Polarcus Private Placement successfully subscribed

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR OTHER MEASURES. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Reference is made to the stock exchange release from Polarcus Limited ("Polarcus" or the "Company") (OSE: PLCS) published yesterday, 9 February 2017 regarding the contemplated private placement of shares in the Company.

The Company announces today that it has conditionally allocated binding subscriptions for 1,000,000,000 new shares at a subscription price of NOK 0.33 raising NOK 330 million in gross proceeds through a private placement (the "Private Placement"). The Private Placement was significantly oversubscribed.

ABG Sundal Collier ASA acted as sole manager (the "Manager") in the Private Placement.

The completion of the Private Placement is subject to:

1. relevant credit committee or board approvals (as applicable) by the bank financing parties (the "Finance Parties") of certain amendments to the existing USD 410 million fleet bank facility agreement between, among others, the Company, DNB Bank ASA, DVB Bank SE, Nordic Branch, Garanti-instituttet for Eksportkreditt (GIEK), Eksportkreditt Norge AS and Eksportfinans ASA (the "Fleet Bank Facility"). The amendments include:

1. no amortization until 1 January 2019;
2. extension of the existing cash sweep until 1 January 2019;
3. the Debt Service Ratio ("DSR") covenant being maximum 1.25x for 2017 and 2018, 2.0x for 2019 onwards and the proceeds from the Private Placement and the Subsequent Offering  being counted as EBITDA for the purpose of calculating the DSR;
4. the Minimum Equity Ratio being reduced from 25% to 20% and multi-client assets being included in the calculation of the Minimum Equity Ratio; and
5. enhanced security including USD 6,000,000 deposit into a retention account for future instalments.

2. credit committee approval from DNB Bank ASA being obtained to extend the USD 25 million working capital facility (the "WCF") by 1 year to 1 July 2019;
3. the bondholders of the NOK denominated "FRN Polarcus Limited Senior Unsecured Callable Bond Issue 2014/2019" as amended with ISINs NO 0010714389 and NO0010757255 and tickers PLCS03 and PLCS03-B (the "NOK Denominated Bond") and the USD denominated "8 per cent Polarcus Limited Senior Unsecured Callable Bond Issue 2013/2018" as amended with ISINs NO0010680150 and NO0010757248 and tickers PLCS02 and PLCS02-B (the "USD Denominated Bond") (together the "Unsecured Bonds") approving an amendment to the Minimum Equity Ratio covenant mirroring the Fleet Bank Facility; and
4. approvals by ordinary resolution at an Extraordinary General Meeting of the Company (the "EGM") being obtained to increase the authorized share capital of the Company and to issue shares in the Company in respect of the proposed equity issues.

The Private Placement will be cancelled if the closing conditions have not been fulfilled by 20 March 2017

The EGM is expected to be held on or about 6 March 2017 (the "EGM"). Following and subject to completion of the Private Placement (but prior to the Subsequent Offering as defined below), the Company will have an issued share capital of USD 15,304,729.47 divided into 1,530,472,947 shares, each with a par value of USD 0.01.

Following an assessment of the Company's financial condition, the need for new investors and preferred timing of the equity issue the Board of Directors has decided that it is in the Company's and shareholders' best interests to carry out the equity raise as a Private Placement.

The Board will propose to the EGM to conduct a subsequent offering of up 122,000,000 shares raising up to approximately NOK 40 million at the same price per share as the Private Placement (the "Subsequent Offering") to existing shareholders in the Company as of the end of trading on 9 February 2017, as registered in the VPS as of the end of 13 February 2017, allocating a preference to such existing shareholders who did not participate in the Private Placement and who are not resident in a jurisdiction where such offering would be unlawful or, for jurisdictions other than Norway, would require any prospectus, filing, registration or similar action (the "Eligible Shareholders"). Non-tradable subscription rights will be awarded. The existing Shares in the Company will trade exclusive of the right to participate in the Subsequent Offering from and including 10 February 2017. Such Subsequent Offering is subject to shareholders at an EGM voting in favor of an ordinary resolution to increase the authorized share capital required to conduct the Private Placement and the Subsequent Offering and issue the necessary shares.

The following primary insiders were allocated shares in the Private Placement:

Chairman of the board Peter Rigg, was allocated 750,000 shares in the Private Placement, subject to completion of the Private Placement he will hold a total of 793,488 Shares, corresponding to 0.05% of the issued share capital after completion of the Private Placement.

Board member Carl-Peter Zickerman (through his wholly owned company Zickerman Group Ltd), was allocated 30,300,000 shares in the Private Placement, subject to completion of the Private Placement he will hold a total of 89,201,798 Shares, corresponding to 5.8% of the issued share capital after completion of the Private Placement.

Board member Tom Henning Slethei (through his wholly owned company Alto Holding AS), was allocated 30,000,000 shares in the Private Placement, subject to completion of the Private Placement he will hold a total of 47,430,114 Shares, corresponding to 3.1% of the issued share capital after completion of the Private Placement.

Board member Erik Mathiesen (through his wholly owned company SISU Holding AS), was allocated 750,000 shares in the Private Placement, subject to completion of the Private Placement he will hold a total of 750,000 Shares, corresponding to 0.05% of the issued share capital after completion of the Private Placement.

Contacts

Rod Starr, CEO +971 4 436 0800 rod.starr@polarcus.com

Hans-Peter Burlid, CFO +971 50 559 8175 hp.burlid@polarcus.com

About Polarcus

Polarcus (OSE: PLCS) is an innovative marine geophysical company with a pioneering environmental agenda, delivering high-end towed streamer data acquisition and imaging services from Pole to Pole. Polarcus operates a fleet of high performance 3D seismic vessels incorporating leading-edge maritime technologies for improved safety and efficiency. Polarcus offers contract seismic surveys and multi-client projects with advanced onboard processing solutions and employs nearly 500 professionals worldwide. The Company's principal office is in Dubai, United Arab Emirates. For more information, visit  www.polarcus.com

Disclaimer

The information included herein may contain forward-looking statements. Forward- looking statements include all statements that are not historical facts, including but not limited to statements expressing or implying the Company's intent, belief or current expectations with respect to, among other things, forecasts, estimates, and predictions. Such forward-looking statements necessarily involve risks and uncertainties and are dependent on assumptions, information, data or methods that may be incorrect or imprecise. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions or expectations proves to be inaccurate or is unrealized. Some factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, developments in the oil and gas industry, the demand for seismic services, the demand for data from the Company's multi-client library, currency risks, political risks, regulatory risks, and unexpected operational setbacks. For a further description of other relevant risk factors we refer to our 2015 Annual Report. The reservation is also made that inaccuracies or mistakes may occur in the information given above concerning the current status of the Company or its business. Any reliance on the information given above is at the risk of the reader, and Polarcus disclaims any and all liability in this respect.  

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