Deep Sea Supply in Brazil PSV and AHTS joint venture

DESS PSVJANUARY 17, 2013 — Deep Sea Supply Plc (DESS), in which John Fredriksen's Hemen Holding Ltd. is the largest shareholder, is entering a joint venture with BTG Pactual Oil & Gás Participações S.A., an investment vehicle of Banco BTG Pactual S.A. a leading Latin American investment bank. The JV is being set up to own and operate Platform Supply Vessels and Anchor Handling Tug and Supply Vessels  in Brazil.

The JV will be owned 50/50 by BTG Pactual and DESS and will initially own and operate a fleet of 15 vessels. The JV will also acquire six large PSVs currently under construction at Sinopacific Shipbuilding and will look to acquire additional PSVs and AHTSs. By implementing the JV, the parties will combine DESS' knowledge and experience within the offshore supply industry with BTG Pactual's local presence, and further develop its position as a large player in the Brazilian market through the JV.

"We see big advantages in developing the business in Brazil together with a strong, local partner and we consider BTG Pactual an excellent strategic partner." says Finn Amund Norbye, CEO of DESS.

BTG Pactual is to purchase a 50 percent ownership interest in each of Deep Sea Supply Navegação Marítima Ltda. and Deep Sea Supply Serviços Marítimos Ltda from DESS.

Deep Sea Navegação and Deep Sea Serviços have an organization of 20 Brazilian employees conducting among others the chartering and the technical and crew management of DESS' fleet of vessels operating in Brazil from offices in Rio and Macaé.

Deep Sea Navegação owns the 2012 built 4,700 dwt PSV Sea Brasil recently delivered from STX Offshore do Brasil and has an "EBN" license to operate and charter vessels in the Brazilian market.

DESS will transfer nine AHTSs and 5 PSVs to the JV.

In exchange, the JV will make a cash payment equal to the equity value of the vessels and will take over the vessels' current financing.

The JV will acquire six large PSVs currently under construction at Sinopacific. These 4,700 dwt PSVs, which are expected to be delivered in 2013, are of Ulstein PX 105  are well suited for operation in the Brazilian market, especially with regard to pre-salt operations. The vessels will be acquired from PSV Holding Inc., an affiliate of Hemen Holding Ltd.

PSV Holding Inc. will be responsible for the completion of each vessel including supervision costs. Both JV partners will pay in cash at the closing of the JV transaction an equity portion of the financing of these vessels and the JV will work to secure necessary bank financing for the vessels prior to their delivery.

The transactions imply an enterprise value of the JV, upon delivery of all the vessels. of approximately $852 million where the existing vessels account for approximately $578 million and the remaining $274million is related to the newbuildings.

The JV partners will also make an equity injection in the JV of $24 million each to meet the JV's working capital requirements. The vessels to be owned and operated by the JV will be managed by Deep Sea Navegação together with certain DESS subsidiaries.

The JV will be governed by a board consisting of two directors from each of DESS and BTG Pactual.

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