Belships ASA : Statement of the Board of Directors of Belships ASA in connection with the mandatory offer put forward by Sonata AS

STATEMENT OF THE BOARD OF DIRECTORS OF BELSHIPS ASA PURSUANT TO SECTION 6-16 OF THE NORWEGIAN SECURITIES TRADING ACT IN CONNECTION WITH THE MANDATORY OFFER PUT FORWARD BY SONATA AS

1       BACKGROUND

This statement by the board of directors of Belships ASA ("Belships " or "Company") is made pursuant to section  6-16 of the Norwegian Securities Trading Act (the "Securities  Trading Act") in connection with the mandatory offer (the "Offer") put forward by Sonata AS ("Sonata" or "Offeror") in accordance with the offer document dated 19 August 2013 (the "Offer Document") for the acquisition of all outstanding shares in Belships, other than the shares owned by Sonata.

On 30 July 2013 Sonata, which had fully underwritten the Company's rights issue, subscribed for and was allocated, 16,047,034 shares in the rights issue, of which 11,583,165 shares were subscribed for on the basis of granted subscription rights and 4,463,869 shares were subscribed for under the underwriting obligation. Following completion of the rights issue, Sonata's ownership in Belships amounts to 28,584,284 shares corresponding to 60.37% of all issued shares in Belships. Sonata is subject to the rules regarding mandatory bid obligation following subsequent acquisitions pursuant to section 6-6 (2) of the Norwegian Securities Trading Act as a result of previous transactions between consolidated companies which did not trigger the bid obligation. The subscription and allocation of the new shares in Belships by Sonata therefore triggered an obligation to make a mandatory offer for all of the outstanding shares in Belships pursuant to Section 6-1 cf Section 6-6 (2) of the Norwegian Securities Trading Act.

Sverre J. Tidemand, the chairman of Belships, is also the chairman and CEO of Sonata. Pursuant to section 6-16, fourth paragraph, of the Norwegian Securities Trading Act, Oslo BÝrs shall decide who shall provide the statement to be given on behalf of the Company when a mandatory offer is made by a board member or any of its closely related parties. No other member of the board of directors of Belships has a conflict of interest in relation to the Offer, and Oslo BÝrs has approved that the board members of the Company other than Sverre J. Tidemand provide this statement (such board members are for the purpose of this statement referred to as the "Board"). Sverre J. Tidemand has not participated in the Board's discussions regarding this statement.

2       THE BOARD'S OPINION

2.1   Process

The Board has reviewed the Offer Document and discusses below factors assumed to be of importance for determining whether the Offer should be accepted. The offer price (the "Offer Price") is NOK 4.00 per share, corresponding to a value of the Company's equity of NOK 187,216,000 based on 46 804 000 outstanding shares (excluding treasury shares).

The Offer Price represents a discount of 0,2 % to the closing share price on 29 July 2013, the last trading day before the Offer was announced, and a discount of 16,9% to the volume weighted average share price in the 6 month period ending on 29 July 2013.

The Board has not initiated a process to encourage other industrial and/or financial potentially interested investors as the Board does not believe that a bid for the Company at this stage will materially increase shareholder value and also, due to the current shareholder structure, has no realistic expectation that alternative bidders will emerge.

2.2   Effects of the Offer in relation to the Company and the employees

Sonata, through Sverre J. Tidemand, is the Chairman of Belships. The Board has no reason to believe that the Offeror will not continue to support the Company's current strategy and plans.

The Board has noted Sonata's statement in the Offer Document that completion of the Mandatory Offer will not have any legal, economic, commercial or work-related consequences for the employees in Belships, nor for the localisation of the Company's business, and has no reason to conclude differently.

2.3   The Board's assessment of the Offer

In June 2013, Belships announced that it had placed orders for two newbuilding contracts for fuel efficient Supramax bulk carriers from Imabari Shipbuilding Co. Ltd to support the further growth plans of the Company.

The Board firmly believes that Belships has a potential to continue its positive development and growth in the time to come, supported by positive market outlooks in the shipping market.

The offer price of NOK 4.00 per share is at a significant discount to the reported book value per share (adjusted for share issue in July) of NOK 8,70 as of 30 June 2013. In the opinion of the Board the Offer Price does not fairly reflect the underlying values in the Company.

The Board has decided not to request a valuation from an independent expert to support its assessment of the fairness of the offer.

2.4   The Board Members' and CEO's point of view by virtue of being shareholders

The Board member Christian Rytter owns 270,000 shares is Belships and will not accept the Offer. No other Board member nor the CEO own any shares.

3       STATEMENTS FROM THE EMPLOYEES

The Offer has been made known to Belships employees. The Board has not received any statement from employees in connection with the Offer.

4       CONCLUSION

Based on the above and on a general assessment of the available alternatives, the Board unanimously recommends Belships shareholders not to accept the Offer from Sonata.

However, shareholders who decide to keep their shares should have a long term perspective on their investment due to the expected effect of the shareholder structure on the liquidity in the share. The Board furthermore emphasises that there can be no certainty that shareholders can realise a value for their shares in excess of the Offer Price as this will depend on future developments in market conditions and the Company's performance, and shareholders should make their own assessment of the Offer.

Oslo, 20 August 2013
 
 
 
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.