Norwegian Property ASA ("Norwegian Property" or the "Company") has over a period had an objective to strengthen the balance sheet and to secure a robust financial position for the Company. In order to achieve this, Norwegian Property has been working to improve debt arrangements and covenant structures as well as evaluated different strategies to raise equity.

 

The Board of Directors of Norwegian Property is proposing to issue up to 201.6 million new shares through a private placement ("the Private Placement"). The subscription price will be determined through a book-building process conducted by the Managers with an indicative price from NOK 6.00 to NOK 7.20 per share. The final subscription price may, however, be set within, below or above the indicative price range. The minimum order in the Private Placement has been set to the number of shares that equals an aggregate subscription price of at least NOK 500,000. The proceeds of the Private Placement will be used for repayment of debt in order to strengthen the balance sheet and improve covenant ratios.

 

The book-building period will commence today (9 June 2009) at 17:30 CET and close on 10 June 2009 at 08.30 CET. The Board of Directors of Norwegian Property may, however, at any time resolve to close or extend the book building period at its own discretion, but in no event earlier than 9 June 2009 at 24:00 CET.

 

The Managers have received significant pre-commitments from existing shareholders and new investors

 

The Private Placement is conditional upon inter alia, the extraordinary general meeting in the Company to resolve to write-down the par value of the Company's shares from NOK 25 to NOK 0.5 and to approve the Private Placement.

 

The Board reserves the right, in its absolute discretion, to cancel the Private Placement at any time.

 

In addition to proposing the Private Placement, Norwegian Property has negotiated with its key banks potential amendments and changes to the current loan agreements. Several amendments with respect to inter alia covenants and repayment dates for the respective loan agreements have been achieved including, but not limited to (i) securing and extending of the remaining OPAS facility from October 2010 to June 2012; (ii) refinancing of the SEK 565 million stand-alone facility maturing in September 2009 for three years to 2012; (iii) secured available financing to repay 2nd priority bond loan maturing March 2010; and (iv) obtained waivers for LTV and ICR covenants on the "NOK 11,000 million Term Loan and Revolving Credit Facility" and "Oslo Property AS NOK 1,700 million Multicurrency Acquisition and Guarantee Facility Agreement" level up to and including Q2 2011. These amendments are subject to a successful Private Placement and the Private Placement is conditional upon the credit committees in the key banks approving the amendments without any material changes.

 

Norgani Hotels and Norwegian Property have entered into an amendment agreement with the Fearnley syndicate whereby the put option related to the four Danish hotels can be exercised from 1 March 2011 (instead of 1 January 2010) until 31 December 2012, with a three months settlement period (instead of 30 days), against a cash consideration. This amendment agreement is subject to a successful Private Placement.

 

Subject to completion of the Private Placement, the Board of Directors will propose to conduct a subsequent repair offering for the shareholders not being offered to participate in the Private Placement in order to enable them to maintain their relative shareholding in the Company.

 

Norwegian Property has retained Arctic Securities ASA, Pareto Securities AS and Pareto Private Equity AS (collectively referred to as the "Managers") to advice on and effect the potential Private Placement directed towards Norwegian investors and international institutional investors.

 

Enclosed is the Company Presentation that gives more detailed information of the Company and the Company's situation.

 

For further information, please contact

Tormod Hermansen, Chairman of the Board, tel. +47 91 705 220

Petter Jansen, Managing Director, tel. +47 90 098 728

Mari Thjømøe, CFO, tel. +47 90 777 824

The contents of this announcement have been prepared by and are the sole responsibility of Norwegian Property. The Managers are acting exclusively for Norwegian Property and no one else and will not be responsible to anyone other than Norwegian Property for providing the protections afforded to their respective clients, or for advice in relation to the contemplated private placement and possible subsequent offering, the contents of this announcement or any of the matters referred to herein.

 

The distribution of this announcement and other information in connection with the private placement and the possible subsequent offering may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

 

This announcement may not be used for, or in connection with, and does not constitute, any offer to sell, or an invitation to purchase, any securities. The private placement and the possible subsequent offering will not be made in any jurisdiction or in any circumstances in which such offer or solicitation would be unlawful.

 

This announcement is not an offer to sell or the solicitation of any offer to buy any Norwegian Property shares or other securities of Norwegian Property (the Securities) in the United States, nor shall there be any sale of the Securities in any state thereof in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The Securities may only be offered and sold in the United States pursuant to an effective registration statement filed with the United States Securities and Exchange Commission or pursuant to an exemption from the registration and prospectus delivery requirements of the United States Securities Act of 1933, as amended.  Any public offering of the Company's securities in the United States will be made only by means of a prospectus that may be obtained from the Company and that will contain detailed information about the Company and management, as well as financial statements and other information relevant to investors

 

The Norwegian Property shares have not been and will not be registered under the applicable securities laws of Australia, Canada or Japan and may not be offered or sold within Australia, Canada or Japan.

 

In the United Kingdom, this announcement is directed only at persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the Financial Promotion Order), (ii) are persons falling within Article 49(2)(a) to (d) (high net worth companies, unincorporated associations etc) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated. This announcement is directed only at such persons and must not be acted on or relied on by persons in the United Kingdom who are not such persons. Any investment or investment activity to which this announcement relates is available in the United Kingdom only to such persons and will be engaged in only with such persons and no other persons in the United Kingdom should rely or act upon this announcement.

 

All investment is subject to risk. The value of the Norwegian Property shares may go down as well as up. Past performance is no guarantee of future returns. Potential investors are advised to seek expert financial advice before making any investment decision.