OTTO MARINE LIMITED (Company Registration No M) (Incorporated with limited liability in the Republic of Singapore on 5 September 1979)

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1 This release is not an offer for sale of the securities in the United States. The Rights Shares may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act. Neither Otto Marine Limited nor any seller of securities intends to register any portion of any offering in the United States or to conduct a public offering of securities in the United States. OTTO MARINE LIMITED (Company Registration No M) (Incorporated with limited liability in the Republic of Singapore on 5 September 1979) - PROPOSED RIGHTS ISSUE OF 474,914,000 ORDINARY SHARES TO RAISE GROSS PROCEEDS OF S$118.7 MILLION - NOTICE OF BOOKS CLOSURE DATE In this document, unless otherwise defined, capitalised terms refer to meanings assigned to them in the section entitled Definitions 1. Introduction The Company today wishes to announce that it proposes to undertake an underwritten renounceable rights issue to raise gross proceeds of S$118.7 million. Pursuant to the Rights Issue, 474,914,000 Rights Shares at an Issue Price of S$0.25 per Rights Share, will be offered on the basis of two (2) Rights Shares for every five (5) existing Shares held by Shareholders as at 31 August 2009, (the Books Closure Date ). The Rights Issue will be fully underwritten by Cazenove & Co. (Singapore) Pte. Limited 1 (a Standard Chartered group company) which has been appointed as the Sole Underwriter to the Rights Issue. Please refer to the section entitled Indicative Timetable of this announcement for the timing of events related to the Rights Issue. 2. In-principle Approval The Company has today (21 August 2009), obtained in-principle approval from the SGX-ST for the listing and quotation of the Rights Shares on the Main Board of the SGX-ST. The SGX-ST s in-principle approval is not an indication of the merits of the Company, the Group, the Shares, the Rights, the Rights Shares or the Rights Issue. 1 Cazenove & Co. (Singapore) Pte. Limited is a wholly-owned subsidiary of Cazenove Asia Limited and a Standard Chartered group company. The mark Cazenove and marks containing Cazenove are trade marks of Cazenove IP Limited and are used under limited licence. Cazenove Asia Limited, its subsidiaries and affiliated companies are now subsidiaries or affiliated companies of Standard Chartered Bank (Hong Kong) Limited, and are not affiliated with JPMorgan Cazenove Limited, Cazenove Inc., or their subsidiaries. 1

2 The SGX-ST s in-principle approval is subject to, inter alia, the following: (a) (b) preference being given to the rounding of odd lots in the allotment of any excess Rights Shares, with Directors and substantial Shareholders ranking last in priority in the allotment of any excess Rights Shares; and the submission of an undertaking to (i) make periodic announcements on the use of the proceeds from the Rights Issue when materially disbursed; and (ii) provide a status report on the use of proceeds via SGXNET annually, until such time the proceeds from the Rights Issue have been fully utilised. 3. Rationale for the Rights Issue and Use of Proceeds The Rights Issue is part of the Company s long-term strategy of prudent financial management. The Company is raising capital from a position of financial and business strength to pro-actively strengthen the Group s balance sheet as well as the Company s competitive position in the offshore marine industry. The Company intends to allocate the gross proceeds of S$118.7 million as follows: (a) (b) S$57.5 million (48.4% of the gross proceeds) to fund the expansion of the Company s chartering fleet and for investments in joint ventures with the Company s strategic partners; S$39.5 million (33.3% of the gross proceeds) to pay off the Brizill Current Account Balance. Prior to the Company becoming listed on the SGX-ST, from time to time, Brizill made collections on behalf of the Company and its subsidiaries from the Group s customers and also made payments on behalf of the Group for procurement of equipment and raw materials from suppliers. Further, Brizill paid for certain purchases of raw materials for the Company s shipbuilding activities and made advances to the Company to fund the Group s working capital needs. In addition, Brizill seconded management staff to the Group and charged a management fee for the secondment. These payments and advances resulted in intercompany balances due from the Group to Brizill. As the payments and advances made by Brizill on the Group s behalf were generally more than the collection of sales proceeds and payments for expenses, these arrangements resulted in an overall net inter-company balance due from the Group to Brizill. These advances and amounts due from the Group were unsecured, non-interest bearing and had no fixed term of repayment. In June 2008, the Company converted S$52.0 million of the amounts due to Brizill into a five-year interestbearing term loan. Accordingly, the remaining amount owing to Brizill remains as a current account balance and was S$39.5 million as at 30 June 2009; (c) (d) S$18.5 million (15.6% of the gross proceeds) for general working capital purposes; and estimated expenses of S$3.2 million (2.7% of the gross proceeds) for underwriting commission, fees and other expenses payable in connection with the Rights Issue. The estimated net proceeds to the Company will be S$115.5 million. Pending the deployment of the net proceeds for the abovementioned uses, the net proceeds may be deposited with banks and/or financial institutions, invested in short-term money markets, and/or used for any other purposes on a short-term basis, as the Board may, in their absolute discretion, deem fit. The Company will make periodic announcements on the use of the proceeds as and when the funds from the Rights Issue are materially disbursed and provide a status report on the use of the Rights Issue proceeds in the annual report(s) of the Company, until such time the proceeds from the Rights Issue have been fully utilised. 2

3 4. Value Proposition for Shareholders The Company believes that the Rights Issue is in the best interests of Shareholders and the Group as a whole. The Rights Issue provides all Shareholders with the opportunity to subscribe for the Rights Shares at the Issue Price of S$0.25 which is at a discount of: (a) (b) 40.5% to the price of S$0.42 per Share (being the last traded price on 20 August 2009, prior to the trading of the Shares being halted upon request by the Company); and 32.6% to the theoretical ex-rights trading price 1 of S$0.371 per Share; 5. Principal Terms of the Rights Issue The Rights Shares will be issued under the share issue mandate approved by Shareholders at the Company s annual general meeting held on 24 April Pursuant to the Rights Issue, 474,914,000 Rights Shares will be provisionally allotted on the basis of two (2) Rights Shares for every five (5) existing Shares held by Shareholders as at the Books Closure Date, fractional entitlements to be disregarded. The Rights will be renounceable and are expected to be traded on the Main Board of the SGX-ST during the Rights Trading Period. The last date and time for acceptances, excess applications and payment for the Rights Shares is expected to be 17 September 2009 at 5.00 p.m. (or 9.30 p.m. for electronic applications). The Rights Shares will, on allotment and issue, rank pari passu in all respects with the existing Shares and shall be entitled to all dividends, rights, allotments or other distributions declared by the Company after the date of issue of the Rights Shares. It is expected that the Rights Shares will be allotted and issued on or about 25 September Fractional entitlements to the Rights Shares, if any, will be disregarded and will, together with the provisional allotments to the Rights Shares which are not taken up for any reason, be aggregated and allotted to satisfy excess applications for Rights Shares (if any) or be disposed of or otherwise dealt with in such manner as the Board may, in their absolute discretion, deem fit in the interests of the Company. In the allotment of excess Rights Shares, preference will be given for the rounding of odd lots, and Substantial Shareholders and the Directors will rank last in priority. Full details of the terms and conditions of the Rights Issue will be set out in the Offer Information Statement that will be lodged by the Company with the MAS in connection with the Rights Issue and dispatched to Entitled Shareholders. 6. Underwriting The Rights Issue will be fully underwritten by the Sole Underwriter pursuant to the terms of the Underwriting Agreement. In consideration of the Sole Underwriter s agreement to underwrite the Rights Issue, the Company will pay the Sole Underwriter an underwriting commission of: a. 1.50% of the Issue Price multiplied by the Pro Rata Shares (S$1.3 million); and b. 2.75% of the Issue Price multiplied by the total number of Rights Shares less the Pro Rata Shares (S$0.9 million). 1 The theoretical ex-rights price = Market capitalisation of the Company Gross proceeds based on the price of S$0.42 per Share + from the Rights Issue Total number of issued Shares of the Company after the Rights Issue 3

4 In addition, the Sole Underwriter will be entitled to a management fee of S$0.4 million. The Sole Underwriter may arrange sub-underwriting for some, all or none of the Rights Shares. 7. Substantial Shareholders Subscription and Sub-underwriting As at the date of this announcement, the Sub-Underwriters, which are wholly owned by the Company s executive chairman Yaw Chee Siew, collectively hold 72.1% of the Company s issued share capital. In support of the Rights Issue, Yaw Chee Siew and the Sub-Underwriters have entered into the Undertaking, pursuant to which the Sub-Underwriters have each irrevocably undertaken with the Company and the Sole Underwriter that (among others) each of them and/or their nominees will subscribe and pay in full for the Pro Rata Shares to which each of them are entitled. In addition, Yaw Chee Siew and the Sub-Underwriters have entered into the Sub-Underwriting Agreement with the Sole Underwriter pursuant to which the Sub-Underwriters have agreed to subunderwrite the Committed Shares. In consideration of the Sub-Underwriting Commitment, the Sole Underwriter has agreed to pay a subunderwriting fee to the Sub-Underwriters equal to: a. 1.50% of the Issue Price multiplied by the number of Pro Rata Shares (S$1.3 million); and b. 2.00% of the Issue Price multiplied by the number of Rights Shares equivalent to the Committed Shares less the Pro Rata Shares, amounting to 12.9% of the Rights Shares (S$0.3 million). The sub-underwriting commission payable to each of the Sub-Underwriters will be paid by the Sole Underwriter from out of the underwriting commission received from the Company and the percentage level of the sub-underwriting commission will not be more than the percentage level of the underwriting commission which the Sole Underwriter will receive pursuant to the Underwriting Agreement. 8. Board Confirmation The Board believes that it is important for the Rights Issue to be fully underwritten in light of recent periods of market stress and volatility. The Board has considered the terms of the Underwriting Agreement and is unanimously of the view that the terms of the Underwriting Agreement have been entered into on an arm s length basis and are on normal commercial terms. The Company s nonexecutive and non-independent director William Edward Alastair Morrison, who is also a director of SCPEL, abstained from taking part in any decisions or recommendations in relation to the appointment of the Sole Underwriter. The Board noted that, the Sub-Underwriters, in agreeing to subscribe for the Pro Rata Shares, will be assuming market risks for the entire Rights Issue period and will be forgoing the ability to trade their Rights. Additionally, the sub-underwriting fee to the Sub-Underwriters will be paid by the Sole Underwriter out of its underwriting commission and will not lead to an additional cost to the Company over and above the underwriting commission payable to the Sole Underwriter. The Board also noted that the Sole Underwriter has confirmed that they had initiated the discussions for the sub-underwriting arrangement with the Sub-Underwriters and that they would not proceed to underwrite the Rights Issue unless, among other things, the Sub-Underwriters entered into the Sub- Underwriting Agreement. Accordingly, the Board is unanimously of the view that the underwriting structure for the Rights Issue, including the sub-underwriting arrangement between the Sole Underwriter and the Sub-Underwriters as described above and the fees payable to the Sole Underwriter and the Sub-Underwriters, is fair, on 4

5 arm s length and normal commercial terms and not prejudicial to the interests of the Company and the other Shareholders. The Company s executive chairman, Yaw Chee Siew, who owns and controls both BCI and CEOTA, and William Edward Alastair Morrison have abstained from taking part in any decisions or recommendations in relation to the Sub-Underwriting Agreement and Undertaking. None of the Directors dissented in arriving at the above opinion. 9. Indicative Timetable An indicative timeline for the Rights Issue is set out below (all references are to Singapore dates and times): Shares trade ex-rights : 27 August 2009 from 9.00 a.m. Books Closure Date : 31 August 2009 at 5.00 p.m. Despatch of the Offer Information Statement together with accompanying forms to Entitled Shareholders : 3 September 2009 Commencement of trading of nil-paid Rights : 3 September 2009 from 9.00 a.m. Last date and time for trading of nil-paid Rights : 11 September 2009 at 5.00 p.m. Last date and time for splitting of nil-paid Rights : 11 September 2009 at 5.00 p.m. Last date and time for acceptance of and payment for Rights Shares Last date and time for renunciation of and payment for Rights Shares Last date and time for application and payment for excess Rights Shares : 17 September 2009 at 5.00 p.m. (9.30 p.m. for Electronic Applications) : 17 September 2009 at 5.00 p.m. : 17 September 2009 at 5.00 p.m. (9.30 p.m. for Electronic Applications) Expected date of issuance of Rights Shares : 25 September 2009 Expected date of commencement of trading of Rights Shares : 28 September 2009 The indicative timetable above is subject to modifications at the discretion of the Company, following consultation with the Sole Underwriter. 10. Notice of Books Closure Date Notice is hereby given that the Transfer Books and the Register of Members of the Company will be closed at 5.00 p.m. (Singapore time) on 31 August 2009 for the purpose of determining the Rights of Shareholders under the Rights Issue. 11. Eligibility to Participate in the Rights Issue Entitled Depositors Depositors will be allotted Rights on the basis of the number of Shares standing to the credit of their securities accounts with CDP as at the Books Closure Date. 5

6 To be Entitled Depositors, Depositors must have registered addresses in Singapore with CDP as at the Books Closure Date or, if they have registered addresses outside Singapore, must provide CDP, at 4 Shenton Way, #02-01 SGX Centre 2, Singapore , with a registered address in Singapore no later than 5.00 p.m. (Singapore time) on 26 August 2009, being three (3) market days prior to the Books Closure Date, in order to be allotted Rights. Entitled Scripholders Scripholders will have to submit duly completed and stamped transfers (in respect of Shares not registered in the name of CDP), together with all relevant documents of title, so as to be received up to 5.00 p.m. (Singapore time) on the Books Closure Date by the Company s share registrar, M&C Services Private Limited, at 138 Robinson Road, #17-00 The Corporate Office, Singapore , in order to be registered to determine the transferee s Rights. To be Entitled Scripholders, Scripholders must have registered addresses in Singapore with the Company as at the Books Closure Date or, if they have registered addresses outside Singapore, must provide the Company s share registrar, M&C Services Private Limited, at 138 Robinson Road, #17-00 The Corporate Office, Singapore , with an address in Singapore for the service of notices or documents not later than 5.00 p.m. (Singapore time) on 26 August 2009, being three (3) market days prior to the Books Closure Date, in order to be allotted their Rights. Persons who bought their Shares previously using CPF Funds (as defined below) should use their CPF account savings ( CPF Funds ) for the payment of the Issue Price to accept their provisional allotments of Rights Shares and (if applicable) apply for excess Rights Shares, subject to the applicable CPF rules and regulations. Such persons who wish to accept their provisional allotments of Rights Shares and (if applicable) apply for excess Rights Shares using CPF Funds will need to instruct their respective approved banks, where they hold their CPF Investment Accounts, to accept the Rights Shares and (if applicable) apply for the excess Rights Shares on their behalf in accordance with the Offer Informaion Statement. CPF Funds may not, however, be used for the purchase of the provisional allotments of the Rights Shares directly from the market. Notwithstanding the foregoing, investors should note that the offer and sale of, or exercise or acceptance of, or subscription for, Rights and Rights Shares to or by persons located or resident in jurisdictions other than Singapore may be restricted or prohibited by the laws of the relevant jurisdiction. Crediting of Rights to any securities account with CDP, the receipt of any Rights, or receipt of the Offer Information Statement and/or any of its accompanying documents, will not constitute an offer or sale in those jurisdictions in which it will be illegal to make such offer or sale, or where such offer or sale will otherwise violate the securities laws of such jurisdictions or be prohibited. The Company reserves absolute discretion in determining whether any Shareholder located or resident outside Singapore may participate in the Rights Issue. Foreign Shareholders For practical reasons and in order to avoid violating applicable securities laws outside Singapore, the Rights Shares will not be offered to Foreign Shareholders. Foreign Shareholders are our Shareholders with registered addresses outside Singapore as at Books Closure Date and who have not at least three (3) market days prior thereto provided CDP or the Company s share registrar, M&C Services Private Limited, as the case may be, with addresses in Singapore for the service of notices or documents. To the extent it is practicable to do so, arrangements may, at the absolute discretion of the Company, be made for the Rights which would otherwise have been provisionally allotted to Foreign Shareholders to be sold nil-paid on the SGX-ST as soon as practicable after commencement of trading of nil-paid Rights. The net proceeds of such sales (after deducting any applicable brokerage, commissions and expenses, including goods and services tax) will be aggregated and paid to Foreign Shareholders in proportion to their respective shareholdings as at the Books Closure Date, save that no payment will be made of amounts of less than S$10 to a single or joint Foreign Shareholder, which amounts will be aggregated and will ultimately accrue to the benefit of the Company. 6

7 12. Interests of Directors and Substantial Shareholders SCPEL, which is a substantial shareholder of the Company, and the Sole Underwriter are both ultimately owned by Standard Chartered Bank. In addition, one of the Company s directors, William Edward Alastair Morrison, is also a director of SCPEL. Save for the above and the Sub-Underwriting Commitments, none of the Directors of the Company or the substantial Shareholders has an interest, direct or indirect, in the Rights Issue other than through their respective shareholding interests, direct or indirect, in the Company. 13. Further Information For further information, please contact Michael See, Chief Financial Officer and Joint Company Secretary at Please note that the applicable rules and regulation in Singapore do not allow the persons manning the enquiry line to give advice on the merits of the Rights Issue, the Rights, the Rights Shares, the Group or to provide investment, business, financial, legal or tax advice. If you are in any doubt as to what action you should take, please consult your business, financial, legal, tax or other professional adviser. 14. Definitions BCI : Business Companion Investments Limited, a company incorporated in the British Virgin Islands and an investment holding company wholly owned by Yaw Chee Siew Board : The board of directors of the Company Books Closure Date : 5.00 p.m. (Singapore time) on 31 August 2009 Brizill : Brizill International Limited, a company incorporated in the British Virgin Islands and an investment holding company wholly owned by Yaw Chee Siew Brizill Current Account Balance : The current account balance owing to Brizill by the Company which amounts to S$39.5 million as at 30 June 2009 CDP : The Central Depository (Pte) Limited CEOTA CEO Technology Asia Limited, a company incorporated in the British Virgin Islands and an investment holding company wholly owned by Yaw Chee Siew Committed Shares : 403,676,900 Rights Shares, equivalent to 85.0% of the total number of Rights Shares to be issued pursuant to the Rights Issue, which comprises: a. the Pro Rata Shares; and b. 61,130,900 Rights Shares Company : Otto Marine Limited 7

8 CPF : Central Provident Fund Depositors : Shareholders whose securities accounts with the CDP are credited with Shares as at 5.00 p.m. (Singapore time) on the Books Closure Date Entitled Shareholders : Entitled Depositors and Entitled Scripholders Group : The Company, its subsidiaries and associated companies collectively Issue Price : The issue price of S$0.25 per Rights Share MAS : The Monetary Authority of Singapore NTA : Net tangible assets Offer Information Statement : The offer information statement to be issued by the Company in relation to the Rights Issue Pro Rata Shares : Pro rata entitlement of 342,546,000 Rights Shares of BCI and CEOTA, based on their combined direct interest in the Company Rights : The provisional entitlements to subscribe for Rights Shares Rights Trading Period : The trading period for the nil-paid Rights from 3 September 2009 to 11 September 2009 Rights Issue : The renounceable underwritten rights issue of the Rights Shares at the Issue Price on the basis of two (2) Rights Share for every five (5) existing Shares held by Shareholders as at the Books Closure Date, fractional entitlements to be disregarded, on the terms and conditions of the Offer Information Statement Rights Shares : 474,914,000 new Shares to be issued by the Company under the Rights Issue SCPEL : Standard Chartered Private Equity Limited Scripholders : Shareholders whose share certificates are not deposited with CDP and whose shares are not registered in the name of CDP SGX-ST : Singapore Exchange Securities Trading Limited Shareholders : The shareholders of the Company Shares : Ordinary shares in the issued share capital of the Company Sole Underwriter : Cazenove & Co. (Singapore) Pte. Limited 1 (a Standard Chartered group company) as the sole underwriter for the Rights Issue 1 Cazenove & Co. (Singapore) Pte. Limited is a wholly-owned subsidiary of Cazenove Asia Limited and a Standard Chartered group company. The mark Cazenove and marks containing Cazenove are trade marks of Cazenove IP Limited and are used under limited licence. Cazenove Asia Limited, its subsidiaries and affiliated companies are now subsidiaries or affiliated 8

9 Sub-Underwriters : BCI and CEOTA Sub-Underwriting Agreement : The sub-underwriting agreement dated 21 August 2009, entered into between Yaw Chee Siew, the Sub- Underwriters and the Sole Underwriter, in relation to the Rights Issue Sub-Underwriting Commitment : The Sub-Underwriters commitment under the Sub- Underwriting Agreement to sub-underwrite the Committed Shares Substantial Shareholder : A Shareholder who has an interest or interests in one or more voting Shares in the Company and the total votes attached to that Share, or those Shares, is not less than 5% of the total votes attached to all the voting Shares in the Company Undertaking : The irrevocable undertaking dated 21 August 2009, given by Yaw Chee Siew and the Sub-Underwriters in favour of the Company and the Sole Underwriter, in relation to the Rights Issue Underwriting Agreement : The underwriting agreement dated 21 August 2009 entered into between the Company and the Sole Underwriter U.S. Securities Act : U.S. Securities Act of 1933, as amended, and the relevant rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder S$ or cents : Singapore dollars and cents respectively By Order of the Board See Kian Heng Company Secretary Singapore 21 August 2009 companies of Standard Chartered Bank (Hong Kong) Limited, and are not affiliated with JPMorgan Cazenove Limited, Cazenove Inc., or their subsidiaries. 9

10 Important Notice This announcement is for information purposes only and does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire, Rights or Rights Shares or to take up any entitlements to Rights Shares in any jurisdiction in which such an offer or solicitation is unlawful. No person should acquire any Rights or Rights Shares except on the basis of the information contained in the Offer Information Statement. The information contained in this announcement should not be distributed, forwarded to or transmitted in or into any jurisdiction where to do so might constitute a violation of applicable securities laws or regulations. The issue, exercise or sale of rights and the acquisition or purchase of Rights Shares are subject to specific legal or regulatory restrictions in certain jurisdictions. the Company assumes no responsibility in the event there is a violation by any person of such restrictions. The distribution of this announcement, the Offer Information Statement, the provisional allotment letters and/or the application forms for Rights Shares and/or excess Rights Shares into jurisdictions other than Singapore may be restricted by law. Persons into whose possession this announcement and such other documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Neither the content of the Company s website nor any website accessible by hyperlinks on the Company s website is incorporated in, or forms part of, this announcement. This announcement contains or incorporates by reference forward-looking statements regarding the belief or current expectations of the Company, the Board and other members of its senior management about the Company s businesses and the transactions described in this announcement. Generally, words such as may, could, will, expect, intend, estimate, anticipate, believe, plan, seek, continue or similar expressions identify forward-looking statements. These forwardlooking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forwardlooking statements. Such risks and uncertainties include the effects of continued or increasing volatility in international financial markets, economic conditions both internationally and in individual markets in which the Group operates, and other factors affecting the level of the Group s business activities and the costs and availability of financing for the Group s activities. Any forward-looking statement contained in this announcement based on past or current trends and/or activities of the Group should not be taken as a representation that such trends or activities will continue in the future. No statement in this announcement is intended to be a profit forecast or to imply that the earnings of the Company for the current year or future years will necessarily match or exceed the historical or published earnings of the Company. Each forward-looking statement speaks only as of the date of the particular statement. the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The initial public offering of the Company was sponsored by United Overseas Bank Limited and Credit Suisse (Singapore) Limited and they assume no responsibility for the contents of this announcement. 10