PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS ISSUE TO RAISE GROSS PROCEEDS OF US$100.5 MILLION

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1 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES. THE MATERIAL SET OUT HEREIN IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER FOR SALE OF THE SECURITIES IN THE UNITED STATES. THE SECURITIES DESCRIBED HEREIN MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE LAWS. THERE IS NO INTENTION TO REGISTER ANY PORTION OF ANY OFFERING IN THE UNITED STATES OR TO CONDUCT A PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES. PLEASE SEE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT. CIMC RAFFLES OFFSHORE (SINGAPORE) LIMITED (FORMERLY KNOWN AS YANTAI RAFFLES SHIPYARD LIMITED) (Incorporated in Singapore on 7 March 1994) (Registration Number D) PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS ISSUE TO RAISE GROSS PROCEEDS OF US$100.5 MILLION 1. INTRODUCTION The board of directors ( Board ) of CIMC Raffles Offshore (Singapore) Limited ( CIMC Raffles ) wishes to announce that CIMC Raffles is proposing to undertake a renounceable non-underwritten rights issue ( Rights Issue ) to raise gross proceeds of approximately US$100.5 million. Pursuant to the Rights Issue, 136,782,500 new ordinary shares ( Rights Shares ) in the capital of CIMC Raffles will be offered at an issue price of US$0.735 for each Rights Share ( Issue Price ) on the basis of one (1) Rights Share for every two (2) existing ordinary shares in the capital of CIMC Raffles ( Shares ) held as at the Singapore Books Closure Date or the Norway Books Closure Date (as defined in section 5 below, and each, a Books Closure Date ), as the case may be, rounded down to the nearest Rights Share. 2. RATIONALE 2.1 Rationale The Rights Issue is being undertaken by CIMC Raffles to raise funds to improve the facilities at its existing shipyards and to build new shipyards, to strengthen its balance sheet structure, and for future investments and working capital requirements. 2.2 To improve facilities at existing shipyards and to build new shipyards CIMC Raffles has a vision to develop itself into a yard of choice with state-of-the-art construction infrastructure for building offshore marine facilities. CIMC Raffles believes its existing innovative yard facilities have attracted considerable interest from both present and potential clients. One of CIMC Raffles key strategies is to continue to improve its facilities to enhance its competitive advantage. CIMC Raffles believes that these investments will reap tremendous benefits for CIMC Raffles and its subsidiaries ( CIMC Raffles Group ), enabling the CIMC Raffles Group to increase its production capacity, and improve efficiency and safety standards. CIMC Raffles planned investments in capital expenditure include the second phase of an 18-metre deepwater wharf at its main shipyard located in Yantai, Shandong, which will give CIMC Raffles a significant competitive advantage in building semi- 1

2 submersible drilling rigs, floating production storage and offloading (FPSO) vessels, floating production unit vessels and other similar vessels. At its shipyard located in Haiyang, Shandong, workshops will be built to enable more construction work to be performed under shelter which minimises the effects of adverse weather on production. A newly acquired shipyard in Longkou, Shandong, will also be developed into a world-class construction yard for building jack-up drilling rigs. The Rights Issue will provide part of the funds required by CIMC Raffles to improve the facilities at its existing shipyards and to build new shipyards. 2.3 To strengthen the balance sheet structure of CIMC Raffles The Board recognises the need to strengthen the balance sheet structure of CIMC Raffles so as to ensure that the CIMC Raffles Group remains competitive in the industry and is able to better respond to new business opportunities when they arise. CIMC Raffles operates in a capital intensive industry. Besides heavy capital investment in yard infrastructure, the construction of an offshore marine facility typically spans a period of 18 to 50 months and requires significant resources. A strong balance sheet structure is essential to enable the CIMC Raffles Group to secure the required banking facilities (including but not limited to project bank loans and bonds, working capital facilities and fixed assets loans, trade facilities, foreign currency facilities and interest rate swap facilities) for the purpose of its operations and expansion on favourable and competitive terms. In this regard, the Rights Issue will strengthen the balance sheet of CIMC Raffles. Part of the proceeds from the Rights Issue will also be used to repay some of the existing borrowings of the CIMC Raffles Group. The improved balance sheet structure of CIMC Raffles is expected to enhance its ability to win new orders and secure corresponding project financing. 2.4 Future investments and working capital The Rights Issue will provide funds for future investments and the working capital requirements of the CIMC Raffles Group. Future investments will be made as and when opportunities are identified and as and when the Board deems appropriate, and may include strategic joint ventures with third parties with a view to developing and expanding the CIMC Raffles Group s market, partnership with significant players in the supply chain in the offshore marine facilities industry, and construction or purchase of oil drilling rigs or other offshore marine facilities to be leased to third parties. 3. PRINCIPAL TERMS OF THE RIGHTS ISSUE 3.1 Rights Shares Based on the total number of 273,565,000 issued Shares as at the date of this Announcement, and assuming that no new Shares will be issued after the date of this Announcement and before the Books Closure Date, an aggregate of 136,782,500 Rights Shares will be allotted and issued pursuant to the Rights Issue. As at the date of this Announcement, CIMC Raffles has 6,469,005 outstanding share options ( Share Options ) issued under the CIMC Raffles Offshore (Singapore) Limited Executive Share Option Scheme, of which 1,821,643 have vested and are exercisable on or before the Books Closure Date. 2

3 As the exercise prices of the Share Options which have vested on or before the Books Closure Date are higher than the last transacted price of the Shares on the Norwegian Over-The-Counter system ( NOTC ) administered and operated by the Norwegian Securities Dealers Association as at the date of this Announcement, CIMC Raffles does not expect to issue, between the date of this Announcement and the Books Closure Date, any new Shares pursuant to the exercise of such Share Options. 3.2 Basis of Entitlements The Rights Shares will be offered on the basis of one (1) Rights Share for every two (2) existing Shares held, as at the Books Closure Date, rounded down to the nearest Rights Share. Hence, fractional entitlements of Rights Shares will be disregarded and will be aggregated with entitlements to the Rights Shares which are not allotted or otherwise taken up for any reason and shall be used to satisfy excess applications for Rights Shares (if any) or otherwise disposed of or dealt with in such manner as the Board may in their absolute discretion deem fit in the interests of CIMC Raffles. The Rights Shares will be issued pursuant to the authority granted under the terms of the general share issue mandate approved by Shareholders at the Annual General Meeting of CIMC Raffles held on 11 June The Rights Shares will, upon allotment and issue, rank pari passu in all respects with the existing Shares, save for any dividends, rights, allotments or other distributions, the record date for which falls before the date of issue of the Rights Shares. 3.3 Issue Price The Issue Price is US$0.735 for each Rights Share. The Issue Price represents a discount of approximately: (a) (b) (c) 5.6% to the last transacted price of NOK 5 1 per Share on the NOTC before the date of this Announcement 2 ; 3.9% to the theoretical ex-rights price of NOK 4.91 per Share 3 ; and 43.9% to CIMC Raffles pro forma post-rights Issue net asset of US$1.31 per Share. 3.4 Offering Circular Full details of the terms and conditions of the Rights Issue will be set out in the offering circular ( Offering Circular ) to be issued by CIMC Raffles in connection with the Rights Issue and to be despatched to Entitled Registered Shareholders and Entitled VPS Shareholders (each term as defined below) in due course. 4. IRREVOCABLE UNDERTAKING As at the date of this Announcement, CIMC Offshore Holdings Limited ( CIMC Offshore Holdings ) holds directly and indirectly approximately 81.96% of the total number of issued Shares. 1 NOK means Norwegian Krones. 2 Computed based on the exchange rate of US$1.00:NOK The theoretical ex-rights price is the theoretical transacted price of each Share assuming the completion of the Rights Issue, and is calculated based on the last transacted price of NOK 5 per Share on the NOTC before the Announcement Date and the number of Shares following completion of the Rights Issue. As at the date of this Announcement, only 131,147,700 Shares, out of a total of 273,565,000 issued Shares, are registered in the VPS (as defined below) and traded on the NOTC. 3

4 CIMC Offshore Holdings has given an irrevocable undertaking dated 5 July 2010 to CIMC Raffles in relation to the Rights Issue ( Irrevocable Undertaking ), pursuant to which it undertook to accept and pay for its provisional allotments of the Rights Shares. under the Rights Issue in full, and to apply and pay for all excess Rights Shares which are not allotted or otherwise taken up under the Rights Issue. CIMC Offshore Holdings will rank last in priority in the allocation of excess Rights Shares. In view of the Irrevocable Undertaking, the Rights Issue is not underwritten by any financial institution. 5. ELIGIBILITY TO PARTICIPATE IN THE RIGHTS ISSUE 5.1 Entitled Registered Shareholders Registered holders of Shares named in the Register of Members of CIMC Raffles ( Registered Shareholders ) as at 5.00 p.m. on 15 July 2010, Singapore time ( Singapore Books Closure Date ) whose registered addresses with CIMC Raffles are in Singapore or Norway, and such other Registered Shareholders as at the Singapore Books Closure Date with registered addresses outside Singapore and Norway where CIMC Raffles is satisfied, at its absolute discretion, that it is not precluded from offering the Rights Shares to those Registered Shareholders either unconditionally or after compliance with conditions which it regards as acceptable ( Entitled Registered Shareholders ), will be entitled to participate in the Rights Issue. Entitled Registered Shareholders will be provisionally allotted their entitlements to the Rights Shares under the Rights Issue ( Rights ) on the basis of their shareholdings in the Register of Members of CIMC Raffles as at the Singapore Books Closure Date, rounded down to the nearest Rights Share. Entitled Registered Shareholders will be at liberty to accept, decline or otherwise renounce their Rights and will be eligible to apply for additional Rights Shares in excess of their provisional allotments under the Rights Issue. The Rights of Entitled Registered Shareholders will not be traded on the NOTC. 5.2 Entitled VPS Shareholders Persons who are registered in the Norwegian Central Securities Depository (or Verdipapirsentralen) ( VPS ) register of CIMC Raffles as holders of beneficial interests in the Shares ( VPS Shareholders ) registered in the name of DnB NOR Bank ASA ( VPS Registrar ) as of 15 July 2010, Norwegian time ( Norway Books Closure Date ), whose registered addresses with the VPS Registrar are in Singapore or Norway, and such other VPS Shareholders as at the Norway Books Closure Date with registered addresses outside Singapore and Norway where CIMC Raffles is satisfied, at its absolute discretion, that it is not precluded from offering the Rights Shares to those VPS Shareholders either unconditionally or after compliance with conditions which it regards as acceptable ( Entitled VPS Shareholders ), will be entitled to participate in the Rights Issue. Entitled VPS Shareholders will be issued VPS registered subscription rights derived from the provisional allotments of the Rights Shares to the VPS Registrar ( VPS Subscription Rights ), on the basis of their shareholdings in the VPS register of CIMC Raffles as of the Norway Books Closure Date, rounded down to the nearest Rights Share. Entitled VPS Shareholders may trade their VPS Subscription Rights on the NOTC. Entitled VPS Shareholders may subscribe for their entitlements to the Rights Shares as well as apply for additional Rights Shares in excess of their entitlements. 4

5 5.3 Non-Entitled Shareholders For practical reasons and in order to avoid any violation of applicable securities laws, the Rights Shares will not be offered to Registered Shareholders other than the Entitled Registered Shareholders or VPS Shareholders other than the Entitled VPS Shareholders (collectively, Non-Entitled Shareholders ). The Rights Shares represented by the Rights or VPS Subscription Rights of Non- Entitled Shareholders will be aggregated with disregarded fractional entitlements to Rights Shares and entitlements to Rights Shares which are not allotted or otherwise taken up for any reason and allotted and issued to satisfy applications or subscriptions for excess Rights Shares (if any) or disposed of or dealt with in such manner as the Directors may, in their absolute discretion, deem fit in the interest of CIMC Raffles, and no Non-Entitled Shareholders shall have any claim whatsoever against CIMC Raffles, the Directors, the VPS Registrar or the Share Registrar in connection therewith. 6. ADJUSTMENTS TO SHARE OPTIONS CIMC Raffles intends to make adjustments with respect to the Share Options which are outstanding as at the Books Closure Date to take into account the Rights Issue so that the holders thereof will not be adversely affected thereby. Details of such adjustments will be communicated separately to holders of the Share Options. 7. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS Save for the Irrevocable Undertaking as described in paragraph 4 above, none of the Directors and the substantial Shareholders has an interest, direct or indirect, in the Rights Issue other than through their respective interests, direct or indirect, in CIMC Raffles. 8. NOTICE OF BOOKS CLOSURE DATE 8.1 Entitled Registered Shareholders Notice is hereby given that the Register of Members and Share Transfer Books of CIMC Raffles will be closed at 5.00 p.m. on 15 July 2010, Singapore time, for the purpose of determining the provisional allotments of Rights Shares to the Entitled Registered Shareholders under the Rights Issue. 8.2 Entitled VPS Shareholders Notice is hereby given that the time and day by which VPS Shareholders must be registered in the VPS register of CIMC Raffles for the purpose of determining the entitlements of Entitled VPS Shareholders under the Rights Issue will be as of 15 July 2010, Norwegian time. The last time and date for the trading on the NOTC of the Shares held by VPS Shareholders with VPS Subscription Rights will be 4.30 p.m. on 9 July 2010, Norwegian time. The Shares held by VPS Shareholders will trade exclusive of the VPS Subscription Rights from 9.00 a.m. on 12 July 2010, Norwegian time. 5

6 9. INDICATIVE TIMETABLE An indicative timetable for the Rights Issue will be set out in a further announcement, and also in the Offering Circular which will be dispatched to Entitled Registered Shareholders and Entitled VPS Shareholders in due course. BY ORDER OF THE BOARD MAI BO LIANG Chairman 5 July 2010 About CIMC Raffles Offshore (Singapore) Limited CIMC Raffles Offshore (Singapore) Limited was incorporated in 1994 in Singapore, and was admitted to the NOTC, which is administered by the Norwegian Securities Dealers Association, in CIMC Raffles Offshore (Singapore) Limited is able to produce a wide range of offshore marine facilities, including semi-submersible drilling rigs, jack-up drilling rigs, heavy lift carriers, pipelay vessels, fall pipe vessels, accommodation barges, platform supply vessels, floating production storage and off-loading vessels, floating storage and off-loading vessels, permanent floating production units and anchor handling supply tug vessels. Investor Contact Marketing & Corporate Communications Manager CIMC Raffles Offshore (Singapore) Limited Fax: (+86) ir@cimc-raffles.com 6

7 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, the Rights, the VPS Subscription Rights or the Rights Shares or to take up any entitlements to Rights Shares, in any jurisdiction in which such an offer, invitation or solicitation is unlawful. No person should acquire any Rights, VPS Subscription Rights or Rights Shares except on the basis of the information contained in the Offering Circular. 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. CIMC Raffles assumes no responsibility in the event there is a violation by any person of such restrictions. The distribution of this Announcement, the Offering Circular, the provisional allotment letters and/or the VPS subscription form into jurisdictions other than Singapore or Norway 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 CIMC Raffles website nor any website accessible by hyperlinks on the CIMC Raffles website is incorporated in, or forms part of, this Announcement. This Announcement may contain or incorporate by reference forward-looking statements regarding the belief or current expectations of CIMC Raffles, the Board and other members of its senior management about the CIMC Raffles 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 forward-looking 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 CIMC Raffles and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking 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 CIMC Raffles Group operates, and other factors affecting the level of the CIMC Raffles Group s business activities and the costs and availability of financing for the CIMC Raffles Group s activities. Any forward-looking statement contained in this Announcement based on past or current trends and/or activities of the CIMC Raffles 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 CIMC Raffles for the current year or future years will necessarily match or exceed the historical or published earnings of CIMC Raffles. Each forward-looking statement speaks only as of the date of the particular statement. CIMC Raffles 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 CIMC Raffles expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 7

ANNOUNCEMENT PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS ISSUE OF SHARES DESPATCH OF THE OFFERING CIRCULAR AND ITS ACCOMPANYING DOCUMENTS

ANNOUNCEMENT PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS ISSUE OF SHARES DESPATCH OF THE OFFERING CIRCULAR AND ITS ACCOMPANYING DOCUMENTS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES. THE MATERIAL SET OUT HEREIN IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER FOR SALE OF THE