Dockwise to build new “Super Vessel” SGM called to authorize USD 100m rights issue

Dockwise Ltd. announces that its Board of Directors has approved the commissioning of a newbuild vessel to serve the emerging demand for ocean transports of up to and above 100,000 metric tons. The decision is subject to approval by a Special General Meeting of shareholders to authorize the proposed USD 100 million rights issue to part-finance the investment.

As announced in relation to the Q2 results in August 2010, Dockwise has been studying the feasibility of investing in a new semi-submersible monohull vessel, bigger than its current largest vessel, the Blue Marlin. This so-called “Type 0” vessel, with capacity of more than 100,000 metric tons, and decksize of 275 x 70 meters will be a first for the maritime transport industry and is expected to require a total investment of approximately USD 200 million. Dockwise has applied for a patent on the design of the vessel.

Business Rationale for the New Build Vessel

The majority of Dockwise’s revenues originate from the Oil & Gas industry. Current trends for projects and equipment in this industry are distinctly towards greater scale and size for premier projects:

•Exploration and production is shifting from shallow water in traditional areas to deep water and remote areas.
•Industry demand is for larger, heavier equipment, in single transportable modules.
•Plant and equipment is increasingly constructed in dedicated, low cost environments ahead of transportation.
Dockwise’s close liaison with customers commissioning production platforms, sparbuoys and FPSOs, to be deployed in offshore projects in the coming decade, has given Dockwise a view of the scale and complexity of the transportation demands, it will be required to meet as the industry leader. The new vessel, which has already passed its tank tests, will exhibit a revolutionary bowless design for key operational advantage.

With Dockwise’s existing backlog in combination with projects on the horizon it is expected that the vessel will be occupied when it will come out of the shipyard in the latter part of 2012. Dockwise is currently in the process of negotiating with selected first rate shipyards for construction of the new vessel.

Attached: artist impression of the new vessel.

Financing of the Investment

The investment in the new Type 0 vessel is expected to require approximately USD 200 million.

In order to cater for a prudent financing of the vessel, Dockwise intends to raise approximately USD 100 million through a fully committed rights issue (the “Rights Issue”). The proceeds of the Rights Issue will be used to pay down or otherwise reduce the senior credit facilities, thereby facilitating the financing of the acquisition of the Type 0 vessel. Dockwise intends to reduce the total amount outstanding under the senior credit facilities with approximately USD 110 million from the net proceeds of the Rights Issue and available cash on the balance sheet. The relevant waivers in respect of the existing debt syndicate, including covenant adjustments for 2011, 2012 and 2013, have been obtained. Furthermore, Dockwise intends to increase its current revolving facility by USD 110 million. For this, four banks (ABN AMRO Bank, Deutsche Bank, Rabobank, The Royal Bank of Scotland) have committed funds at an identical margin and also otherwise in line with the terms and conditions of Dockwise’s existing revolving facilities.

André Goedée, Dockwise Chief Executive Officer, said:

“The decision to invest in this unique new vessel once again underlines our view towards the future and the position of Dockwise at the premium end of the marine heavy transport industry. We have determined that there is a growing desire to develop larger structures for the deepwater development of hydrocarbons and we have determined this investment to be key to support our clients, oil companies, engineers and the yards, in this trend in the next decades.”

The Rights Issue

A Special General Meeting of shareholders (SGM) to authorize the Rights Issue will be called for 23 November 2010, which will also be the last day of trading of the Dockwise shares inclusive of subscription rights. As the ordinary settlement period in the VPS and Euroclear Nederland is T+3, subscription rights will be allocated on basis of the transcript of the company’s shareholder register as of the end of 26 November 2010.

The Company will prepare a prospectus in relation to the Rights Issue, which will, subject to applicable securities laws, be published prior to the start of the subscription period. Subject to the approval of the SGM, Dockwise expects that the Rights Issue will be carried out pursuant to the following indicative timetable:

•SGM: 23 November 2010
•Last day of trading inclusive of subscription rights: 23 November 2010
•Record date for allocation of subscription rights: 26 November 2010
•Start of subscription period: 29 November 2010
•End of subscription period: 13 December 2010
•Payment date: 17 December 2010
•Delivery and listing of new shares: 17 December 2010
In the Rights Issue, it is proposed that existing shareholders of Dockwise who may lawfully subscribe for shares to be issued will be allocated subscription rights according to their shareholding at the date of record subject to applicable securities laws. The Company intends to allow for trading of subscription rights on Oslo Børs and NYSE Euronext Amsterdam. Over-subscription and subscription without rights will not be permitted.

Full subscription of the Rights Issue is committed by four large shareholders in Dockwise; HAL Investment B.V., Project Holland Deelnemingen B.V., Sankaty Advisors LLC and Skagen Vekst (together, the “Shareholders”) Each of the Shareholders, together holding an aggregate of 40.9% of the total outstanding shares, has further committed to vote in favor of the Rights Issue at the SGM.

The subscription rights entitle the holders to subscribe for the shares in the Rights Issue at a subscription price of EUR 17 per share (or EUR 16 per share should the volume weighted average price of the ordinary shares listed and traded on NYSE Euronext Amsterdam (“VWAP”) be below EUR 17.75 over the period from 9.00 CET on 15 November 17.30 CET on 22 November 2010 according to the proposed timetable).

The Royal Bank of Scotland N.V. will act as sole global coordinator and sole bookrunner in the Rights Issue.