Cecon Completes Bonds Issuance and Vessels Construction Financing

Cecon ASA (“Cecon”) successfully completed the construction re-financing of three vessels owned by three subsidiaries (Cecon Shipping 1 AS, Cecon Shipping 2 AS and Cecon Shipping 3 AS, collectively referred to as the “Subsidiaries”) being built at the shipyard of Chantier Davie Canada Inc. in Lévis, Quebec (“Davie”).

This re-financing was structured through a four tranches bond issuance facility with a maximum aggregate amount of US$282,500,000 (the “Senior Financing”). This was utilized in part by Cecon for a debt reduction through the acquisi-tion of a loan made by Export Development Canada (“EDC”) to Cecon in February 2009. The Senior Financing will also permit full financing for the completion of three vessels under construction at Davie's shipyard, pursuant to completion contracts entered into between the Subsidiaries and Davie. Tranches A and B bonds (totalling US$107,500,000) were issued at closing to certain funds managed by York Capital Management Global Advisors, LLC (“York”). Tranches C and D bonds (totalling US$175,000,000) will be issued at a later time upon the satisfaction of various terms of a commitment agreement entered into with certain funds managed by York. Norsk Tillitsmann ASA (“Norsk”) is acting as bond trustee on behalf of the bondholders (the “Senior Bondholders”) under the Senior Financing.

Cecon has further entered into a Second Amended and Restated Bond Loan Agreement, amending the existing US$122,000,000 bond loan agreement (the “Junior Financing”) with the bondholders thereunder (collectively, the “Junior Bondholders”), with Norsk also acting as bond trustee on behalf of the Junior Bondholders.

The Senior Financing entailed a reorganisation of Cecon's vessel-building activities under a new subsidiary called Rever Offshore AS (“Rever”) of which York owns 15 per cent and Cecon holds 85 per cent. This reorganisation also involved transfer of ownership of the Subsidiaries to Rever and the settlement of all intra-group debt.

The Senior Financing and the Junior Financing are secured by the registration of firstranking Builder's Mortgages and other charges on all three vessels, on other charges on related assets, on the shares in the Subsidiaries, on the other assets of Rever and on the shares of Rever owned by Cecon, as well as by a guarantee of Cecon.

Cecon, Rever and the Subsidiaries were represented in Canada by Fasken Martineau DuMoulin LLP, Montreal, with a team that included Alain Riendeau, Francis Trifiro and Svetlana Samochkine; and in Norway by Wikborg, Rein & Co., with a team that included Cecilie Grue, Vidar Løhre and Mudassar Amin.

York and the Senior Bondholders were represented in Canada by Stikeman Elliott LLP, Montreal, with a team that included Vincent Prager, François Ouimet, Lana Rabinovitch, Michel Bolduc, Marlene Kempthorne, Joseph Reynaud and Matthew Liben; in the United States by Paul Hastings LLP, with a team that included William Schwitter, Edward Holmes, Randal Palach and Farah Tariq; and in Norway by Thommessen AS, with a team that included Halvor Mansåker, Ståle Kristiansen, Heidi Dillevig and Ingrid Solum.

The Junior Bondholders were represented in Canada by Blake, Cassels & Graydon LLP in Montreal, with a team that included Viorelia Guzun, Bernard Boucher and Ryan Hillier; and in the United Kingdom by Bingham McCutchen LLP, with a team that included Liz Osborne, Peter Ibrahim and Gordon Davidson; and in Norway by BA-HR DA, with a team that included Magnus Tønseth, Erik Langseth and Trygve Nilssen.

Davie was represented by Borden Ladner Gervais LLP in Montreal, with a team that included Marc Babinski, Vincent Frenette, Jean-Marie Fontaine and Yaniv Saragosti.

EDC was represented by John O'Connor of Langlois Gaudreau O'Connor LLP, Quebec.

Lawyer(s)

Francis Trifiro Vincent Frenette François H. Ouimet Alain Riendeau Marc A. Babinski Ryan Hillier Bernard Boucher Viorelia Guzun Yaniv Saragosti Lana Rabinovitch Jean-Marie Fontaine Matthew Liben Vincent M. Prager John G. O'Connor Joseph Reynaud

Firm(s)

Fasken Martineau DuMoulin LLP Stikeman Elliott LLP Paul, Hastings, Janofsky & Walker LLP Thommessen Krefting Greve Lund AS Blake, Cassels & Graydon LLP Bingham McCutchen LLP BA-HR Borden Ladner Gervais LLP (BLG) Langlois Gaudreau O'Connor Wikborg, Rein & Co.