideration shares in SOFF (the "Merger"). Reference is made to the further details provided in the joint stock exchange announcement made by SOFF and REM on 28 July 2016. Solship Invest is currently a wholly owned subsidiary of SOFF and not Solship AS, another subsidiary of SOFF. SOFF's direct holding of Solship Invest is a change from SOFF's stock exchange release 31 August 2016.

The Merger will be completed as a statutory triangular merger, whereby Solship Invest will be the surviving company. Solstad will in connection with the Merger create a new class B shares which will have the same economic rights as the ordinary shares in SOFF (to be renamed class A shares), but with 1/10(th) vote. It is Solstad's intention that the new class B shares can be an instrument for further consolidation in the industry. As merger consideration, REMs shareholders will receive new SOFF class B shares, except as provided below. The Merger will be based on an agreed exchange ratio of 0.0696 SOFF shares per REM share. This is based upon the issue prices in REM and SOFF's private placements, proposed earlier this June and July, of NOK 0.87 per share and NOK 12.50 per share respectively, corresponding to the agreed ratio of 0.0696 SOFF class B shares per REM share.

Åge Remøy and his related companies will, receive up to 6 million SOFF class A shares for the first NOK 75 million in REM shares subscribed by them in REM's NOK 150 million directed share issue, which will be carried out as proposed before the Merger. It is a condition from Åge Remøy's side that his current controlling position in REM is reflected by a significant voting interest in Solstad after the Merger, which will be effected by his entitlement to get half of the consideration shares attributable to the directed share issue in REM in the form of SOFF class A shares. The principal shareholders of Solstad have agreed to this and look forward to having Åge Remøy as a key industrial shareholder. His principal holding company will also nominate a member to the board of directors of Solstad upon effectiveness of the Merger. In this respect, the nomination committee of Solstad has, in accordance with the request from Åge Remøy, nominated Inger-Marie Sperre as a new member of the Board of Directors of Solstad, effective upon completion of the Merger.

The Merger plan with appendices has been published on www.newsweb.no, under tickers "REM" and "SOFF". In addition, the Merger plan will be published on the websites of REM and SOFF respectively, www.rem-offshore.no and www.solstad.no. The Merger plan is expected to be registered with the Norwegian Register of Business Enterprises (NW: Foretaksregisteret) within short.   

The respective Boards of SOFF and REM have today summoned the shareholders in both companies to extraordinary general meetings to be held on 10 October 2016 at 10:00 CET to resolve the proposed Merger. The notices are attached to this announcement and will be distributed to all shareholders of record in REM and SOFF as of today. In addition to the approval of the Merger plan, the following items are included on the agenda for the respective companies:

REM:

1. Proposal for share capital reduction from NOK 1 per share to NOK 0,50 per share to facilitate the private placements referred to in items B to D below;
2. Proposal for private placement directed towards a company controlled by Mr. Åge Remøy in the total amount of NOK 150 million at an offer price of NOK 0,87 per share;
3. Proposal for private placement directed towards the bondholders in REM04 PRO and REM05 through conversion of NOK 513 million in outstanding debt under REM04 PRO and REM05; and
4. Proposal for private placement directed towards Vard Group AS in the amount of NOK 191.721.778 through conversion of debt incurred in connection with the cancellation of the Company's newbuild contract with Vard Group;

For further details about the proposals by the board of REM, reference is made to the notice for EGM in REM and the stock exchange announcement released by REM on 27 June 2016 with detailed information on the proposed financial restructuring of REM.

SOFF:

1. Proposal for approval of an extension of the conversion period for the company's convertible loan subscribed by Aker Capital AS on 31 August 2016;
2. Proposal for issuance of warrants to Aker Capital in the total amount of NOK 250 million as an alternative to conversion of the convertible loan;
3. Proposal for issuance of a board authorisation to issue shares in connection with a contemplated subsequent private placement (repair offering) directed towards shareholders in REM as per the date of the EGM in REM which were not invited to participate in the REM private placements, conditional upon completion of the Merger;
4. Appointment of new member to the Board of Directors

Subject to approval of the Merger plan in the extraordinary general meetings of REM, SOFF and Solship Invest, all to be held on 10 October at 10:00 CET, and clearance from the competition authorities, it is expected that the Merger will become effective around 24 November 2016.

As previously announced, REM is undergoing an overall financial restructuring to strengthen its balance and liquidity position. The Merger is premised upon the completion of REM's restructuring prior to the Merger, requisite approvals from creditors of REM and SOFF and requisite approvals or absence of intervention by competent regulatory authorities. The Merger is supported by the largest shareholder in REM, Mr. Åge Remøy and companies controlled by him, as well as the largest shareholders in SOFF.

As further previously announced, SOFF is also going through a comprehensive refinancing. SOFF has previously publicly disclosed that it foresees to participate in a consolidation within the industry. Solstad is of the opinion that completion of the refinancing and the Merger is expected form a good platform for weathering the tough times the industry is going through.

Assuming (i) completion of Aker's investment undertaking in the aggregate amount of NOK 250 million at NOK 12.50 per SOFF class A share, (ii) the simultaneous investment undertaking in the aggregate amount of NOK 35.1 million by the Solstad family (iii) full subscription of the NOK 39.9 million SOFF subsequent private placement of SOFF class A shares at NOK 12.50 per SOFF class A share, (iv) full subscription of the NOK 20 million subsequent private placement to current REM shareholders at NOK 12.50 per SOFF class B shares, (v) issuance of 137,665,714 REM shares, or SOFF class B shares in lieu thereof at the exchange ratio for the Merger, to REM bondholders pursuant to the REM restructuring plan of June 27, 2016, and (vi) issuance of 13,776,554 REM shares to Vard Group AS pursuant to that plan,  the issued number of shares of SOFF is expected to be 90,241,182. The number of class B shares is expected to be 19,553,805 and the number of votes 72,642,757. Under these assumptions, Aker will hold 20 million class A shares and 1,807,150 class B shares, representing approximately 24% of the shares and 28% of the votes. This includes SOFF class B shares issued to Aker in its capacity as holder of REM bonds. In addition, Aker will hold, in the aggregate, rights to 20,000,000 class A shares through the NOK 250 million convertible loan and warrants. Reference is made to SOFF' stock exchange release 31 August 2016.  The Solstad family will, through its related companies, hold 20,937,457 class A shares, representing approximately 23% of the shares and 29% of the votes. Åge Remøy and his related companies will hold 6 million class A shares and 7,112,003 class B shares, representing approximately 15% of the shares and 9% of the votes.

As previously announced, in connection with the Merger, Aker will issue a put option to Mr. Åge Remøy's principal holding company exercisable in the thirteenth month after effectiveness of the Merger for a total of 6 million class B shares in SOFF, with a strike price of NOK 12.50 per share. Acquisition of class B shares on the basis of that agreement will increase the number of SOFF shares held by Aker by 6 million and the number of votes by 600,000. This would represent an increase of Akers holding under the same assumptions of approximately 7% of the equity and approximately 1% of the votes.

Further details about the contemplated subsequent private placements

Subject to completion of the Merger, REM shareholders as of the date of the extraordinary general meeting in REM on 10 October 2016 not participating in the directed share issue will be offered to participate in a NOK 20 million subsequent private placement of SOFF class B shares at NOK 12.50.

The NOK 39.9 million private placement of shares in SOFF at NOK 12.50 per share resolved at the extraordinary general meeting on 13 July, 2016 will not be affected by the Merger, but will be subject to completion of the private placement directed towards Aker Capital AS and the Solstad family as further detailed in the stock exchange announcement by SOFF on 31 August 2016.

The timeline for subsequent private placements (repair offerings) will be aligned, save that the SOFF class B-Shares to be issued to shareholders in REM will not be distributed to the investors VPS accounts until the Merger has been completed. The proposed timeline is set out below (dates are tentative):

Item	SOFF subsequent private placement - Class A Shares	REM subsequent private placement - Class B Shares
Last day of trading incl. Allocation Rights	13 July 2016	10 October 2016
First day of trading excl. Allocation Rights	14 July 2016	11 October 2016
Record Date	15 July 2016	12 October 2016
Prospectus published	On or about 9 September 2016	On or about 9 September 2016
Start application period	14 October 2016	14 October 2016
Expiry application period	27 October 2016	27 October 2016
Allocation*	28 October 2016	28 October 2016
Allocation letters distributed*	On or about 28 October 2016	On or about 28 October 2016
Payment date	1 November 2016	1 November 2016
Registration of share capital* increase and delivery of shares	3 November 2016	On or about 24 November 2016
Listing and first day of trading	3 November 2016	On or about 25 November 2016

*Allocation of SOFF class B-Shares will be conditional upon completion of the Merger. Registration of the share capital increase pertaining to and the delivery of the class B-Shares are expected to occur shortly after effectiveness of the Merger. In the event that the Merger is not completed, payment received from the investors will be reversed.

The Board of Solstad is in the process of preparing a prospectus which will comprise relevant information about the Merger, the contemplated listing of a new class of B-Shares, the subsequent private placements directed towards eligible shareholders in REM and SOFF, respectively, and the listing of the shares to be issued to Aker Capital AS and the Solstad family as further detailed in the stock exchange announcement by SOFF on 31 August 2016. The prospectus is expected to be approved by the Norwegian Financial Supervisory Authority within short and will be subject to separate announcement and publication by SOFF. 

SOFF is in the process for applying for listing of the new Class B-Shares on the Oslo Stock Exchange. It is expected that the application for listing will be considered by the Board of Directors of Oslo Børs on or about 16 November 2016. Further details will be provided in due course.

The Boards of SOFF and REM respectively have duly considered issues on equal treatment raised by the contemplated financial restructurings and proposed merger further detailed above. Given the current situation with the contemplated structure being a result of challenging and lengthy negotiations with a number of concerned parties and expected continued challenging market conditions, the execution of the proposed structure and associated transactions are deemed to be made in common best interest of the involved companies and their shareholders.

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Akers Chief Financial Officer Frank Reite is a member of the board of directors of Solstad Offshore ASA.

Ellen Solstad and Lars Peder Solstad of the Solstad family, who through their related companies hold shares in Solstad Offshore ASA are a member of the board of directors and the chief executive officer, respectively, of Solstad Offshore ASA.

Åge Remøy is the chairman of the board of directors of REM Offshore ASA.

***

For further information, please contact:

Åge Remøy, Chairman of, REM Offshore ASA at [phone] or Arild Myrvoll, Chief Executive Officer of REM Offshore ASA at [phone].

Lars Peder Solstad, Chief Executive Officer of Solstad Offshore ASA at [phone] or Sven Stakkestad, Deputy Chief Executive Officer of Solstad Offshore ASA at [phone].

Atle Kigen, Head of corporate communications of Aker ASA at [phone].

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

Extraordinary general meeting
Merger

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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