AMSC ASA - SALE OF THE U.S. JONES ACT ACTIVITIES TO A FUND MANAGED BY MARITIME PARTNERS, LLC

Lysaker, August 22, 2023 – Reference is made to the joint announcement made by AMSC ASA (“AMSC”) and Maritime Partners, LLC. (“Maritime Partners”) today regarding the signing by AMSC and Project Merchant Acquisition LLC (the “PM Acquisition”), a newly-formed company owned and controlled by a fund managed by Maritime Partners, of a share purchase agreement (the “SPA”) for PM Acquisition’s purchase of American Tanker Holding Company, Inc. (“ATHC”), a wholly-owned subsidiary of AMSC (the “Transaction”).

Pål Lothe Magnussen, CEO of AMSC commented that “the management team at AMSC is pleased that a Maritime Partners managed fund, a leading Jones Act leasing company, is acquiring our Jones Act business. We believe this is the ideal new owner of this business for the next phase in the lifecycle of these assets. AMSC’s ownership tenure has surpassed 18 years since the ships were ordered, during which significant financial profits have been created and provided to AMSC and its shareholders. We believe that the long remaining commercial life of the fleet in combination with strong bareboat charter contract cover in a strong market represents a good opportunity and point in time for us to reconsider capital allocation for AMSC and strategy going forward, and this transaction is a natural step in this process.”

Key terms of the Transaction

ATHC, directly or indirectly, owns all shares in each of American Shipping Corporation, American Tanker, Inc., ASC Leasing I, Inc, ASC Leasing II, Inc, ASC Leasing III, Inc, ASC Leasing IV, Inc ASC Leasing V, Inc, ASC Leasing VI, Inc and ASC Leasing VII, Inc, ASC Leasing VIII, Inc, ASC Leasing IX, Inc and ASC Leasing X, Inc. The Transaction does accordingly comprise all of the ownership interests in AMSC group’s ten vessels operating in the U.S. Jones Act market and related activities.

AMSC will receive cash proceeds from the Transaction of in aggregate USD 249.3 million, divided between consideration for the shares in ATHC and repayment of a shareholder loan, reflecting an enterprise value of ATHC of USD 746.7 million based on the balance sheet of ATHC as at March 31, 2023. The consideration represents a premium to current implied trading value of AMSC and a valuation of ATHC that is 2.4x book equity (based on year end 2022 book equity and including the shareholder loan) and EV/EBITDA (2022) ratio of 9.1x and P/E ratio of 19.8x (2022).

Pursuant to the SPA, the purchase price for the shares will be adjusted for any deviation (positive or negative) between budgeted and actually incurred capex relating to a 15 year special survey for each of the MR tanker vessels Seakay Star and Seakay Valor, and certain other non-material planned capex items. The special survey for Seakay Valor was completed during the second quarter of 2023, and Seakay Star is scheduled to be completed during the fourth quarter of 2023.

USD 246.3 million of the gross cash proceeds are payable to AMSC at completion of the Transaction, while the remaining USD 3 million (as adjusted, if relevant) is expected to be paid during the first quarter of 2024.

Completion of the Transaction is subject to the approval of the Transaction by the AMSC general meeting with no less than a 2/3 majority of the shares and the votes represented at the general meeting, which also is in line with the recommendation in section 14 of the Norwegian Code of Practice for Corporate Governance. Notice of an extraordinary general meeting to consider the Transaction (the “EGM”) is expected to be sent to the AMSC shareholders on or about August 29, 2023, and the EGM is expected to be held during the second half of September 2023. Completion is in addition conditional upon the fulfilment of certain customary conditions, including, inter alia, expiry or termination of the waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act, no material breach of the SPA and absence of material adverse event.

The main shareholders in AMSC, Aker Capital AS and DNB Bank ASA, holding in aggregate 34.61% of the shares and votes in AMSC, have irrevocably and unconditionally agreed to exercise all voting rights in respect of its respective shares in AMSC in favor of the Transaction.

AMSC has given certain customary representations and warranties in respect of ATHC, its subsidiaries, financial position, tax matters, assets, rights, obligations, business and operations as at the date of signing of the SPA and as of completion of the Transaction. Any breach of fundamental warranties, such as ownership to shares in ATHC or a subsidiary, or warranties relating to tax matters can in general only be claimed by the Buyer under a W&I insurance taken out in connection with the Transaction, and AMSC may in practice only be liable if a breach of any such warranty is caused by wilful misconduct or fraud by AMSC. For breach of any other warranty, AMSC may, subject to certain customary limitations, be held liable up to an amount of USD 40 million for a period of 12 months following completion of the Transaction.

Completion of the Transaction is expected to occur on or before October 31, 2023. In the event completion has not occurred within December 22, 2023, each party has a right to terminate the SPA, and accordingly abandon the Transaction, provided that the party wanting to terminate has not caused the delay, and further provided that the parties have discussed in good faith a potential extension of the said deadline prior to such termination.

As security for any claims under the SPA, AMSC has undertaken, for a period of 12 months following completion of the Transaction, to maintain a minimum equity of USD 45 million.

In respect of the Senior Unsecured USD 220,000,000 Callable Bond Issue 2020/2025 (ISIN NO 0010886328), issued by American Tanker, Inc., a fully owned subsidiary of ATHC, the intention is to call for a bondholder meeting to seek bondholders' approval for certain amendments to the bond terms.

AMSC going forward

Following closing of the Transaction, the board of directors of AMSC intends to resolve paying an additional dividend of USD 170 million. The expected additional dividend equates to about NOK 25.1 per share assuming a NOK/USD exchange rate of 10.6. AMSC will retain the remaining cash proceeds from the Transaction to be used for general corporate purposes and equity for future investments in new projects.

AMSC will continue to own the Normand Maximus on bareboat contract to a single purpose subsidiary of Solstad Offshore. This business unit generates an annual EBITDA of about USD 30 million and provides significant dividend capacity.

AMSC will remain as a public company with shares listed on the Euronext Oslo Stock Exchange and continue to grow within the maritime ship owning and ship leasing market. Aker will remain as a key shareholder, and the existing management and board of directors will continue as is.

AMSC will continue to seek attractive risk/reward projects offering flexible solutions to operators in the shipping and offshore markets, targeting medium term contracts with extension optionality, and preferably participating in future upside through profit sharing mechanisms.

AMSC will continue to pay quarterly attractive dividends.

Company Contacts

Pål Lothe Magnussen, +47 90 54 59 59, [email protected]

About AMSC

Established in 2005 and listed on the Euronext Oslo Stock Exchange (ticker AMSC), AMSC is a ship owning company with nine modern handy size product tankers, one modern handy size shuttle tanker and one subsea construction vessel on bareboat charters with various counterparties. AMSC has a significant contract backlog, as well as profit sharing agreements, which offers visibility with respect to future earnings and potential dividend capacity. Following completion of the Transaction, the only remaining vessel of the group will be the subsea construction vessel Normand Maximus, which is chartered to a single purpose subsidiary of Solstad Offshore ASA.

AMSC’s ambition to pay attractive dividends to its shareholders remains after completion of the Transaction. Further information is available at www.amscasa.com.

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This information is considered to include inside information pursuant to the EU Market Abuse Regulation article 7 and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

This stock exchange announcement was published by Morten Bakke, CFO, AMSC ASA, on August 22, 2023 at 08:32 CET.

This communication is not an offer to sell or purchase, or the solicitation of an offer to sell or purchase, any securities, or the solicitation of a proxy, in any jurisdiction in which, or to any person to whom, such offer, sale or solicitation is not authorized or would be unlawful.