THE CORPORATE REORGANISATION AND PROPOSED LISTING OF THE SUBSEA SERVICES BUSINESS OF SWIBER HOLDINGS LIMITED ( SWIBER OR THE COMPANY ) 1. INTRODUCTION Further to the announcement on 13 May 2010 on the proposed listing of the subsea services business of Swiber (the "Proposed Listing") on the Official List of the Catalist board (the Catalist ) of the Singapore Exchange Securities Trading Limited (the SGX-ST ), the board of directors of Swiber (the "Board") wishes to announce that Swiber and its relevant subsidiaries have entered into a sale and purchase agreement (the "Sale and Purchase Agreement") in connection with a restructuring exercise (the Restructuring ) for the Proposed Listing. The subsea services business is currently undertaken by Kreuz Subsea Pte. Ltd. ( Kreuz Subsea ), Kreuz Subsea Marine Pte. Ltd. ( Kreuz Subsea Marine ), Kreuz Subsea Ltd ( Kreuz Labuan ) and Kreuz Subsea (B) Sdn Bhd ( Kreuz Brunei ) (collectively, the "Kreuz Group"). The Kreuz Group has appointed DBS Bank Ltd. as its sponsor, underwriter and placement agent for the Proposed Listing and the offering to be undertaken in connection thereto. 2. THE RESTRUCTURING EXERCISE Prior to the completion of the Restructuring, 70% of the issued share capital of Kreuz Subsea is held by Newcruz International Pte. Ltd (a wholly-owned subsidiary of Swiber), with the remaining 30% held by three executive officers of Kreuz Subsea (the Management Members"). Kreuz Labuan and Kreuz Brunei are currently 100% owned by Kreuz Subsea, while Kreuz Subsea Marine is currently 100% owned by Swiber s wholly-owned subsidiary, Kreuz Holdings Pte. Ltd. ( Kreuz Holdings ). Pursuant to the Sale and Purchase Agreement (as well as other agreements to be entered into pursuant to the Restructuring ):- (a) (b) Kreuz Holdings will purchase the entire paid-up capital of Kreuz Subsea for an aggregate consideration of approximately US$107.1 million (which is the consideration agreed between the relevant parties taking into account the aggregate audited profit after tax of Kreuz Subsea and Kreuz Labuan for the financial year ended 31 December 2009 ( FY2009 ). Kreuz Holdings will then allot and issue new ordinary shares to Swiber and the Management Members to satisfy the said consideration and will, as a result, become the holding company of Kreuz Subsea; and Kreuz Subsea Marine will acquire two work accommodation dive support vessels, namely Swiber Glorious and Swiber Supporter (the "DSVs"), and one 12-man saturation diving system (the "SAT System", together with the "DSVs", the Assets ) from two wholly-owned subsidiaries of Swiber, namely Swiber Offshore Marine Pte. Ltd. and NewCruz Shipbuilding & Engineering Pte. Ltd. respectively. The aggregate consideration for Swiber Glorious, Swiber
Supporter and the SAT System is approximately US$76.4 million based on the valuations obtained from third party valuers. After taking into account the assignment of loans amounting to aggregate of approximately US$28.9 million for Swiber Glorious, Swiber Supporter and the SAT system, Kreuz Subsea Marine shall pay a net amount of approximately US$47.6 million for the DSVs and the SAT System (such net amount to be adjusted depending on the exact amount of loans to be assigned on completion of the Sale and Purchase Agreement). Kreuz Subsea Marine will then satisfy the consideration by allotting and issuing new ordinary shares in the capital of Kreuz Subsea Marine to Kreuz Holdings and in exchange, Kreuz Holdings shall allot and issue new ordinary shares to Swiber. Upon the completion of the Restructuring, Kreuz Holdings will become the ultimate holding company of Kreuz Subsea, Kreuz Subsea Marine, Kreuz Labuan and Kreuz Brunei, resulting in Swiber and the Management Members holding 75% and 25% of Kreuz Holdings, respectively. Pursuant to the Restructuring, Swiber will effectively acquire an additional 5% shareholding interests in Kreuz Subsea (the Acquisition ) and dispose 25% interests in the Assets (the Disposal ). 3. SALIENT TERMS OF THE RESTRUCTURING EXERCISE Completion of the Restructuring is subject to the approval of various financial institutions for the transfer of shares in Kreuz Subsea, and the assignment of loans in relation to the Assets. Completion of the Restructuring shall take place no later than the lodgment of the preliminary offer document of Kreuz Holdings with the SGX-ST for the Proposed Listing. In the event that Kreuz Holdings is not listed on the Catalist by 31 December 2010 (or such other date as may be agreed between Kreuz Holdings and the Management Members), the Management Members have agreed to transfer their aggregate 25% shareholding interests in Kreuz Holdings to Swiber in exchange for an aggregate 30% shareholding interests in Kreuz Subsea. The Proposed Listing is subject to, among other things, approval from the SGX-ST, prevailing capital market conditions and/or such other regulatory or other approvals or consents being acquired and remaining in force. The pre-admission notification for the Proposed Listing will be submitted to the SGX-ST in due course.
4. RULE 1006 OF THE SGX-ST LISTING MANUAL The relative figures of the Acquisition and the Disposal computed pursuant to Rule 1006 of the SGX-ST Listing Manual, using the latest announced consolidated accounts of the Company and its subsidiaries (the "Group") as at 31 March 2010 as announced by the Company on 13 May 2010 are: Rule 1006(a) Net asset value of the Disposal (US$ million) (1) 16.5 Net asset value of the Group (US$ million) 306.9 Size of relative figure 5.4% Rule 1006(b) Net profits before tax and minority interest attributable to the Disposal and Acquisition (US$ million) (2) 0.57 Net profits before tax and minority interest of the Group (US$ million) 8.4 Size of relative figure 6.8% Rule 1006(c) Aggregate amount of consideration for the Disposal and Acquisition 24.5 (US$ million) (3) Market capitalisation of the Company as at 20 May 2010 (being the market day immediately preceding the date of the Sale and Purchase Agreement) (US$ million) (4) 357.4 Size of relative figure 6.8% Rule 1006(d) The number of equity securities issued by the Company as consideration for an acquisition, compared with the number of equity securities previously in issue. Not applicable Notes: (1) This Rule is not applicable for the Acquisition. The aggregate net asset value of the Assets as at 31 March 2010 amounted to approximately US$66.2 million. As such, the net asset value of the Disposal (which represents 25% of the aggregate net asset value of the Assets) amounted to approximately US$16.6 million. (2) The aggregate net profits before tax and minority interest attributable to the Assets and Kreuz Subsea for the first quarter of FY2010 was approximately US$2.1 million and US$1.0 million respectively. As such, the net profits before tax and minority interest attributable to the Disposal (which represents 25% of the aggregate net profits attributable to the Assets) and the Acquisition (which represents 5% of the aggregate net profits attributable to Kreuz Subsea) amounted to US$0.5 million and US$0.05 million respectively. (3) The aggregate consideration for the Assets and Kreuz Subsea was approximately US$76.4 million and US$107.1 million respectively. As such, the consideration for the Disposal (which represents 25% of the aggregate consideration payable for the Assets) and the Acquisition (which represents 5% of the
aggregate consideration payable for the entire issued share capital of Kreuz Subsea) amounted to US$19.1 million and US$5.4 million respectively. (4) The market capitalisation of the Company is based on 505,355,000 ordinary shares in issue (excluding treasury shares) as at 20 May 2010 (being the market day immediately preceding the date of the Sale and Purchase Agreement), the weighted average price of the shares of approximately S$0.99 per share transacted on the SGX-ST on 20 May 2010 and the exchange rate of US$1.00 = S$1.40. 5. FINANCIAL EFFECTS OF THE RESTRUCTURING EXERCISE The financial effects of the Restructuring on the net tangible assets ( NTA ), earnings per share ( EPS ) and gearing of the Group in respect of FY2009 have been prepared based on the following assumptions: (a) (b) (c) (d) (f) The financial effects of the Restructuring are based on the terms of the Restructuring as at the date of this announcement; The financial effects of the Restructuring are purely for illustrative purposes and should not be taken as an indication of the actual financial performance of the Group following the Restructuring, or a projection of the future financial performance or position of the Group after the completion of the Restructuring ; The financial effects of the Restructuring are based on the Group s audited financial statements for FY2009; The carrying value of the Assets being acquired has been assumed to approximate fair value; and For the purposes of computing the NTA, EPS and gearing of the Group after the proposed Acquisition, it is assumed that the Restructuring was completed in FY2009. 5.1 Net tangible assets Before Restructuring As at 31 December 2009 After Restructuring NTA (US$'000) 303,336 303,336 Number of shares ('000) 505,355 505,355 NTA per share (US$ cents) 60.0 60.0
5.2 Earnings per share Before Restructuring As at 31 December 2009 After Restructuring Net profit attributable to 34,677 33,903 shareholders (US$'000) Weighted average number 468,993 468,993 of shares ('000) used in the computation of basic EPS EPS (1) (US$ cents) 7.4 7.2 Note: (1) EPS is computed based on the weighted average number of shares for the full financial year. 5.3 Gearing Before Restructuring As at 31 December 2009 After Restructuring Total Borrowings (US$'000) 338,106 338,106 Shareholders Funds 303,336 303,336 (US$'000) Gearing Ratio (times) 1.1 1.1 6. INTERESTS OF DIRECTORS Save for their shareholding interests in the Company, none of the directors of the Company has any interest, direct or indirect in the Restructuring. 7. DOCUMENT FOR INSPECTION A copy of the Sale and Purchase Agreement is available for inspection during normal business hours from 9.00 a.m. to 5.00 p.m. at the registered office of the Company at 12 International Business Park, #04-01, Singapore 609920 for a period of three months from the date of this announcement.
By Order of the Board Goh Kim Teck Executive Chairman and CEO 21 May 2010