NODL: Announces contemplated spin-off and private placement in its subsidiary Northern Rig Holding Ltd.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Northern Drilling Ltd. (“NODL”) is contemplating to spin-off its two harsh environment rigs, West Mira and West Bollsta, together with related operating companies through its wholly-owned subsidiary Northern Rig Holding Ltd. (to be renamed Northern Ocean Ltd.) (“NOL”). With West Mira having commenced operations for Wintershall Norge AS and West Bollsta on schedule for contract start-up with Lundin Norway AS, expected in 2Q 2020, a separation is expected to crystalize the underlying values of NODL’s harsh environment fleet. NOL will benefit from a high quality fleet with strong contract coverage, a best in class balance sheet and 100% exposure to a harsh environment market that continues to recover. It is the opinion of the Board of Directors that a spin-off will improve flexibility for the harsh environment rigs and potentially accelerate NOL’s ability to return cash to shareholders.

In order to finance the remaining ready to drill cost for West Mira and West Bollsta, while preserving its best in class balance sheet, NOL is contemplating a private placement (the “Private Placement“) of new ordinary shares (the “Offer Shares“) for gross proceeds of approx. USD 100 million. The subscription price for the Offer Shares will be determined by the Board of directors of NOL based on an accelerated bookbuilding process.

NOL has received credit approval from lenders to increase its existing USD 400 million term loan facility by USD 50 million in the form of an RCF. The interest rate for the RCF is Libor plus 350 bps which is considered attractive.

NODL is contemplating an exchange offer (the “Exchange Offer”) as further explained below, where NODL shareholders can choose to exchange a portion of their NODL shares for NOL shares. The Exchange Offer is expected to be launched in Q1 2020 (if made) where NODL currently intends (to the extent possible) to offer substantial parts of its NOL shares to existing NODL shareholders.

Private Placement

The Private Placement is directed towards investors subject to, and in compliance with, applicable exemptions from relevant prospectus or registration requirements. NOL has retained DNB Markets, a part of DNB Bank ASA, Danske Bank, Norwegian Branch, Arctic Securities AS, Fearnley Securities AS, Pareto Securities AS and Skandinaviska Enskilda Banken AB (publ) as managers in the Private Placement (collectively the “Managers“).

The bookbuilding period for the Private Placement will start today, 3 December 2019 at 16:30 (CET) and will close on 4 December 2019 at 08:00 (CET). NOL reserves the right to close or extend the application period at any time and for any reason at its sole discretion and without notice. The minimum order size and allocation in the Private Placement will be the USD equivalent of EUR 100,000, provided that NOL may, at its sole discretion, offer and allocate an amount below EUR 100,000, pursuant to any applicable exemptions from the prospectus requirement being available. Hemen Holding Limited, a company indirectly controlled by trusts established by Mr John Fredriksen for the benefit of his immediate family, and being the largest shareholder in NODL, has pre-subscribed for and will be allocated Offer Shares equivalent to a minimum of approx. USD 40 million.

Allocation of Offer Shares will be made at the discretion of the NOL’s Board of Directors in consultation with the Managers, shortly after the end of the bookbuilding period.

Completion of the Private Placement is conditional upon the necessary corporate resolutions in NOL being made and the Offer Shares having been fully paid and validly issued. The Private Placement will be cancelled if the conditions are not fulfilled, and may be cancelled by NOL in its sole discretion at any time and for any reason.

In order to facilitate timely delivery of issued shares, delivery of Offer Shares allocated in the Private Placement is expected to be made by delivery of shares in NOL borrowed by the Managers from NODL, through a share lending agreement to be entered into between NODL, NOL and the Managers. The Managers will settle the share loan from NODL with the new shares issued in connection with the Private Placement.

Listing venue and Exchange Offer

NOL is currently a wholly owned subsidiary of NODL. The shares of NOL are expected to be registered on N-OTC shortly after completion of the Private Placement. NOL has already initiated the process and is planning, in Q1 2020, to apply for listing of its shares on Oslo Børs, or alternatively Oslo Axess (the “Listing”), subject to fulfilling the listing conditions including approval by the Oslo Stock Exchange, approval of a prospectus by the Norwegian Financial Supervisory Authority (the “Prospectus”), and receipt of required consents from authorities on Bermuda.

NODL is contemplating to offer its shareholders (who may lawfully participate in such offer, if made) to exchange certain of their shares in NODL for shares in NOL (the “Exchange Offer”), conditioned on inter alia necessary corporate resolutions and approval of the Prospectus. It is currently contemplated that the Exchange Offer will be structured as a share buy-back by NODL, with payment by NODL in the form of shares in NOL to accepting NODL shareholders. Shares bought back by NODL will be immediately cancelled. Shareholders in NODL which do not accept the Exchange Offer will remain as shareholders in NODL for shares they own. Depending on the terms and acceptance ratio of the Exchange Offer, it is expected that NODL will cease to be a parent company of NOL at the completion of such offer. It is further expected that NODL will remain a listed company on Oslo Børs.

The terms and conditions for the Exchange Offer, if made, including the number of shares in NODL to be offered for exchange, exchange ratio between NODL shares and NOL shares, structure and conditions, are not decided and will be considered at a later stage. Any Exchange Offer will be made through the Prospectus and is expected to take place immediately prior to the Listing.

Potential Subsequent Offering

Subject to (i) completion of the Private Placement, (ii) prevailing market price of NOL’s shares being higher than the subscription price, (iii) the receipt of required consents from authorities on Bermuda, and (iv) approval of the Prospectus, NOL will consider to carry out a subsequent offering (the “Subsequent Offering”) of new shares in NOL. A Subsequent Offering will be, if made, and on the basis of the Prospectus, directed towards shareholders in NODL who (i) are shareholders in NODL as of expiry of the bookbuilding period for the Private Placement, as registered as shareholders in NODL’s register of shareholders with the Norwegian Central Securities Depositary (Nw. Verdipapirsentralen) (the “VPS”) as of 5 December 2019, (ii) are not allocated Offer Shares in the Private Placement, and (iii) are not resident in a jurisdiction where such offering would be unlawful or, for jurisdictions other than Norway, would require any prospectus, filing, registration or similar action (the “Eligible Shareholders”). The Eligible Shareholders will be granted non-tradable subscription rights. The subscription period in the Subsequent Offering is expected to commence shortly after publication of the Prospectus, expected in Q1 2020. The subscription price in the Subsequent Offering will be the same as in the Private Placement. NODL will issue a separate stock exchange notice including the ex. date, record date and other information for the participation in the Subsequent Offering if and when finally resolved.

A company presentation including further details about NODL, NOL and the contemplated reorganisation is available on NODL’s website at the following link: www.northerndrillingltd.com/

Northern Ocean – Company Presentation

Advokatfirmaet BAHR AS acts as legal advisor in connection with the Private Placement.

Contacts:

Scott McReaken, CEO in Northern Drilling Ltd.

Tel. +1 832 509 7191

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IMPORTANT NOTICE

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of NODL or NOL. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. Neither NODL nor NOL intend to register any part of the offering or their securities in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to “qualified institutional buyers” as defined in Rule 144A under the Securities Act.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression “Prospectus Regulation” means Regulation 2017/1129 as amended together with any applicable implementing measures in any Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “strategy”, “intends”, “estimate”, “will”, “may”, “continue”, “should” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although NODL and NOL believe that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control.

Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in public sector investment levels, changes in the general economic, political and market conditions in the markets in which NODL or NOL operate, NODL’s and NOL’s ability to attract, retain and motivate qualified personnel, changes in NODL’s and NOL’s ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Neither NODL nor NOL guarantees that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this document.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. Neither NODL nor NOL undertakes any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

Neither the Managers nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities NODL or NOL. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.