Transcript Mosvold Jackup Ltd - NFMF : OTC : Login

Confidential
Company presentation
Mosvold Supply Ltd.
USDm 32 private placement
16m shares at USD 2.0
Pareto Securities ASA
June 20, 2007
Solely for review in connection with the Private Placement of the Equity
Private Placement – not for reproduction or distribution
The information contained herein may be subject to change without prior
notice. Please note that this is not an offering document nor a research
analysis of Mosvold Supply Ltd.
Confidential
Disclaimer
This Presentation has been produced by Mosvold Supply Ltd. (the “Company” or “Mosvold Supply”) with assistance from Pareto Securities ASA, solely for use at the presentation to
investors held in connection with the proposed offering of shares by the Company and may not be reproduced or redistributed, in whole or in part, to any other person. This presentation
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This document contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forwardlooking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, expects”, “predicts”,
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assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may
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This Presentation and the information contained herein do not constitute an offer of securities for sale in the United States and are not for publication or distribution to U.S. persons
(within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). The securities proposed to be offered in the Company have not been and
will not be registered under the Securities Act and may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from the registration requirements
of the Securities Act.
This Presentation speaks as of 20 June 2007. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any
circumstances, create any implication that there has been no change in the affairs of the Company since such date.
2
Content
1) Introduction
2) The assets
3) The market
4) Company set-up
5) Key financials
6) Summary
3
Confidential
Investment case
 Mosvold with opportunistic approach to high-end AHTS market
 Mosvold Supply Ltd (Cyprus) initiated and backed by Mosvold with substantial experience and track record
from offshore drilling, supply and shipping
 Pure and leveraged play on high-end, large AHTS vessels
 Based on attractive turnkey newbuild contracts and proven Vik Sandvik design
 2x AHTS (Vik Sandvik 491 Clean Design) with total USDm 167 all-in delivered price (Oct-09/Jun-10 delivery)
vs approx USDm 208 quotes from western European yards
 2x individual options for similar vessels (USDm 80/82 1) with calls 15 Sep 2007 and 30 Jan 2008,
respectively). Expected delivery late 2010 and late 2010/early 2011
 Robust market outlook
 High-end AHTS order book balanced by strong demand (rig/FPSO/field developments), stricter safety rules
and environmental issues
 Attractive payment schedule and contract terms justifying leveraged capital structure
 USDm 32 equity, USDm 30 bond and USDm 112 take-out financing
 Significant equity value potential
 Equity replacement value approx USDm 70 based on current newbuild quotes
 3-yr historical average AHTS day rates yielding P/E 1.2x and EV/EBITDA 4x (2 vessels)
 Additional value from 2x attractive newbuild options
 Alternative strategies to be actively pursued by Mosvold
1) Will be adjusted acc. to price changes on critical equipment
4
Confidential
Strong equity return potential
 Current asset replacement cost
estimated at NOKm 625 per vessel
(delivered price)
Implying USDm 208 (2x AHTS)
Ignoring value of 2x Mosvold options
 Mosvold equity worth USDm 66 on
asset replacement values

+ 90% on initial USDm 35 market cap
 Mosvold equity worth USDm 86 on
asset replacement values incl. 2x
options 1)
USD million


Mosvold Supply Equity Potential
110
100
90
80
70
60
50
40
30
20
10
0
102
86
66
35
Initial mkt cap
 >USDm 100 equity value potential
based on 3-yr average earnings
scenario




EBITDA USDm 44
Assuming target EV/EBITDA 5.5x
Implying P/E 3.6x on target valuation
3x initial equity valuation
Repl cost
Repl cost incl
options 1)
Earnings
Potential
1) Options assumed to be USD 10m in the
money vs. alternative quotes
Source: Pareto Securities ASA
5
Confidential
Transaction terms
Private placement
 USDm 32 through 16 million new shares at USD
2.0 per share, each with USD 0.01 nominal value
 1.5 million shares currently outstanding, equal to a
pre-money valuation of USDm 3
 Companies affiliated with Mosvold have presubscribed and will be allocated up to USDm 7 of
the new issue
 Mosvold with 12 months lock-up on their approx.
30% holding post transaction
 Use of proceeds: To finance the construction of 2
large AHTS vessels. All-in delivered project price
USDm 167
 Investor requirement: Institutional and professional
investors / US 144A (QIBs)
Timetable & key conditions
 Subscription period: 20 June 2007
 Earliest closing at 17:00 Norwegian time.
Subscription period may be extended
 Minimum subscription: USD 80,000 (equivalent to
40,000 shares)
 Allocation on or about 21 June
 Payment on or about 26 June
 Delivery of shares on or about 5 July
 Listing: Immediate OTC listing. Subsequent listing
on Oslo Axess to be evaluated
 Documentation: Investor presentation, term sheet
and terms of application
 The private placement is subject to a bond issue
of USDm 30
 Manager: Pareto Securities ASA
6
Content
1) Introduction
2) The assets
3) The market
4) Company set-up
5) Key financials
6) Summary
7
VS 491 CD: High capacity AHTS
- State-of-the art workhorses meeting future requirements
Environmental friendly design
 Double hull construction (DnV Clean Design notation)
 Safeguarding the environment from possible leakage
 Unmatched fuel economy
 Reduces emissions of greenhouse gases
 Cost effective solution for charterers
 HYBRID propulsion system
 Straight shaft technology when steaming
 Diesel electric principles when the vessel is holding position
Main features












Design:
Overall length:
Breadth moulded:
Deadweight (7.9 m draft):
Speed at 6.0 m draft:
Total horsepower:
Min. bollard pull:
DP class:
Towing/anchor handling winch:
Crane capacity (ROV w/heave comp.):
Fuel consumption:
Accommodation:
Vik Sandvik
91 m
22 m
4,000 t
17 knots
28,080
270 t
II
500 t
1x 5t, 1x 6t and 1x 12t
13.5 t diesel per day
60 persons
Well reputed equipment suppliers




Diesel engines:
Thrusters:
Towing winches:
DP:
MAK
Brunvoll
Hatlapa
Kongsberg
8
Mosvold Supply AHTS with high-end specifications
Siem
Havila
Farstad
Olympic
Mosvold Supply
VS 491 CD
Havyard 845
UT 731 CD
Aker AH05
VS 491 CD
Loa
91
87
87.4
94
91
Breadth
22
22
21
23
22
28000
23000
25000
26500
28080
Bollard Pull
300
250
240
260
270
Winch
500t
500t
500t
500t
500t
Winch Drum
Triple
Triple
Triple
Na
Triple
Deck
750
675
760
840
700
Accommodation
60
35
40
68
60
Max Speed
18
17
18
17
17
Economical Speed
12
12
13
Na
13
DP
2
2
2
2
2
Shark Jaws
2x350t
2x350t
Na
Na
2 x 350t
Stern Roller
SWL 750
SWL 600
Na
Na
SWL 600t
ø4m, length 8m.
ø4.5m, length 6m
Na
Na
ø4m,length 8m
Towing Pins
4x350t
2x300
Na
Na
4 x 350t
Deadweight
4250
4000
3900
4925
4000
Fuel
1450
1550
1100
2800
1550
Fresh Water
1160
500
700
800
1090
Mud
670
500
850
660
679
Dry Bulk
300
250
175
180
306
Rig Chain
680
610
670
800
670
Oilrec
870
1000
1000
Na
1000
II
II
Na
Na
Prep.II
mai.09
mai.09
mai.09
apr.09
Oct 09/Jun 10
Design
BHP (horse power)
Stern Roller Dimention
FIFI
Delivery
Source: Mosvold and Pareto Securities
9
Mosvold Supply Construction program
2Q07
AHTS TBN 1
AHTS TBN 2
3Q07
4Q07
1Q08
20% payment
20% payment
2Q08
3Q08
4Q08
10% payment
10% payment
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
70% payment
70% payment
USDm 80 - to be adjusted acc. to chg. on critical equipment , callable 15 Sep 2007 with estimated delivery late 2010
AHTS Opt. 1
USD 80m – price adj. to reflect key equipment cost – exercise by mid-Sep 07, expected delivery late 2010
USDm 82 - to be adjusted acc. to chg. on critical equipment , callable 30 Jan 2008 with estimated delivery late 2010 / early 2011
AHTS Opt. 2
USD 82m – price adj. to reflect key equipment cost – exercise by late-Jan 08, expected delivery late 2010/early 2011
 Favorable payment structure securing commitment from Batamec Shipyard
 20% at contract signing
 10% at key equipment delivery
 70% at final delivery
 Turnkey construction contract with parent company Otto Offshore Ltd., Labuan, Malaysia
 Contract price USDm 154
 All-in delivered price USDm 167 (incl. project development, supervision & interest)
 Refund guarantee from Bangkok Bank (BBB+)
10
Batamec Shipyard with relevant expertise
 PT Batamec Shipyard wholly owned subsidiary
of Otto Marine Pte Ltd
 Otto Marine Ptd Ltd started operations in 1979
 Principal activities:
 Shipbuilding
 Ship repair & conversion
 Offshore structural engineering
 Batamec is strategically located at Batam Island,
Indonesia
 6 vessels successfully delivered since embarking
 Management comprises over 45 qualified and
on shipbuilding strategy
experienced engineers, primarily from PPL and
 Order book of 30 vessels with deliveries until 2010
Keppel Fels
 Of which 10x 10,000HP AHTS
 Total workforce: 2,200
 Certified to ISO 9001:2000 with Lloyds Register
Quality Assurance as at 25 April 2005
 Major clients:
 Tidewater
 ESNAAD
 Seatrucks
 PETRA
 RK Offshore
 Marine Subsea (Africa Offshore Services)
11
Content
1) Introduction
2) The assets
3) The market
4) Company set-up
5) Key financials
6) Summary
12
Large AHTS rates holding up at record levels
- avg spot rates YTD 2007 approx USD 115,000/d
North Sea Spot Rates
(USD/day)
Current
AHTS > 12' BHP (rig moves)
100,000
Spot market
Prior Week
Last Month
57,600
66,400
Estimated 2007E effective day rate*
62,000 / 83,600
(15,000 BHP / 25,000 BHP)
Large AHTS spot day rates
 68% spot utilization (60%)
200,000
180,000
160,000
Recent fixtures
 Island Vanguard at USD 95,000
(Pareto 2Q07E: USD 82,000)*
120,000
 Maersk Detector at USD 90,000
(Pareto 2Q07E: USD 64,000)*
100,000
80,000
 Sea Lynx at USD 74,000
(Pareto 2Q07E: USD 64,000)*
60,000
 Highland Valour at USD 100,000
(Pareto 2Q07E: USD 64,000)*
40,000
20,000
2004
2005
2006
2007
ec
D
ov
N
O
ct
p
Se
g
Au
Ju
l
n
Ju
M
ay
r
Ap
M
ar
b
Fe
n
0
Ja
USD/day
140,000
Current Spot
*Term rates and Pareto estimates are effective day rates; total rev./no. of days
Source: Johan G. Olsen Shipbrokers, Pareto estimates
13
World AHTS fleet is old (22 years avg age)
- Newbuild order book 19% of existing fleet
- New vessels substantially larger and more capable than older vessels
160
140
120
100
80
60
40
20
20
10
20
08
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
19
70
0
Source: Clarksons / JGO Shipbrokers / Pareto estimates
14
Drilling and field development driving AHTS demand
- Boost in drilling activity and growing number of FPSO installations going forward
- Deepwater field development boosting AHTS vessel usage
# units
General floater activity
# units
FPSO units
%
250
250
25
Fleet
Annual growth
(#)
200
200
150
150
15
100
100
10
50
50
5
0
0
0
2003
2010E
2003
20
2010E
Annual growth 2000-2005 vs. 2006-2010
Source: ODS Petrodata, Infield, Pareto estimates
15
Large AHTS to be preferred going forward
- Meeting new and stricter requirements from clients and authorities
Mosvold Supply VS 491 CD
 22 m breadth
 500 t
7º tilting
Conventional / older vessel
 17 m breadth
 400 t
19º tilting
16
Large AHTS to enjoy high utilization going forward
Source: JGO Shipbrokers
17
BP
ffsho
re
Vik in
g
Sarto
r Sh ip
ping
Atlan
tic To
win g
Ultra
pe tro
l
SMS
Othe
rs
CH O
AHTS > 10,000 BHP
SBS
Harve
y
Nord
ca pit
al
Sea m
ar
BUE
Vroo
n
D'a m
oto F
rateli
Garw
age
80
Havi la
Eide s
vi k
Grea
t Ea s
tern
Sie m
Offsh
ore
Horn
be ck
Olym
pic
Ezra
Holdin
g
Augu
s ta
Møks
te r
Sec u
nda
Intra
Oi l S
ervi c
es
CBO
REM
Offs h
ore
Fin ar
ge
Edda
Supp
ly
Otto
Cand
ies
Sols t
ad
DO F
Offsh
ore
Chine
se ow
n ers
Sea c
or
Swire
Deep
Sea S
upply
Is lan
d Off
s hore
Toi sa
Tric o
Ma rin
e
bon O
ffs ho
re
Maer
s
k
Edis o
n Cho
u est
Fa rs t
ad Sh
ippin
g
Tid ew
ater
Gulf
Offsh
o re
Bour
Consolidation opportunities ahead
- Fragmented market creates room for consolidation
- New, large AHTS in favor
90
PSV > 2,000 DWT
70
Newbuilds
60
50
40
30
20
10
0
Source: Petrodata / Platou / Farstad / Pareto
18
Content
1) Introduction
2) The assets
3) The market
4) Company set-up
5) Key financials
6) Summary
19
Investor friendly and cost-effective company set up
 Mosvold Supply Ltd. has been established and registered in Cyprus
 No direct employees in Mosvold Supply
 Corporate governance in accordance with public company guidelines (incl. 30% mandatory offer threshold
prior to listing)
 No corporate tax (pay only local tonnage tax)
 Management agreement with Mosvold Management Ltd. (100% owned by Mosvold Shipping Holding Ltd.)
 Fixed price mgmt contract (G&A/accounting/reporting) of USD 42,500 per vessel per month
- 12 months cancellation period
 Mosvold management responsible for construction and building supervision at estimated cost of USDm 1.7 per vessel
(may be subcontracted to reputable technical manager)
 Post-delivery commercial management fee 1.25%
 USDm 2 project development costs first 2 vessels + 1% commission on shipbuilding contracts
 1% commission on sale of vessel(s) or change of control in Mosvold Supply Ltd. (> 30%)
Corporate set-up:
Mosvold Supply Ltd.
Est.: Cyprus, June 2007
100%
100%
AHTS #1 TBN
AHTS #2 TBN
Cyprus
Cyprus
20
Confidential
Board of Directors
 Roy T. Mosvold (42) – Chairman
 Experience from New York and London in shipping, investment and trading. Mr. Mosvold serves as
Chairman of Mosvold Jackup, Moss Mosvold Platforms and Mosvold Shipping Ltd. Mr. Mosvold holds
a B.Sc. major Finance and International business from New York University
 Vasilios Trikoupis (56)
 Mr. Vasilios Trikoupis from Cyprus has experience from Montanios & Montanios Law Firm where he
has served as Accountant Assistant and Accountant Manager from 1971 to date. Mr. Trikoupis holds a
Higher Stage Certificate in Accounting from the London Chamber of Commerce and Industry
 Magne Kristiansen (52)
 Degrees from Norwegian School of Economics & Business Administration (NHH) and University of
California. Experience from Ernst & Young, investment bank Samuel Montagu, Mosvold Shipping
(CFO 1988-1995, CEO 1995-2000), DSND Subsea (renamed Siem Offshore in 2003 and included
ownership of Subsea 7 Inc) as EVP & CFO in 2000-2001, CEO from 2002 to 2005
21
Confidential
Experienced management team in place
 John G. Bernander (49) – CEO
 John G. Bernander is a lawyer educated at the University of Oslo. He has held various managerial
positions, lastly as CEO of the Norwegian Broadcasting Corp. 2001 – 06. From 1993 – 2001 he was
CEO of the Gard P& I Club and Gard Services AS. Bernander has worked as Corporate Counsel for
Sørlandsbanken AS and Johan G. Olsen AS and has served in political offices as Member of
Parliament , Deputy Leader of the Conservative Party and as Deputy Minister of Trade and Industry
 Per Tønnesen (58) – Technical Director
 Master Mariner with experience as master on tankers, bulkers, containerships and passenger vessels.
Fleet Technical manager with Subsea 7 2002 – 2003. Technical Manager /SQ with Mosvold
Shipping 1998 – 2002, and before that held the same position with Red Band (Fred Olsen) from 1991
– 1998
 Marianne Andreassen (30) – Controller
 Holds a Master Degree in Business Administration from Norwegian School of Economics & Business
Administration (NHH), State Authorized Public Accountant. Experience from Ernst & Young Norway
(2000 – 2006) and Ernst & Young USA (2003)
22
Confidential
Mosvold – an experienced shipping and offshore services group
 The Mosvold family has continuously been active in shipping since 1910
 First investment in offshore: Part ownership of semi early 80ies
 Acquired 3 modern J/Us from Keyes Offshore in 1989
 Mosvold Shipping was IPO‘d on the Oslo Stock Exchange in 1990
 Acquired 100% of Dual Drilling Co in 1990. Dual was a Dallas based worldwide drilling contractor
owning 3 J/Us and 10 platform rigs
 Through Dual, acquired further 3 J/Us in 1993 combined with raising new equity and listing of Dual on
NASDAQ (Mosvold Shipping retained 60% of Dual)
 Dual merged with Ensco in 1996 with payment in shares. All shares distributed to Mosvold
shareholders
 Mosvold initiated a J/U project 1H 2004 to build 2 J/U (with 4 options) at PPL Shipyard and Keppel
FELS in Singapore. The entire project sold to Awilco in 2004 and is the now the foundation of Awilco
Offshore
 Mosvold is managing the construction of two semi-submersible baredecks at the Russian yard
Sevmash. Baredecks sold to Saipem and SeaDragon Offshore with forward delivery
 Mosvold founded Mosvold Drilling Ltd. in 2005 (2x Ultra Deep Water Drillships on order with Samsung,
acquired by Seadrill)
 Mosvold founded Mosvold Jackup Ltd. in 2006 (2x 300 ft Jackups on order at MIS)
 Mosvold with innovative approach taking advantage of yard market potential, eg. MIS and Sevmash
23
Content
1) Introduction
2) The assets
3) The market
4) Company set-up
5) Key financials
6) Summary
24
Confidential
Mosvold Supply – a leveraged newbuild play
 Supported by favourable newbuild contract terms
USDm
200
USDm 173 Total funding requirement
6
180
160
140
83
120
112
100
Bank/
take-out debt
80
60
40
30
83
20
32
18% of EV
0
AHTS #1
AHTS #2
SG&A etc
Equity
2 pr Bond
Unfinanced
25
Mosvold Supply capex and funding (2 vessels)
 USDm 167 all-in/ready to operate cost
 Incl. capitalised interest costs
 Total funding requirement of USDm 173
 Incl. G&A, fees and financing costs
 USDm 32 of equity (June 2007)
 USDm 30 bond issue (June 2007)
 USDm 112 of bank/take-out debt assumed upon
delivery
 Fully funded to delivery from initial equity and bond
 Take-out representing approx 64% of all-in cost
Total Capex and Funding
Vessel Capex
Optional equipment
Project development cost
Supervision etc
Capitalised interest cost
Total Capex
Equity
Bond
Take-out
Total Funding
Source: Mosvold Supply Ltd
Capex and Funding (2x AHTS)
Yard Turnkey Contract Price
Supervision/site team/pre-del crew cost
Optional equipment
Contingency
Capitalised interest costs
All-in ready to operate cost
Project devevopment cost
SG&A/mgmt fee/legal fees/equity fee
Total Financing Requirement
153
2
1
2
9
167
2
4
173
Funding
Equity
2.pr Bond
1.pr Senior debt (unfunded)
Total Funding
32
30
112
174
18%
17%
64%
100%
Implied cash at delivery 1)
1
1) Excl cash contribution from vessel #1 during 1H2010
2007E
31
2
1
2
36
2008E
15
2
3
20
2009E
54
1
2
3
60
2010E
54
1
1
1
57
CUM
154
1
2
6
9
172
32
30
62
-
56
56
56
56
32
30
112
174
26
Confidential
Pro forma Mosvold Supply key figures (2x AHTS)
 EV USDm 177 fully invested
 Ignoring value of 2x newbuild options
 Post-deal market cap USDm 35
 Incl. pre-money value USDm 3
 Approx 30% Mosvold ownership
 P/E 4.4x on current Pareto 09E estimates for
similar vessels (NOK 275k/d)
 EV/EBITDA 7.4x
 P/E 1.2x on 3-yr historical average of NOK
450k/d
 EV/EBITDA 4x
 P/E 1x assuming day rates at 2007E levels
 EV/EBITDA 3.5x
Mosvold Supply Ltd Earnings Scenarios (Fully Invested)
Pareto 09E
Day Rates
NOK/day
275,000
USD/day
45,455
Utilisation
96%
Daily opex incl fixed mgmt fee
($10,000)
No of vessels
2.0
PROFORMA P&L
Vessel EBITDA
SG&A
EBITDA
Depreciation (25yr)
Operating profit
Net financials fully invested (yr1)
Net Profit (after tax)
Cash Earnings
Maintenance capex
Free cash flow (pre debt amortisation)
Free cash flow (post debt amortisation)
EPS
Share price
No of shares (fully invested)
Market capitalisation
Net debt fully invested
Enterprise Value
EV/EBITDA
P/E
RoE (on mkt cap)
FCF yield (post debt amortisation)
Net interest bearing debt/EBITDA
EBITDA/Net interest
Source: Pareto Securities ASA
3yr Avg Pareto 07E
450,000
500,000
74,380
82,645
96%
96%
($10,000) ($10,000)
2.0
2.0
USDm
"
25
(1)
45
(1)
51
(1)
"
"
"
"
"
24
(6)
18
(10)
8
44
(6)
38
(10)
28
50
(6)
44
(10)
34
"
"
"
"
NOK
14
(1)
13
2
2.7
34
(1)
33
22
9.7
40
(1)
39
28
11.7
12.1
17.5
35
142
177
7.4
4.4
22.6 %
9%
5.9x
2.4x
12.1
17.5
35
142
177
4.0
1.2
80.5 %
23%
3.2x
4.4x
12.1
17.5
35
142
177
3.5
1.0
97.0 %
28%
2.8x
5.0x
NOK
mill
USDm
"
"
27
Confidential
Mosvold Supply – most leveraged play in town
 Mosvold Supply with strong equity upside on rising asset values
 NAV +55% on 10% increase in asset values
 Vs. peer group average 30%
 Ignoring 2x Mosvold Supply options
 Mosvold Supply the only pure play on high-end, large AHTS
 Newbuild prices still on an upward trend (squeeze on equipment suppliers)
 Mosvold Supply with opportunistic approach
 Chartering/Re-sale/Business combinations/Expansion
% Chg in Equity Value from 10% change in asset values
60%
55%
50%
40%
31%
33%
30%
30%
20%
10%
0%
Mosvold
SIOFF
REM
Peer Group Avg
Source: Pareto Securities ASA
28
Confidential
Long-term scenario: attractive IRR
 12% IRR on equity based on Pareto 2009E rate forecast



NOK 275k/d
Including pre-delivery construction phase
Exit 5-yr post delivery (2014E) at depreciated book values
 33% IRR on equity assuming rates reflecting 3-yr average



NOK 450k/d
Including pre-delivery construction phase
Exit 5-yr post delivery (2014E) at depreciated book values
Mosvold Supply - Project Return Scenarios
IRR (Pareto rates/NOK 275k/d)
Gross Cash Flow
USDm
Equity Cash Flow
IRR project
IRR equity
Asset DCF @8%
USDm
Implied EV/EBITDA
Implied P/E yr1
IRR (3yr avg rates/NOK 450k/d)
Gross Cash Flow
Equity Cash Flow
IRR project
IRR equity
Asset DCF @8%
Implied EV/EBITDA
Implied P/E yr1
Source: Company/Pareto Securities ASA
USDm
USDm
2007E
(36)
(31)
9%
12%
81
7.3 x
4.0 x
2008E
(20)
0
2009E
(58)
0
2010E
(39)
0
2011E
23
0
2012E
23
0
2013E
22
0
2014E
168
69
2007E
(36)
(31)
20%
33%
144
3.9 x
1.1 x
2008E
(20)
0
2009E
(56)
0
2010E
(23)
0
2011E
43
20
2012E
43
28
2013E
43
29
2014E
188
91
29
Content
1) Introduction
2) The assets
3) The market
4) Company set-up
5) Key financials
6) Summary
30
Confidential
Investment case
 Mosvold with opportunistic approach to high-end AHTS market
 Mosvold Supply Ltd (Cyprus) initiated and backed by Mosvold with substantial experience and track record
from offshore drilling, supply and shipping
 Pure and leveraged play on high-end, large AHTS vessels
 Based on attractive turnkey newbuild contracts and proven Vik Sandvik design
 2x AHTS (Vik Sandvik 491 Clean Design) with total USDm 167 all-in delivered price (Oct-09/Jun-10 delivery)
vs approx USDm 208 quotes from western European yards
 2x individual options for similar vessels (USDm 80/82 1) with calls 15 Sep 2007 and 30 Jan 2008,
respectively). Expected delivery late 2010 and late 2010/early 2011
 Robust market outlook
 High-end AHTS order book balanced by strong demand (rig/FPSO/field developments), stricter safety rules
and environmental issues
 Attractive payment schedule and contract terms justifying leveraged capital structure
 USDm 32 equity, USDm 30 bond and USDm 112 take-out financing
 Significant equity value potential
 Equity replacement value approx USDm 70 based on current newbuild quotes
 3-yr historical average AHTS day rates yielding P/E 1.2x and EV/EBITDA 4x (2 vessels)
 Additional value from 2x attractive newbuild options
 Alternative strategies to be actively pursued by Mosvold
1) Will be adjusted acc. to price changes on critical equipment
31
Confidential
Strong equity return potential
 Current asset replacement cost
estimated at NOKm 625 per vessel
(delivered price)
 Mosvold equity worth USDm 66 on
asset replacement values

+ 90% on initial USDm 35 market cap
 Mosvold equity worth USDm 86 on
asset replacement values incl. 2x
options 1)
 >USDm 100 equity value potential
based on 3-yr average earnings
scenario




Mosvold Supply Equity Potential
Implying USDm 208 (2x AHTS)
Ignoring value of 2x Mosvold options
EBITDA USDm 44
Assuming target EV/EBITDA 5.5x
Implying P/E 3.6x on target valuation
3x initial equity valuation
USD million


110
100
90
80
70
60
50
40
30
20
10
0
102
86
66
35
Initial mkt cap
Repl cost
Repl cost incl
options 1)
Earnings
Potential
1) Options assumed to be USD 10m in the
money vs. alternative quotes
Source: Pareto Securities ASA
32