Information Memorandum

Transcription

1 Information Memorandum Solstad Offshore ASA Information memorandum regarding the proposed division of Rem Offshore ASA through a share capital reduction Manager 12 May 2009

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3 Table of Contents 1 IMPORTANT INFORMATION About this Memorandum Incorporation by reference Documents on display Information sourced from third parties EXECUTIVE SUMMARY Introduction The proposed division The transaction s main content Share capital and compensation Conditions for completion Description of Solstad Offshore subsequent to the Division of Rem Offshore Board of Directors and Management of Solstad Offshore subsequent to the Division of Rem Offshore Description of Rem Exit Board of directors and management of Rem Exit subsequent to the Division Advisers and auditor Manager Legal adviser Auditor Selected unaudited pro forma condensed financial information Expected timetable for implementation of the Division Documents on display RISK FACTORS Risk factors related to the Company and the industry in which the Company operates Risk factors related to the Company s business Risks related to the Company s shares Risks related to the Division RESPONSIBILITY STATEMENT Statement from the board of directors of Solstad Offshore ASA NOTICE REGARDING FORWARD-LOOKING STATEMENTS THE PROPOSED DIVISION OF REM OFFSHORE The transaction s main content Reasons for the Division The Internal Rem Transactions The Share Capital Reduction Information about assets, rights and obligations to be transferred Assets, rights and obligations to be retained by Rem Offshore Time frame for the Division Employees, incentive plans, pensions etc Taxation effects Accounting effects Conditions for the completion of the Transaction Costs of the Transaction Manager and legal adviser INFORMATION ABOUT REM EXIT

4 7.1 Incorporation, registered office and registration number Statutory auditors Legal structure Business overview Other assets and liabilities Commercial management of the vessels Unaudited pro forma condensed financial information Contracts Working capital Board of directors and management Shareholders and share trading Legal and arbitration proceedings INFORMATION ABOUT SOLSTAD OFFSHORE AFTER THE TRANSACTION Organization and legal structure Business overview The transaction s significance on earnings, assets and liabilities of Solstad Offshore Board of Directors and management CAPITAL RESOURCES Borrowing requirements and funding structure Capitalization and indebtedness (unaudited) Funding structure after the Division UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION, SOLSTAD OFFSHORE AFTER THE TRANSACTION Unaudited pro forma condensed financial information Unaudited pro forma profit and loss account Unaudited pro forma balance sheet INFORMATION ABOUT SOLSTAD OFFSHORE Introduction Incorporation, registered office and registration number Statutory auditor Organization and legal structure Vision and values Business overview Historical financial information Administrative management, supervisory bodies and senior management overview Corporate Governance Material contracts outside ordinary business Research and development, patents and intellectual property Trend information Legal and arbitration proceedings Related party transactions Working capital statement Shareholders and treasury shares MARKET Market drivers Demand/supply balance Key issues and challenges

5 13 TAX MATTERS Tax consequences related to the ownership and disposal of shares Norwegian Shareholders Tax consequences related to the ownership and disposal of shares, Non- Norwegian shareholders Duties on transfer of shares Inheritance tax DEFINITIONS AND GLOSSARY OF TERMS DOCUMENTS ON DISPLAY...72 Appendix I: Independent assurance report on pro forma financial information Appendix II: Independent vessel valuation reports 5

6 1 IMPORTANT INFORMATION 1.1 About this Memorandum For the definitions of terms used throughout this Information Memorandum, including the preceding pages, see Section 14 Definitions and Glossary of Terms. This Information Memorandum has been prepared pursuant to section 3.5 of Oslo Børs' Continuing Obligations for Listed Companies, in order to provide information about Solstad Offshore ASA ( Solstad Offshore or the Company ) and its business in connection with the proposed division of Rem Offshore ASA ( Rem Offshore ) through a share capital reduction and subsequent integration with Solstad Offshore, whereby 48.7 % of the shares in Rem Offshore will be redeemed and settlement will be made with shares in a newly established company which, directly or through a subsidiary, has assumed certain assets, liabilities, rights and obligations from Rem Offshore ASA (the Division ). This Information Memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, any of the shares or other securities issued by the Company. This Information Memorandum has been submitted to Oslo Børs ASA ( Oslo Børs ) for inspection before it was published. This Information Memorandum is not a prospectus and has neither been inspected nor approved by Oslo Børs in accordance with the rules that apply to a prospectus. The Company has furnished the information regarding the Company in this Information Memorandum. Section 6.3 in relation to information received from Rem Offshore should however be noted. The Company acknowledges responsibility for the information contained in this Information Memorandum and confirms, to the best of its knowledge and belief (having taken all reasonable care to ensure that such is the case), that the information contained in this Information Memorandum is in accordance with the facts and does not omit anything likely to affect the import of the information. This Information Memorandum has been prepared in an English version only. The manager, NRP Securities ASA (the Manager or NRP Securities ) has not independently verified any of the information contained herein. Neither the Manager nor its advisors or the advisors of the Company, nor their respective affiliates make any representation or warranty (expressed or implied) as to the accuracy or completeness of this Information Memorandum or any statements, estimates or projections contained herein, and none of them will have any liability for the recipient s use of this Information Memorandum or any other oral, written or other communications transmitted to the recipient in the course of its evaluation of the Company. The information contained herein has been prepared to assist interested parties in making their own evaluation of the Company and does not purport to be all-inclusive or to contain all information that prospective investors may desire or that may be required in order to properly evaluate the business, prospects or value of the Company. In all cases, interested parties should conduct their own investigation and analysis of the Company and the data set forth in this Information Memorandum. All inquiries relating to this Information Memorandum should be directed to the Company or the Manager. No other person has been authorized to give any information about, or make any representation on behalf of, the Company in connection with the Division or matters described herein, and, if given or made, such other information or representation must not be relied upon as having been authorized by the Company or the Manager. The information contained herein is as of the date hereof and subject to change, completion or amendment without notice. There may have been changes affecting the Company or its subsidiaries subsequent to the date of this Information Memorandum. Neither the delivery of this Information Memorandum at any time after the date hereof will, under any circumstances, create any implication that there has been no change in the Company s affairs since the date hereof or that the information set forth in this Information Memorandum is correct as of any time since its date. This Information Memorandum includes forward-looking statements, including, without limitation, projections and expectations regarding the Company s future financial position, business strategy, 6

7 plans and objectives. When used in this document, the words anticipate, believe, estimate, expect, seek to, may, plan and similar expressions, as they relate to the Company, its subsidiaries or its management, are intended to identify forward-looking statements. Such forwardlooking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company and its subsidiaries, or, as the case may be, the industry, to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Some important factors that could cause actual results to differ materially from those in the forward-looking statements are, in certain instances, included with such forward-looking statements as set out in Section 3 Risk Factors and in Section 5 Notice regarding forward-looking statements. Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements. The distribution of this Information Memorandum may in certain jurisdictions be restricted by law. Persons in possession of this Information Memorandum are required to inform themselves about and to observe any such restrictions. No action has been taken or will be taken in any jurisdiction by the Company or the Manager that would permit the possession or distribution of any documents relating to the Division or any amendment or supplement thereto, including but not limited to this Information Memorandum, in any country or jurisdiction where specific action for that purpose is required. Unless otherwise indicated, the source of information included in this Information Memorandum is the Company. In particular, the information contained in Sections 6.3 to 6.7 and Section 7 have been sourced from Rem Offshore. The contents of this Information Memorandum shall not to be construed as legal, business or tax advice. Each reader of this Information Memorandum should consult its own legal, business or tax advisor as to legal, business or tax advice. If you are in any doubt about the contents of this Information Memorandum, you should consult your stockbroker, bank manager, lawyer, accountant or other professional adviser. In the ordinary course of their respective businesses, the Manager and certain of its respective affiliates have engaged, and may continue to engage, in investment and commercial banking transactions with the Company and its subsidiaries. Governing law This Information Memorandum shall be governed by Norwegian law. Any dispute arising in respect of this Information Memorandum is subject to the exclusive jurisdiction of the Norwegian courts with Oslo City Court as legal venue. Investing in the Company s shares involves risks. See Section 3 Risk Factors of this Information Memorandum. 1.2 Incorporation by reference Oslo Børs Continuing Obligations for Listed Companies allow Solstad Offshore to incorporate by reference information in this Memorandum that has been previously filed with Oslo Børs (in its capacity as Norway s competent authority for the purposes of the Prospectus Directive) in other documents. Solstad Offshore hereby incorporates the following documents by reference in this Memorandum: its annual report for the year ended 31 December 2008, available at FILE/Annual%20report% pdf its annual report for the year ended 31 December 2007, available at 7

8 FILE/SOFF_%C3%85rsrapport_2007_Engelsk.pdf, and its annual report for the year ended 31 December 2006, available at FILE/SOF-06-Annual_report_ENG.pdf The information incorporated by reference in this Memorandum should be read in connection with the cross-reference list below. Cross Reference Table Relating to Information Incorporated by Reference: ANNEX I MINIMUM DISCLOSURE REQUIREMENTS FOR THE MEMORANDUM 6.2. A description of the principal markets in which the issuer competes, including a breakdown of total revenues by category of activity and geographic market for each financial year for the period covered by the historical financial information Audited historical financial information covering the latest 3 financial years (or such shorter period that the issuer has been in operation), and the audit report in respect of each year. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Member State national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third country s national accounting standards equivalent to these standards. If such financial information is not equivalent to these standards, it must be presented in the form of restated financial statements DOCUMENT/SECTION/PAGE 2008 Annual Report pages (note 4, Reporting by segments and geographical markets ) 2007 Annual Report pages (note 4, Reporting by segments and geographical markets ) 2006 Annual Report pages (note 4, Reporting by segments and geographical markets ) 2008 Annual Report pages Annual Report pages Annual Report pages Documents on display The following documents are referred to in this Memorandum and will for the life of this Information Memorandum be available for inspection at the offices of the Company at Nesaveien39, 4297 Skudeneshavn: The Company s Memorandum of incorporation; The Company s Articles of Association; The Company s financial statements 2008; The Company s financial statements 2007; and The Company s financial statements

9 1.4 Information sourced from third parties The information in this Memorandum that has been sourced from third parties has been accurately reproduced and as far as the Company is aware and able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. 9

10 2 EXECUTIVE SUMMARY This summary should be read as an introduction to the Information Memorandum and in conjunction with, and is qualified in its entirety, by more detailed information and the appendices appearing elsewhere in this Information Memorandum. Any decision to invest in the Company s shares should be based on a consideration of the Memorandum as a whole by the investor. In case a claim relating to the information contained in the Information Memorandum is brought before a court, the plaintiff investor might, under the national legislation, have to bear the cost of translating the Memorandum before legal proceedings are initiated. No civil liability attaches to those persons who have prepared the summary including any translation thereof, and applied for its notification, unless the summary is misleading, inaccurate or inconsistent when read together with the other parts of this Information Memorandum. 2.1 Introduction Solstad Rederi AS ( Solstad Rederi ), a wholly owned subsidiary of Solstad Offshore controls approx. 48.7% of Rem Offshore ASA ( Rem Offshore ). Aage Johan Remøy and the companies Remy AS, Rem Invest A/S, Barentz AS, Polaris A/S and Rem Maritime Eiendom AS who are controlled by him (the Remøy Companies ) are also a significant shareholder in Rem Offshore controlling approx. 39.9% of Rem Offshore. The current ownership situation in Rem Offshore is not optimal for neither Rem Offshore nor its shareholders when it comes to operations, strategy and development/growth potential for Rem Offshore. The proposed Division and the impact on Solstad Offshore is described in this Information Memorandum pursuant to Oslo Børs Continuing Obligations for Listed Companies section The proposed division Solstad Rederi and the Remøy Companies have proposed to the board of directors of Rem Offshore (hereafter the Rem Offshore Board ) to divide Rem Offshore, and the Rem Offshore Board resolved on 13 April 2009 to support the Division as proposed by entering into an agreement with Solstad Rederi and the Remøy Companies. The proposed division will take place through a share capital reduction, whereby the share capital of Rem Offshore will be reduced by NOK 19,265,467 through redemption of 1,926,546,700 shares (following the Share Split described in Section below). All shareholders of Rem Offshore will be offered to redeem 48.7% of their shares in Rem Offshore. The settlement for the redeemed shares will be shares in a newly incorporated company, Rem Exit AS (hereafter Rem Exit ), which prior to the completion of the Share Capital Reduction, directly or through a newly incorporated subsidiary, Remsol AS (hereafter Remsol ), will have received vessels and certain other assets and liabilities from Rem Offshore or its subsidiaries at a net asset value equal to the fair value of the share capital reduction. 2.3 The transaction s main content On 13 April 2009, Rem Offshore, Solstad Rederi and the Remøy Companies entered into an agreement for a proposed division of Rem Offshore (hereafter (the Division Agreement ), whereby the share capital of Rem Offshore shall be reduced and the shares redeemed shall be converted into shares in Rem Exit which prior to completion of the share capital reduction, directly or through Remsol, will have received vessels, other assets, liabilities, rights and obligations from Rem Offshore at a net asset value equal to the fair value of the share capital reduction. The 10

11 division of Rem Offshore is proposed to take place through two parallel transactions, each mutually conditional upon each other: (i) (ii) The transfer of certain vessels, other assets, liabilities, rights and obligations from Rem Offshore to Rem Exit or Remsol through a demerger of Rem Ship AS and other internal transactions as further described in Section 6.3 of this Information Memorandum (hereafter collectively referred to as the Internal Rem Transactions ); and A reduction of the share capital of Rem Offshore by 48.7% (NOK 19,265,467) as further described in Section 6.4 below (hereafter the Share Capital Reduction ). The Internal Rem Transactions and the Share Capital Reduction are hereafter collectively referred to as the Division. 2.4 Share capital and compensation Through the Division, the share capital of Rem Offshore is reduced by NOK 19,265,467 from NOK 39,583,276 to NOK 20,317,809 by redemption of 1,926,546,700 shares (following the Share Split). Through the Division, the share capital of Rem Exit is increased and the number of shares in Rem Exit will upon completion of the Division consist of 1,926,546,700 shares. As compensation for each redeemed share in Rem Offshore the shareholder will receive one share in Rem Exit. Solstad Rederi will as far as possible receive shares in Rem Exit only, and all of Solstad Rederi s shares in Rem Offshore will be redeemed provided that no other shareholder decides to redeem shares in Rem Offshore. The Remøy Companies will not receive shares in Rem Exit, but will maintain their shareholding in Rem Offshore equalling approximately 78% post capital reduction assuming Solstad Rederi is the only receiver of shares in Rem Exit. However, if Kaldbakur EHF, who owns 6.44% of the shares in Rem Offshore, and/or Olympic Orion AS, who owns 4.30% of the shares in Rem Offshore, or companies controlled by them (or other shareholders who have acquired their shareholdings) wish to redeem parts of their shareholding against receiving shares in Rem Exit, the Remøy Companies have undertaken also to receive shares in Rem Exit in such number that Solstad Rederi will not be obliged to offer to acquire the shares in Rem Exit in accordance with Section 4-26 of the Norwegian Private Limited Liability Companies Act. Solstad Rederi s ownership position in Rem Exit may range between approximately 89% and 100%. 2.5 Conditions for completion The completion of the Division is conditional upon the fulfillment of the following conditions: All consents from banks, GIEK/Eksportfinans, Norsk Tillitsmann ASA (on behalf of the bondholders under Rem Offshore s MNOK 250 bond loan agreement), charterers and other parties which are necessary for the Division shall have been obtained, unless the failure to obtain such consent will not have a material adverse effect for Rem Offshore or for Rem Exit; Solstad Rederi shall have confirmed that all necessary third party consents from banks, bondholders, charterers and others to the integration of Rem Exit with the other Solstad Rederi business activities have been given, so that Solstad Rederi within 12 months from the completion of the Division can carry out a transaction as described in Section of this Information Memorandum; 11

12 The general meetings of Rem Offshore, Rem Ship AS and Rem Con AS shall have adopted all resolutions which are necessary for the completion of the Division; The deadline for objections from the creditors of Rem Offshore and the creditors of Rem Ship AS shall have expired and the relationship with any creditors that have submitted objections shall have been settled, or the District Court shall have decided that the Share Capital Reduction and/or the Rem Ship Demerger may nevertheless be completed; That both review of documentation and inspections of vessels are concluded not to significantly affect the Division; That it is satisfactorily clarified that the Division will not have material adverse tax effects on Rem Offshore, Rem Exit or the shareholders; The competition authorities do not prohibit the completion of the Division; and Rem Offshore shall fulfill all conditions for the continued listing on Oslo Børs or on Oslo Axess after the Division. 2.6 Description of Solstad Offshore subsequent to the Division of Rem Offshore Following the Division of Rem Offshore and the integration of Rem Exit with Solstad Offshore, the Solstad Offshore Group will have a fleet of 42 vessels in operation (as of the date of this Information Memorandum) and 7 newbuilding contracts. Total pro forma assets of Solstad Offshore as of 31 December 2008 including Rem Exit will be about MNOK 11,924. For more information see Section 8 of this Information Memorandum. 2.7 Board of Directors and Management of Solstad Offshore subsequent to the Division of Rem Offshore The Board of Directors and management of Solstad Offshore will not change following the Division of Rem Offshore. As a consequence of the Division, the level of activity in Solstad Offshore will be higher, and the Group may need to expand the size of its administration. Staff in Rem Maritime AS will be reduced by approximately half its current number of employees, and Solstad Offshore will offer employment to such relevant staff. For more information see Section 8.4 below. 2.8 Description of Rem Exit The assets of Rem Offshore which will be transferred to Rem Exit or its subsidiary Remsol comprise of (i) the vessels Rem Balder, Rem Commander, Rem Fortress, Rem Clough, Rem Fortune, Rem Supplier and Rem Spirit, including all assets, liabilities, rights and obligations pertaining to the vessels as well as their net profits from 1 January 2009, and (ii) a newbuilding type Aker AH12 CD, hull no. 724 under construction at STX Norway Offshore AS Brattvåg. Rem Exit is currently a shelf company registered under the name of Tekågel Invest 385 AS. Existing charterparty contracts for the vessels that are being transferred to Remsol will be transferred together with the vessels, and consents from the charterers to such transfer will be obtained as a condition to the completion of the Division. In addition to the vessels and the newbuilding contract mentioned above, Rem Exit will assume (i) an untaxed profit at a nominal value of MNOK 16.7 as of 1 January 2009 and (ii) net cash or a claim against Rem Ship AS in the amount of approximately MNOK 240 as of 1 January 2009, adjusted for working capital, the actual value of the untaxed profit and the profit from 1 January

13 Further, Rem Exit will receive a claim against Rem Offshore in the amount of MNOK 19.5 in connection with a loan in the amount of MNOK 40 granted by Rem Offshore to Kleven Maritime AS on terms described in more detail in Section of this Information Memorandum. The total booked value of the transferred assets is approximately NOK 2.3 billion as of 31 December It is intended that Rem Exit will take over the bond loan in Rem Offshore in the nominal amount of MNOK 250 at a value of MNOK 237. Furthermore, Remsol will also assume a payment obligation of MNOK 580 in connection with the new building contract for hull no. 724 at STX Norway Offshore AS Brattvåg with delivery March The valuation of the vessels is based on negotiations between Solstad Rederi and the Remøy Companies considering third party broker valuations, charter party contract terms, charter counterparty and contract length. The part of Rem Offshore which is assumed to be transferred is in the opinion of Solstad Offshore a balanced and representative part of the Rem Group, with regards to new building commitments, segment exposure, debt to asset ratio, contract coverage etc. Further, Solstad Offshore is of the opinion that the net asset value of the transferred activities is corresponding with Solstad Rederi s share of the net assets value of Rem Offshore prior to the Division. Furthermore, Solstad Offshore has included a condensed valuation report obtained after the Division Agreement by shipbrokers and pursuant to the Oslo Børs reporting requirements for shipping companies. It should be noted that the report has been prepared without completing inspection of the vessels and valuations are prepared on a charter free basis. The broker valuations are included as Appendix II to this Information Memorandum and reasonably supports the net asset value of the vessels transferred, previously agreed between Solstad Rederi and the Remøy Companies. 2.9 Board of directors and management of Rem Exit subsequent to the Division As of the date of this Information Memorandum, the board of directors of Rem Exit consists of Aage Johan Remøy (Chairman), Arild Ove Myrvoll (board member) and Jørn Petter Remøy (board member). Rem Exit has no employees, and it has no plans for employments forward. Rem Exit intends to work closely with the existing management of Solstad Offshore, which indirectly will become the largest shareholder of Rem Exit. Upon completion of the Division, the existing board of directors will be replaced by representatives from Solstad Offshore Advisers and auditor Manager The Manager for the Division is NRP Securities ASA, Haakon VIIs gate 1, P.O.Box 1358 Vika, NO Oslo, Norway. As of the date if this Information Memorandum, NPR Securities (including associated parties and employees) does not hold any shares in Solstad Offshore Legal adviser The legal adviser to the Company is Wikborg Rein. 13

14 Auditor Ernst & Young AS is the Company s auditor. For more information about the auditor, please refer to Section 11.3 below Selected unaudited pro forma condensed financial information The unaudited pro forma condensed financial information has been prepared for illustrative purposes to show how the Division of Rem Offshore would have affected Solstad Offshore s consolidated income statement for 2008 if the Division had taken place on 01 January In addition, it is shown below how the consolidated balance sheet per 31 December 2008 would have been if the Division had occurred at the balance sheet date. Due to its nature, the unaudited pro forma condensed financial information addresses a hypothetical situation, and therefore, does not represent how the statements of operations would actually have been if the transactions had in fact occurred at an earlier date, and is not representative of the results of operations for any future periods. Investors are cautioned against placing undue confidence in this unaudited pro forma condensed financial information. The financial information in the column with heading Actual Solstad Offshore Group ASA 2008 below is identical to the financial statements for Solstad Offshore Group ASA as for the year ended 31 December These are audited figures. No historical financial reporting for the business to be consolidated has been published. The spin-off business will be incorporated as a wholly owned subsidiary of Rem Offshore and thereafter distributed to Solstad Offshore. The unaudited pro forma condensed financial information for Solstad Offshore does not include all information required for financial statements under the International Financial Reporting Standard (IFRS), and should be read in conjunction with the historical information for the Company. The pro forma figures financial information has been prepared by using the same accounting principles as adopted by Solstad Offshore for Selected unaudited profit and loss account information for 2008 (NOK 1.000) Pro forma Pro forma Notes Solstad Offshore Adjustments Solstad Offshore Consolidated of pro forma Consolidated Rem Exit Solstad Audited Unaudited Unaudited Unaudited Total operating income Total operating costs Operating profit/loss Net financing Ordinary profit before taxes Tax on ordinary result Net profit for year Minority shares Majority shares Earnings and diluted earnings per share (NOK) 1,21 5,23 For more information, please see Section 10. Selected unaudited balance sheet information for

15 (NOK 1.000) Pro forma Pro forma Notes Solstad Offshore Adjustments Solstad Offshore Consolidated of pro forma Consolidated Solstad Audited Unaudited Unaudited ASSETS Long-term assets Deferred tax asset Total intangible assets Total long-term fixed assets Total financial assets Total long-term assets Current assets Stock Total receivables Investments Bank deposits and cash equivalents Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Share capital ( at NOK 2.00) Treasury shares Other paid-in capital Total restricted equity Total earned equity Minority interests Total equity Liabilities Total provisions Total long-term liabilities Total current liabilities Total liabilities TOTAL EQUITY AND LIABILITIES For more information, please see Section Expected timetable for implementation of the Division The following timetable is expected to apply for the transaction: The general meeting of Rem Offshore will consider and decide upon the Share Capital Reduction in the extraordinary general meeting to be held on or about 2 June 2009 The general meeting of Rem Ship AS will consider and decide upon the demerger of Rem Ship before the end of May 2009; The deadlines for creditors objections elapse two months following registration in the Register of Business Enterprises of the resolutions approving the Share Capital Reduction and the Ship Demerger; and 15

16 The transfer of newbuilding contract for hull no 724 from Rem Con AS to Remsol via Rem Offshore to be completed subsequent to the elapse of the creditor s notice period in the beginning of August Provided that the necessary corporate resolutions are made, the Division will be consummated legally as soon as the required resolutions have been made, all required approvals or consents have been obtained from contract counterparts/third parties, the documentation has been completed and the deadlines for objections from creditors have elapsed, presumably during August Documents on display For the life of this Information Memorandum, the following documents may be inspected by contacting the Company or the Manager: The Company s Articles of Association; The Company certificate; Historical financial information of Solstad Offshore for the financial years 2006, 2007 and The financial statements for Solstad Offshore may also be found at Solstad Offshore s website, and All other reports, letters and other documents, historical financial information and statements prepared by any expert at Solstad Offshore s request, any part of which is included or referred to in this Information Memorandum. 16

17 3 RISK FACTORS Investors should carefully consider all of the information contained in this Information Memorandum, including but not limited to, the following risk factors, which may affect some or all of the Company s activities, the industry in which it operates and the securities issued. However, the risk factors described below are not the only ones that will be faced by the Company. Other risks and uncertainties, including those not currently considered material by the Company s management, may impair the Company s business. The risk factors discussed below may adversely affect the business, financial condition, operating results or cash flow of the Company. The order in which risk factors appear is not intended as an indication of the relative weight or importance thereof. Such information is presented as of the date hereof and is subject to change, completion or amendment without notice. An investment in the shares is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or a part of the investment. 3.1 Risk factors related to the Company and the industry in which the Company operates Market risks The oil service industry is focused on providing products and services to the worldwide oil and gas industry. The Company s business and operations depend principally upon conditions prevailing in the oil and gas industry and, in particular, the exploration, development and production spending of oil and gas companies. Such spending is influenced by many factors, including the current and anticipated prices of oil and gas and the global economic activity. Capital expenditures, and in particular exploration and development expenditures and the subsea installation programs, by oil and gas companies can be negatively affected by a number of factors including, but not limited to, decreases in oil and gas prices, fluctuations in production levels and disappointing exploration results. As growth in the world economy now has ceased with a significant reduction in the oil price, it is likely that this will have a negative effect on future activity Political and international risks The Company is subject to risks related to international operations that could harm the Company s business and results of operations. With operations worldwide, and with approximately 50% of the Company s revenues likely to be derived outside of Norway, the Company s business and results of operations will be subject to various risks inherent in international operations. These risks include: Instability of foreign economies and governments Risks of war, terrorism, civil disturbance, seizure, renegotiation or nullification of existing contracts Foreign exchange restrictions, sanctions and other laws and policies affecting taxation, trade and investment The Company cannot assure that it will not be subject to material adverse developments with respect to the Company s international operations or that the coverage will be adequate to cover any losses arising from such risks Government regulations The Company s operations are subject to numerous international conventions as well as national, state and local laws and regulations in force in the jurisdictions in which the Company conducts, or 17

18 will conduct, its business. These laws and regulations relate to the protection of the environment, human health and safety, taxes, labour and wage standards, certification, licensing, safety and training and other requirements. Laws, regulations and licensing of the various governments of the countries in which the Company operates regarding the exploration for and development of their oil and gas reserves can impact the rate of development of oil and gas fields, which in turn affects the demand for the Company s services. The offshore service industry is dependent on demand for services from the oil and gas exploration industry and, accordingly, is affected by changing taxes, regulations and other laws or policies affecting the oil and gas industry generally. The amendment of existing laws and regulations or the adoption of new laws and regulations curtailing or further regulating exploratory or development drilling and production for oil and gas for political, economic or other reasons, could harm the Company s business, operating results or financial condition. The Company cannot predict the extent to which its future cash flow and earnings may be affected by mandatory compliance with any such new legislation or regulations. In addition, the Company may become subject to additional laws and regulations as a result of future vessel relocations or other operations of the Company being conducted in jurisdictions in which it is not currently operating. Moreover, the Company may have no right to compensation from its customers if its costs are increased through such governmental actions, and its operating margins may fall as a result. 3.2 Risk factors related to the Company s business Oil prices The demand for the Company s offshore service vessels is dependent upon the deep water subsea installation and maintenance/repair activity as well as the offshore exploration, development and production activity. These activities have historically been volatile and closely linked to the price of hydrocarbons. Low oil prices typically lead to a reduction in exploration drilling as the oil companies scale down their investment budgets. A further decrease in the oil prices may have a material adverse impact on the financial position of the Company Competitive industry The market for the Company s products and services is competitive. The Company believes that it is well positioned to strengthen its market position. However, the Company s competitive position may be harmed if its current competitors strengthen their market position and if new competitors with similar types of vessels and services establish operations in the same segments of the market. The failure of the Company to maintain competitiveness through the successful management of its vessels and services strategy could have a material adverse effect on the Company s business, operating results and financial condition Regional activity In 2008, 42% of the Company s net revenues was generated through providing services to oil companies and offshore construction companies operating in the North Sea, i.e. on the Norwegian continental shelf (the NCS ) and the UK continental shelf (the UKCS ). Some 20% of net income for 2008 was generated from vessels operating in Asia and 15% from offshore activities in Mediterranean/rest Europe. The Company is as such subject to risks related to its international operations Contractual risks The Company s business depends on contracts with customers regarding rendered services from its fleet of vessels. Depending on its length, the vessels time charter contracts normally involves a substantial value or consideration to the Company. Furthermore, some of the contracts are 18

19 governed by foreign law which may create both legal and practical difficulties in case of a dispute or conflict. The Company also operates in regions where the ability to protect contractual and other legal rights may be limited compared to regions with more wellestablished markets. This will, following the completion of the Division, also apply to contracts that are being transferred to Rem Exit or Remsol Credit risk Lack of payments from customers/clients may significantly and adversely impair the Company s liquidity. Solstad Offshore gives due consideration to the credit quality of its potential clients during contract negotiations to minimize the risk of payment delinquency, but no assurance can be given that the Company will be able to avoid this risk. The main strategy to reduce financial market risk is the use of financial derivatives, both for the specific exposure and for the net exposure of the Company. If financial derivatives are appropriate, only conventional derivatives are used. The Company only uses recognized financial institutions Currency fluctuations Because a significant portion of the Company s business is conducted in currencies other than NOK, the Company will be exposed to volatility associated with foreign currency exchange rates in the course of its business. USD and GBP are the most important foreign currencies affecting the Company s business. Fluctuations in currencies, in particular the aforesaid currencies, in relation to NOK may affect the Company s result Operational risks There will always be operational risks involved in performing services from the Company s fleet of offshore service vessels. This includes among others unexpected failure or damage to vessels and technical equipment, work accidents or adverse weather conditions. These risks can cause personal injury, prevent offshore operations to be performed as scheduled and other business interruptions, property and equipment damage, pollution and environmental damage. The Company may be subject to claims as a result of these hazards. The Company seeks to prevent loss or damages from such incidents by insurance, contractual regulations and emergency routines. However, there will always be some exposure to technical and operational risks, with unforeseen problems leading to unexpectedly high operating costs, substantial losses, additional investments, etc., which may have a material negative effect on the Company s operating results and financial position. Additionally, the occurrence of any of these risks could hurt the Company s reputation Dependence on key personnel The Company s future results of operations will to a large extent depend on its ability to manage its growth effectively. If the Company fails to attract and retain management and key personnel who can manage the Company s growth effectively, it could have a material adverse effect on the Company s business, operating results and financial condition. The Company s offshore employees are highly skilled and highly trained seafarers, and failure by the Company to continue to attract and retain such individuals could materially adversely affect the ability to compete in the offshore service vessel industry Disputes The Company will from time to time be involved in disputes in the ordinary course of its business activities. Such disputes may disrupt business operations and adversely affect the results of operations and financial condition. Please see Section ( Legal and arbitration proceedings ) for a description of current material disputes in which the Company is involved. 19

20 Environmental risks The Company s operations are subject to numerous national and international, environmental, health and safety laws, regulations, treaties and conventions (together, Regulations ), including, inter alia, those controlling the discharge of materials into the environment, requiring removal and cleanup of environmental contamination, establishing certification, licensing, health and safety, taxes, labor and training standards, operation of the vessels or otherwise relating to the protection of human health and the environment. The amendment or modification of existing Regulations or the adoption of new Regulations curtailing or further regulating the Company s business could have a material adverse effect on the Group s operating results and financial condition. The Company cannot predict the extent to which future earnings or capital expenditures may be affected by compliance with such new Regulations Taxation risks The Company s and/or its subsidiaries activities will to a large extent be governed by the fiscal legislation of the jurisdictions where it is operating, as its activities in some cases will be deemed to form a permanent establishment according to the tax laws of those countries. Thus, the Company is exposed to a material risk regarding the correct application of the tax regulations as well as possible future changes in the tax legislation of those relevant countries. New and changed regulations could have an impact on the Company s profitability. The Company deems to have assessed tax regulations in good faith. Notwithstanding this, the relevant tax authorities may overrule the Company s judgment, and no assurance can be provided with respect to assessment of tax. Additionally, the Company is to a certain extent being exposed to different rules of customs duty based on the legislation of the local jurisdiction and the willingness of the authorities to encourage exploration activities. 3.3 Risks related to the Company s shares Share volatility The trading price of the shares could fluctuate significantly in response to quarterly variations in operating results, general economic outlook, adverse business developments, interest rate changes, changes in financial estimates by securities analysts, matters announced in respect of commodity prices or competitors or changes to the regulatory environment in which the Company operates. Market conditions may affect the shares regardless of the Company s operating performance or the overall performance of the oil and gas sector. Accordingly, the market price of the shares may not reflect the underlying value of the Company s assets and operations, and the price at which investors may dispose of their shares at any point in time may be influenced by a number of factors, only some of which may pertain to the Company while others of which may be outside the Company s control. The market price of the shares could decline due to sales of a large number of shares in the Company in the market or the perception that such sales could occur. Such sales could also make it more difficult for the Company to offer equity securities in the future at a time and at a price that are deemed appropriate The ability to bring action against the Company may be limited under Norwegian law The Company is a public limited liability company organized under the laws of Norway. The rights of holders of Shares are governed by Norwegian law and by the Articles of Association. These rights might differ from the rights of shareholders in other jurisdictions. In particular, Norwegian law limits the circumstances under which shareholders of Norwegian companies may bring 20

21 derivative actions. Under Norwegian law, any action brought by the Company in respect of wrongful acts committed against the Company takes priority over actions brought by shareholders in respect of such acts. In addition, it may be difficult to prevail in a claim against the Company under, or to enforce liabilities predicated upon, securities laws in other jurisdictions Shareholders not participating in future offerings may be diluted Unless otherwise resolved or authorized by the general meeting, shareholders in Norwegian public companies such as the Company have pre-emptive rights proportionate to the aggregate amount of the shares they hold with respect to new shares issued by the company. For reasons relating to foreign securities laws or other factors, foreign investors may not be able to participate in a new issuance of shares or other securities and may face dilution as a result Risk related to future development and forward looking statements This Memorandum includes forward looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause the Company s actual results, performance or achievements to be materially different from any future results, performances achievements expressed or implied by the forward looking statements. See Section 1.1 and Section 5 for further details. 3.4 Risks related to the Division Failure to obtain the necessary consents to the Division The completion of the Division is subject to certain conditions, including the consent from bondholders, charterers and from the vessels existing mortgage banks. Failure to obtain such consents may result in the Division being delayed or not being completed at all. There is also an inherent risk that mortgage banks and/or bondholders only will accept the Division subject to changes in existing terms and conditions. There is a risk that such changes can adversely change the inherent economics of the Division. If the Division is not completed for any reason, Solstad Offshore would not realize the expected benefits of having completed the Division, certain costs relating to the Division will be payable irrespective of whether the Division is completed or not, and Solstad Offshore would continue to face the risk the Company is currently facing as a major shareholder in Rem Offshore ASA Liquidity risks The Company is dependent upon having access to long term funding. There can be no assurance that the Company may not experience net cash flow shortfalls exceeding the Company s available funding sources. Furthermore, there can be no assurance that the Company will be able to raise new equity, or arrange new borrowing facilities, on favorable terms and in amounts necessary to conduct its ongoing and future operations, should this be required Currency risks The Company s business has NOK as its functional currency. Operating revenues and the majority of its expenses are denominated in NOK. Fluctuating foreign exchange rates can have an effect on the results of operations when income and costs are incurred in currencies other than NOK, such as USD Unaudited pro forma financial information This Information Memorandum contains unaudited pro forma condensed financial information, which gives effect to the transaction. The unaudited pro forma condensed financial information is based on estimates and assumptions which the Company believes to be reasonable and is being furnished solely for illustrative purposes and is not necessarily indicative of what Solstad Offshore s and Rem Exit s separate results of operations and financial condition would have been had the 21

22 transaction occurred at an earlier date. Rem Exit has no operating history as a separate entity. As a result, you should not place undue reliance on the Company s unaudited condensed pro forma financial information presented in this Memorandum Norwegian law subjects Remsol and Rem Ship AS to joint liability after the Division Through the Divison, the obligations of Rem Ship AS will be divided between Remsol and Rem Ship AS in accordance with the principles of the demerger plan of Rem Ship AS, pursuant to the Norwegian Private Limited Companies Act, section If either Remsol or Rem Ship AS is liable under the Division for an obligation that arose prior to completion of the Division and fails to satisfy that obligation, the non-defaulting party will be jointly and severally liable for the obligation. This statutory liability is unlimited in time, but is limited in amount to the equivalent of the net value allocated to the non-defaulting party in the Division The Division is dependent on legal and binding resolutions in Rem Offshore The Division depends upon legal and binding resolutions being made by the corporate bodies of Rem Offshore. In this regard, it is mentioned that certain shareholders in Rem Offshore have suggested that the Division may imply a violation of provisions for protection of minority shareholders in the Norwegian Public Limited Companies Act section 5-21/

23 4 RESPONSIBILITY STATEMENT 4.1 Statement from the board of directors of Solstad Offshore ASA The Board of Directors hereby declare that, having taken all reasonable care to ensure that such is the case, the information contained in this Information Memorandum is, to the best of our knowledge, in accordance with the facts and contains no omissions likely to affect its import. Skudeneshavn, 12 May 2009 The Board of Directors of Solstad Offshore ASA Harald Eikesdal (chairman) Johannes Solstad (vice chairman) Toril Eidesvik Annette Solstad Arne Austreid 23

24 5 NOTICE REGARDING FORWARD-LOOKING STATEMENTS This Information Memorandum includes forward-looking statements, including, without limitation, projections and expectations regarding the Company s future financial position, business strategy, plans and objectives. When used in this document, the words anticipate, believe, estimate, expect, seek to, may, plan and similar expressions, as they relate to the Company, its subsidiaries or its management, are intended to identify forward-looking statements. Such forwardlooking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company and its subsidiaries, or, as the case may be, the industry, to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company s present and future business strategies and the environment in which the Company and its subsidiaries will operate. Factors that could cause the Company s actual results, performance or achievements to materially differ from those in the forward-looking statements include but are not limited to: the competitive nature of the markets in which the Company and its subsidiaries operates; global and regional economic conditions; government regulations; changes in political events; and force majeure events. Some important factors that could cause actual results to differ materially from those in the forward-looking statements are, in certain instances, included with such forward-looking statements and in Section 3 Risk Factors. Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements. 24

25 6 THE PROPOSED DIVISION OF REM OFFSHORE 6.1 The transaction s main content On 13 April 2009, Rem Offshore, Solstad Rederi and the Remøy Companies entered into the Division Agreement, whereby the share capital of Rem Offshore shall be reduced and the shares redeemed shall be converted into shares in Rem Exit, a subsidiary of Rem Offshore which prior to completion of the share capital reduction, directly or through its subsidiary, Remsol, will have received vessels, other assets, liabilities, rights and obligations as described in detail in section 6.5 from Rem Offshore at a net asset value equal to the fair value of the share capital reduction. The division of Rem Offshore is proposed to take place through two parallel transactions, each mutually conditional upon each other: (i) (ii) The Internal Rem Transactions; and The Share Capital Reduction. Subsequent to the completion of the Division, Solstad Offshore will become between approx. 89 and 100% shareholder in Rem Exit, 6.2 Reasons for the Division Solstad Rederi, a wholly owned subsidiary of Solstad Offshore, and the Remøy Companies each control a significant equity interest in Rem Offshore. Solstad Rederi owns 48.7% and the Remøy Companies own 39.9% of the share capital in Rem Offshore (see figure 1 below). The current ownership situation in Rem Offshore is not optimal for neither Rem Offshore nor its shareholders when it comes to operations, strategy and development/growth potential for Rem Offshore. The two major shareholders in Rem Offshore are of the opinion that Rem Offshore should be divided, whereby Solstad Rederi s shares in Rem Offshore as far as possible are redeemed against Solstad Rederi receiving shares in Rem Exit, thereby taking over parts of the Rem Offshore business activity. Solstad Rederi and the Remøy Companies, have therefore proposed to the Rem Offshore Board to divide Rem Offshore as set out in this Information Memorandum. The Board resolved on 13 April 2009 to support the Division as proposed by entering into an agreement with Solstad Rederi and the Remøy Companies. The remaining shareholders in Rem Offshore are given the option to either maintain their ownership in Rem Offshore or to accept a pro rata participation in the ownership of Rem Exit and Rem Offshore respectively. 25

26 Figure 1 Rem Offshore s current shareholder structure and organization ~ 49% Solstad Others ~ 11% Remøy Companies ~ 40% Rem Offshore ASA 100% 100% 100% 35% RemCon AS Rem Ship AS Rem Maritime AS Rem Star AS Rem TBN 1* Rem Balder Rem Viking** Rem Odin** Rem TBN 2* Rem Fortune Rem Spirit Rem Provider Rem Mermaid Rem Supplier Rem Server** AHTS MPSV PSV * Under construction ** Recently sold Rem Fortress Rem Clough Rem Commander Rem Forza Rem Etive Rem Poseidon 6.3 The Internal Rem Transactions Any reference and descriptions in this Information Memorandum of Rem Offshore (and subsidiaries) the Internal Rem Transactions, including matters relating to the companies Rem Exit and Remsol is based solely on information received by the Company, directly or indirectly from Rem Offshore The Internal Rem Transactions will be consummated by the competent corporate bodies within the Rem Offshore group of companies prior to the completion of the Division Establishment of Rem Exit and Remsol Rem Exit was incorporated by the law firm Thommessen Krefting Greve Lund AS as a private limited liability company in accordance with Chapter 2 of the Norwegian Private Limited Liability Companies Act on 6 March The current share capital of Rem Exit is NOK 100,000 divided into 1,000 shares, each with a nominal value of NOK 100. On 30 April 2009, the shares in Tekågel Invest 385 AS were acquired by Rem Offshore and on 6 May 2009 the company changed its name to Rem Exit. Remsol is a private limited liability company incorporated by the law firm Thommessen Krefting Greve Lund AS in accordance with Chapter 2 of the Norwegian Private Limited Liability Companies Act on 30 March The shares in Remsol was acquired by Rem Offshore on 30 April The 26

27 current share capital of Remsol is NOK 100,000 divided into 1,000 shares, each with a nominal value of NOK 100. Provided that the General Meeting of Rem Offshore to be held on or about 2 June 2009 resolves the Share Capital Reduction, the following transactions will be carried out: Demerger of Rem Ship AS The board of directors of Rem Ship AS has prepared a plan (hereafter the Ship Demerger Plan ) for the demerger of Rem Ship AS in accordance with Chapter 14 of the Norwegian Private Limited Liability Companies Act (hereafter the Ship Demerger ), whereby (i) seven vessels, (ii) an untaxed profit and (iii) net cash or a claim against Rem Ship AS, as further described in Section 6.5 below shall be transferred to Remsol. Through the Ship Demerger, the share capital of Rem Ship AS will be reduced proportionally to reflect the market value of the net assets being transferred as a consequence of the Ship Demerger. Simultaneously, the share capital of Remsol will be increased as a consequence of the net assets received in the Ship Demerger. The new shares in Remsol will be allocated to Rem Offshore as consideration for the contribution of the vessels and the other assets and liabilities. The Ship Demerger Plan will be presented to a general meeting of Rem Ship AS to be held before the end of May 2009, and the completion of the Ship Demerger by registration in the Register of Business Enterprises is expected to occur after the two month creditors notice period, pursuant to Section 14-7, cf. Sections to of the Norwegian Private Limited Liability Companies Act, has elapsed and all other necessary conditions for completion set out in the Ship Demerger Plan have been satisfied. It is expected that the creditor notice period will elapse around July/August Transfer of new building contract for hull no 724 A contract between Rem Con AS and STX Norway Offshore AS Brattvåg dated 3 rd May 2007 for the newbuilding of hull no. 724 with delivery to take place in March 2010, including instalments paid in, and a remaining payment obligation of Rem Con AS in the amount of MNOK 580 (hereinafter the Hull no. 724 Contract ) will be transferred from Rem Con AS to Rem Offshore in consideration for a claim against Rem Offshore. The Hull no. 724 Contract will then be contributed to the share capital of Remsol as a consideration in kind in a share issue against Rem Offshore, whereby the share capital of Remsol will be increased (hereinafter the Remsol Share Issue ) Transfer of bond loan An outstanding senior unsecured bond loan in the amount of MNOK 250 (ISIN: NO ) administrated by Norsk Tillitsmann ASA (hereafter the Bond Loan ) will be transferred from Rem Offshore to Rem Exit at a value of MNOK 237. The Bond Loan was issued 23 March 2007, with maturity 23 March In order to obtain consent to the transfer of the Bond Loan, Rem Offshore has summoned a bondholder meeting to be held on 15 May As an alternative to the transfer of the Bond Loan to Rem Exit, Rem Offshore may render a loan to Rem Exit on the same terms and conditions as the Bond Loan, provided that Solstad Offshore issues a guarantee for the payment obligations of Rem Exit (hereafter the Replacement Loan ). The Bond Loan or the Replacement Loan will be contributed to the share capital of Rem Exit in connection with the Rem Exit Share Issue (as defined in Section of this Information Memorandum). 27

28 6.3.5 Claim against Rem Offshore relating to loan to Kleven Maritime AS In connection with the Rem Exit Share Issue, Rem Exit will receive a claim against Rem Offshore in the amount of MNOK 19.5 relating to a loan of MNOK 40 rendered by Rem Offshore to Kleven Maritime AS (hereafter the Kleven Claim ). As security for the Kleven Claim, Rem Offshore will pledge to Rem Exit its claim against Kleven Maritime AS under the loan. The loan is subject to interest at market rates and falls due on 30 June The Kleven Claim will be on back-to-back conditions with Rem Offshore s claim against Kleven Maritime AS under the loan, i.e Rem Offshore will only be obliged to pay instalments and interest to Rem Exit to the extent Rem Offshore receives payments of interest and instalments from Kleven Maritime AS Share capital increase in Rem Exit Prior to the completion of the Share Capital Reduction, the share capital of Rem Exit will be increased in a share issue against Rem Offshore, based on Rem Offshore s contribution in kind of all the shares in Remsol, the Bond Loan or the Replacement Loan and the Kleven Claim (hereafter the Rem Exit Share Issue ). Through the Rem Exit Share Issue, Remsol becomes a subsidiary of Rem Exit. After the Rem Exit Share Issue, the share capital of Rem Exit will be divided into 1,926, shares (or 19,265,467 if the Share Split as described in Section of this Information Memorandum is not carried out). 6.4 The Share Capital Reduction The General Meeting of Rem Offshore will be presented with a proposal to reduce the share capital of Rem Offshore by 48.7% with settlement to take place in all shares of Rem Exit The reduction of the number of shares The share capital of Rem Offshore is currently NOK 39,583,276, divided into 39,583,276 shares, each with a nominal value of NOK 1. In order to facilitate the conversion of the redeemed shares into shares of Rem Exit, the Board of Directors of Rem Offshorehas proposed a share split, whereby each share of Rem Offshore is subdivided into 100 shares each with a nominal value of NOK 0.01 (the Share Split ), so that the total number of shares subsequent to the share split will be 3,958,327,600. The Share Split will only be carried out if it is required in order to convert the shares of Rem Offshore into shares of Rem Exit. Through the Share Capital Reduction the number of shares will be reduced by 1,926,546,700 to 2,031,780,900 (or by 19,265,467 to 20,317,809 if the Share Split is not carried out). The Share Capital Reduction will be carried out in accordance with Chapter 12 of the Norwegian Public Limited Liability Companies Act. The resolution to reduce the share capital must be adopted by the General Meeting by the majority as required for an amendment to the articles of association, i.e. by a majority of two thirds of both the votes cast and the share capital represented at the General Meeting, cf. Section 5-18 of the Norwegian Public Limited Liability Companies Act. From the registration of the resolution in the Register of Business Enterprises, there will be a two month creditor notice period before the Share Capital Reduction can become effective. Provided that the Share Capital Reduction is resolved by the General Meeting, completion of the Share Capital Reduction can at the earliest become effective around 5 August

29 6.4.2 The consideration for the redeemed Shares The total consideration for the 1,926,546,700 (19,265,467 if the Share Split is not carried out) shares redeemed as a consequence of the Share Capital Reduction will be all outstanding shares of Rem Exit, representing 1,926,546,700 (or 19,265,467 if the Share Split is not carried out) shares. For each redeemed share the redeemed shareholder will receive one share in Rem Exit. The ratio (48.7%) between the net asset value of the assets, liabilities, right and obligations to be transferred to Rem Exit as part of the Internal Rem Transactions and the net asset value of Rem Offshore before the Division is equal to the ratio between the redeemed shares and Rem Offshore s total share capital Offer for conversion of Shares in Rem Offshore into shares in Rem Exit: All shareholders of Rem Offshore, except for the Remøy Companies and Solstad Rederi will be offered (a) to maintain their shareholding in Rem Offshore, without any redemption of their shares taking place, or (b) as replacement for their shares in Rem Offshore, to receive shares in Rem Exit proportionately to the Share Capital Reduction and their current shareholding in Rem Offshore, i.e. for up to for 48.7% of their shares in Rem Offshore. The Remøy Companies have declared that they do not wish to receive shares in Rem Exit, but retain their shares in Rem Offshore. Solstad Rederi has declared that it to the furthest possible extent wishes to receive shares in Rem Exit. Provided that no other shareholders decide to have their shares redeemed, Solstad Rederi will redeem all of its shares in Rem Offshore, and the Remøy Companies ownership in Rem Offshore will equal approximately 78%. If other shareholders wish to receive shares in Rem Exit (limited to 11.4% of the shares), the shareholding of Solstad Rederi in Rem Exit will be reduced correspondingly and Solstad Rederi will remain a shareholder of Rem Offshore. In the event that Kaldbakur EHF, who owns 6.44% of the shares in Rem Offshore, and/or Olympic Orion AS, who owns 4.30% of the shares in Rem Offshore, or companies controlled by them (or other shareholders who have acquired their shareholdings) wish to redeem parts of their shares in Rem Offshore and as a result thereof the shareholding of Solstad Rederi in Rem Exit represents more than 90%, the Remøy Companies have undertaken to receive shares in Rem Exit in such number that Solstad Rederi will not be obliged to offer to acquire the shares in Rem Exit in accordance with Section 4-26 of the Norwegian Private Limited Liability Companies Act. Solstad Rederi has waived the right of compulsory acquisition pursuant to Section 4-26 of the Norwegian Private Limited Liability Companies Act in the event Solstad Rederi, alone or together with other Solstad Group companies, before or after a merger or another integration with other Solstad Group companies (as described in Section below), becomes the owner of more than 90% of the shares in Rem Exit or the merged company and holds an equivalent share of the votes at the general meeting of such company Rem Exit after the Division Rem Exit will not apply for a public listing of its shares. Provided that Solstad Offshore obtains the third-party consents required for the integration of Rem Exit with its group of companies, Solstad Offshore has undertaken within 12 months to integrate Rem Exit in its business activities, for example by way of a merger, alternatively by an offer to purchase the shares of the minority shareholders, based on the conversion rate between Rem Exit and the relevant Solstad entity. The conversion rate will be based on value adjusted equity, and settlement made in shares in Solstad Offshore, in order to offer the shareholders in Rem Exit a listed instrument. 29

30 6.5 Information about assets, rights and obligations to be transferred Pursuant to the Division Agreement, the part of Rem Offshore which will be transferred to Remsol through the Ship Demerger and the Remsol Share Issue includes the following vessels; Rem Balder, Rem Commander, Rem Fortress, Rem Clough, Rem Fortune, Rem Supplier, Rem Spirit and a newbuilding type Aker AH12 CD (the Hull no. 724 Contract at STX Norway Offshore AS Brattvåg). The vessels will be transferred together with all assets, liabilities, rights and obligations, including existing charter parties and secured debts, pertaining to the vessels as well as their net profits from 1 January The valuation of the vessels is based on negotiations between Solstad Rederi and the Remøy Companies considering third party broker valuations, charter party contract terms, charter counterparty and contract length. The part of Rem Offshore which is proposed to be transferred is in the opinion of Solstad Offshore a balanced and representative part of the Rem Group, with regards to new building commitments, segment exposure, debt to asset ratio, contract coverage etc. Further, Solstad Offshore is of the opinion that the net asset value of the transferred activities is corresponding with Solstad Rederi s share of the net asset value of Rem Offshore prior to the Division. Furthermore, Solstad Offshore has included a condensed valuation report obtained after the Division Agreement by shipbrokers and pursuant to the Oslo Børs reporting requirements for shipping companies. It should be noted that the report has been prepared without completing inspection of the vessels and valuations are prepared on a charter free basis. The broker valuations are included as Appendix II to this Information Memorandum and reasonably support the net asset value of the vessels transferred, previously agreed between Solstad Rederi and the Remøy Companies. Remsol will also assume a payment obligation of MNOK 580 in connection with the Hull no. 724 Contract at STX Norway Offshore AS Brattvåg with delivery March In connection with delivery of the vessel, a firm financing offer is granted, but yet to be drawn, of up to 70% of the project cost. In addition, Remsol will assume (i) the fair value of the its portion of the tax liability incurred by Rem Ship AS in connection with the old tonnage tax system in 2007 at a nominal value of MNOK 16.7 as of 1 January 2009 and (ii) net cash or a claim against Rem Ship AS in the amount of approximately MNOK 240 as of 1 January 2009, adjusted for working capital, the actual value of the untaxed profit and the profit from 1 January Furthermore, Rem Exit will through the Rem Exit Share Issue receive the Kleven Claim and the Bond Loan or the Replacement Loan. The total booked value of the transferred assets in Solstad Offshore's accounts is approximately NOK 2.3 billion as of 31 December Solstad Offshore, Rem Exit and Remsol shall refrain from using Rem in connection with its business name and/or vessel name. The vessels transferred to Rem Exit will be renamed subsequent to the completion of the Division to this effect. 6.6 Assets, rights and obligations to be retained by Rem Offshore The remaining business with its related assets, liabilities, rights and obligations shall remain in Rem Offshore. As such, Rem Offshore will retain all other assets and liabilities, as well as its 100% ownership in Rem Ship AS, Rem Con AS, Rem Maritime AS and 35% ownership in Rem Star AS. The vessels that will be retained by Rem Offshore are; Rem Etive, Rem Provider, Rem Mermaid, Rem Forza, Rem Poseidon and a newbuilding type Aker AH12 CD, hull no. 725 at STX Norway Offshore AS Brattvåg, as well as the vessels Rem Viking, Rem Odin and Rem Server which as of the date of this Information Memorandum have been sold. 30

31 6.7 Time frame for the Division The Share Capital Reduction will require the approval from the general meeting of Rem Offshore. Likewise, the general meeting of Rem Ship AS must approve the Ship Demerger. The Board of Directors of Rem Offshore and of Rem Ship AS will prepare the relevant corporate documentation for the Division and summon general meetings to adopt the required resolutions on or about 2 June 2009 in Rem Offshore and before the end of May 2009 in Rem Ship AS. The deadlines for creditors objections elapse two months following registration in the Register of Business Enterprises of the resolutions approving the Share Capital Increase and the Ship Demerger. The transfer of newbuilding contract for hull no 724 from Rem Con AS to Remsol via Rem Offshore will be completed subsequent to the elapse of the creditor s notice period in the beginning of August Provided that the necessary corporate resolutions are made, the Division will be consummated legally as soon as the required resolutions have been made, all required approvals or consents have been obtained from contract counterparts/third parties, the documentation has been completed and the deadlines for objections from creditors have elapsed, presumably during August Employees, incentive plans, pensions etc As of the date of this Information Memorandum, Solstad Offshore has approx. 1,000 employees, of which 955 serve as crew on the Group s vessels, and 45 are employed as administrative personnel. Subsequent to the Division, the sailors will, if possible, continue to serve on the same vessels as before. The 212 employees serving on the vessels that are to be transferred from Rem Ship AS will be offered to continue their services for a company within the Solstad Group. 6.9 Taxation effects Ship Demerger The Ship Demerger will be carried out at taxable continuity, according to the rules in the Norwegian Tax Act, chapter 11. Remsol undertake all existing tax values/tax positions relating to the transferred assets and liabilities, including unallocated share of tax related to the compulsory exit from the previous NTT and a tax position related to a currency swap agreement. This currency swap agreement is terminated in Transfer of the Hull no. 724 Contract The sale of the Hull no. 724 Contract will be considered realization of the contract for Norwegian tax purposes Transfer of the Bond Loan The transfer of the Bond Loan from Rem Offshore to Rem Exit will be considered a realization of the loan for Norwegian tax purposes. There will hence be discontinuity in the tax position of the bond undertaken by Rem Exit, as the bond will generate a new tax value in Rem Exit The Share Capital Reduction The Share Capital Reduction in Rem Offshore, which is performed as a redemption of shares, leads to a taxable gain for Solstad Offshore. 3% of the estimated gain, MNOK 225, will be taxable income from shares. This has been recognized in the pro forma profit and loss account presented in Section 10 below. 31

32 6.10 Accounting effects Solstad Offshore s shares in Rem Offshore has historically been recognized as an available for sale investment stated at fair value in the balance sheet. Changes in fair value have been recognized directly against equity. After the transaction Solstad Offshore will consolidate the acquired business in which the financial results of the acquired business will be included in the respective profit and loss and balance sheet line items. All assets and liabilities acquired through Rem Exit will in the consolidated financial statements of Solstad Offshore be recognized at their fair values as of the transaction date. A preliminiary pruchase price allocation has been performed in which fair values has been identified for the different assets and liabilities acquired through the transaction. Identified excess/less values identified in the preliminary purchase price allocation will be amortized over the expected useful lives of the different items Conditions for the completion of the Transaction The completion of the Division is conditional upon the fulfillment of the following conditions: All consents from banks, GIEK/Eksportfinans, Norsk Tillitsmann ASA (on behalf of the bondholders under Rem Offshore s MNOK 250 Bond Loan agreement), charterers and other parties which are necessary for the Division shall have been obtained, unless the failure to obtain such consent will not have a material adverse effect for Rem Offshore or for Rem Exit; Solstad Rederi shall have confirmed that all necessary third party consents from banks, bondholders, charterers and others to the integration of Rem Exit with the other Solstad Rederi business activities have been given, so that Solstad Rederi within 12 months from the completion of the Division can carry out a transaction as described in Section of this Information Memorandum; The general meetings of Rem Offshore Rem Ship AS and Remcon AS shall have adopted all resolutions which are necessary for the completion of the Division; The deadline for objections from the creditors of Rem Offshore and the creditors of Rem Ship AS shall have expired and the relationship with any creditors that have submitted objections shall have been settled, or the District Court shall have decided that the Share Capital Reduction and/or the Rem Ship Demerger may nevertheless be completed; That both review of documentation and inspections of vessels are concluded not to significantly affect the Division; That it is satisfactorily clarified that the Division will not have material adverse tax effects on Rem Offshore, Rem Exit or the shareholders; The competition authorities do not prohibit the completion of the Division; and Rem Offshore shall fulfill all conditions for the continued listing on Oslo Børs or on Oslo Axess after the Division Costs of the Transaction The costs of the Division have been provisioned for in the pro forma balance sheet as of 31 December 2008 upon separation of assets and liabilities to Rem Exit. The total costs are estimated to be MNOK 4.7 and include, but are not limited to, public registration fees, fees to the Norwegian Register of Business Enterprises and fees to the Manager and Solstad Offshore s auditor and other advisers. 32

33 6.13 Manager and legal adviser NRP Securities ASA, Haakon VIIs gate 1, P.O.Box 1358 Vika, NO-0113 Oslo, Norway, is the Manager for the Division. The legal adviser to the Company is Wikborg Rein, Olav Kyrresgate 11, P.O. Box 1233 Sentrum, N Bergen, Norway. 33

34 7 INFORMATION ABOUT REM EXIT The following section contains a presentation of Rem Exit, which is a holding company for the purpose of executing the Division. The information contained in this Section 7 is based solely on information received by the Company, directly or indirectly from Rem Offshore. 7.1 Incorporation, registered office and registration number Rem Exit was incorporated under the name Tekågel Invest 385 AS on 6 March 2009 and with registration number by the law firm Thommessen Krefting Greve Lund. On 30 April 2009, the company was acquired by Rem Offshore, and its name was changed to Rem Exit AS on 6 May Rem Exit is intended to be a holding company for the purpose of executing the Division, and at the date of this Information Memorandum, the company has not had any activities other than what relates to the Division. Its registered office and principal place of business is Holmefjordvegen 6, NO-6090 Fosnavåg, Norway. 7.2 Statutory auditors PricewaterhouseCoopers AS (reg. Nr ) is the statutory auditor of Rem Exit. PricewaterhouseCoopers AS is member of The Norwegian Institute of Public Accountants (DnR). 7.3 Legal structure Following completion of the Division, it is intended that Rem Exit will continue to be a privately owned holding company with no other investments or activities than its ownership of all the shares in Remsol and the other assets and liabilities that Rem Exit assumes as a consequence of the Division. 7.4 Business overview Through the Division, eight vessels, including a new building contract and all assets and liabilities attached to the vessels, as well as an untaxed profit and the profit from 1 January 2009 from the vessels will be transferred to Remsol, which upon completion of the Division will be a wholly-owned subsidiary of Rem Exit. The vessels that will be transferred to Remsol are; Rem Balder, Rem Commander, Rem Fortress, Rem Clough, Rem Fortune, Rem Supplier, Rem Spirit and a newbuilding type Aker AH12 CD, the Hull no. 724 Contract. Existing charter parties will follow the relevant vessels. 34

35 7.4.1 Vessels in operation CSV s: Rem Commander Rem Fortress Rem Clough Type:CSV Design: MT 6016 DWT: 4100 tonnes Cargo deck area: 840 m2 Flag: NOR Classification: DNV +1A1, E0, SF, Dynpos AUTR, Clean, Comf-V(3), dk(+), HL(2,5), Ice C, (Supply vessel -Hull) Yard: Kleven Verft AS Delivered: Contract: On contract with Global Industries L.L.C. until 1 June 2011 with 5x1 year options Type: CSV Design: MT 6016 DWT: 4700 tonnes Cargo deck area: 800 m2 aft of ROV Flag: NOR Classification: DNV +1A1, E0, SF, Supply Vessel, Oil Rec, Dynpos AUTR, Clean, Comf-V(3), dk(+), HL(2,5), LFL*, DeIce, Ice C Bridge arrangement according to NAUT OSV Yard: Kleven Verft AS Delivered: Contract: On contract with Global Industries L.L.C. until 1 October 2009 with 4x1 year options Type: CSV Classification: DNV Flag: NOR Delivered: 2008 Builder: Kleven Yard AS Design: MT 6022 Dead weight: 6500 T Main engine: Cat 5 x 3516TA ekw Accommodation: 120 pers. Deck cranes: 2x5t at 10m radius with knuckle jib Offshore crane: Hydramarine 200t at 10m radius Moonpool (7,2m x 7,2m): 51,84 m2 Contract: Through Q3 2013, option trough Q

36 AHTS: Rem Balder Type: AHTS Design: UT 712 L BHP: 16,320 Winch capacity: 400 tonnes Bollard pull: 390 tonnes Cargo deck area: 510 m2 Flag: NOR Classification: DNV +1A1, TUG, Supply Vessel, E0, SF, Dynpos AUTR, Comf-V(3), Ice C, Oil Rec Yard: Kleven Verft AS Delivered: Contract: On contract with Petróleo Brasileiro (Petrobras) from July 2007 to July 2009 with 1x2 year options. PSV s: Rem Fortune Rem Supplier Type: PSV Design: MT 6000 Mk.II DWT: 4700 tonnes Cargo deck area: 941 m2 Flag: NOR Classification: DNV +1A1, E0, SF, Supply Vessel Basic, Dynpos AUTR, Clean, Comf-V(3), dk(+), HL(2,0/2,8), LFL*, Oil Rec, NAUT OSV Yard: Kleven Verft AS Delivered: Contract: On contract through Q3 2009, option through Q Type: PSV Design: UT 755 LN DWT: 3350 tonnes Cargo deck area: 680 m2 Flag: NOR Classification: DNV + 1A1, E0, SF, DK(+), HL( 2,5)- DYNPOS AUT Yard: Brattvaag Skipsverft Delivered: Contract: Spot 36

37 Rem Spirit Type: PSV Classification: DNV 1A1 Fire Fighter I SF E0 DYNPOS-AUT CLEAN DK(+) HL(2.8) TMON Flag: NOR Delivered: 2008 Builder: Aker Yards ASA Design: UT 755 LN Contract: Spot Vessels under construction Rem TBN (STX bn 724) Design : STX AH12CD Classification: DNV 1A1,SF,SUPPLY VESSEL,tug,EO,DYNPOS-AUTR, COMFORT-V(3) CLEAN DESIGN,NAUT OSV,TMON,DK(+) HL(2.8),HELIDK Flag: NOR Delivery: feb 2010 Builder: STX EUROPE Brattvåg Length o.a: 95 m Length p.p: 85 m Breadth mid: 24 m Depth main deck: 9.8 m DWT:5000 Cargo deck area:760m2, 10 t/m2 Accommodation: 20 crew 50 pers Winch: 500t Bollard pull 300t + Contract: Open 7.5 Other assets and liabilities Furthermore, Rem Exit will receive the Kleven Claim, a claim against Rem Offshore in the amount of MNOK 19.5 in connection with a loan in the amount of MNOK 40 granted by Rem Offshore to Kleven Maritime AS. Rem Exit will following consent from Norsk Tillitsmann ASA (on behalf of the bondholders), also take over the Bond Loan, or the Replacement Loan as the case may be, of Rem Offshore in the nominal amount of MNOK 250 at a value of MNOK 237. The total booked value of the transferred assets in Rem Offshore's accounts is approximately NOK 2.3 billion as of 31 December Remsol will also assume a payment obligation of MNOK 580 (as of the date of this Information Memorandum) in connection with the newbuilding contract for hull no. 724 at STX Norway Offshore AS Brattvåg with delivery March In connection with delivery of the vessel, a firm financing offer is granted, but yet to be drawn, of up to 70% of the project cost. Refund guarantees from STX Europe Holding AS, with registration number , have been provided in favor of Rem Con AS for paid-in installments. 37

38 Subsequent to the Division, the sailors will, if possible, continue to serve on the same vessels as before. The 212 employees serving on the vessels that are to be transferred from Rem Ship AS will be offered to continue their services for a company within the Solstad Group. There will not be a transfer of administration personnel from Rem Maritime AS to Rem Exit or Remsol. Pursuant to the Division, Solstad Rederi, Rem Exit and Remsol will be prohibited from using Rem in its business name and in their vessel names. Consequently, the names of the vessels transferred to Remsol shall be renamed subsequent to the completion of the Division. The assets, rights and obligations to be transferred are further described in Section 6 of this Information Memorandum. 7.6 Commercial management of the vessels Rem Maritime AS, a subsidiary of Rem Offhore, is currently responsible for management, administration and chartering of vessels to be owned by Remsol AS. The vessels are managed on standard contracts with unspecified duration and with 6-12 months termination notice. The management fee is NOK 150,000 per vessel per month. Upon completion of the Division, the management of the vessels will gradually be transferred to Solstad Offshore s management company, Solstad Shipping AS. Solstad Shipping AS applies the SHIPMAN 98 /THE BALTIC AND INTERNATIONAL MARITIME COUNSIL (BIMCO) STANDARD SHIP MANAGEMENT AGREEMENT for its ship management services. Its duration is unspecified with 3 months mutual termination notice, and the terms will depend on the type of vessel, its area of operation as well as technical and operational complexity. 7.7 Unaudited pro forma condensed financial information The unaudited pro forma financial information for Rem Exit 2008 for the transferred activities prepared by Rem Offshore shows operating income in 2008 at MNOK 423 and operating result before depreciation and amortization at MNOK 257. Two of the vessels included in the transferred activities were delivered medio March and ultimo October 2008, respectively, and did not operate the entire accounting year during As of year-end 2008, unaudited pro forma equity is MNOK 772 and fair value of total assets required are approximately MNOK 2,327. The cash flow from the operation from 1 January 2009 until the completion of the contemplated Division will be allocated to the company in which the respective vessels will be placed. 7.8 Contracts There will be no material contracts outside Rem Exit s ordinary described activities. 7.9 Working capital In the opinion of Solstad Offshore, following completion of the Division, Rem Exit will have sufficient working capital to meet its requirements the next 12 months Board of directors and management Board of directors As of the date of this Information Memorandum, the board of directors of Rem Exit consists of the following members: 38

39 Aage Johan Remøy, Chairman Aage Johan Remøy (58) is the Chief Executive Officer of Rem Offshore and the Chairman of the board of directors of Barentz AS, Polaris AS, Rem Con AS, Rem Invest AS, Rem Maritime AS, Rem Maritime Eiendom AS, Rem Norway AS, Rem Ship AS, Remy AS and Remøy Fiskeriselskap AS. Arild Ove Myrvoll, Board member Arild Ove Myrvoll (35) is Chief Financial Officer of Rem Offshore, the Chairman of the board of directors of Roce Equity AS and Rem Star AS, and a member of the Board of Directors of Rem Con AS, Rem Maritime AS, Rem Norway AS, Rem Ship AS and Igesund Eigedom AS. Jørn Petter Remøy, Board member Jørn Petter Remøy (38) is Fishing Fleet Manager of Rem Offshore and a member of the board of directors of Rem Con AS, Rem Invest AS, Rem Maritime AS, Rem Maritime Eiendom AS, Rem Norway AS, Rem Ship AS and Remøy Fiskeriselskap AS Management Rem Exit does not intend to have any employees, and it has no plans for employment going forward. Rem Exit intends to work closely with the existing management of Solstad Offshore, who indirectly will become the largest shareholder of Rem Exit Board of directors upon completion of the Division Upon completion of the Division, the existing board of directors will be replaced by representatives of Rem Exit s largest shareholder, Solstad Rederi Options and benefits for Board Members and management in connection with the Division None of the members of the Board have any agreements with Rem Offshore, Solstad Offshore or Rem Exit for benefits, in form of options to acquire shares or otherwise, in connection with the Division, and no such agreements will be entered into Shareholders and share trading Rem Exit is currently a wholly owned subsidiary of Rem Offshore. Following completion of the Division, the shares in Rem Exit will be held by Solstad Rederi and other shareholders (limited to 11.4%) who accept the offer to have their shares in Rem Offshore redeemed. The shares in Rem Exit will not be traded on any regulated market or any OTC market, and it is not intended to provide for any liquidity or trading in the shares. Solstad Offshore has undertaken to offer the shareholders in Rem Exit listed shares in Solstad Offshore within 12 months from completion of the Division, provided that the third-party consents required for the integration of Rem Exit in the Solstad Group of companies can be obtained, see Section of this Information Memorandum Legal and arbitration proceedings As far as Solstad Offshore is aware, as of the date of this Information Memorandum, neither Rem Exit or Remsol is involved in any governmental, legal or arbitration proceedings (including such proceeding which are pending or threatened of which Rem Exit and/or Remsol is aware) which may have significant effects on Rem Exit s or Remsol s financial position or profitability. 39

40 8 INFORMATION ABOUT SOLSTAD OFFSHORE AFTER THE TRANSACTION 8.1 Organization and legal structure The Solstad Offshore Group will after the transaction have the following legal structure: 8.2 Business overview The business of Solstad Offshore subsequent to completion of the transaction and the principal markets will not differ from the existing business in Solstad Offshore. 8.3 The transaction s significance on earnings, assets and liabilities of Solstad Offshore Solstad Offshore will after the transaction have a total unaudited pro forma total assets as of approximately MNOK 11,946 and unaudited pro forma equity of approximately MNOK 3,826. Unaudited pro forma profit for Solstad Offshore is for 2008 MNOK 178. For detailed information see Section 10. Solstad Offshore s shares in REM Offshore have historically been recognized as an available for sale investment stated at fair value in the balance sheet. Changes in fair value have been recognized directly against equity. After the transaction Solstad Offshore will consolidate the acquired business in which the financial results of the acquired business will be included in the individual profit and loss and balance sheet line items. 8.4 Board of Directors and management The Board of Directors and the management will be the same as for Solstad Offshore prior to the transaction. For detailed information see Section

41 9 CAPITAL RESOURCES 9.1 Borrowing requirements and funding structure Funding structure Solstad Offshore s debt funding structure prior to incorporation of Rem Exit and Remsol comprises primarily of loans secured through mortgages in individual vessels and/or fleet loans. The loan agreements are subject to requirements towards the borrowers and/or guarantor s working capital and equity in addition to requirements towards market value clauses on the financed vessels (from 110 to 125% of the outstanding loans). The first year's loan installments are exempt from calculation of working capital. The company satisfied all conditions of the loan agreements at In addition to mortgaged assets, combined with negative security clauses, the agreements include re-assignment of certain other securities, such as assignment in vessel income, charter parties and insurance terms. As of end of 1 st Quarter 2009 mortgage loans have a remaining term/duration ranging from 6 months to approximately 10 years. Solstad Offshore has issued a NOK 300 mill unsecured bond loan falling due in May Interest rate is NIBOR + 0,85%. Interest is to be paid each quarter. During the term of the loan the borrower shall; comply with a set of information covenants and not without the permission of the trustees or bond holders take specific actions that have a material adverse effect on the Company. There are no financial covenants attached to this loan agreement Borrowing requirements In Solstad Offshore ASA, all new build contracts are entered into by Solstad Rederi AS. Long-term financial agreement has been entered into for the vessel to be delivered in 2009, Normand TBN 190. Solstad Rederi AS has not, as per the date of this Information Memorandum, entered into financial agreements for its remaining newbuilding program, but dialogues with banks and financial institutions are initiated for financing of around 70% of the vessels contract prices. For the vessels under construction in NOR, the newbuild program will be financed through cash flow from operation, shareholder equity and funds available for this purpose under the company s existing fleet loan, Newbuilding contracts: New build contracts in Solstad Rederi AS - NOK Solstad Contract Paid External Remaining payments Due for payment Delivery Share Price Instalments financing / Bank to yard pr to yard in 2009 Normand TBN "190" August % Normand TBN "069" July % Under application Normand TBN "730" March % Not applied Normand TBN "167" September % Under application New build contracts in Nor Offshore Ltd - USD Solstad Contract Paid Remaining Due for payment Delivery Share Price Instalments to yard in 2009 NOR Australis March % $ $ $ NorCE Endevour December % $ $ $ $ Note: Numbers in The company has the option to change some of the equipment on the vessels and therefore there may be some variation in the prices above. During 1 st quarter 2009 there has been paid a further installment of MNOK 89 towards TBN IMR, NOK 35,6 mill towards TBN 167 and USD 0,75 mill and USD 12,6 mill towards NOR Australis and NorCE Endeavour respectively. The adequacy of available funds will depend on many factors, including the further growth of the business, capital expenditures, proceeds from potential divestment of assets, market development and availability of mortgage/debt financing. The Company believes that the funds from operations, 41

42 funds available under its existing loan facilities and funds from current loan applications will be sufficient to support Solstad Offshore s current strategy over the coming years. 9.2 Capitalization and indebtedness (unaudited) Capitalization as at Short-term part of long-term debt Mortgage loan Bond Loan Leasing obligation Total interest bearing debt A Sharholders equity B Minority Interest in Equity C Total Capitalization (A+B+C+D) Indebtness as of Total interest bearing debt A Bank deposits and cash equivalents B Net interest bearing debt (A-B) Note: Numbers in NOK Above is based on unaudited financial information for Solstad Offshore excluding the incorporation of Rem Exit as per No new debt will be incurred by Solstad Offshore in conjunction with the Division, however existing debt in the Rem Exit group will be consolidated on the balance sheet of Solstad Offshore. 9.3 Funding structure after the Division Rem Exit and Remsol s debt funding structure comprises of loans secured through mortgages in the individual vessels and an unsecured bond loan of NOK 250 mill. The bond loan has maturity in March Current interest rate is NIBOR + 2,05%. Interest is to be paid each quarter. As of end of 1 st quarter 2009 the mortgage loans in Remsol totals NOK 1,272 billion and have a remaining term/duration ranging from 5 to 8 years of which NOK 112 mill is due within 12 months (short term part of long-term debt). Remsol s existing bank loan and the unsecured bond facility are subject to requirements towards the borrowers and/or guarantors working capital/liquidity, equity and debt service ability in addition to requirements towards marked value clauses on the financed vessels. In addition to the mortgaged assets the agreements include guarantees from Rem Offshore, assignment in factoring agreements, contracts and insurance terms. The Company has requested Remsol s existing mortgage banks and bond holders for logical amendments under the existing loan agreements to reflect the change of debtor with respect to current financial covenants, security etc. The completion of the transaction is subject to certain conditions, including the consent from bondholders and the vessels existing mortgage banks. The above is based upon such consents being granted and that the facilites will follow the same maturity terms. Solstad Offshore, as at the date of this Information Memorandum, is not subject to any restrictions on the use of capital resources that have materially affected, or could materially affect, directly or indirectly, the Company s normal operations. 42

43 10 UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION, SOLSTAD OFFSHORE AFTER THE TRANSACTION 10.1 Unaudited pro forma condensed financial information The unaudited pro forma condensed financial information has been prepared for illustrative purposes to show how the transaction of Rem Exit as described in section 7 of this Information Memorandum might have affected the Solstad Offshore s consolidated profit and loss account for 2008 as if the transaction occurred on 1 January 2008 and the unaudited consolidated balance sheet as of 31 December 2008 as if the transaction occurred at that date. Due to its nature, the unaudited pro forma condensed financial information addresses a hypothetical situation and, therefore, does not represent what the statements of operations would actually have been if the transaction had in fact occurred on an earlier date and is not representative of the results of operations for any future periods. Investors are cautioned not to place undue reliance on this unaudited pro forma financial information. The unaudited pro forma information does not include all of the information required for financial statements under International Financial Reporting Standards (IFRS) as adopted by the European Union, and should be read in conjunction with the consolidated financial statements of Solstad Offshore and Rem Offshore as of and for the year ended The historical financial information of Rem Exit and Solstad Offshore have been prepared in accordance with IFRS as adopted by the EU. The unaudited pro forma financial information has been prepared using the same accounting principles as for the audited 2008 consolidated financial statement of Solstad Offshore. The historical profit and loss account information for Solstad Offshore for the period , on which the pro forma adjustments were applied, has been derived from the audited 2008 consolidated financial statements. The unaudited pro forma financial information has been prepared upon the presumption that the conditions for completion as described in section 2.4 are met. The unaudited historical financial information for Rem Exit in the unaudited pro forma profit and loss account has been derived from management reports for the activities to be transferred. Each vessel acquired through the transaction has historically been a separate reporting unit of Rem Offshore. The unaudited financial information in the operation reports for the different vessels corresponds to amounts included in the audited 2008 consolidated financial statements of Rem Offshore. Depreciation expense of Rem Exit includes the depreciation of excess values at Rem Offshore group level in addition to the depreciation expense recognized at unit level. Payroll expenses for service personnel onshore and other operating expenses that has not been directly allocated to the different units has been reflected in Rem Exit based on a proportion of the total cost incurred by Rem Offshore. The calculation of the adjustment is based on the ratio of total number of charter days to the total number of charter days for the vessels that are to be transferred. Interest expense in Rem Exit corresponds to actual interest incurred in the individual units based on the interest expense of the individual loans to be transferred in the transaction and agree to operation reports for the individual units. Currency effect on two USD based loans that are to be transferred to Rem Exit is included as other finance costs with actual currency losses included in the operations reports for the two units. Interest expense on the bond loan to be transferred is included in Rem Exit with actual interest expense incurred by Rem Offshore for 2008 and agrees to the amount included in note 10 to the 2008 audited financial statements of Rem Offshore (parent company). 43

44 The acquisition of Rem Exit has in the unaudited pro forma financial information been included in accordance with IFRS 3 Business Combination that requires the acquiree s identifiable assets, liabilities and contingent liabilities to be recognized at their fair values as of the acquisition date. In the unaudited pro forma balance sheet as of 31 December 2008 no separate column is included for Rem Exit as this is considered not relevant for the transaction that is considered as an asset deal. Rem Exit will only receive the balance sheet items as described in Section 7 in the Information Memorandum and these items have been included in the column Pro Forma adjustments at their fair values as of the transaction date (13 April 2009). A preliminary purchase price allocation (PPA) has been performed in which the identifiable assets, liabilities and contingent liabilities of Rem Exit has been identified. A final PPA has not been prepared as of to date as only limited information and time has been available in preparation of the PPA. The PPA in the unaudited pro forma financial information is based on the fair value of acquired assets and liabilities as of the date of acquisition. The excess/less values identified in this preliminary PPA may change when further and more complete information regarding the assets and liabilities acquired is available. The values allocated to the identified tangible and intangible assets and liabilities may change in the final PPA. There exist further uncertainties with regards to the actual completion of the transaction as described in Section 2.5. This may impact the presentation and amortization of excess/less values in the unaudited pro forma financial information. All shareholders in Rem Offshore, except Solstad Offshore and the Remøy Companies will be offered to maintain their shareholding in Rem Offshore, or receive shares in Rem Exit proportionately to the capital reduction and according to their current shareholding in Rem Offshore. Solstad Offshore will as far as possible receive shares in Rem Exit only, and all Solstad Offshore s share in Rem Offshore will be redeemed provided that no other shareholder decides to redeem shares in Rem Offshore and receive shares in Rem Exit. To the extent that other shareholders decide to receive shares in Rem Exit, the redeemed part of Solstad Offshore's shareholding in Rem Offshore, is reduced correspondingly. The unaudited pro forma financial information are based on that no other shareholders decide to receive shares in Rem Exit hence no minority interests are calculated. If shareholders in Rem Offshore decides to receive shares in Rem Exit during this transaction, this will be limited to maximum 11.4 %. With the exception of the currency reclassification effects relating to accounts receivables as explained in Note 1 under Section 10.2, and the gain related to the realization of shares in Rem Offshore ASA in Note 6 under Section 10.2, the pro forma adjustments to the profit and loss account and the balance sheet in sections 10.2 and 10.3 will also impact the financial statements going forward. 44

45 10.2 Unaudited pro forma profit and loss account (NOK 1.000) Pro forma Pro forma Notes Solstad Offshore Adjustments Solstad Offshore Consolidated of pro forma Consolidated Rem Exit Solstad Audited Unaudited Unaudited Unaudited Freight income 1, Other operating income Total operating income Personnel costs Ordinary depreciation Depreciation on capitalised periodic maintenance Other operating expenses Income from investment in associated companies Total operating costs Operating profit/loss Other interest income Other financial income 5, Other interest charges Other finance costs Net financing Ordinary profit before taxes Tax on ordinary result Net profit for year Minority shares Majority shares Earnings and diluted earnings per share (NOK) 1,21 5,23 Notes to the unaudited pro forma profit and loss account adjustments 1. Currency effects on accounts receivables are in accordance with Solstad Offshore accounting principles, classified as other financial income/other finance cost, while currency effects on accounts receivables are included in freight income in Rem Exit. The reclassification effect for 2008 is MNOK Negative value of charter contracts in the amount og MNOK identified in the preliminary purchase price allocation has been amortized over the remaining contract periods and recognized as freight income. This to reflect as if the charter agreements were entered into at market charter rates as at the transaction date. The effect for 2008 is MNOK 36.7, based on being the start of the amortization period. 3. The adjustments of MNOK 97.6 made to ordinary depreciation expense reflects depreciation on identified excess values related to the acquired vessels in the purchase price allocation and adjustments to the applied accounting principles on depreciation of vessels in Solstad Offshore. The depreciation profile and expected useful lives used by Solstad Offshore differ from the depreciation profile and expected useful lives used by Rem Offshore. The adjusted depreciation expense is calculated on a straight-line basis and adjusted for residual value. Residual value is the estimated amount that currently would be obtained from disposal of the asset, after deducting the estimated costs of disposal, as if the asset were already of the age and in the condition anticipated at the end of its useful lifetime. The fair value of the acquired vessels in accordance with the purchase price allocation is divided into its significant parts. Each part of the vessels that are significant to 45

46 the total cost of the vessels are separately identified and depreciated over that significant parts useful lifetime. The vessels are divided into the following significant parts (depreciation profile): hull (30 years), anchor handling, loading and unloading equipment (20 years), thrusters, DP and lifting equipment (15 years) and other equipment (15 years). 4. The adjustments of MNOK 5.3 made to depreciation on capitalized periodic maintenance represent additional depreciation expense to reflect the increased identified fair value of capitalized periodic maintenance in the purchase price allocation and the expected time of next scheduled periodic maintenance. 5. Solstad Offshore will receive cash of MNOK Rem Offshore in connection with the transaction. There has not been made any adjustment regarding interest income or currency effects on the cash and the receivable in the pro forma profit and loss account. 6. Solstad Offshore has through the transaction recognized a gain of MNOK related to the realization of shares in Rem Offshore ASA based on the fair value of equty of Rem Exit of MNOK 1,208.9 as of the transaction date. 48.7% of Solstad Offshore s ownership interest in Rem Offshore is considered continued through the Rem Exit transaction, and no gain is recognized on this part. 7. The Bond Loan is in the transaction transferred at fair value. The amortization effect of the difference between the fair value and the nominal value of the bond loan, MNOK 13.3, is recognized in the pro forma profit and loss account as increased interest expense of MNOK 6.9 based on the effective interest method. 8. The transaction has resulted in a taxable gain (3%) on the realization of Solstad Offshore s shares in Rem Offshore ASA that has been recognized in the pro forma profit and loss account. Rem Exit will continue to be a Norwegian tonnage taxed company in which ordinary operating profits are tax exempt. 46

47 10.3 Unaudited pro forma balance sheet ASSETS (NOK 1.000) Pro forma Pro forma Notes Solstad Offshore Adjustments Solstad Offshore Consolidated of pro forma Consolidated Solstad Audited Unaudited Unaudited Long-term assets Intangible assets Deferred tax asset Total intangible assets Long-term fixed assets Vessels and new build contracts Periodic maintenance Other tangible fixed assets Total long-term fixed assets Financial assets Investments in associated companies Investments in stocks and shares Other long-term receivables Pension funds Total financial assets Total long-term assets Current assets Stock Receivables Account receivables Other short-term receiavbles Total receivables Investments Market based shares Bank deposits and cash equivalents Total current assets TOTAL ASSETS

48 (NOK 1.000) Pro forma Pro forma Notes Solstad Offshore Adjustments Solstad Offshore Consolidated of pro forma Consolidated Solstad Audited Unaudited Unaudited EQUITY AND LIABILITIES Equity Restricted equity Share capital ( at NOK 2.00) Treasury shares Other paid-in capital Total restricted equity Earned equity Other equity Total earned equity Minority interests Total equity Liabilities Provisions Taxes payable Other provisions Total provisions Other long-term liabilities Other long-term loans Debt to credit institutions/leasing obligations Total long-term liabilities Current liabilities Accounts payable Bank overdraft Taxes payable 6, Accrued salaries and related taxes Other current liabilities Current interest bearing liabilities 4, Total current liabilities Total liabilities TOTAL EQUITY AND LIABILITIES Notes to the unaudited pro forma balance sheet adjustments 1. The fair value of vessels acquired in the transaction is divided between vessels and new building contract MNOK 2,508.9, periodic maintenance MNOK 18.2 and transferred charter contracts MNOK Negative value of acquired charter contracts of which MNOK 22.9 is classified as long-term and MNOK 36.7 as short-term will be amortized over the contract periods (6 to 26 months) as freight income. 2. Solstad Offshore s shares in Rem Offshore have been redeemed against net transferred values in Rem Exit. The increase in value of shares in Rem Offshore in 2009 as per 48

49 transaction date, MNOK net after tax, has been recognized against equity in accordance with the accounting treatment for an available for sale investment. Parts of the increased value of the Rem Offshore shares has been recognized as income as described in note 6 to the unaudited pro forma profit and loss account. 3. A claim against Rem Offshore amounted to MNOK 19.5 related a loan of MNOK 40 rendered by Rem Offshore against a third party has been transferred to Rem Exit as part of the transaction. Rem Exit will trough the transaction receive cash, MNOK as per transaction date. 4. Debt transferred to Rem Exit is recognized at fair value as of the transaction date. Debt with maturity less than 12 months from the balance sheet date, MNOK is classified as current interest bearing liabilities. Identified excess value (less value) on debt with fixed interests, MNOK 12.9, is recognized and classified as part of debt to credit institutions. 5. The costs of the Division have been provisioned for in the pro forma balance sheet. The total costs are estimated to be MNOK Taxes payable, MNOK 1.9, relates to gain on sale of shares in Rem Offshore. 7. Taxes payable (current liabilities) MNOK 1.9 and taxes payable (provisions) MNOK 14.8 relates to Remsol s part of the unallocated share of tax related to the compulsory exit from the previous Norwegian Tonnage Tax Regime. 49

50 11 INFORMATION ABOUT SOLSTAD OFFSHORE 11.1 Introduction Solstad Rederi was established in 1964 by Captain Johannes Solstad. The Company s head office and home port are still located in Skudesneshavn, Norway. During the Company s first ten years of operation it acquired and operated 14 dry cargo vessels (liner type) and also took delivery of three new build semi-container vessels. The size of these vessels varied from 8,000 DW to 14,000 DW. The Company s offshore activities began in 1973, when it ordered four supply vessels from a Dutch shipyard and by 1976 the Company operated 9 supply vessels of various types. Most of them were jointly owned with other Haugesund-based shipping companies and all were built at the same Dutch shipyard, Pattje. From 1974 to 1982, the Company owned and operated a combined fleet of both offshore and dry cargo vessels and had several new builds on order. Two AHTS and three AHTS were built in New Foundland and four semi-container vessels were built in Rostock in East Germany. However, the last dry cargo vessel was sold in 1982 and for the next eight years Solstad Rederi AS only operated offshore supply vessels. In October 1997, the Company was listed on the Oslo Stock Exchange under the name of Solstad Offshore ASA. Solstad Shipping AS is wholly owned by Solstad Offshore ASA and is responsible for management and marketing. The Company s fleet consists of 35 wholly owned, jointly owned and leased vessels together with 6 new builds (4 new builds in Norway and 2 through Nor Offshore Ltd in Singapore). Solstad Offshore engage around 1000 people, 955 of which are at sea. In addition to its head office in Skudesneshavn, Solstad has branch offices in Aberdeen, Brazil and Singapore Incorporation, registered office and registration number Solstad Offshore is a Norwegian public limited company incorporated under the laws of Norway and in accordance with the Norwegian Public Limited Liability Companies Act with the registration number The Company s registered office and principal place of business is at Nesaveien 39, P.O. Box 13, NO-4297 Skudeneshavn, Norway, telephone number (+47) , telefax number (+47) , and web address: Statutory auditor Ernst & Young AS, registration number , has been the Group s auditors since the incorporation. Ernst & Young AS address is Christian Fredriks Plass 6, NO-0154 Oslo, Norway. Ernst & Young AS is a member of Den Norske Revisorforening (The Norwegian Institute of Public Accountants). Ernst & Young AS has audited the 2006, 2007 and 2008 financial statements of the Company (included by reference); unqualified audit opinions were issued. Ernst & Young AS has not audited or reviewed or produced any report on other information provided in this Information Memorandum, except for the Independent assurance report on pro forma financial information which is enclosed as Appendix I. 50

51 11.4 Organization and legal structure The figure below shows the current organizational structure of Solstad Offshore ASA: NOR OFFSHORE LTD NORCE OFFSHORE PTE LTD (50%) (100%) SOLSTAD SHIPPING AS SOLSTAD CABLE HOLLAND LTD (100%) (62,5%) SOLSTAD CABLE CUTTER LTD SOLSTAD MANAGMENT AS (62,5%) (100%) SOLSTAD CABLE UK LTD SOLSTAD CABLE CLIPPER LTD (62,5%) (62,5%) ADSI OFFSHORE UK LTD PIONEER OFFSHORE LP SOLSTAD OFFSHORE UK LTD (100%) (100%) (100%) SOLSTAD OFFSHORE SERVICE VESSEL UK LTD PROGRESS OFFSHORE LP (100%) (100%) PIPRO (UK) LTD PIONEER OFFSHORE LTD NORMAND DRIFT AS (100%) (100%) SOLSTAD OFFSHORE ASA (100%) PROGRESS OFFSHORE LTD (100%) SOLSTAD REDERI AS Rem Offshore ASA (100%) (48,7%) TRYM TITAN AS ADSI INC (62,5%) (50%) NISA INC (50%) NORMAND SKARVEN AS/KS (71,1%) SOLSTAD BRASIL AS (100%) After the Division in Rem Offshore, Solstad Rederi s shares in Rem Offshore will be redeemed against Solstad Rederi receiving shares in Rem Exit. To the extent that other shareholders decide to receive shares in Rem Exit, the redeemed part of Solstad Rederi s sharholding in Rem will be reduced correspondingly Vision and values Solstad Offshore s philosophy is to run a profitable and integrated shipping company with high specification vessels in its market segment based on owned or chartered vessels. The company s core business is to primarily offer services to the oil-related offshore industry. It aims to be a major player and offer a wide spectrum of services based on high quality vessels, equipment and maritime competence. In the North Sea the aim is to be one of the leaders in the industry and on an international level, with a significant presence in deep water, sub sea and construction activities. The company continues to focus on safety, the environment, solidity and profitability and aims to meet the targets set for these areas. The most important target is health safety and the environment in order to prevent injury to personnel and damage to equipment and any uncontrolled spillage from the vessels. The Company s strategy is to deliver a customer focus based solution and high quality services as well as actively developing customer services in close co-operation with new and existing customers. In general, the company manages the total operation of the vessels including freight, crewing and technical support. The company will evaluate where it is possible to achieve cost effective operations and an optimal return on capital employed in co-operation with new suppliers with a view to long-term strategic co-operation. Such collaboration is also evaluated with regard to risk and capital injection. 51

52 11.6 Business overview Solstad Offshore is a shipping company providing services on a world wide basis to oil companies and other service companies within the oil industry. The Group operates integrated shipping activities with varying types of high specification vessels within different segments. The vessels can be divided into three categories; construction service vessels (CSV), anchor handling tug supply vessels (AHTS) and platform supply vessels (PSV) which service the various segments. The company is generally responsible for freight, manning and technical maintenance. The core activity is to offer custom built vessels, competent marine crew with extensive experience and a wide range of services to the oil related offshore industry. The Groups fleet operates world wide and have international recognition for its participation in deep water areas, sub sea activities and construction services. A majority of the Solstad Offshore fleet is equipped to carry out more complex projects than the traditional supply and anchor-handling services. In addition to international expansion, the company has focused on providing vessels and equipment for use with installations, monitoring and maintenance of equipment on sub sea installations. In 2008 the company s net freight income was divided as follows: 55% from AHTS, 31% from CSV s and 14% from PSV s. Geographically freight income was divided: 42% from the North Sea, 9% from South America, 8% from West Africa, 7% from mid and North America, 15% from the Mediterranean and 19% from Asia Construction Service Vessels (CSV) Solstad Offshore ASA is one of the leading shipping companies in the world within the operation of construction service vessels. The construction market has a high level of activity and as such is one of SOFF s main areas of interest. Offshore development projects of increasing complexity are continuously being developed in deep waters. This has led to new services and the need for new equipment. The Group s CSV fleet is custom built to service this market segment. Some of the services offered are; heave compensating cranes, ranging from 50t to 300 t; large cabin capacities; A-frames up to 350t; DP2 and DP3 systems; large winch systems and moon pools Anchor handling tug supply vessels (AHTS) The Company has vessels ranging from BHP to BHP which meet our clients requirement in both shallow and deep waters with main focus towards the high end deep water segments. The fleet provides highly efficient solutions and is fitted with additional equipment such as DP, fire fighting, oil spill recovery and comprehensive tank capacities. The Group has a considerable record for installation of mooring systems for FPSO s Plaform Supply Vessels (PSV) The main task for a large number of these vessels is to transport cargo to and from oil platforms in order to provide the offshore industry with predictable logistic chains. The vessels are as such equipped with large storage areas, both above and below deck. Several of the vessels are also equipped for oil spill protection and stand by services. All of the Groups PSV s are equipped with DP2 and are often used to support ROV operations The Solstad Offshore ASA fleet The Groups fleet consist of 35 wholly owned/jointly owned and leased vessels together with 6 new builds (4 in Norway and 2 through NorOffshore Ltd (NOR) in Singapore). Solstad Offshore ASA s new builds consist of 4 CSV s of various sizes. Through its 50% share in NOR, Solstad Offshore ASA currently operates 1 CSV (owned) and 8 newer AHTS s (ranging from 5,500 BHP to 11,000 BHP) 5 of which are owned and 3 are on bareboat lease. The company has options to purchase these leased ships during the leasing period. 52

53 NOR has a further CSV, TBN Nor Australis (the previous Nor Vision) under construction for delivery in May The handover is delayed from the original delivery time as the ship is to be equipped for a long-term project for Woodside Energy Ltd. In addition, NOR has 1 derrick lay barge (DLB) under construction. The hull of the DLB has been delayed and hand over from the yard is expected at the end of the year. Built Deck Winch Bollard A.Frame Const. DP cabin Dry Other Skip: year Design Reg. BHP DWT m2 power pull Capt. T. crane t class cap. bulk equp. Konstruksjonsservice skip Normand tbn OSCV 06L Normand tbn ST 256L Normand tbn PSV/ROV 06CD Normand tbn VS Normand Seven 2007 VS 4420 NIS Normand Installer 2006 VS 4204 NIS Normand Flower 2002 UT 737 IOM Normand Mermaid 2002 P 103 IOM Normand Cutter 2001 VS 4125 IOM Normand Clipper 2001 VS 4125 NIS Normand Pioneer 1999 UT 742 IOM Normand Progress 1999 UT 742 IOM Normand Tonjer 1983 UT 705 NOR Store AHTS Normand Ferking 2007 VS 490 NOR X 1,2,3 Normand Master 2003 A101 NOR * Normand Mariner 2002 A101 NOR * Normand Ivan 2002 VS 180 NOR * 2 52 X 1,2 Normand Borg 2000 UT 722 NIS X 2 Normand Atlantic 1997 UT 740 NOR X 1,2,3 Normand Neptun 1996 UT 740 NOR X 1,2,3 Mindre AHTS Normand Mjolne 1985 UT 718 NOR X 1,2,3 Normand Draupne 1985 UT 718 NOR X 1,2,3 Normand Jarl 1985 UT 712 NIS X 1,2,3 Normand Skarven 1986 UT 716 NOR X 1,2,3 Normand Drott 1984 UT 712 NIS X 1,2,3 PSV Normand Aurora 2005 P 105 NOR X Normand Skipper 2005 VS 4420 NOR X 2,3 Normand Flipper 2003 UT 745E NOR X 2 Normand Vester 1998 UT 745 NOR X 2,3 Normand Carrier 1996 UT 745 NOR X 2,3 NOR Offshore Pte Ltd CSV Tbn Nor Australis 2009 CSV SIN X 120 1,4 NOR Offshore Pte Ltd AHTS Nor Valiant 2008 CSV SIN X Nor Chief 2008 Kiam Chian SIN X 1 Nor Sky (1) 2008 Kiam Chian SIN X 1 Nor Spring (1) 2008 SasaShip SIN X 1 Nor Captain (1) 2007 Kiam Chian SIN X 1 Nor Tigerfish 2007 Kiam Chian SIN X 1 Nor Sun 2006 Kiam Chian SIN X 1 Nor Star 2005 Kiam Chian SIN X 1 Nor Supporter 2005 Kiam Chian SIN X 1 "Other equipment": 1) Fi-Fi 2) Oil recovery 3) Standby / Resq 4) Diving system * A-Ramme shared (1) Bareboat Contract status At the time of submission of the report the contract coverage for remaining 2009, based on number of days, is 59% for the Groups vessels and for 2010 it is currently 48%. Including options, contract cover is 70% and 62% for 2009 and 2010 respectively. 53

54 54