Replace - Tender/ Acquisition/ Takeover/ Purchase Offer :: Voluntary

MANDATORY CONDITIONAL CASH OFFER

by

CEL IMPETUS CORPORATE FINANCE PTE LTD

(Incorporated in the Republic of Singapore)

(Company Registration No.: 201631484Z)

for and on behalf of

FSL HOLDINGS PTE. LTD.

(Incorporated in the Republic of Singapore)

(Company Registration No.: 200615503E)

to acquire all the issued and paid-up ordinary units in

FIRST SHIP LEASE TRUST

(Constituted in the Republic of Singapore pursuant to a deed of trust dated 19 March 2007 as amended by a supplemental deed dated 20 April 2010

and a second supplemental deed dated 6 April 2011)

other than those already owned, controlled or agreed to be acquired by FSL Holdings Pte. Ltd.

OFFER ANNOUNCEMENT

1. INTRODUCTION

1.1. The Offer

CEL Impetus Corporate Finance Pte Ltd ("CICF"), for and on behalf of FSL Holdings Pte. Ltd. (the "Offeror"), wishes to announce that the Offeror intends to make a mandatory conditional cash offer

(the "Offer") for all the issued and paid-up ordinary units (the "Units") in First Ship Lease Trust ("FSL Trust"), other than those already owned, controlled or agreed to be acquired by the Offeror and the parties acting in concert with it in accordance with Rule 14 of the Singapore Code on Take- overs and Mergers (the "Code").

1. The Preferential Offering
   On the date of this Announcement (the "Offer Announcement Date"), the Offeror and its concert party, FSL Trust Management Pte. Ltd. (the "Concert Party" and together with the Offeror, the "Concert Party Group"), has been issued in aggregate 719,353,464 Units pursuant to the non- renounceable non-underwritten preferential offering of 956,184,865 new units in FSL Trust ("New Units") at an issue price of S$0.045 for each New Unit, on the basis of three (3) New Units for every two (2) Units held by unitholders of FSL Trust (the "Unitholders") as at the relevant books closure date (the "Preferential Offering").
   As a result of the Preferential Offering and as of the Offer Announcement Date, the Concert Party Group will hold an aggregate of 877,231,095 Units, representing approximately 55.04% of the total issued Units in FSL Trust after the Preferential Offering, and approximately 49.59% of the Maximum Potential Total Units (as defined in paragraph 2.5 below).
2. Mandatory Offer
   As a result of the Preferential Offering and in accordance with Rule 14 of the Code, the Offeror is required to make a mandatory general offer for all the Offer Units (as defined in paragraph 2.2 below).

2. THE OFFER

1. Offer Terms
   In accordance with Rule 14 of the Code, and subject to the terms and conditions set out in the formal offer document to be issued by CICF for and on behalf of the Offeror (the "Offer Document"), the Offeror will make the Offer for the Offer Units on the following basis:
   For each Offer Unit: S$0.0585 in cash (the "Offer Price").
   The Offer Price takes into account, among other factors, the highest price paid by the Concert Party Group for the purchase of Units in the six (6)-month period immediately prior to the Offer Announcement Date (the "Relevant Period").
   The Offeror DOES NOTintend to increase the Offer Price save for the right to do so in a competitive situation. Therefore, in accordance with Rule 20.2 of the Code, save in a competitive situation, the Offeror will not be allowed to subsequently amend the terms of the Offer, including the Offer Price, in any way.
2. Offer Units
   The Offer, when made, will be extended to:
3. 1. all Units other than those already owned, controlled or agreed to be acquired by the Concert Party Group as at the Offer Announcement Date; and
   2. all new Units unconditionally issued or to be issued pursuant to the valid conversion, prior to the close of the Offer, of the Convertible Bonds (as defined in paragraph 2.6 below)

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(collectively, the "Offer Units").

1. No Encumbrances
   The Offer Units are to be acquired:
2. 1. fully paid;
   2. free from any claim, charge, pledge, mortgage, lien, option, equity, power of sale, declaration of trust, hypothecation, retention of title, right of pre-emption, right of first refusal, moratorium or other third party right or security interest of any kind or an agreement, arrangement or obligation to create any of the foregoing; and
   3. together with all rights, benefits and entitlements as at the Offer Announcement Date and thereafter attaching thereto, including the right to receive and retain all dividends, rights, other distributions and/or return of capital (if any) declared, paid or made by FSL Trust in respect of the Offer Units on or after the Offer Announcement Date (collectively, the "Distributions").
3. Adjustment for Distributions
   Without prejudice to the foregoing, the Offer Price has been determined on the basis that the Offer Units will be acquired with the right to receive any Distribution that may be declared, paid or made by FSL Trust on or after the Offer Announcement Date.
   Accordingly, in the event any Distribution is or has been declared, paid or made by FSL Trust in respect of the Offer Units on or after the Offer Announcement Date to a Unitholder who validly accepts the Offer (the "Accepting Unitholder"), the Offer Price payable to such Accepting Unitholders shall be reduced by an amount which is equal to the amount of such Distribution, depending on when the settlement date in respect of the Offer Units tendered in acceptance of the Offer by the Accepting Unitholder falls, as follows:
4. 1. if such settlement date falls on or before the books closure date for the determination of entitlements to the Distribution (the "Books Closure Date"), the Offer Price for each Offer
      Unit shall remain unadjusted and the Offeror shall pay the Accepting Unitholder the unadjusted Offer Price for each Offer Unit, as the Offeror will receive the Distribution in respect of such Offer Unit from FSL Trust; or
   2. if such settlement date falls after the Books Closure Date, the Offer Price for each Offer Unit shall be reduced by an amount which is equal to the amount of the Distribution in respect of each Offer Unit (the Offer Price after such reduction, the "Adjusted Offer Price") and the Offeror shall pay the Accepting Unitholder the Adjusted Offer Price for each Offer Unit, as the Offeror will not receive the Distribution in respect of such Offer Unit from FSL Trust.
5. Minimum Acceptance Condition

The Offer will be conditional upon the Offeror having received, by the closing date of the Offer ("Closing Date"), valid acceptances in respect of such number of Offer Units which, when taken

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together with the Units owned, controlled or agreed to be acquired by the Concert Party Group (either before or during the Offer and pursuant to the Offer or otherwise), would result in the Concert Party Group holding such number of Units carrying more than 50% of the total voting rights attributable to the issued Units (excluding treasury Units) as at the Closing Date (the "Minimum Acceptance Condition").

Accordingly, the Offer will not become or be capable of being declared unconditional as to acceptances until the Closing Date, unless at any time prior to the Closing Date, the Offeror has received valid acceptances (which have not been withdrawn) in respect of such Offer Units which, when taken together with the Units owned, controlled or agreed to be acquired by the Concert Party Group will result in the Concert Party Group holding more than 50% of the voting rights attributable to the Maximum Potential Total Units. For these purposes, the "Maximum Potential Total Units" means the total number of Units which would be in issue if all the Convertible Bonds were validly converted as at the date of such declaration.

2.6. Convertible Bonds

As of the Offer Announcement Date, FSL Trust has convertible bonds (the "Convertible Bonds") in a principal amount of US$7,250,000, which are convertible into Units at a conversion price of S$0.05644 per Unit (following the adjustment made to such conversion price as a result of the Preferential Offering in accordance with the terms and conditions of the Bond Subscription Agreement (as defined below)) (the "Conversion Price") into 175,225,461 new Units1, representing approximately 9.91% of the Maximum Potential Total Units. The Convertible Bonds were issued to VGO Special Situations I (Luxembourg) S.á r.l. (the "Bondholder") pursuant to the bond subscription agreement dated 24 April 2018 (the "Bond Subscription Agreement") between

FSL Trust and the Bondholder as amended and supplemented by a supplemental agreement dated 24 May 2018 and a second supplemental agreement dated 26 November 2018.

In accordance with Rule 19 of the Code, CICF, for and on behalf of the Offeror, will also make an offer to the Bondholder to acquire the Convertible Bonds ("CB Offer") subject to:

1. the Offer becoming or being declared unconditional; and
2. the Convertible Bonds continuing to be transferable and convertible into new Units.

The offer price for every US$1,000 or US$100,000 principal amount of Convertible Bonds (the "CB Offer Price") will be as follows:

For every US$1,000 principal amount of Convertible Bonds: S$1,413.89 in cash2; or

For every US$100,000 principal amount of Convertible Bonds: S$141,389.00 in cash3.

1. Based on an exchange rate as quoted in Bloomberg L.P. of US$1:S$1.3641 as of 6 June 2019.
2. Based on an exchange rate as quoted in Bloomberg L.P. of US$1:S$1.3641 as of 6 June 2019.
3. Based on an exchange rate as quoted in Bloomberg L.P. of US$1:S$1.3641 as of 6 June 2019.
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In accordance with Note 1 to Rule 19 of the Code, the CB Offer Price is calculated based on the Offer Price multiplied by the number of new Units into which the principal amount of the Convertible Bonds tendered in acceptance of the CB Offer may be converted.

If any payment of interest or distribution is made or paid by FSL Trust or any right arises (for any reason whatsoever) on or after the Offer Announcement Date for the benefit of the Bondholder who accepts or has accepted the CB Offer, the Offeror reserves the right to reduce the CB Offer Price payable to the accepting Bondholder by the amount of such interest, distribution or right.

If the Offer lapses or is withdrawn, or if the Convertible Bonds are not transferable or cease to be convertible into new Units, the CB Offer shall lapse accordingly.

Under the Bond Subscription Agreement, no Bondholder may exercise its right to sell, transfer or assign the Convertible Bonds (the "Transferred Bonds") if (i) the Transferred Bonds are being sold, transferred or assigned to any of the persons set forth in Rule 812(1) of the Listing Manual ("Restricted Persons") or (ii) the conversion of the Transferred Bonds into new Units would result in FSL Trust issuing new Units to transfer a controlling interest (as defined in the Listing Manual), unless the prior approval of the Unitholders has been obtained. As a substantial Unitholder of FSL Trust, the Offeror is a Restricted Person and FSL Trust has not obtained the approval of Unitholders for any transfer of the Convertible Bonds to the Offeror pursuant to the CB Offer.

Pursuant to Condition 2.1 of the Bond Subscription Agreement, the Convertible Bonds are issued in registered form in the denomination of US$100,000 or integral multiples of US$1,000 thereof. Accordingly, the Bondholder should accept the CB Offer in integral multiples of US$1,000 in principal amount of Convertible Bonds but in any case not less than US$100,000 in principal amount of Convertible Bonds.

The Convertible Bonds are to be acquired (i) fully paid and free from all encumbrances and (ii) together with all rights, benefits and entitlements attached thereto as at the Offer Announcement Date and hereafter attaching thereto, including but not limited to the right to receive and retain all interest, payments, rights and other distributions (if any) declared, paid or made by FSL Trust on or after the Offer Announcement Date.

For the avoidance of doubt, the Offer and the CB Offer are separate and mutually exclusive. The CB Offer does not form part of the Offer, and vice versa. While the CB Offer is conditional upon the Offer becoming or being declared unconditional, the Offer will not be conditional upon acceptances received in relation to the CB Offer.

Further details of the CB Offer will be set out in a letter to be despatched to the Bondholder in due course.

2.7. Further Information

Further information on the Offer and the terms and conditions of the Offer will be set out in the Offer Document.

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