With reference to the stock exchange notice of 20 November 2015, the Board of Directors of Western Bulk ASA (the 'Company') has explored and pursued available solutions to ensure the future viability of the Company.

The Company is exposed to an increasingly challenging market situation with dramatically low dry bulk charter rates and guarantees granted by group companies for charters for certain ship owners. This has resulted in significant strains on the Company's short term liquidity situation. Based on the above the Board of Directors of the Company has, in order to protect the interests of all stakeholders, including the interests of the Company's creditors and shareholders, considered available options and initiated a process to explore strategic alternatives. In doing so the Board is observing its fiduciary obligations and is acting in the best common interest of the Company and its shareholders as well as its creditors and employees. Pareto Securities has been engaged as financial advisor for the strategic process.

Based on the above, the Company has on 1 February 2016 executed a sale and purchase agreement in respect of its 100 % owned subsidiary Western Bulk Chartering AS ('WB Chartering') to an entity wholly controlled by Kistefos AS (the 'Purchaser'), following an accelerated auction process involving identified interested parties (the 'Transaction'). The Transaction is entered into on market terms with regard to the need for an accelerated sales process. The enterprise value in the Transaction is app. MUSD 47. The cash consideration to the Company is MUSD 16, to be received upon final completion of the Transaction. Under the terms of the Transaction, the Purchaser will further assume the debtor position from the Company of the remaining outstanding amount of MNOK 271 under the MNOK 300 senior unsecured bond issue with ISIN NO 001067557.2 (the 'Bond Issue'). All bonds held in treasury by the Company shall be transferred to the Purchaser as part of the Transaction.

Other proposed terms for the bond include the following:

  • Bondholders must agree to an extension of the term of the Bond Issue.

  • Bondholders must agree to a reduced interest.

  • Certain amendments related to covenants.

Given the situation the Board of Directors believes that the Transaction is the best way to protect the stakeholder values related to Western Bulk ASA and to alleviate the Company's challenging liquidity situation.

The Transaction is further conditional upon approval from the Company's bondholders and the ambition is to complete the transfer of shares and bonds within a few days. Completion is pending that the bondholders representing the requisite majority having in writing undertaken to meet and vote all of its bonds in favour of the necessary amendments to the Bond Issue.

The Company will continue its operations with the current key management until further notice on arm's length terms agreed with the Purchaser.

Western Bulk Chartering AS will be an independent company outside the Western Bulk Group. WB Chartering will following the Transaction have a more robust financial position and will have a viable basis for further operations creating value in a challenging market.

The Purchaser is regarded as a related party under statutory law. The accelerated sales process and the liquidity situation have necessitated an adaptation of the statutory procedural rules for the requisite corporate resolutions in order to protect the interests of the Company's shareholders and its creditors. Accordingly, a shareholder meeting to approve the sale of WB Chartering to the Purchaser will be held by the Company on or about 3 February 2016. In order to rectify non-compliance with statutory procedural rules, the shareholders will be invited to a subsequent extraordinary general meeting confirming the resolution to approve the Transaction as soon as possible. The notice period for the subsequent extraordinary general meeting confirming the Transaction will be 3 weeks in accordance with the mandatory provisions of statutory law. Separate stock exchange notices for the extraordinary general meetings will be published as soon as possible. Kistefos AS, controlling app. 60.4 % of the shares in the Company, has undertaken to vote in favour of the Transaction at such extraordinary general meetings.

The Board of Directors believes that the Transaction provides Western Bulk ASA with a basis for continued operations and to further explore and pursue potential solutions with the remaining creditors, at large ship owners with guaranteed minimum charters. Such process will be initiated by written enquiry to the creditors concerned. If no acceptable solution for the Company with the remaining creditors is achieved, the basis for the Company's continued operations will be reassessed. The Board of Directors will regardless diligently and continuously evaluate whether the basis for continued operations exists.

The Company will release a detailed stock exchange notice regarding the Transaction within the deadline set out in section 3.4.3 of the Oslo Børs Continuing Obligations of stock exchange listed companies.

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For more information, please contact:

Jens Ismar, Chief Executive Officer

Tel: +47 9009 0897

E-mail: jens.ismar@westernbulk.com

Håvard Furu, Chief Financial Officer

Tel: +47 9912 3443

E-mail: havard.furu@westernbulk.com

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Bulk Invest ASA issued this content on 01 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 23 February 2016 14:29:28 UTC

Original Document: http://www.westernbulk.com/release?xml=http://cws.huginonline.com/B/158865/PR/201602/1982484.xml