|As discussed in Farstad Shipping ASA’s (“Farstad” or the “Company”) financial report for Q2 2016, the Company is working on an overall restructuring plan to strengthen the Company’s balance sheet and liquidity position going forward.
Farstad, represented by its independent board members, and Siem Oilservice Invest Holdings Limited signed on the 24th of November a binding term sheet (“Term Sheet”) for a restructuring of Farstad along the following lines (the “Restructuring”):
Farstad will issue a minimum of 702 000 000 ordinary shares (the "New Shares") for a total subscription of minimum NOK 1 billion at a price per share of approximately NOK 1.4245 (the "Cash Issue"). Siem will underwrite NOK 1 billion of the Cash Issue, and subscribe for and be allocated a minimum number of New Shares so that Siem owns 50,1% of the shares in Farstad, post restructuring. Tyrholm & Farstad AS, the largest shareholder of Farstad, is cooperating with Siem for the purposes of the restructuring, and will be offered a preferential right to subscribe 105 300 000 New Shares for a subscription of NOK 150 million. The rest of the New Shares will be offered to a mix of existing shareholders and other stakeholders to be finally agreed.
Siem will carry out a mandatory offer for the existing shares of Farstad in accordance with chapter 6 of the Norwegian Securities Trading Act.
A substantial majority of the senior secured lenders are supportive to the binding term sheet. The senior secured lenders will be requested to convert parts of the group's secured debt into equity in Farstad, and provide amortisation deferrals so as to provide the company with a financial runway throughout 2021.
The bondholders in Farstad's bond loans will be requested to convert all outstanding amounts, in total NOK 1.4 billion, under the bond loans into equity in Farstad.
Certain other creditors will also be requested to contribute in the restructuring.
The head office and centre of operation of Farstad will remain in Ålesund.
The Term Sheet is inter-alia subject to reaching final agreements with other key Farstad stakeholders including the senior secured lenders, the bondholders and certain other creditors. Farstad is continuing its negotiations with these stakeholders.
Ålesund, 24 November 2016