Western Bulk ASA (a Public Limited Liability Company organised under - - PDF document

PROSPECTUS

Western Bulk ASA

(a Public Limited Liability Company organised under the Laws of Norway) Initial Public Offering of minimum 13 636 364 and maximum 20 000 000 New Shares, and a secondary sale of minimum 29 687 697 and maximum 42 414 970 Secondary Shares Indicative price range from NOK 15 to NOK 22 per Offer Share Listing of the Company's Shares on Oslo Børs, alternatively Oslo Axess

___________________________________________

The information contained in this prospectus (the "Prospectus") relates to (a) the listing and admission to trading of ordinary shares, each with a par value of NOK 0.50 (the "Shares") in Western Bulk ASA (the "Company" or "Western Bulk") on Oslo Børs, alternatively Oslo Axess, and (b) the initial public offering (the "Offering") of minimum 43 324 061 and maximum 62 414 970 Shares (the "Offer Shares") in the Company. The Offering consists of a primary offering of minimum 13 636 364 and maximum 20 000 000 new shares, each with a par value of NOK 0.50 (the "New Shares") offered by the Company and a secondary sale of minimum 29 687 697 and maximum 42 414 970 Shares in the Company offered by Kistefos AS (the "Principal Selling Shareholder") and by certain shareholders controlled by the Company's management (the "Management Selling Shareholders", and together with the Principal Selling Shareholder, the "Selling Shareholders") (the "Secondary Shares"), (the New Shares together with the Secondary Shares, the "Offer Shares"), in connection with an institutional

• ffering in which Offer Shares are offered a) to institutional and professional investors in Norway, (b) to investors outside Norway and the

United States, pursuant to applicable exemptions from local prospectus requirements and other filing requirements and in compliance with Regulation S under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and (c) in the United States to qualified institutional buyers ("QIBs") as defined in, and in reliance on Rule 144A under the U.S. Securities Act; subject to a minimum application of NOK 2 000 000 (the "Institutional Offering"), a retail offering to the public in Norway subject to a minimum application amount of NOK 10 500 and a maximum application amount of NOK 1 999 999 (the "Retail Offering"), and an employee offering directed at Eligible Employees (as defined in Section 20 "Definitions and Glossary of Terms") (the "Employee Offering") subject to a minimum application amount of NOK 10 500. In addition, the Managers may elect to over-allot a number of additional shares equalling up to 10% of the number of Offer Shares (the "Additional Shares"). The Selling Shareholders have granted ABG Sundal Collier, on behalf of the Managers, an over-allotment option (the "Over-Allotment Option") to purchase a corresponding number of Shares to cover any such over-allotments. The offer period for the Institutional Offering (the "Bookbuilding Period") is expected to take place from 3 October 2013 at 9.00 a.m. CET until 17 October 2013 at 4.30 p.m. CET. The order period for the Retail Offering and the Employee Offering is expected to take place from and including 3 October 2013 at 9.00 a.m. CET until 17 October 2013 at 12.00 p.m. CET (the "Order Period"). The Bookbuilding Period and/or the Order Period may be shortened or extended at the Company's discretion, but will in no event close earlier than 10 October 2013 at 4.30 p.m. CET or be extended beyond 31 October 2013 at 4.30 p.m. CET. Investing in the Offer Shares involves a high degree of risk. Prospective investors should read this entire Prospectus and, in particular, Section 2 "Risk Factors" beginning on page 14, when considering an investment in the Offer Shares. The Offer Shares have not been and will not be registered under the U.S. Securities Act, and may not be offered or sold except: (i) within the United States to QIBs in reliance on Rule 144A or another exemption from the registration requirements under the U.S. Securities Act; or (ii) to non-U.S. persons in offshore transactions compliance with Regulation S under the U.S. Securities Act, and in accordance with any applicable securities laws of any state or territory of the United States or any other jurisdiction. Transfer of the Offer Shares will be restricted and each purchaser of the Offer Shares in the United States will be required to make certain acknowledgements, representations and agreements, as described under Section 7.2 "Transfer restrictions". This is an initial public offering; prior to the Offering there was no public trading market for the Shares, and the Shares are not listed on any stock exchange or regulated market. The Company intends to apply for listing and trading of the Shares on Oslo Børs, alternatively Oslo Axess, (the "Listing"), and the listing application is expected to be considered by the board of directors of Oslo Børs on 15 October 2013. Completion of the Offering is conditional on (i) the Company's Listing Application being approved by Oslo Børs, (ii) that any conditions for such approval being fulfilled by the Company and (iii) the Board of Directors, at its sole discretion, in consultation with the Managers, resolving to issue the New Shares and complete the Offering. If any of these conditions are not met, the Offering will be canceled, all orders for Offer Shares will be disregarded, any allocations made will be deemed not to have been made and payments made by investors will be returned without interest. No financial claim or compensation can be claimed against the Company or the Managers if the Offering is not completed.

___________________________________________

Joint Lead Managers and Bookrunners

ABG Sundal Collier Pareto Securities Swedbank First Securities The date of this Prospectus is 2 October 2013

i

Important information

This Prospectus has been prepared by the Company in connection with the application for Listing of the Company's shares on Oslo Børs, or alternatively Oslo Axess and the Offering conditional on the Listing. For the definitions of terms used throughout this Prospectus, see Section 20 "Definitions and Glossary of Terms" of this Prospectus. _______________________ The Company has furnished the information in this Prospectus. This Prospectus has been prepared in compliance with the Norwegian Securities Trading Act Chapter 7 and related legislation, including the EC Commission Regulation EC/809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 regarding information contained in prospectuses (the "Prospectus Directive") as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements (hereafter "EC Regulation 809/2004"). The Financial Supervisory Authority of Norway (the "Norwegian FSA") has reviewed and approved this Prospectus in accordance with the Norwegian Securities Trading Act Sections 7-7 and 7-8. The Norwegian FSA has not controlled or approved the accuracy or completeness of the information included in this Prospectus. The Prospectus has been published in an English version only. All inquiries relating to this Prospectus should be directed to the Company or the Managers. No other person has been authorised to give any information, or make any representation on behalf of, the Company in connection with the Listing and the Offering and, if given or made, such other information or representation must not be relied upon as having been authorized by the Company or the Managers. The information contained herein is as of the date hereof and subject to change, completion or amendment without notice. There may have been changes affecting the Company or its subsidiaries (together the "Group") subsequent to the date of this Prospectus. Any new material information and any material inaccuracy that might have an effect on the assessment of the Shares arising after the publication of this Prospectus and before the Shares are listed on Oslo Børs, or alternatively Oslo Axess, will be published and announced promptly as a supplement to this Prospectus in accordance with section 7-15 of the Norwegian Securities Trading Act. Neither the delivery of this Prospectus nor the completion of the Listing and Offering at any time after the date hereof will, under any circumstances, create any implication that there has been no change in the Company's affairs since the date hereof or that the information set forth in this Prospectus is correct as of any time since its date. The distribution of this Prospectus and the Offering and sale of the Offer Shares in certain jurisdictions may be restricted by law. This Prospectus does not constitute an offer of, or an invitation to purchase, any

• f the Offer Shares in any jurisdiction in which such offer or sale would be unlawful. No one has taken

any action that would permit a public offering of Shares to occur outside of Norway. Accordingly, neither this Prospectus nor any advertisement or any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and

• regulations. The Company and the Managers require persons in possession of this Prospectus to inform

themselves on, and to observe, any such restrictions. The Offer Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and regulations. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. For further information on the manner of distribution of the Offer Shares and the selling and transfer restrictions to which they are subject, see Section 7 "Selling and Transfer Restrictions".

ii

The contents of this Prospectus are not to be construed as legal, business or tax advice. Each reader of this Prospectus should consult with its own legal, business or tax advisor as to legal, business or tax aspects of an investment in the Offer Shares. If you are in any doubt about the contents of this Prospectus you should consult your stockbroker, bank manager, lawyer, accountant or other professional adviser. ABG Sundal Collier Norge ASA, Pareto Securities AS and Swedbank First Securities (acting as Joint Lead Managers and Bookrunners) (collectively, the "Managers") make no representation or warranty, whether express or implied, as to the accuracy or completeness of such information, and nothing contained in this Prospectus is, or shall be relied upon as, a promise or representation by the Managers. In the ordinary course of their respective businesses, the Managers and certain of their respective affiliates have engaged, and may continue to engage, in investment and commercial banking transactions with the Company and its subsidiaries. NOTICE TO NEW HAMPSHIRE RESIDENTS NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR

• TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY

PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. NOTICE TO INVESTORS IN THE UNITED STATES Because of the following restrictions, prospective investors are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of the Shares. The Offer Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States and may not be offered, sold, pledged or otherwise transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable state securities laws. Accordingly, the Offer Shares will not be offered or sold within the United States, except in reliance on the exemption from the registration requirements of the U.S. Securities Act under Rule 144A. The Offer Shares will be offered outside the United States in compliance with Regulation S. Prospective purchasers are hereby notified that sellers of Offer Shares may be relying on the exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A under the U.S. Securities Act. See Section 7.2 "Transfer Restrictions". Any Shares offered or sold in the United States will be subject to certain transfer restrictions as set forth under Section 7.2 "Transfer Restrictions". The securities offered hereby have not been recommended by any United States federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not passed upon the merits of the Offering or confirmed the accuracy or determined the adequacy of this Prospectus. Any representation to the contrary is a criminal offense under the laws of the United States.

iii

In the United States, this Prospectus is being furnished on a confidential basis solely for the purposes of enabling a prospective investor to consider purchasing the particular securities described herein. The information contained in this Prospectus has been provided by the Company and other sources identified herein. Distribution of this Prospectus to any person other than the offeree specified by the Managers or their representatives, and those persons, if any, retained to advise such offeree with respect thereto, is unauthorised and any disclosure of its contents, without prior written consent of the Company, is prohibited. This Prospectus is personal to each offeree and does not constitute an offer to any other person or to the public generally to purchase Offer Shares or subscribe for or otherwise acquire any Shares. NOTICE TO UNITED KINGDOM INVESTORS This Prospectus is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth companies, and other persons to whom it 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"). The Offer Shares are only available to, and any invitation, offer

• r agreement to subscribe, purchase or otherwise acquire such Shares will be engaged in only with, relevant
• persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

NOTICE TO INVESTORS IN THE EEA In relation to each Member State of the EEA which has implemented the Prospectus Directive (each, a "Relevant Member State"), an offer to the public of any Offer Shares may not be made in that Relevant Member State, other than the offers contemplated by this Prospectus in Norway once this Prospectus has been approved by the Norwegian FSA and published in accordance with the Prospectus Directive as implemented in Norway, except that an offer to the public of any Offer Shares in a Relevant Member State may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in the Relevant Member State: (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; (b) to fewer than 100, or if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Shares shall result in a requirement for the publication by the Company or any Manager of a prospectus pursuant to Article 3 of the Prospectus Directive or supplement to a prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes hereof, the expression an "offer to the public" in relation to any Offer Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Offer and the shares to be offered so as to enable an investor to decide to purchase any Offer Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in each Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

iv

NOTICE TO INVESTORS IN SINGAPORE This Prospectus or any other offering material relating to the Offer Shares has not been and will not be registered as a prospectus with the Monetary Authority of Singapore, and the Offer Shares will be offered in Singapore pursuant to an exemption under Section 273(1)(f) of the Securities and Futures Act, Chapter 289 of Singapore (the "Securities and Futures Act"). Accordingly the Offer Shares may not be offered or sold, or be the subject of an invitation for subscription or purchase, nor may this Prospectus or any other offering material relating to the Offer Shares be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to a qualifying person (as defined in Section 273 of the Securities and Futures Act) in relation to the Group, and in accordance with the conditions specified in Section 273 of the Securities and Futures Act or (b) otherwise pursuant to, and in accordance with the conditions of, any

• ther applicable provision of the Securities and Futures Act.

TABLE OF CONTENTS 1. SUMMARY .......................................................................................................................................... 2 2. RISK FACTORS ................................................................................................................................ 14 3. RESPONSIBILITY FOR THE PROSPECTUS ................................................................................. 28 4. GENERAL INFORMATION ............................................................................................................. 29 5. USE OF PROCEEDS; REASONS FOR THE OFFERING ............................................................... 31 6. THE TERMS OF THE OFFERING ................................................................................................... 32 7. SELLING AND TRANSFER RESTRICTIONS ................................................................................ 50 8. PRESENTATION OF THE COMPANY ........................................................................................... 54 9. INDUSTRY OVERVIEW .................................................................................................................. 70 10. BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE ................................................................................................................................. 84 11. SELECTED OPERATING AND FINANCIAL INFORMATION .................................................... 98 12. OPERATING AND FINANCIAL REVIEW ................................................................................... 105 13. LIQUIDITY AND CAPITAL RESOURCES ................................................................................... 111 14. DIVIDENDS AND DIVIDEND POLICY ....................................................................................... 124 15. SHARES AND SHARE CAPITAL .................................................................................................. 126 16. SECURITIES TRADING IN NORWAY ......................................................................................... 135 17. TAXATION ...................................................................................................................................... 140 18. LEGAL AND ARBITRATION PROCEEDINGS ........................................................................... 144 19. ADDITIONAL INFORMATION ..................................................................................................... 146 20. DEFINITIONS AND GLOSSARY OF TERMS .............................................................................. 148 APPENDICES APPENDIX 1: ORDER FORM FOR THE RETAIL OFFERING (ENGLISH) ..................................................... I APPENDIX 2: ORDER FORM FOR THE RETAIL OFFERING (NORWEGIAN) ........................................... IV APPENDIX 3: ORDER FORM FOR THE EMPLOYEE OFFERING (ENGLISH) ........................................... VI APPENDIX 4: ORDER FORM FOR THE EMPLOYEE OFFERING (NORWEGIAN)................................. VIII APPENDIX 5: NORWEGIAN TRANSLATION OF THE SUMMARY (NORSK SAMMENDRAG) .............. X

2 1. SUMMARY Summaries are made up of disclosure requirements known as "Elements". These elements are numbered in Sections A – E (A.1 – E.7). This summary contains all the Elements required to be included in a summary for this type of securities and

• issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence
• f the Elements.

Although an Element may be required to be inserted in the summary because of the type of securities and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of "not applicable". Section A – Introduction and warnings A.1 Introduction and warnings This summary should be read as an introduction to the Prospectus. Any decision to invest in the Offer Shares should be based on consideration of the Prospectus as a whole by the investor. Where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the relevant European Union member states, have to bear the costs of translating the Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities. A.2 Consent to the use of the prospectus by financial intermediaries Not applicable; no consent is granted by the Company to the use of the Prospectus for subsequent resale or final placement of the Shares. Section B – Issuer and any guarantor B.1 Legal and commercial name Western Bulk ASA (the "Company" or "Western Bulk"). B.2 Domicile/ Legal form/ Legislation/ Country of incorporation The Company is a public limited liability company incorporated and registered in Norway under the Public Limited Companies Act with business organisation number 980 747 026.

3 B.3 Key factors of

• perations

and principal activities The Group is an asset-light and trading-oriented dry bulk operator, using its shipping experience, customer relationships, market intelligence and trading skills to generate a margin from a high-volume activity. The Group provides vessels and transportation services for commodity producers, consumers and traders world-wide, while providing cargoes and services for vessel owners. Cargo services are provided through freight contracts (Contracts of Affreightment, or COAs) of various durations, or through single voyages fixed in the spot market. To perform the services, the Group takes in vessels mainly on time charter basis but also from time to time on voyage basis, with durations ranging from one single trip (anything from 10 to 100 days) to several years. Through its customer relationship activities and ability to offer high quality services, and based on its efficient commercial organisation, the Group has been able to build a broad supplier and customer base. The Group has increased its activity and fleet volume significantly over the last few years growing from an average fleet size of about 50-60 vessels in 2007 - 2008 to currently run a fleet of 130-150 vessels. Since 2008 the Group has done business with more than 400 new customers, and in 2012 alone it did business with more than 300 individual customers. On the back of this activity, the Group gains access to significant amounts of market information which enables the Group to identify and act on arbitrage opportunities in the market, and to take small, calculated and controlled exposures to the freight market. As such, the Group utilizes its deal flow and informational advantage to identify and act on various trading opportunities. A significant part of these opportunities arise from the Group's access to physical

• ptionality, typically the option to extend the duration of a time charter contract at a fixed

price, but also other options, such as the option to replace a nominated vessel with another vessel, the option to carry more or less volume, etc. These options give the Group flexibility to constantly optimize its portfolio, and provides upside exposure with limited downside risk. Dry bulk operation is a volume-driven margin business that requires broad and detailed market insight, systems to effectively distribute information throughout the organisation, highly professional risk management, efficient financial management and operational

• expertise. In particular, risk management is crucial to protect margins against unexpected

losses and to provide a common framework to evaluate commercial decisions on a risk- adjusted basis. The Group has therefore spent significant resources to develop and implement a comprehensive risk management infrastructure including various models to quantify risks, as well as policies and procedures put in place to limit and control market, counterpart and operational risks. This infrastructure is supported by a strong risk management culture that acknowledges risk management as a key capability and a distinct value driver for the organisation. The Group has very limited direct ownership in vessels or other tangible assets. Rather, its main assets are its brand name, its systems and its employees. However, the Company has, from 2009 entered into leases with purchase options in WB Shipholding to support and leverage from its core operation. The division has two main objectives: (1) leverage the Group's in-depth knowledge of the market and of the strengths and weaknesses of different vessel designs, as well from its relationships with yards and major ship owners, to take

• pportunistic exposures towards the asset market, and (2) to provide WB Chartering with

longer term access to vessels. B.4a Significant recent trends affecting the

• During the first 8 months of 2013, the Supramax market was on average about

12.5% lower than during the same period in 2012, whereas the spot market

4 Issuer and the industry in which it operates volatility was 58% lower.

• The Group has continued to increase its trading volumes, and the average fleet

size for the first 8 months of 2013 is about 12% larger than the average for the same period in 2012.

• In June 2013, one of the Company's largest competitors, STX Pan Ocean Co.,
• Ltd. applied for Rehabilitation under Korean bankruptcy law. While STX Pan

Ocean continues to trade its owned fleet, as well as what remains of its time chartered fleet, its activity level has been significantly reduced since the company went into receivership. B.5 Description

• f

group The Company is the parent company of the Western Bulk Group. The Company has two wholly owned subsidiaries; WB Chartering AS and WB Shipholding AS (owners of WB Management AS, WB Carriers AS, WB Pte Ltd, WB Shipowning I AS, WB Shipowning III AS, WB Shipowning IV AS and WB Shipowning V AS as illustrated below, and 51%

• f the shares in Western Bulk Shipowning II AS). The Group's main business is operated

mainly through the two subsidiaries WB Chartering AS and WB Shipholding AS. No

• perational activities are being conducted by the Company.

B.6 Notifiable voting rights Different voting rights Control As the date of this Prospectus Kistefos AS and Kistefos Investment AS, controlled by Christen Sveaas, own 96.5% of the share capital of the Company. After completion of the Offering, and assuming issuance of the maximum number of New Shares and the maximum sale of the Secondary Shares (without taking into account any Over-allotment shares sold), the companies controlled by Christen Sveaas will hold approximately 59% of the issued share capital. After completion of the Offering, and assuming issuance of the minimum number of New Shares and the minimum sale of the Secondary Shares (without taking into account any Over-allotment shares sold), the companies controlled by Christen Sveaas will hold approximately 70% of the issued share capital. As far as the Company is aware of, there is no other natural or legal person other than the above mentioned, which directly or indirectly has a shareholding in the Company above 5 per cent which is noticeable under Norwegian Law. Shareholders with ownership exceeding 5 per cent must comply with disclosure obligations according to the Norwegian Securities Trading Act section 4-2. All Shares and shareholders have equal rights, including voting rights. Christen Sveaas will, through his indirect ownership in the Company, have the ability to significantly influence the outcome of matters submitted for vote by the shareholders of

5 the Company. B.7 Selected historical key financial information The selected condensed financial information set forth in this Prospectus should be read in conjunction with the relevant financial statements and the notes to those statements which can be found on the Company's webpage, www.westernbulk.com. The selected financial data presented in this section has been derived from the audited consolidated financial statements of the Group for the year ended December 2012, 2011 and 2010. The following tables present data extracted from selected financial information for the Group as of and for the three and six months ended 30 June 2013 and 2012, and for each of the three years ended 31 December 2010, 2011 and 2012. The presented data for 2010 and 2011 are in accordance with NGAAP, while for 2011 and all succeeding periods presented, the data are in accordance with IFRS. Consolidated income statement USD (1 000)

IFRS N-GAAP 6 months ended 30 June 2013 6 months ended 30 June 2012 3 months ended 30 June 2013 3 months ended 30 June 2012 2012 2011 2011 2010 Gross revenues 521 139 548 728 278 004 278 797 1 143 580 1 027 843 1 027 843 1 081 976 Voyage expenses

• 257 323
• 275 056
• 130 455
• 137 034
• 560 257
• 435 662
• 435 662
• 338 182

T/C expenses

• 231 132
• 241 151
• 127 963
• 121 150
• 500 551
• 521 186
• 521 186
• 649 840

Other vessel expenses

• 5 899
• 5 854
• 3 027
• 2 933
• 11 617
• 11 558
• 11 558
• 7 496

Net T/C result 26 784 26 667 16 559 17 681 71 155 59 437 59 437 86 459 Administration expenses

• 17 314
• 18 138
• 8 405
• 9 099
• 39 922
• 37 372
• 37 235
• 42 172

Tonnage tax

• 428
• 453
• 214
• 226
• 906
• 613
• Result before depreciation and

impairment, finance items and income tax (EBITDA) 9 042 8 077 7 940 8 356 30 327 21 452 22 202 44 287 Impairment and provisions for onerous contracts

• 2 400
• 1 900
• 3 333

Depreciation

• 1 186
• 1 008
• 556
• 567
• 2 474
• 1 080
• 1 638
• 2 377

Gain/ (loss) disposal property, plant and equipment

• 1
• 1
• 1 531

2 529

• Operating profit/(loss)

7 856 7 069 7 384 10 189 27 853 23 803 23 093 45 243 Financial income 1 109 247 1 215 11 100 569 569 365 Financial costs

• 1 389
• 2 863
• 1 196
• 2 341
• 3 239
• 1 535
• 1 571
• 2 558

Share of profit/(loss) from associates

• 644
• 208
• 271
• 80
• 643
• 1 262
• 2 228
• 316

Unrealized fair value gain/ (loss) on derivatives

• 9 871
• 745
• 8 578
• 10 701

115

• 909
• Profit before tax from continuing
• perations
• 2 939

3 500

• 1 446
• 2 923

24 186 20 666 19 863 42 734 Income tax expense 1

• 64
• 4
• 60

325

• 1 663

240

• 3 636

Profit for the year from continuing

• perations
• 2 938

3 436

• 1 450
• 2 983

24 511 19 004 20 103 39 098 Attributable to : Equity holders of parent

• 2 958

3 367

• 1 468
• 2 924

24 386 18 001 19 356 39 228 Non-controlling interest 20 68 18

• 59

125 1 003 747

• 130

Total

• 2 938

3 436

• 1 450
• 2 983

24 511 19 004 20 103 39 098 Earnings per share (USD)

• 0.21

0.26

• 0.11
• 0.23

1.81 1.44 1.55 3.16

6 Consolidated Cash Flow Statement USD (1 000)

IFRS N-GAAP 6 months ended 30 June 2013 6 months ended 30 June 2012 3 months ended 30 June 2013 3 months ended 30 June 2012 2012 2011 2011 2010 CASH FLOW FROM OPERATIONS Profit/(loss) before tax

• 2 938

3 500

• 1 446
• 2 923

24 186 20 666 19 863 42 734 Taxes paid

• 1 331
• 2 176
• 663
• 1 026
• 3 347
• 2 339
• 2 339

43 Depreciation 1 186 1 008 556 567 2 474 1 080 1 638 2 377 Impairment and prov. for onerous contr.

• 2 400
• 1 900
• Unreal. fair value gain(loss) on derivativ.

8 567 3 512 6 982 12 700 1 324 3 544

• Impairments

772

• 1 175

1 055

• 894
• 572
• 144
• 144

3 638 Share of (profit)/loss from associates 644 208 271 80 643 1 262 2 228 316 Gain/(loss) disposal assets

• 1
• 1
• 1
• 1 841
• 2 838
• Changes in current receivables and current

liabilities

• 32 165
• 29 438
• 23 548
• 24 101
• 23 197

8 232 10 153 12 854 Net cash flow from/(to) operating activities

• 25 266
• 24 562
• 16 794
• 17 998

1 510 28 560 28 560 61 963 CASH FLOW FROM INVESTMENTS Investments in fixed assets

• 471
• 650
• 403
• 167
• 707
• 187
• 187
• 25 405

Sales of fixed assets

• 40 133

40 133

• Investment in/disposal of financial assets
• 657

4 120

• 657

28 495 4 120

• 20 255
• 20 255
• Investment in associates
• 4

250

• 4
• 265
• 7 020
• 7 020
• 5 350

Changes in long term receivables

• 76
• 72
• 39
• 35
• 154
• 1 539
• 1 538
• Net cash flow from investments
• 1 208

3 648

• 1 102

28 293 3 524 11 132 11 133

• 30 755

CASH FLOW FROM FINANCING ACTIVITIES Changes in interest bearing short term and long term debt 51 100

• 9 138

41 450 9 307

• 19 408
• 10 411
• 10 411

13 329 Loan to related party

• 24 103
• 10 042

Dividend and group contribution paid

• 27 800
• 27 800
• 37 195
• 37 195
• 25 121

Equity received from/(paid to) non- controlling interest

• 34
• 5 352
• 34
• 1 874
• 5 352
• Share capital increase
• 7 997

8 539 8 539 5 035 Net cash flow from financing activities 23 266

• 14 490

37 719 7 433

• 16 763
• 39 067
• 39 067
• 16 800

Net change in cash/cash equivalents

• 3 209
• 35 405

19 822 17 728

• 11 728

626 626 14 408 Cash/cash equivalents at start of period 65 316 77 044 42 284 23 912 77 044 76 417 76 417 62 010 Cash/cash equivalents at end of period 62 107 41 639 62 107 41 639 65 316 77 044 77 044 76 417 Restricted cash at end of period 5 583 5 025 5 583 5 025 5 506 5 285 5 285 2 817 Available cash and cash equivalents at end

• f the period

56 524 36 614 56 524 36 614 59 810 71 759 71 759 73 600

7 Consolidated balance sheet USD (1 000)

ASSETS IFRS N-GAAP 30.06.2013 30.06.2012 31.12.2012 31.12.2011 31.12.2011 31.12.2010 Non current assets Deferred tax asset 1 997 1 787 2 163 1 781 4 296 1 235 Property, plant and equipment 22 670 24 794 23 385 25 151 24 359 63 415 Investment in associates 9 296 10 374 9 940 10 833 9 825 5 034 Investment in financial assets 23 885 247 22 781 30 224 30 224

• Derivatives

5 882 1 521 6 537 4 657

• Long term receivable

1 787 1 628 1 710 1 556 1 556 17 Total non current assets 65 517 40 352 66 516 74 202 70 260 69 701 Current Assets Bunker stocks 58 372 56 072 52 276 44 831 44 831 22 051 Accounts receivable 44 443 38 275 52 488 36 718 38 293 38 362 Other receivables 5 783 13 891 3 981 41 41 21 203 Prepaid cost 3 070

• -
• Derivatives

1 308 11 365 9 141 5 777

• Other financial assets

4 21 714 3 3 3 3 Bank deposits 62 107 41 639 65 316 77 044 77 044 76 417 Total current assets 175 087 182 957 183 205 164 414 160 212 158 036 TOTAL ASSETS 240 604 223 308 249 721 238 615 230 472 227 737 EQUITY AND LIABILITIES IFRS N-GAAP 30.06.2013 30.06.2012 31.12.2012 31.12.2011 31.12.2011 31.12.2010 Equity Share capital 9 914 9 914 9 914 9 363 9 363 8 757 Share premium reserve 15 379 15 379 15 379 7 933 7 933

• Other paid-in capital

15 214 12 684 16 308 12 684 12 684 12 684 Retained earnings 29 799 36 783 59 346 31 687 29 080 47 314 Available-for-sale reserves

• 730
• 2 014
• 1 177
• Non-controlling interests

6 272 6 232 6 290 11 555 11 167 4 905 Total equity 75 848 78 978 106 059 73 221 70 226 73 660 Long term liabilities Deferred tax liability 1 064 2 028 1 152 2 025 2 025 2 629 Pension liabilities 1 345 3 755 1 399 3 594 457

• Derivatives

2 775 333 2 042 303

• Liabilities to financial institutions

60 700 12 256 11 594 12 919 14 244 42 769 Other long-term liabilities 1 556 1 773 6 662 8 711

• 285

Total long term liabilities 67 440 20 145 22 850 27 553 16 726 45 683 Current liabilities Accounts payable 32 018 34 129 28 704 36 493 36 493 18 879 Prepaid freight 13 147 19 722 21 927 36 030 36 030 21 010 Prepaid income

• 6 260

1 568

• 10 234

Taxes payable 506 1 463 1 439 3 102 3 102 2 100 Accrued cost 37 098 33 478 39 379 22 667 22 667 27 561 Provisions 5 200 5 200 5 200 5 500 5 500

• Derivatives
• 2 711
• 1 708
• Bank overdraft
• 9 639

31 18 114 18 114

• Liabilities to financial institutions

1 325 1 325 1 325 1 325

• Other current liabilities

8 022 10 258 21 238 12 904 21 614 28 609 Total current liabilities 97 316 124 185 120 812 137 842 143 520 108 394 Total liabilities 164 756 144 330 143 662 165 394 160 246 154 077 TOTAL EQUITY AND LIABILITIES 240 604 223 308 249 721 238 615 230 472 227 737

B.8 Pro forma financial information Not applicable. There is no pro forma financial information.

8 B.9 Profit forecast

• r estimate

Not applicable. No profit forecast or estimate is made. B.10 Audit report qualifications Not applicable. There are no qualifications in the audit reports. B.11 Working Capital As of the date of this Prospectus, the Company is of the opinion that the Group's working capital is sufficient for its present requirements and, in particular, is sufficient for at least the next twelve months from the date of this Prospectus. Section C – Securities C.1 Description the type and the class of the securities and the security identification code The Listing comprises all of the Company's issued Shares, hereunder 137 998 850 existing Shares and minimum 13 636 364 and maximum 20 000 000 New Shares to be issued in connection with the Offering. The Offering consists of minimum 43 324 061 and maximum 62 414 970 Offer Shares, of which minimum 13 636 364 and maximum 20 000 000 Offer Shares are New Shares to be issued by the Company and to be resolved issued by the Board pursuant to an authorisation granted by the general meeting of the Company on 28 September 2013, and minimum 29 687 697 and maximum 42 414 970 Offer Shares are existing Secondary Shares offered by the Selling Shareholders. The Company has one class of shares and all Shares are equal in all respects. The New Shares will, upon delivery, be registered with the same ISIN as the existing Shares, being ISIN NO 001 0691298. C.2 Currency NOK C.3 Number

• f

issued shares and par value At the date of the Prospectus the Company's issued share capital is NOK 68 999 425 divided into 137 998 850 Shares each with a par value of NOK 0.50. All the issued Shares are fully paid. C.4 Rights attached to the shares The New Shares will rank pari passu in all respects with the existing Shares. The Offer Shares will carry full shareholder rights in the Company from the time of registration of the share capital increase pertaining to the Offering in the Norwegian Register

• f Business Enterprises, which is expected to occur on or about 23 October 2013.

The Offer Shares will be eligible for any dividends which the Company may declare after said

• registration. All Shares, including the Offer Shares, will have voting rights and other rights and
• bligations which are standard under the Public Limited Companies Act, and are governed by

Norwegian law. C.5 Restriction on the free transferability

• f the shares

Not applicable. The Shares of the Company are freely transferable. C.6 Application for admission The Company's Shares are not currently listed on Oslo Børs or any other stock exchange or

9 to trading on a regulated market regulated market. The Company has applied for listing of the Company's shares on Oslo Børs,

• r alternatively Oslo Axess. The board of directors of Oslo Børs is expected to decide on the

Company's application in an extraordinary meeting to be held on 15 October 2013. C.7 Dividend policy The Company intends to pay regular dividends on a semi-annual basis of 75%-100% of its adjusted net profits (net profits after tax excluding unrealised gains and losses on derivatives) held to hedge future results. See section 14 about dividends and 13.6.2 for restrictions inherent in loan agreements. Section D – Risks D.1 Key risks relating to the issuer and its business

• The Group may not be able to enter into more long-term time charters and obtain

financing and/or new equity, which may affect the ability to implement the Group's growth strategy.

• In order to continue the ongoing business and to ensure the prospected growth

strategy, the Group is dependent on continuing and expanding relationships with existing customers and to obtain new customers.

• If the Group is not able to attract and retain key personnel, it may have a negative

effect on the success of the Company and the Group, and on the Group's ability to expand its business and maintain and develop its sophisticated risk control system.

• The Group could be subject to fraudulent behavior from employees and/or third

parties acting against the interest of the Group and/or the Group may not succeed in implementing adequate procedures to prevent bribery in order to avoid liability for corruption made by an employee.

• The Group's risk management policies and procedures may leave it exposed to

unidentified or unanticipated risks as they have not proved fully effective in the past and may not be fully effective in the future. Failure to mitigate all risks associated with the Group's business could have a material adverse effect on the Group's business, results of operations and financial condition.

• The Company's future profits depend in part on its ability to identify and take

advantage of arbitrage opportunities and volatility, and if there is a lack of such

• pportunities due to inter alia flat market, shortage of liquidity and/or information, it

may have a negative influence on the financial results of the Group. Further, the ability to take advantage of such opportunities originating from market volatility depends on various factors such as the access to good deal flow, knowing and understanding all risk exposures and having disciplined approach to position-taking, all of which may be lost to the Group.

• There is no guarantee that WB Chartering will be able to uphold the historical

relationships between market level and Net TC margins. Further the current and historical relationship may not be representative for future relationships, and may not indicate causality between the margin and market level and/or volatility. This may have an adverse effect on the Group's results of operations and financial condition.

• The Group is involved in claims and disputes, which may have a negative impact on

the results and cash flows of the Group.

10

• The Group as a whole is exposed to a material risk regarding changes in, or

interpretation of, applicable tax laws and/or related to any future restructuring of the Group which may impact the business, results of operations and financial condition

• f the Group.
• The Group is subject to significant counterparty risk. For the chartered-in fleet,

should the freight market strengthen from the level a vessel is fixed in at, a tonnage provider could be tempted to attempt to withdraw their vessel from the Group, in favor of a higher rate for alternative employment. On the cargo-side, should market rates fall from the level a cargo or COA commitment was taken on by the group at, a charterer could be tempted to default on the agreement with the Group, and instead try to fix their freight cost at a lower level.

• Several of the Group's long term TC leases are newbuilds which can have delayed
• delivery. Further, some of the long term TC leases are subject to successful delivery

to the owner, which may depend on circumstances outside the Group's control, hereunder the owner cancelling the construction contract.

• The dry bulk shipping market is highly competitive and is depending of factors such

as low barriers to entry, lack of transparency, highly fragmented market with many small market participants, and access to financing, which might be of hindrance for the Group's ability to fully realize its ambitions for growth and/or have material adverse effect on the Group's overall business.

• Changes in the level and pattern of global economic growth, the highly competitive

nature of the global shipping industry and changes in the supply of and demand for vessel capacity leads to a highly cyclical nature of the dry bulk shipping industry and may have a material adverse effect on the Group's business, financial condition, results of operation and liquidity.

• Terrorist attacks, piracy, increased hostilities, political unrest or war could lead to

further economic instability, increased costs and disruption of the Company's business

• Operational and other errors may incur liabilities for the Group
• Maritime claimants could arrest vessels owned or chartered by the Group
• As certain loan agreements entered into by the Company and the Group contain cross

default clauses and require compliance with certain financial covenants, the Group's ability to comply with such financial covenants may have an impact on the Group's ability to avoid default under debt instruments and charter agreements.

• The Group will need to refinance some or all of its indebtedness in the future, which

implies a refinancing risk at maturity date for current debt obligations.

• The Group trades significant volumes of derivatives that are subject to daily clearing
• f variation margins, which could lead to significant cash in- or outflows if there are

significant market movements in freight rates and oil prices

• The Group is exposed to exchange rate fluctuations for revenues and expenses

incurred in other currencies than the US Dollar

• The Group is exposed to fluctuations in working capital. The Group is party to loan

11 agreements, which together with various guarantees provided, require the Group to have at least USD 20 million in liquidity at all times to be in compliance with its financial covenants. Accordingly, the Group may require additional funds and seek to raise such funds through issuing new equity and/or debt. D.3 Key risks relating to the shares

• The price of the Shares may fluctuate significantly
• There is no existing market for the Shares, and a trading market that provides

adequate liquidity may not develop

• Future sales of Shares by the controlling shareholder may depress the price of the

Shares

• Investors in the United States may have difficulty enforcing any judgment obtained

in the United States against the Company or its directors or executive officers in Norway

• The transfer of Shares is subject to restrictions under the securities laws of the

United States and other jurisdictions

• Shareholders outside of Norway are subject to exchange rate risk

Section E – Offer E.1 Net proceeds Total expenses The net proceeds of the Offering to the Company is expected to be approximately NOK 264 million. The Company's total expenses of the Offering, including the preparation of this Prospectus, will amount to approximately NOK 36 million. E.2a Reasons for the

• ffer

Use of proceeds Net amount of the proceeds The Offering is intended to bring the Company in compliance with the requirements for listing

• n Oslo Børs of having at least 500 shareholders, or alternatively the requirement for a listing
• n Oslo Axess of having at least 100 shareholders. A listing on Oslo Børs, or alternatively

Oslo Axess, will provide a regulated place for trading of the Shares, provide greater liquidity in the Shares and make them more attractive investment objects. It will also further facilitate the use of capital markets in order to raise equity should the Company need so in the future, and enable the Company to use its Shares as transaction currency in future acquisitions and mergers, if any. The Company intends to apply the net proceeds of the Offering for working capital to support further growth of WB Chartering and for an opportunistic growth of WB Shipholding asset base, including more leases with purchase options. The Company estimates that the net proceeds of the Offering to the Company after deduction

• f the estimated commissions and expenses to the Managers and other advisors, as well as
• ther costs associated with the Listing will be approximately NOK 264 million.

E.3 Terms and conditions

• f

the offer Below is a brief overview of the terms and timetable for the Offering:

12

Date Commencement of the Bookbuilding Period in the Institutional Offering .................................... 3 October 2013, at 09:00 a.m. CET Commencement of the Order Period for the Retail Offering and the Employee Offering ............ 3 October 2013, at 09:00 a.m. CET Expiry of the Order Period for the Retail Offering and the Employee Offering ............................ 17 October 2013, at 12:00 p.m. CET(1) Close of the Book-building Period in the Institutional Offering .................................................... 17 October 2013, at 4:30 p.m. CET(1) Allocation of Offer Shares .............................................................................................................. On or about 18 October 2013 Distribution of contract notes .......................................................................................................... On or about 23 October 2013 Payment due date ............................................................................................................................. On or about 23 October 2013 Registration of the capital increase and issuance of the new Shares .............................................. On or about 23 October 2013 Delivery of the Offer Shares ........................................................................................................... On or about 23 October 2013 Commencement of trading in the Shares on Oslo Børs, or alternatively on Oslo Axess ............... On or about 24 October 2013 _______________ (1) Subject to shortening or extension. To the extent the Bookbuilding Period or the Order Period is shortened or extended, all other dates referred to in this table may be extended correspondingly.

The Offering consists of minimum 43 324 061 and maximum 62 414 970 Offer Shares, of which minimum 13 636 364 and maximum 20 000 000 Offer Shares are New Shares to be issued by the Company and to be resolved issued by the Board pursuant to an authorisation granted by the general meeting of the Company on 28 September 2013, and minimum 29 687 697 and maximum 42 414 970 Offer Shares are existing Secondary Shares offered by the Selling Shareholders. Through the Offering the Company intends to issue New Shares for total Offer Price of NOK 300 million and the Selling Shareholders intend to sell Secondary Shares for total Offer Price of approximately between NOK 636 million and NOK 953

• million. The final number of Offer Shares to be issued and sold in the Offering will be

determined by the Company and the Managers, subsequent to expiry of the Bookbuilding Period. The Offering comprises three tranches:

• the Institutional Offering, in which Offer Shares are being offered to (i) institutional

and professional investors in Norway, (ii) to investors outside Norway and the United States pursuant to applicable exemptions from local prospectus requirements and

• ther filing requirements, and (iii) in the United States to qualified institutional

buyers (QIBs) as defined in, and in reliance on Rule 144A under the U.S. Securities Act, subject to a lower limit per application of NOK 2 000 000.

• the Retail Offering, in which Offer Shares are being offered to the public in Norway

subject to a lower limit per application of NOK 10 500 and an upper limit per application of NOK 1 999 999 million for each applicant. Applicants in the Retail Offering will receive a discount of NOK 1 500 on their aggregate application amount for the Offer Shares allocated to such applicants;

• the Employee Offering, in which Offer Shares are being offered to Eligible

Employees of the Group, subject to a lower limit of application of an amount of NOK 10 500 for each Eligible Employee. Each Eligible Employee will receive a discount of NOK 3 000 on the aggregate Offer Price for Offer Shares allocated to such Eligible Employee (i.e. a discount of NOK 1 500 in addition to the discount

• ffered in the Retail Offering). Eligible Employees participating in the Employee

Offering will, subject to certain restrictions, receive full allocation for an application for Offer Shares; and The Bookbuilding Period for the Institutional Offering is expected to take place from 3 October 2013 at 09:00 a.m. (CET) to 17 October 2013 at 4:30 p.m. (CET). The Order Period for the Retail Offering and the Employee Offering will take place from 3 October 2013 at

13 09:00 hours (CET) to 17 October 2013 at 12:00 p.m. (CET). The Bookbuilding Period and/or the Order Period may be shortened or extended at the Company's own discretion, but will in no event close earlier than 10 October 2013 at 4.30 p.m. CET or be extended beyond 31 October 2013 at 4.30 p.m. CET. It has been provisionally assumed that 10% of the Offering will be reserved for applications through the Retail Offering and the Employee Offering, and 90% of the Offering will initially be reserved for the Institutional Offering. However, the final allocation between tranches will be decided by the Board in consultation with the Managers on 17 October 2013 on the basis of the application level in the respective tranches relative to the overall application level for the Offering, and with regard to the requirements of free float and number of shareholders pertaining to a listing of the Shares on Oslo Børs, or alternatively Oslo Axess. The Company reserves the right to deviate from the provisionally assumed allocation between the tranches without further notice and at its sole discretion. The allocation of Offer Shares to the applicants in the Institutional Offering is expected to formally be determined by the Company in consultation with the Managers on or about 17 October 2013. Notifications of allocations in the Institutional Offering are expected to be issued by Managers on or about 18 October 2013. The allocation in the Retail Offering and the Employee Offering will take place after the expiry of the Order Period. Written notifications of allocations in the Retail Offering and the Employee Offering are expected to be issued by Swedbank First Securities acting as settlement agent for the Retail Offering on or about 17 October 2013 by post. Payment in respect of the Offer Shares allocated to subscribers in the Institutional Offering will take place against delivery of the Offer Shares (as regards the New Shares in the form of borrowed Shares) to the Norwegian VPS account specified by the investor. Payment and delivery of Offer Shares is expected to take place on or around 23 October 2013. In completing the Order Form, each applicant in the Retail Offering and the Employee Offering will authorise Swedbank First Securities (on behalf of the Managers) to debit the applicant's Norwegian bank account for the total amount due for the ordered and allocated Offer Shares on or about 23 October 2013 and there must be sufficient funds in the stated bank account from and including 22 October 2013. Subject to timely payment by the applicant, Offer Shares allocated to applicants in the Retail Offering and in the Employee Offering is expected to be delivered to the applicants' VPS accounts and will be available for the applicant on or about 23 October 2013. E.4 Interests material to the

• ffer

The Managers or their affiliates have provided from time to time, and may provide in the future, investment and commercial banking services to the Company and its affiliates in the

• rdinary course of business, for which they may have received and may continue to receive

customary fees and commissions. The Managers do not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory

• bligation to do so. Further, a portion of the commissions that are to be paid for the services of

the Managers in respect of the Offering are calculated on the basis of the gross proceeds of the Offering. The Selling Shareholders have an interest in the Offering by virtue of being shareholders of the Company and as a consequence of the proposed sale of Secondary Shares which forms part of the Offering.

14 The Company will receive the proceeds of the Offering, except the proceeds from the Secondary Sale which will be received by the selling shareholders. Other than as set out above, the Company is not aware of any interest of any natural and legal persons involved in the Offering that is material to the Offering E.5 Selling entity and lock-up agreements The Managers have entered into lock-up agreements with the Selling Shareholders. Under the lock-up agreement, the Principal Selling Shareholder and the other Management Selling Shareholders have agreed not to offer, sell, contract or otherwise dispose of shares in the Company for a period of 180 days and 365 days respectively, following the first day of Listing, without the prior written consent of the Managers. E.6 Dilution Assuming full subscription and depending on the final Offer Price, the Offering will result in a dilution of between approximately 10% to 14% for the existing shareholders that do not participate in the Offer. E.7 Expenses charged to the investor Not applicable. The expenses related to the Offering will be paid by the Company and the Selling Shareholders. 2. RISK FACTORS 2.1 GENERAL Investing in the Company involves inherent risks. This Section 2 "Risk Factors" contains an overview of the risk factors that are known to the Company and considered material by it. Prospective investors should consider, among other things, the risk factors set out in this Prospectus before making an investment decision, and should consult his or her own expert advisors as to the suitability of an investment in the Shares. An investment in the Shares is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of the investment. If any of the following risks actually occur, individually or together with other circumstances, the Company's business, financial position, cash flow and operating results could be materially and adversely affected, which may cause a decline in the value and trading price for the Shares that could result in a loss of all or part of any investment in the Shares. The order in which the risks are presented below is not intended to provide an indication of the likelihood of their occurrence nor of their severity or significance. 2.2 RISKS RELATED TO THE BUSINESS OF THE GROUP 2.2.1 The ability to implement the Group's growth strategy The Group is planning to increase its operating fleet to a minimum of 160 vessels in 2014 and a minimum of 180 vessels in 2015. This includes several newbuild vessels which will be long term hired-in from delivery of the newbuild from the shipyard to the owner. As with any newbuild vessel there are risks of delays, and potentially excessive delays which could result in cancellations. These factors could have an effect on timing for vessels to enter the operating fleet. The Group will also seek to grow by entering into more long-term time charter ("TC") agreements with attached purchase options. For the Group to enter into additional agreements, the Group will be dependent on having access to such deals, predominantly with Japanese ship owners and trading houses, who are the main market makers for these structures. Obtaining and maintaining this kind of deal flow requires consistent relationship- building with current and potential counterparts, as well as the Group being capable of maintaining a solid

15 reputation as a consistently performing and reliable charterer of dry bulk vessels. This in turn requires both

• perational skill and financial ability to honor all contracts entered into on both the cargo - and tonnage side.

Should the Group lose access to the market for long-term TC-deals with attached purchase options for any of the reasons stated above, or other reasons, or other reasons beyond the Group's control, the ability to grow the Group's long-term TC book might be severely reduced or even disappear. The Group may in the future be dependent on obtaining financing and/or new equity to enable the contemplated growth of the Group. It is not certain that the Group will be able to obtain future financing on acceptable terms and conditions, nor that the Group will be able to raise new capital in the equity markets. If the Group is unable to obtain future debt and/or equity financing, it might not be possible for the Group to grow in accordance with its business plan or to exercise purchase options inherent in the time charter contracts of the Group. This may have a material adverse effect on the Group's business, financial condition, results of operation and liquidity. 2.2.2 The ability to continue and expand relationships with existing customers and to obtain new customers The Group has a highly diversified customer base, but in order to continue the ongoing business and to ensure the prospected growth strategy, the Group must continue its strong and long relationships with industrial customers in addition to attracting new customers. However, it is not given that the Group will be able to continue its existing relationships, nor that it will be able to attract new customers. This could, for instance, be a result of reduced competitiveness, making it harder for the Group to offer competitive pricing on its freight

• services. Moreover, if the Company's external reputation is damaged, customers may elect to stay away from the

Group even if it can offer competitive freight rates. This may have a material adverse effect on the Group's future income from its chartering business. Likewise, if the Group fails to maintain its relatively new and operationally efficient fleet, due to for example loss of commercial relationships and/or deal flow, or delayed delivery of newbuildings, it may fail to remain competitive against other tonnage providers. Further, the Group may fail to attract cargo owners who place strict demands on the quality of the vessels they choose to employ to carry their cargoes. 2.2.3 The Group's ability to attract and retain key personnel The Group's success depends, to a significant extent, upon the abilities and efforts of its management team along with its other highly skilled professionals. If the Group does not retain key competence, this may have a negative effect on the success of the Company and the Group, and the Group's ability to expand its business and maintain and develop its sophisticated risk control system, which will correspondingly, have an adverse effect

• n the Group's competitive position and financial performance. Difficulty in hiring and retaining replacement

personnel could adversely affect the business prospects of the Group. 2.2.4 The Group could be subject to fraudulent behavior from employees and/or third parties Employees of, and/or third parties acting as agents for the Group could engage in fraudulent behaviour against the Group on their own, or that of others' initiative, making them act against the interest of the Group. Such actions could include, but is not limited to, document fraud, port bribes, fraudulent commission agreements, facilitation payments and bribes to get access to exclusive business. Whether deliberate or not, such actions could potentially put the Group at risk for both legal liabilities and reputational damage. Following the introduction of the UK Bribery Act, and the subsequent international conventions on the subject (UN, OECD, EU), a growing number of countries are intensifying their efforts towards fighting corruption. Norway has, like the UK, also changed its indemnity act to include liability for corruption, whereas it is required that the employers take "adequate procedures" to prevent bribery within the organisation in order for the employer to avoid liability for corruption made by an employee. The Group is continuously working to ensure such adequate procedures to prevent fraudulent behavior from individuals inside, or with connections to, the Group are implemented and repeatedly reinforced in all levels of the organisation. However, should the Group

16 fail to meet applicable regulation it could potentially trigger criminal, civil and employment sanctions. Ensuing attention from the media could further increase reputation risk. Consequently, the reputational risk of employees acting beyond or without the mandate of the Group could be detrimental to the Group's ability to retain and attract customers, as well as key personnel. 2.2.5 The Group's risk management policies and procedures may leave it exposed to unidentified or unanticipated risks The Group's activities are exposed to i.e. freight rate risk, bunker fuel price risk, as well as risks relating to foreign exchange, interest rate, counterparties (including credit), operations, regulations and other risks. The Group has devoted significant resources to developing and implementing policies and procedures to manage these risks and expects to continue to do so in the future. Nonetheless, the Group's policies and procedures to identify, monitor and manage risks have not been fully effective in the past and may not be fully effective in the

• future. Some of the Group's methods of monitoring and managing risks are based on historical market behaviour

that may not be an accurate predictor of future market behaviour. Other risk management methods depend on evaluation of information relating to markets, suppliers, customers and other matters that are publicly available

• r otherwise accessible by the Group. This information may not in all cases be accurate, complete, up to date or

properly evaluated. Management of operational, legal and regulatory risk requires, among other things, policies and procedures to properly record and verify a large number of transactions and events, and these policies and procedures may not be fully effective in doing so. The Group uses, among other techniques, Value-at-Risk ("VaR"), as a key risk measurement technique for its

• perations in WB Chartering. VaR does not purport to represent actual gains or losses in fair value on earnings

to be incurred by the Group, nor does the Group expect that VaR results are necessarily indicative of future market movements or representative of any actual impact on its future results. Failure to mitigate all risks associated with the Group's business could have a material adverse effect on the Group's business, results of

• perations and financial condition.

2.2.6 The Group's IT infrastructure, and in particular its voyage management and risk management systems may become unavailable due to a breakdown in the Group's IT systems The Group depends on several IT systems to perform its day-to-day tasks. In particular, it relies on its risk management system to maintain an overview of its exposure in the market and of its derivatives hedges. Without access to this system, the Group would, over time, risk losing control over its exposure. Likewise, a loss of access to the Group's chartering system may make it difficult to keep track of voyage details and in particular to have the information required to continue issuing invoices to its freight customers. 2.2.7 The Company's future profits depend in part on its ability to identify and take advantage of arbitrage opportunities and volatility A lack of arbitrage opportunities, for instance caused by unusually low or flat markets, or the Group Companies' inability to take advantage of such opportunities, for example because of a shortage of liquidity, lack of information or because of incorrect judgments made by the Group's commercial staff, may negatively impact the future financial result of the Group. Extracting value from volatility can be challenging, especially if markets become too volatile. It requires the ability to turn positions around quickly to benefit from sudden changes in your local markets, and to grab

• pportunities before an arbitrage window closes. Although the Group has developed this skill over time, it has

not been able to consistently deliver positive results from employing it; as co-drivers of success to fully take advantage of arbitrage opportunities originating from market volatility include, but are not limited to, having access to a good deal flow, knowing and understanding risk exposures and having a disciplined approach to position-taking. Should one or more of these success factors be lost to the Group, and/or market volatility

17 remain limited altogether, this could significantly impair the Group's ability to produce consistently strong results over time. 2.2.8 Historical relationships between market level and Net TC margins may not be representative for future relationships, and may not indicate causality between the margin and market level and/or volatility Looking at the period from 2007 to first half 2013 there has been a relatively clear correlation between the Net TC margin per vessel days in WB Chartering (excluding certain non-recurring items not related to ordinary business) and the market level, represented by Baltic Exchange Supramax Index. This correlation may be spurious, and should not be construed to represent a causal relationship between the factors. Neither is there any guarantee that WB Chartering is able to uphold the relationship in the future; nor that it will be able to maintain the base margin at historical levels. 2.2.9 The Group is involved in claims and disputes, which may have a negative impact on the results and cash flows of the Group As a party to several contracts and other instruments, governing complex operational, commercial and legal matters which involve significant amounts, the Group will from time to time be subject to commercial disagreements, contractual disputes, and, possibly, litigation with its counterparties, as well as insurance matters, environmental issues, and governmental claims for taxes or duties in its ordinary course of business. The Group is currently involved in a number of disputes both as defendant and plaintiff due to the nature of the Group's business. Please see section 18 "Legal and arbitrational proceedings" for a description of current disputes of importance in which the Group is involved. Such matters may not always be resolved in favour of the Group or in accordance with its expectations. The Group cannot predict with certainty the outcome or effect

• f any current or future commercial disagreements, contractual disputes or litigation involving the Group and its

counterparties or others. Accruals for potential liabilities are made (see annual report 2012, note 21 for details), but the Company may however not guarantee that the accruals made for potential liability will cover the amount payable. The Group might suffer economical and reputational damage from its involvement in claims or disputes, which could lead to material adverse change to the Group's financial condition, results of operation and liquidity, as well as the deterioration of existing customer relationships, and/or the Group's ability to attract new customers, all factors which are important for the Group's ability to continue to run and grow its business. 2.2.10 Changes in, or interpretation of, tax laws applicable to the Company and the other Group Companies The Company's and the Group's activities will to a large extent be governed by the fiscal legislation of the jurisdictions where it is operating. Thus, the Group as a whole is exposed to a material risk regarding the correct application of the tax regulations as well as possible future changes in the tax legislation of those relevant

• countries. In addition, the Group is, to a certain extent, exposed to different rules of freight duty and withholding

tax. Certain of the Company's subsidiaries operate within the Norwegian tonnage tax regime. There is a risk that these favorable tax regulations will be modified in the future, and/or that the Norwegian tonnage tax regime no longer will be applicable to any of the Group Companies due to new requirements and/or changes in the Group structure. One of the Company's subsidiaries (Western Bulk Pte Ltd) operates within the MSI-Approved International Shipping Enterprise Award, which gives tax exemption on qualifying shipping income for 10-year renewable

• periods. Western Bulk Pte Ltd's future tax rate in Singapore depends on its ability to remain qualified for the

scheme, and on the future development or existence of the scheme.

18 In general, changes in taxation law or the interpretation of taxation law may also impact the business, results of

• perations and financial condition of the Group.

2.2.11 Counterparty risk The Group is subject to significant counterpart risk. For the chartered-in fleet, should the freight market strengthen from the level a vessel is fixed in at, a tonnage provider could be tempted to attempt to withdraw their vessel from the Group, in favor of a higher rate for alternative employment. Where chartered-in fleet are undelivered newbuilds, there is also the risk of delays in delivery time to the Group. On the cargo-side, should market rates fall from the level a cargo or COA commitment was taken on by the group at, a charterer could be tempted to default on the agreement with the Group, and instead try to fix their freight cost at a lower level. Also, there is a risk of counterparts failing to meet their obligations to the Group in the event of an operational

• incident. This could negatively impact the Group's results should it fail to pursue the counterpart. In the event of

such an incident, should the parties not be able to reach a commercial agreement or settlement, there is a risk that the Group might have to engage in arbitration procedures and/or litigation to collect their dues. There is also a risk that counterparties might unrightfully and/or with fraudulent intentions, try to engage in a dispute with the Group with the aim to appropriate funds from the Group. In addition to the negative effect such incidents might have on the Groups results and/or reputation, it could also lead to an unnecessary diversion of the Groups funds and resources from more efficient uses. Defaulting counterparts, especially on long term contracts, may also cause the Group significant subsequent losses as the Group hedges its contracts through the use of e.g. bunker swaps, forward freight agreements, long term charter-in of vessels etc. If the counterparty defaults, the Group will still be bound by its hedging arrangements, which may, if the market deteriorates, become very unfavourable. Such unfavourable hedging arrangements may give the Group significant losses and materially and adversely affect the Group's business, financial position, cash flow and operating results. Despite continuous and diligent efforts made by the Group to continuously improve these counterpart risk approval- and management systems, the Group's counterpart risk cannot be reduced to negligible levels, as there are so many factors influencing the behavior of both tonnage providers and cargo-owners, equally on the macro- and micro level. 2.2.12 Some of the Group's TC leases with purchase options are not yet formally signed and some are for newbuilds All TC contracts with purchase options in WB Shipowning have been confirmed by the lessors subject to fulfillment of conditions, some of which include successful delivery of the vessels, except for one, where some minor details are yet to be confirmed. Seven of the leases are not formally signed as of the date of this

• Prospectus. While under English law the recaps of the contracts are regarded as concluded and firm when

subjects are lifted, there may be a risk that if the contracts are challenged by the vessel owners, the lack of a signed contract may weaken the Company's contention that there was a binding contract. Some of the TC leases for newbuilds have successful delivery of the vessel as a subject, and there is therefore also the risk of delays which could lead to the owner cancelling the construction contract in which case the subject would not be lifted. 2.3 RISKS RELATED TO THE DRY BULK INDUSTRY 2.3.1 Highly competitive dry bulk shipping market The dry bulk shipping market is highly competitive, which at some point of time in the future might be of hindrance for the Group's ability to fully realize its ambitions for growth, and/or have a material adverse effect

• n the Group's overall business. Factors determining the degree of competiveness in the dry bulk market

include, but are not limited to: low barriers to entry, lack of transparency, highly fragmented market with many small market participants, and access to financing.

19 2.3.2 Highly cyclical nature of the dry bulk shipping industry Historically, the shipping industry, including the dry bulk market in which the Group mainly has its assets and

• perations, has been highly cyclical, experiencing volatility in profitability and asset values. This has mainly

been due to changes in the level and pattern of global economic growth, the highly competitive nature of the global shipping industry and changes in the supply of and demand for vessel capacity. Such events may have a material adverse effect on the Group's business, financial condition, results of operation and liquidity. Downturns in the global economy can lead to a significant decline in world trade, which in turn results in decreased freight volumes and may result in rate adjustments in the shipping industry and in the demand for maritime and logistics services and corresponding material decreases in the revenues of businesses in the industry. The main drivers of demand growth are outside of the Group's control. For example, short-term variances in growth rates of demand for agricultural commodities are often a result of seasonal variations, variations which can be further augmented by irregularities in weather patterns. In the longer term, the demand growth for commodities like seaborne iron ore and coal will likely have a larger impact on the fleet utilisation rate. Should e.g. Chinese demand for iron ore start to fall significantly, the consequences for tonne-mile demand would be negative and the market could move into a prolonged market regime with oversupply of tonnage. Should the

• pposite happen, and the demand for Chinese iron ore imports should grow it could open up for more marginal,

longer haul supply. Random shocks to the economy beyond the Group's control could also impact the growth in demand for transportation of dry bulk commodities, both positively and negatively. A negative shock in demand for dry bulk transportation could result in lack of employment for the Group's vessels causing idle time and lay- up of vessels and a corresponding loss of revenues. The fleet serving the dry bulk market is large and with diverse ownership. Owing to the long life span of ships, as well as the long construction period, the fleet size will not adapt as quickly to changes in the market as the demand side does. In periods of high market rates, there is a risk that vessel orders will surpass future demand growth for seaborne transportation, which may have a long-lasting effect on the market balance once the ships are delivered. Over time, during such periods of oversupply, the fleet productivity goes down; vessels spend longer time off hire (in port/bunkering/ballasting), and the average speed of the fleet is reduced. In order for fleet productivity to increase again, there must be an increase in demand and/or increase in the scrapping of

• vessels. Factors influencing ship-owners to scrap their vessels depend on a number of parameters, including but

not limited to, age of the vessel, technical advances (e.g. within the area of fuel efficiency), scrap prices and the freight market. The prevailing freight market influences both present earnings for the vessel, and the present possibilities for locking in the future income of the vessel for a given period. Should behavioural factors, or

• ther factors influencing ship-owners' decision to scrap its vessels, distort the ongoing reduction of net fleet

growth in the form of scrapping of obsolete vessels, the Group may face a further prolonged period of depressed freight rates, which can have a severe negative effect on the Group's performance and results. Should the freight market levels remain depressed for a prolonged period, either due to lack of demand for seaborne commodities and/or continued oversupply of vessels, the Group could suffer as lower markets imply lower margins, making it more difficult to produce positive net results and maintaining a healthy balance sheet. Specifically, the Group's existing forward book of chartered-in vessels which currently are without employment contracts, will have negative results if the future market rates are below the charter hire rate payable by the Group for these vessels. Further, a prolonged low market period could render the Group's significant TC- and purchase options out of the money, adversely affecting the Group's ability to realize its ambitions for further fleet growth.

20 2.3.3 Fluctuation of vessel values which may result in an impairment of the book value of vessels, breach of financial covenants or a loss upon a sale of a vessel Over time, vessel values may fluctuate substantially, which may result in an impairment of the book value of the Group's vessels and investments in vessel-owning companies, a loss upon a sale of the vessels or breach of financial covenants relating to the market value of the vessels1. Such a covenant currently exists for the Group's financing of the vessel Western Stavanger. Based on vessel valuations performed as of 30 June 2013, the Group was in compliance with this covenant. The fair market value of the Group's vessels and investment in vessel-owning companies or other ships possibly acquired in the future may increase or decrease depending on a number of factors, including:

• the prevailing level of dry bulk charter rates;
• general economic and market conditions affecting the dry bulk industry, including competition from
• ther companies;
• types, sizes and ages of dry bulk vessels;
• supply and demand for dry bulk vessels;
• costs of newbuildings;
• governmental or other regulations; and
• technological advances.

If the Group sells its vessels, its shares in vessel-owning companies or other vessels it acquires in the future when prices have fallen and before having recorded an impairment adjustment to the financial statements, the sale may be at less than the Group's vessels' carrying amount in the financial statements, resulting in a loss. The Group's financing arrangements are subject to customary covenants. As is normal in the maritime industry, such covenants also relate to the market value of the Group's assets being financed. Lenders may accelerate loan repayments should the market value of the Group's vessels fall below the thresholds set out in the Group's loan covenants (as further described in the relevant loan agreement). Such loss or repayment may have a material adverse effect on the Group's business, financial condition, results of operation and liquidity. 2.3.4 Fluctuation of bunker fuel prices Increasing bunker fuel price is an area of concern, with high oil prices continuing into 2013. The corresponding increase in voyage costs makes it more challenging to increase Net TC results. The Group's average bunker price in 2012 was about USD 670 per ton (all fuel types), and the bunker prices (heavy fuel) have risen from around USD 250 per ton at the start of 2009 to about USD 600 per ton at the end of July 2013. Increasing bunker prices may also lead to higher working capital requirements, which may have a negative effect on the Company's liquidity. To reduce the risk of fluctuations in bunker fuel prices the Group has policies in place that require the use of bunker fuel swaps or options to hedge the inherent fuel oil exposure in its freight contracts. Bunker fuel hedging contracts only exist for a small number of major ports, such as Singapore and Rotterdam. This means that the hedging contracts will settle against bunker fuel prices in these ports, and not against actual bunker prices achievable in the ports the Group Companies will need to perform its bunker purchases. In addition, it is not possible to either exactly quantify the fuel need for a certain future voyage or to purchase hedging instruments for non-standard volumes. This means that the Group will be subject to basis risk, i.e. the risk that the Group's underlying exposure will not exactly match the exposure of the hedging contract put in

1 Applicable also for vessels owned in Western Alterna Partnership, in which the Group has a 20% ownership. The Partnership was in

compliance with this covenant when last tested on 23 September 2013.

21

• place. This basis risk may from time to time be significant, even though the size and diversification of the

Group's operations mean that the risk is relatively small in aggregate and over time. 2.3.5 Losses arising from the inherent risks of the shipping industry, which the Group's insurance policies may not be adequate to cover The Group procures insurance for their fleet against risks commonly insured against by vessel owners and

• perators, including hull and machinery insurance, war risks insurance and protection and indemnity insurance

(which includes environmental damage and pollution insurance). There is no assurance that the Group Companies are adequately insured against all risks or that the insurers will pay a particular claim. Even if the insurance coverage is adequate to cover incurred losses, the Group may not be able to timely obtain a replacement vessel in the event of a loss. Furthermore, in the future, the Group may not be able to obtain adequate insurance coverage at reasonable rates for its fleet. The Group Companies may also be subject to calls,

• r premiums, in amounts based not only on their own claim records but also the claim records of all other

members of the protection and indemnity associations through which they receive indemnity insurance coverage for tort liability. The Group's insurance policies also contain deductibles, limitations and exclusions which, although they represent standards in the shipping industry, may nevertheless increase the Group's costs or decrease their recovery in the event of a loss. 2.3.6 Downturns in general economic and market conditions in the countries and regions where the Company operates, which may adversely affect the financial condition of any of the Company's customers and other counterparts and their ability to settle their obligations towards the Company For some years, Europe and other parts of the world have experienced weakened economic conditions and volatility following adverse changes in global capital markets. This has resulted in a significant contraction, de- leveraging and reduced liquidity in the credit markets. A number of governments have implemented, or are considering implementing, a broad variety of governmental actions or new regulations for the financial markets. This could; for instance, lead to reduced liquidity for the derivative instruments currently used by the Group to hedge some its freight rate and fuel oil price risks. Continued deterioration in the global economy may also cause a decrease in the worldwide demand for the Company's products and services. Limitations on the availability of capital, higher costs of capital for financing expenditures or the desire to preserve liquidity, may cause the Company's current or prospective customers to make reductions in future capital budgets and spending. Such adjustments could reduce demand for the Company's products and services. A tightening of the credit markets may also affect the solvency of the Company's counterparties which could impact the performance and payment of the counterparties' obligations under the current or future contracts of the Company or their ability to obtain adequate financing causing them to terminate existing contracts of affreightment ("COA's"). 2.3.7 Terrorist attacks, piracy, increased hostilities, political unrest or war could lead to further economic instability, increased costs and disruption of the Company's business War, military tension and terrorist attacks have among other things caused instability in the world's financial and commercial markets. This has in turn significantly increased political and economic instability in some of the geographic markets in which the Group operates (or may operate in the future), and has contributed to high levels of volatility in prices of various commodities, and in particular the price of oil. Continuing instability may cause further disruption to financial and commercial markets and contribute to even higher level of uncertainty and volatility. In addition, acts of terrorism and threats of armed conflicts in or around various areas in which the Group operates (or may operate in the future) could limit or disrupt the Group's markets and operations, including by causing disruptions from evacuation of personnel, situations of prolonged force majeure, cancellation of contracts or the loss of personnel, vessels or other assets. Armed conflicts, political unrest,

22 terrorism and their effects on the Group or its markets may have a significant adverse effect on the Group's business and results of operations in the future. Vessels could be requisitioned by a government in the case of war or other emergencies or become subject to

• arrest. This could significantly and adversely affect the earnings of the relevant unit and the Group as well as the

Group's liquidity forecast. Acts of piracy on ocean going vessels have recently decreased in frequency in certain areas whilst have increased in others. Acts of piracy have historically affected ocean-going vessels trading in regions of the world, such as the South China Sea, the Gulf of Aden off the coast of Somalia, where there has been a decrease in incidents over the last year and off the Gulf of Guinea where there has been an increase in incidents over the same period. These trading areas are listed as conditional trading areas or war risk zones and a higher premium has to be paid to insurers. Premiums payable for such insurance coverage could increase significantly and may be more difficult to obtain if the piracy risk increases. In addition, crew costs could also increase in such

• circumstances. Detention, hijacking or other acts of piracy against the vessels, or an increase in cost or

unavailability of insurance for the vessels owned or chartered in by the Group may have a material adverse effect on the Group's business, financial condition, results of operation and liquidity. 2.3.8 Operational and other errors may incur liabilities for the Group The vessels owned or chartered in by the Group are subject to perils particular to marine operations, including capsizing, grounding, collision and loss and damage from severe weather or storms. The vessels may also be subject to other unintended accidents. Such circumstances may result in loss of or damage to the relevant vessel, damage to property, including other vessels and damage to the environment or persons or for damages connected with future time charter contracts which cannot be fulfilled. Such events may lead to the Group being held liable for substantial amounts by injured parties, their insurer and public governments. In the event of pollution, the Group may be subject to strict liability. Environmental laws and regulations applicable in the countries in which the Group operates have become more stringent in recent years. Such laws and regulations may expose the Group to liability for the conduct of or conditions caused by others, or for acts by the Group that were in compliance with all applicable laws at the time such actions were taken. The occurrence of the above mentioned events may have a material adverse effect on the Group's business, financial condition, results of operation and liquidity, and there can be no assurance that the Group's insurance will fully compensate any such potential losses and/or expenses. 2.3.9 Maritime claimants could arrest vessels owned or chartered by the Group Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against one or more of the vessels owned or chartered in by the Group for unsatisfied debts, claims or damages. In many jurisdictions a maritime lien holder may enforce its lien by arresting a vessel through judicial proceedings. The arrest or attachment of one or more of the vessels owned or chartered in by the Group could interrupt the cash flow of the charterer and/or the Group and require the Group to pay a significant amount of money to have the arrest lifted. In addition, in some jurisdictions, under the "sister ship" theory of liability, a claimant may arrest both the vessel which is subject to the claimant's maritime lien and/or any "associated" vessel, which is any vessel owned or controlled by the same owner. Like other ship-owners with multiple vessels, the Group is exposed to claimants who may try to assert "sister ship" liability against vessels owned by the Group. A claimant may also arrest vessels chartered in by the Group even if the claimant has no claim against the Group. The Group might suffer reputational damage from its owned or chartered vessels becoming subject to a maritime lien, which could affect the company unfavourably whether the maritime lien holders' claim is justified

• r not. This could lead to the deterioration of existing customer relationships, and/or the Group's ability to

23 attract new customers, both factors which are important for the Group's ability to continue to run and grow their business. 2.3.10 Risks in general inherent in international operations The Group's owned and chartered vessels are, and future vessels acquired may be, operated and chartered to charterers operating from various countries, and operated internationally. As a result, and as the Company continues to increase its fleet, the Group encounters the following risks, among others:

• exchange rate fluctuations;
• difficulties in collecting amounts owed;
• domestic and foreign tax policies; and
• laws and regulations, interpretations and court decisions under legal systems, which are not always

fully developed. 2.3.11 Compliance with new environmental laws or regulations Implementation of coming international (and local) rules from the International Maritime Organisation ("IMO") regarding ballast water treatment plants as well as new air emissions regulations, could impose additional costs to the Group. Such additional costs may have a material adverse effect on the Group's business, financial condition, results of operation and liquidity. 2.4 FINANCIAL RISKS 2.4.1 The Group's ability to comply with financial covenants Certain loan agreements entered into by the Company and the Group contain cross default clauses, which are usual for this type of contract and require compliance with certain financial indicators (so-called covenants). Specifically:

• The NOK 300 million bond loan expiring in April 2017 requires for Western Bulk ASA (consolidated)

to maintain the following; a book equity ratio of >25% until 18 April 2016 and >30% thereafter, a NIBD/EBITDA of <3.75, and a minimum equity of USD 50 million and minimum liquidity of USD 10 million. Furthermore the loan agreement restricts dividend payments to a maximum of 100% of consolidated net profits on a semi-annual basis.

• The USD 12.3 million (outstanding amount) mortgage loan for the vessel Western Stavanger, expiring

May 2015 and granted by Nordea Bank Norge ASA requires a minimum of USD 500 000 in cash and 125% MVC2 by the borrower, and the requirements for Western Bulk ASA (consolidated) as a guarantor are to maintain the following; a book equity ratio of >25%, a minimum equity of USD 50 million and minimum liquidity of USD 10 million. Furthermore the guarantee provided by Western Bulk ASA under the loan agreement restricts dividend payments to a maximum of 100% of consolidated net profits on a semi-annual basis.

• The bareboat charter for Western Oslo is guaranteed by Western Bulk ASA in favor of Lyngholmen

Shipping AS/IS as owner and NIBC Bank as lender, and requires for Western Bulk ASA (consolidated) to maintain the following; a book equity ratio of >25%, a minimum equity of USD 50 million and minimum liquidity of USD 20 million, as well as always maintaining a positive working capital.

• The time charters for the three vessels Western Wilton, Western Moscow and Western Texas are

guaranteed by Western Bulk ASA in favor of DVB Bank SE as lender, and requires for Western Bulk

2 MVC= Minimum value clause; Vessel value equal to at least 125% of the outstanding loan amount.

24 ASA (consolidated) to maintain the following; a book equity ratio of >25%, a minimum equity of USD 50 million and minimum liquidity of USD 20 million, as well as always maintaining a positive working capital. If the Company and the Group fail to comply with these covenants and are unable to obtain a waiver from the lenders/bondholders or an amendment of the covenants, a default could result under the debt instruments and charter agreements and the debt may become immediately due and payable. It cannot be assured that the Company and the Group will be in compliance with the covenants in the future or that they will be able to obtain a waiver or an amendment of these covenants if necessary. The ability to comply with the covenants may be affected by events beyond the Company's control, including prevailing economic, financial and industry conditions. 2.4.2 Interest rate risk on floating rate debt As of 30 June 2013, USD 12.3 million and NOK 300 million of the Group's borrowings and bond loan had floating interest rates calculated on the basis of LIBOR and NIBOR. As such, movements in interest rates could negatively affect the financial performance of the Group. The Group is not currently using derivatives to hedge the exposure to interest rate fluctuations. 2.4.3 Refinancing risk at maturity date for debt obligations As of 30 June 2013, the Group had interest bearing liabilities, excluding estimated interest payments, of USD 0.66 million maturing within six months or less, USD 0.66 million maturing within six to twelve months, USD 11.0 million maturing within one to two years, NOK 300 million maturing within two to five years, and no interest bearing liabilities maturing beyond five years. The Group may also incur additional debt in the future. The Group will need to refinance some or all of its indebtedness in the future. No assurance can be given that it will be able to do so at favorable terms or at all. If the Group cannot refinance its indebtedness, it will have to dedicate some or all of its cash flows, and it may be required to sell certain assets to pay the principal and interest on its indebtedness. In such a case the Group may not be able to pay dividends to its shareholders or to expand its fleet as planned. The Group's borrowing arrangements subject the Group to certain limitations on its business and future financing activities as well as certain financial and operational covenants. These restrictions may prevent the Group from taking actions that otherwise might be deemed to be in the best interest of the Group. The debt service obligations of the Group requires the Group to dedicate a substantial portion of its cash flows from

• perations to payments on indebtedness and could limit the Group's ability to obtain additional financing, make

capital expenditures and acquisitions and/or carry out other general corporate activities in the future. These

• bligations may also limit the Group's flexibility in planning for or reacting to, changes in its business and the

industry in which it operates or detract from the Group's ability to successfully withstand a downturn in business

• r the economy generally. Additionally, a default under any indebtedness or other financial agreement by a

subsidiary may constitute an event of default under other borrowing arrangements pursuant to cross default provisions. 2.4.4 The Group trades significant volumes of derivatives that are subject to daily clearing of variation margins, which could lead to significant cash in- or outflows if there are significant market movements in freight rates and oil prices Nearly all of the Group's derivatives are cleared through clearing-houses. For all cleared derivatives, the Group must deposit money into the clearing account if the market value of the derivatives falls. However, the Group will also receive money should the market value of the derivatives increase.

25 The main purpose of entering into derivatives contracts is usually to hedge future freight commitments and bunker oil price risk inherent in the freight contracts. The income or loss from the freight commitment will happen when the freight service is rendered, whereas the corresponding loss or income from any derivative hedge will have an immediate cash effect when expectation on the future market changes. This can cause significant cash flow volatility as cash flow from derivative hedges and from freight commitments do not happen at the same time, and there is a risk that this can disrupt ongoing business. However, the Group has routines in place to prevent a situation where this cash volatility causes a disruption to ongoing business, and also aims at having enough free cash to cushion abnormal and simultaneous movements in both oil and freight

• markets. In extreme cases, the Group may also resort to use less derivatives over certain periods, leaving parts or

all of the freight rate and fuel oil price exposure without hedges. The resulting uncovered exposure may however not be in accordance with the Group's net market strategy or view and may therefore have a material adverse effect on the Group's business, financial condition, results of operation and liquidity. 2.4.5 Access to hedging instruments such as Freight Forward Contracts and Bunker Swaps may fluctuate The Group's access to hedging instruments may fluctuate over time due to lack of ability to qualify for membership with a clearing house, and/or lack of market liquidity. The market for freight derivatives traded over-the-counter is almost non-existent. Therefore, access to using freight derivatives may become very limited should the Group no longer qualify for a membership with a clearing house. To be able to qualify for membership with a clearing house, the Group must, among other criteria, be able to meet and maintain minimum net capital requirements and be based in a qualifying

• jurisdiction. Should the Group's clearing houses change their membership criteria based on events beyond the

Group's control, or other events, it will adversely impact the Group's ability to utilize the full range of hedging instruments relevant to their underlying business. For fuel oil hedging instruments there is OTC market, but the ability to trade in this market depends on Credit Support Agreements with financial institutions or major oil producers and traders. The Company's access to such credit lines may be restricted or even disappear altogether, both because of regulatory changes affecting the market for OTC derivatives or because of a deterioration in the Group's financial situation and/or reputation. Sufficient market liquidity to allow for relatively quick contract execution is important for the Group's ability to be able to utilize derivatives as hedging instruments in an efficient manner. In periods of high market volatility, market liquidity can often be limited, rendering the Group unable to execute its hedging strategies. 2.4.6 The Group is exposed to exchange rate fluctuations for revenues and expenses incurred in other currencies than the US Dollar The functional currency of the Group is USD as the majority of the Group's transactions are denominated in

• USD. Currency risks arise with transactions that are completed in other currencies than USD, including

administrative expenses and debt financing in other currencies than USD such as the NOK 300 million bond

• loan. The Group uses financial derivatives to reduce the currency exposure. However, there can be no assurance

that such measures would be sufficient, which may have a material adverse effect on the Group's business, financial condition, results of operation and liquidity. 2.4.7 The Group is exposed to fluctuations in working capital The Group is depending on having available funds to support working capital requirements for its business. The adequacy of available funds will depend on many factors, including but not limited to the further growth of the business, capital expenditures, changes in working capital, market development (including but not limited to freight rates, time charter rates and bunker oil price), margin calls on derivatives and maturity of debt. The Group is party to loan agreements, which together with various guarantees provided, require the Group to have

26 at least USD 20 million in liquidity at all times to be in compliance with its financial covenants. Accordingly, the Group may require additional funds and seek to raise such funds through issuing new equity and/or debt. The Group may therefore in the future be dependent on obtaining financing and/or new equity to ensure adequacy of available funds to support the business. It is not certain that the Group will be able to obtain future financing on acceptable terms and conditions, nor that the Group will be able to raise new capital in the equity

• markets. If the Group is unable to obtain future debt and/or equity financing, it may have a material adverse

effect on the Group's business, financial condition, results of operation and liquidity. 2.5 RISK FACTORS RELATING TO THE SHARES 2.5.1 The price of the Shares may fluctuate significantly The trading price of the Shares could fluctuate significantly in response to a number of factors beyond the Company's control, including quarterly variations in operating results, adverse business developments, changes in financial estimates and investment recommendations or ratings by securities analysts, significant contracts, acquisitions or strategic relationships, publicity about the Company, its services or its competitors, lawsuits against the Company, unforeseen liabilities, changes to the regulatory environment in which it operates or general market conditions. In recent years, the stock market has experienced extreme price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in the same industry. Those changes may occur without regard to the operating performance of these companies. The price of the Company's Shares may therefore fluctuate based upon factors that have little or nothing to do with the Company, and these fluctuations may materially affect the price of its Shares. 2.5.2 There is no existing market for the Shares, and a trading market that provides adequate liquidity may not develop Prior to the Offering, there was no public market for the Shares, and there can be no assurance that an active trading market will develop, or be sustained or that the Shares may be resold at or above the Offer Price. The market value of the Shares could be substantially affected by the extent to which a secondary market develops for the Shares following the completion of this Offering. 2.5.3 Future sales of Shares by the controlling shareholder may depress the price of the Shares The market price of the Shares could decline as a result of sales of a large number of Shares in the market after the Offering or the perception that these sales could occur. These sales, or the possibility that these sales may

• ccur, also might make it more difficult for the Company to sell equity securities in the future at a time and at a

price that it deems appropriate. Although the Principal Selling Shareholder and the Management Selling Shareholders are subject to agreements with the Managers that restricts their ability to sell or transfer their Shares for 180 and 365 days respectively, after the first day of listing of the Company's Shares on Oslo Børs, or alternatively Oslo Axess, the Managers may, in their sole discretion and at any time, waive the restrictions on sales or transfer in the agreement during this period. Additionally, following this period, all Shares owned by the Selling Shareholders will be eligible for sale in the public market, subject to applicable securities laws restrictions. 2.5.4 Future issuances of Shares or other securities may dilute the holdings of shareholders and could materially affect the price of the Shares It is possible that the Company may in the future decide to offer additional Shares or other securities in order to finance new capital-intensive projects, or in connection with unanticipated liabilities or expenses or for any

• ther purposes. Any such additional offering could reduce the proportionate ownership and voting interests of

27 holders of Shares, as well as the earnings per Share and the net asset value per Share of the Company, and any

• ffering by the Company could have a material adverse effect on the market price of the Shares.

2.5.5 Investors may not be able to exercise their voting rights for Shares registered in a nominee account Beneficial owners of the Shares that are registered in a nominee account (such as through brokers, dealers or

• ther third parties) may not be able to vote for such Shares unless their ownership is re-registered in their names

with the VPS prior to the Company's general meetings. The Company cannot guarantee that beneficial owners

• f the Shares will receive the notice of a general meeting in time to instruct their nominees to either effect a re-

registration of their Shares or otherwise vote for their Shares in the manner desired by such beneficial owners. 2.5.6 Investors in the United States may have difficulty enforcing any judgment obtained in the United States against the Company or its directors or executive officers in Norway The Company is incorporated under the laws of the Kingdom of Norway, and all of its current directors and executive officers reside outside the United States. Furthermore, most of the Company's assets and most of the assets of the Company's directors and executive officers are located outside the United States. As a result, investors in the United States may be unable to effect service of process on the Company or its directors and executive officers or enforce judgments obtained in the United States courts against the Company or such persons in the United States, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States. The Company has been advised by its Norwegian legal counsel that the United States and Norway do not currently have a treaty providing for reciprocal recognition and enforcement

• f judgments (other than arbitral awards) in civil and commercial matters.

2.5.7 The transfer of Shares is subject to restrictions under the securities laws of the United States and

• ther jurisdictions

The Shares have not been registered under the Securities Act or any US state securities laws or any other jurisdiction outside of Norway and are not expected to be registered in the future. As such, the Shares may not be offered or sold except pursuant to an exemption from the registration requirements of the Securities Act and applicable securities laws. See Section 7.2 "Transfer Restrictions—United States". In addition, there can be no assurances that shareholders residing or domiciled in the United States will be able to participate in future capital increases or rights offerings. 2.5.8 Shareholders outside of Norway are subject to exchange rate risk The Shares are priced in Norwegian kroner ("NOK"), the lawful currency of Norway, and any future payments

• f dividends on the Shares will be denominated in NOK. Accordingly, any investor outside Norway is subject to

adverse movements in the NOK against their local currency, as the foreign currency equivalent of any dividends paid on the Shares or price received in connection with any sale of the Shares could be materially adversely affected.

3.

R E S P O N S I B I L I T Y F O R T H E PROSPECTUS

The Board of Directors of Western Bulk ASA accepts responsibility for the information contained in this

• Prospectus. The members of the Board of Directors hereby declares that, having taken all reasonable care to

ensure that such is the case, the information contained in this Prospectus is, to the best of their knowledge, in accordance with the facts and contains no omissions likely to affect its import. October

The Board of Directors of Western Bulk ASA Christen Sveaas, Chairman of the Board Kristin Gjertsen, Director of the Board Rolf A. Wikborg, Director of the Board

29 4. GENERAL INFORMATION 4.1 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Prospectus contains certain forward-looking information and statements, including, but not limited to, certain statements set forth under Section 1 — "Summary", Section 2 — "Risk Factors", Section 14 — "Dividends and Dividend Policy", Section 12 — "Operating and Financial Review", Section 8 — "Presentation

• f the Company" and Section 9 — "Industry Overview", and elsewhere in this Prospectus. Such forward-

looking information and statements are based on the current, estimates and projections of the Company or assumptions based on the information currently available to the Company. Such forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and

• assumptions. The Company cannot give assurance to the correctness of such information and statements. These

forward-looking information and statements can generally be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use terminology such as "targets", "believes", "expects", "aims", "assumes", "intends", "plans", "seeks", "will", "may", "anticipates", "would", "could", "continues", "estimate", "milestone" or other words of similar meaning and similar expressions or the negatives thereof. By their nature, forward-looking information and statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements that may be expressed or implied by the forward-looking information and statements in this Prospectus. Should one or more of these risks or uncertainties materialize, or should any underlying assumptions prove to be incorrect, the Company's actual financial condition or results of operations could differ materially from that or those described herein as anticipated, believed, estimated or expected. Additional factors that could cause the Company's actual results, performance or achievements to differ materially include, but are not limited to, those discussed under Section 2 — "Risk Factors". Any forward-looking information or statements in this Prospectus speak only as at the date of this Prospectus. Except as required by applicable law, the Company does not intend, and expressly disclaims any obligation or undertaking, to publicly update, correct or revise any of the information included in this Prospectus, including forward-looking information and statements, whether to reflect changes in the Company's expectations with regard thereto or as a result of new information, future events, changes in conditions or circumstances or

• therwise on which any statement in this Prospectus is based.

Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any

• f these forward-looking statements.

4.2 STABILISATION In connection with the Offering, ABG Sundal Collier as stabilisation manager, or its agents, on behalf of the Managers, may engage in transactions that stabilise, maintain or otherwise affect the price of the Shares for up to 30 days from the commencement of trading and Listing of the Offer Shares on Oslo Børs, or alternatively on Oslo Axess. Specifically, the Stabilisation Manager may over-allot Offer Shares or effect transactions with a view to supporting the market price of the Offer Shares at a level higher than that which might otherwise

• prevail. The stabilisation manager and its agents are not required to engage in any of these activities and, as

such, there is no assurance that these activities will be undertaken; if undertaken, the stabilisation manager or its agents may end any of these activities at any time and they must be brought to an end at the end of the 30-day period mentioned above. Save as required by law or regulation, the stabilisation manager does not intend to disclose the extent of any stabilisation transactions under the Offering.

30 4.3 ENFORCEMENT OF CIVIL LIABILITIES The Company is a public limited liability company incorporated under the laws of Norway. As a result, the rights of holders of the Shares will be governed by Norwegian law and its Articles of Association. The rights of shareholders under Norwegian law may differ from the rights of shareholders of companies incorporated in

• ther jurisdictions. The Company's directors and executive officers are not residents of the United States, and a

substantial portion of the Company's assets are located outside the United States. As a result, it may be difficult for investors in the United States to effect service of process on the Company or its directors or executive

• fficers in the United States or to enforce in the United States judgments obtained in U.S. courts against the

Company or those persons based on the civil liability provisions of the federal securities laws of the United States or other laws of the United States or any state thereof. Uncertainty exists as to whether courts in Norway will enforce judgments obtained in other jurisdictions, including the United States, against the Company or its directors or officers under the securities laws of those jurisdictions or entertain actions in Norway against the Company or its directors or officers under the securities laws of other jurisdictions. The United States and Norway do not currently have a treaty providing for reciprocal recognition and enforcement of judgements (other than arbitral awards) in civil and commercial matters. 4.4 AVAILABLE INFORMATION The Company has agreed that, for so long as any of the Offer Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the U.S. Securities Act, it will during any period in which it is neither subject to Sections 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"), nor exempt from reporting pursuant to Rule 12g3-2(b) under the U.S. Exchange Act, provide to any holder or beneficial owners of Shares, or to any prospective purchaser designated by any such registered holder, upon the request of such holder, beneficial owner or prospective owner, the information required to be delivered pursuant to Rule 144A(d)(4) of the U.S. Securities Act.

31 5. USE OF PROCEEDS; REASONS FOR THE OFFERING Gross proceeds of the Offering for the Company are expected to be approximately NOK 300 million. The Company estimates that the net proceeds of the Offering to the Company after deduction of the estimated commissions and expenses to the Managers and other advisors, as well as other costs associated with the Listing will be approximately NOK 264 million. For further information on the costs related to the Offering see section 6.20. The Company intends to apply the net proceeds from the Offering for working capital to support further growth

• f WB Chartering and for an opportunistic growth of WB Shipholding's asset base, including more leases with

purchase options. The Offering is further intended to bring the Company in compliance with the requirement for a listing on Oslo Børs of having at least 500 shareholders, each holding Shares of value no less than NOK 10 000, or alternatively the requirement for a listing on Oslo Axess of having at least 100 shareholders. A listing on Oslo Børs, or alternatively Oslo Axess, will provide a regulated place for trading in the Shares, provide greater liquidity in the Shares and make them more attractive investment objects. It will also further facilitate the use of capital markets in order to raise equity should the Company need so in the future, and enable the Company to use its Shares as transaction currency in future acquisitions and mergers, if any.

32 6. THE TERMS OF THE OFFERING This Section sets out the terms and conditions pursuant to which all applications for Offer Shares in the Offering are made. Investing in the Offer Shares involves inherent risks. In making an investment decision, each investor must rely on their own examination, analysis of and enquiry into the Company and the terms of the Offering, including the merits and risks involved. None of the Company, the Selling Shareholders or the Managers, or any of their respective representatives or advisers, are making any representation to any offeree

• r purchaser of the Offer Shares regarding the legality of an investment in the Offer Shares by such offeree or

purchaser under the laws applicable to such offeree or purchaser. Each investor should consult with his or her

• wn advisors as to the legal, tax, business, financial and related aspects of a purchase of the Offer Shares. You

should read this Section in conjunction with the other parts, in particular Section 2 "Risk Factors". 6.1 OVERVIEW OF THE OFFERING The Offering consists of minimum 43 324 061 and maximum 62 414 970 Offer Shares, of which minimum 13 636 364 and maximum 20 000 000 Offer Shares are New Shares to be issued by the Company and to be resolved issued by the Board pursuant to an authorisation granted by the general meeting of the Company on 28 September 2013, minimum 27 272 727 and maximum 40 000 000 Offer Shares are existing Secondary Shares

• ffered by the Principal Selling Shareholder and 2 414 970 Offer Shares are existing Secondary Shares offered

by the Management Selling Shareholders. Through the Offering the Company intends to issue New Shares for total Offer Price of about NOK 300 million and the Principal Selling Shareholder intends to sell Secondary Shares for a total Offer Price between NOK 600 million and NOK 880 million. The final number of Offer Shares to be issued and sold in the Offering will be determined by the Company in consultation with the Principal Selling Shareholder and the Managers, subsequent to expiry of the Bookbuilding Period. In addition, pursuant to the Over-Allotment Facility, the Managers may, with consent of the Company, elect to

• ver-allot a number of Additional Shares equaling up to 10% of the number of Offer Shares. The Principal

Selling Shareholder have granted ABG Sundal Collier, on behalf of the Managers, an Over-Allotment Option to purchase a number of Shares corresponding to the number of Additional Shares to cover any such over-

• allotments. "Offer Shares" shall in the rest of this Section 6, unless the context indicates otherwise, also include

any Additional Shares (see Section 6.11.1, "Over-allotment of additional shares"). The Offering comprises three tranches:

• the Retail Offering, in which Offer Shares are being offered to the public in Norway subject to a lower

limit per application of NOK 10 500 and an upper limit per application of NOK 1 999 999 for each

• applicant. Applicants in the Retail Offering will receive a discount of NOK 1 500 on their aggregate

application amount for the Offer Shares allocated to such applicants;

• the Employee Offering, in which Offer Shares are being offered to Eligible Employees of the Group,

subject to a lower limit of application of an amount of NOK 10 500 for each Eligible Employee. Each Eligible Employee will receive a discount of NOK 3 000 on the aggregate Offer Price for Offer Shares allocated to such Eligible Employee (i.e. a discount of NOK 1 500 in addition to the discount offered in the Retail Offering). Eligible Employees participating in the Employee Offering will, subject to certain restrictions, receive full allocation for an application for Offer Shares; and

• the Institutional Offering, in which Offer Shares are being offered to (i) institutional and professional

investors in Norway, (ii) to investors outside Norway and the United States pursuant to applicable exemptions from local prospectus requirements and other filing requirements, and (iii) in the United

33 States to qualified institutional buyers (QIBs) as defined in, and in reliance on Rule 144A under the U.S. Securities Act, subject to a lower limit per application of NOK 2 000 000. All offers and sales outside the United States will be made in compliance with Regulation S under the U.S. Securities Act. In the event that an investor applies for Offer Shares in both the Retail Offering and / or the Employee Offering and the Institutional Offering, the investor's combined application will be regarded as an application in the Institutional Offering. It has been provisionally assumed that 10% of the Offering will be reserved for applications through the Retail Offering and the Employee Offering, and 90% of the Offering will initially be reserved for the Institutional

• Offering. However, the final allocation between tranches will be decided by the Board in consultation with the

Managers on 17 October 2013 on the basis of the application level in the respective tranches relative to the

• verall application level for the Offering, and with regard to the requirements of free float and number of

shareholders pertaining to a listing of the Shares on Oslo Børs, or alternatively Oslo Axess. The Company reserves the right to deviate from the provisionally assumed allocation between the tranches without further notice and at its sole discretion. The Company and the Principal Selling Shareholder, together with the Managers, reserve the right to at any time increase or reduce the number of Offer Shares in the Offering and the corresponding proceeds from the Offer, depending on the number and size of orders or applications received in the Offering, if the Offer Price is set

• utside the prevailing Indicative Price Range at the time of the Prospectus, fluctuations in the USD/NOK

exchange rate, or other factors. An increase or reduction will only be made once, and will be announced through Oslo Børs no later than 09:00 a.m. CET on the last day of the Bookbuilding Period. The Offering is subject to the Board's decision to issue the New Shares and complete the Offering. The Board reserves the right to not complete the Offering. The Offering will not be completed if Oslo Børs does not approve the Company's application for listing on Oslo Børs, or alternatively Oslo Axess, in its meeting scheduled for 15 October 2013. The table below provides certain indicative key dates for the Offering, subject to change.

Date Commencement of the Bookbuilding Period in the Institutional Offering .......................................................... 3 October 2013, at 09:00 a.m. CET Commencement of the Order Period for the Retail Offering and the Employee Offering .................................. 3 October 2013, at 09:00 a.m. CET Expiry of the Order Period for the Retail Offering and the Employee Offering.................................................. 17 October 2013, at 12:00 p.m. CET(1) Close of the Bookbuilding Period in the Institutional Offering ........................................................................... 17 October 2013, at 4:30 p.m. CET(1) Allocation of Offer Shares .................................................................................................................................... On or about 18 October 2013 Distribution of contract notes ................................................................................................................................ On or about 18 October 2013 Payment due date .................................................................................................................................................. On or about 23 October 2013 Registration of the capital increase and issuance of the new Shares .................................................................... On or about 23 October 2013 Delivery of the Offer Shares ................................................................................................................................. On or about 23 October 2013 Commencement of trading in the Shares on Oslo Børs, or alternatively Oslo Axess.......................................... On or about 24 October 2013 _______________ (1) Subject to shortening or extension. To the extent the Bookbuilding Period or the Order Period is shortened or extended, all other dates referred to in this table may be amended correspondingly.

6.2 THE OFFER SHARES The New Shares will be created pursuant to the Public Limited Companies Act. The Secondary Shares are existing Shares in the Company. All Shares in the Company, including the Offer Shares, will after the

34 registration of the share capital increase pertaining to the New Shares in the Norwegian Register of Business Enterprises, rank in parity with one another and carry one vote per Share. The Offer Shares will, upon issuance, be registered with the VPS in book-entry form under the ISIN NO 001 0691298. The Company's register of shareholders with the VPS is administered by Nordea Bank Norge ASA. 6.3 CONDITIONS FOR COMPLETION OF THE OFFERING The completion of the Offering on the terms set forth in this Prospectus is conditioned upon the following criteria being met: (i) The Board of Directors of Oslo Børs approving the listing of the Shares on Oslo Børs, or alternatively Oslo Axess; (ii) The Company fulfilling the conditions for the Listing as set by Oslo Børs and; (iii) The Board resolving to issue the New Shares and complete the Offering. There can be no assurance that these conditions will be satisfied. The Company reserves the right, in consultation with the Managers, to withdraw, suspend or revoke and not to consummate the Offering at its sole discretion (and for any reason), including during the Bookbuilding Period, at any time until the share capital increase associated with the Offering is registered with the Norwegian Register of Business Enterprises. In such case, this will be announced through Oslo Børs' information system. This right may not be exercised after the Shares have been listed. In the event that the Offering is cancelled, all orders for Offer Shares will be disregarded, any allotments made will be deemed not to have been made, and any payments made will be returned without interest or other compensation. 6.4 RESOLUTIONS RELATING TO THE OFFERING In an extraordinary general meeting held 28 September 2013 it was resolved to grant the Board an authorisation to increase the share capital of the Company with up to NOK 22 500 000 by issuing up to 45 000 000 new Shares, each with a par value of NOK 0.50. The extraordinary general meeting unanimously passed the following resolution: "The Board of Directors is authorised to increase the Company's share capital through issuance of new shares

• n the following conditions
• 1. The share capital may, in one or more occurrences, be increased by up to NOK 22 500 000.
• 2. The Board of Directors is authorised to amend the Company's Articles of Association to reflect the new

share capital of the Company when the mandate is utilised.

• 3. The pre-emptive rights of the existing shareholders under section 10-4 of the NPLCA may be set aside.
• 4. The mandate may only be used in connection with the contemplated offering to be conducted in

connection with the listing of the Company's shares on Oslo Børs, alternatively on Oslo Axess.

• 5. The new shares shall be issued in the same class of shares as the existing shares of the Company.
• 6. In connection with a subdivision of shares or a combination of shares, the mandate, including the

number of shares and the nominal value shall be adjusted equally to reflect such subdivision or

35 combination of shares.

• 7. The mandate shall be valid until the next annual General Meeting, however no later than 30 June

2014. The pre-emptive rights of the existing shareholders under section 10-4 of the Public Limited Companies Act may be set aside to ensure that the Company receives a broader shareholder base, and thus qualifies for the listing requirements. The Company believes a successful listing will be for the benefit of all its shareholders, as a listing on Oslo Børs, or alternatively Oslo Axess, will make the Company a more attractive investment object and be beneficial for the Company's future development. Subject to conditions for completion of the Offering set out in Section 6.3 "Conditions for completion of the Offering", the authorisation will be utilized by the Board to issue the New Shares applied for in the Offering. In addition, each of the Selling Shareholders has agreed to sell the number of Secondary Shares required in the Offering, including any Additional Shares to be sold by the Principal Selling Shareholder upon exercise of the Over-Allotment Option (if exercised). On 30 September 2013, it was resolved to launch the Offering. The New Shares are expected to be issued following a final resolution by the Board on or around 17 October 2013. 6.5 INDICATIVE PRICE RANGE AND OFFER PRICE A non-binding Indicative Price Range of NOK 15 to NOK 22 per Offer Share (the Indicative Price Range) has been set by the Board after consultation with the Managers and the Principal Selling Shareholder. The Indicative Price Range may be amended at any time during the Bookbuilding Period. Any such amendments to the Indicative Price Range will be announced in releases through the electronic information system of Oslo Børs before opening of trading on Oslo Børs the last day of the then prevailing Bookbuilding Period. The bookbuilding process, which will form the basis for the determination of the final Offer Price and the number of Offer Shares, will be conducted only in connection with the Institutional Offering. The Indicative Price Range has been determined on the basis of an overall evaluation including an assessment of the Company's assets and prospects, the Company's historic and expected earnings and future market prospects and a comparison of these factors with the market valuation of comparable companies, as well as taking into account the expected demand for the Offer Shares. The Board will determine the Offer Price after the end of the Bookbuilding Period. The decision by the Board will be made after consultation with the Managers, based on, among other factors, an evaluation of the level of demand in the bookbuilding process in the Institutional Offering, an assessment of the market and the recommendation from the Managers, and may be set within, above or below the Indicative Price Range at the sole discretion of the Board and the Managers. The final Offer Price and Offer size will, once determined, be announced by the Company through the electronic information system of Oslo Børs. Such announcement is expected to be made either after close of trading on Oslo Børs on 17 October 2013 or before trading commences on 18 October 2013.

36 6.6 THE INSTITUTIONAL OFFERING 6.6.1 Overview The Institutional Offering is structured as an offer of Offer Shares to (i) institutional and professional investors in Norway, (ii) to investors outside Norway and the United States pursuant to applicable exemptions from local prospectus requirements and other filing requirements and in compliance with Regulation S under the U.S. Securities Act, and (iii) in the United States to qualified institutional buyers (QIBs) as defined in, and in reliance

• n Rule 144A under the U.S. Securities Act.

The minimum order in the Institutional Offering is NOK 2 000 000. Investors who intend to place an order less than or equal to NOK 1 999 999 must do so in the Retail Offering or the Employee Offering (if the applicant is an Eligible Employee). Investors ordering Offer Shares in the Institutional Offering may not order Offer Shares in the Retail Offering and/or the Employee Offering. The same applies for the personally related parties of such investors, as defined in § 1-5 of the Norwegian Public Limited Companies Act. In the event an investor or his personally related parties places orders for Offer Shares both in the Institutional Offering and the Retail Offering and/or the Employee Offering, the said parties may risk that the Managers without further notice disregard the

• rders made in the Retail Offering and/or the Employee Offering. In the event the Managers for whatever reason

do not disregard the orders placed in the Retail Offering and/or the Employee Offering on the basis referred to above, the investor may not use the basis referred to above as grounds for requiring a reduction of the number of Offer Shares allotted to the investor. 6.6.2 Bookbuilding Period The Bookbuilding Period will last from 3 October 2013 at 09:00 a.m. (CET) to 17 October 2013 at 4:30 p.m. (CET), after which no further orders will be accepted. The Company reserves the right to shorten or extend the Bookbuilding Period at any time. Any shortening of the Bookbuilding Period will be announced through the electronic information system of Oslo Børs on or before 09:00 a.m. (CET) on the last day of the Bookbuilding Period as shortened, whereas any extension of the Bookbuilding Period will be announced through the electronic information system of Oslo Børs on or before 09:00 a.m. (CET) on the day following the last day of the (then prevailing) Bookbuilding Period. A shortening

• r extension of the Bookbuilding Period can be made one or several times, provided, however that the

Bookbuilding Period will in no event close earlier than 4:30 p.m. (CET) on 10 October 2013 or be extended beyond 4:30 p.m. (CET) on 31 October 2013. In the event of a shortening or extension of the Bookbuilding Period, the allocation date, the Payment Date and the date of delivery of Offer Shares will be changed accordingly, but the date of listing and commencement of trading on Oslo Børs, or alternatively Oslo Axess, will not necessarily be changed. 6.6.3 Delivery of orders in the Institutional Offering Orders for Offer Shares in the Institutional Offering must be made during the Bookbuilding Period by informing

• ne of the Application Offices listed in section 6.9 – "The Application Offices" of the number of Offer Shares or

the aggregate application amount the investor wishes to apply for and the price such investor is offering to pay for such Offer Shares. Any orally placed order in the Institutional Offering will be binding upon the investor and subject to the same terms and conditions as a written order. The Managers may, at any time and in their sole discretion, require the investor to confirm any orally placed order in writing. Orders made may be withdrawn or amended by the investor at any time up to the end of the Bookbuilding Period. After the end of the Bookbuilding Period (including an end based on a shortening of the Bookbuilding Period), all received orders that have not been withdrawn or amended are irrevocable and binding upon the investor, regardless of whether the final Offer Price is set below, above or within the indicative price range. All orders in the Institutional Offering will be treated in the same manner regardless of which of the Managers an order is placed with.

37 By making an order (as amended, if applicable), and not having withdrawn such order prior to the end of the Bookbuilding Period, the investor irrevocably confirms its request to subscribe for and purchase at the Offer Price the number of Offer Shares allocated to such investor up to the number of Offer Shares ordered or the aggregate application amount, and authorises and instructs each of the Managers acting jointly or severally (or someone appointed by them) to formally subscribe for any New Shares allocated to such investor and to take all actions required to ensure delivery of the Offer Shares to such investor in the VPS, on behalf of the investor. 6.6.4 Allocation of Offer Shares The allocation of Offer Shares to the applicants in the Institutional Offering is expected to formally be determined by the Company in consultation with the Managers on or about 17 October 2013. Notifications of allocations in the Institutional Offering are expected to be issued by Managers on or about 18 October 2013. Applicants may contact the Managers in order to be informed about their allocations on this date. 6.6.5 Payment and delivery of allocated shares In order to facilitate prompt delivery of the Offer Shares to investors against payment for the Offer Shares in the Institutional Offering, it is expected that New Shares allocated in the Institutional Offering will be delivered to the investors in the form of existing Shares borrowed by the Managers from the Principal Selling Shareholder pursuant to a share lending agreement between the Managers and the Principal Selling Shareholder. The borrowed Shares will be equal in all respects to the Offer Shares. A number of Shares equal to the number of borrowed Shares, will then be issued and delivered to the Managers for re-delivery to the Principal Selling Shareholder as re-delivery of the borrowed Shares on or about 23 October 2013. Payment in respect of the Offer Shares allocated to applicants in the Institutional Offering will take place against delivery of the Offer Shares (as regards the New Shares, in the form of borrowed Shares) to the Norwegian VPS account specified by the investor. Payment and delivery of Offer Shares is expected to take place on or around 23 October 2013. Pursuant to a payment guarantee agreement expected to be entered into by the Company and the Managers acting in their capacities as payment guarantors (the "Payment Guarantors") after the Bookbuilding Period, the Payment Guarantors will, subject to the terms and conditions of the payment guarantee, pre-fund payment for any New Shares not paid by defaulting applicants when due. The non-paying applicants will remain fully liable for payment of the Offer Shares allocated to them, irrespective of any payment by the Payment Guarantors under the payment guarantee. If payment is not received by the Payment Date, the Company, the Selling Shareholders and the Payment Guarantors (on its own behalf for New Shares paid pursuant to the payment guarantee and, if applicable, on behalf of the Managers for unpaid Additional Shares) reserve the right to re- allot, cancel or reduce the allocation or otherwise dispose of the allocated Offer Shares in accordance with and to the fullest extent permitted by applicable laws. The New Shares allocated to such applicants and paid for by the Payment Guarantors pursuant to the payment guarantee will be transferred to a VPS account operated by one of the Managers. Such New Shares will not be transferred to the non-paying applicant until payment for the relevant New Shares is received. The Payment Guarantors also reserves the right, without further notice, to sell or assume ownership of any unpaid New Shares if payment has not been received by the third day after the Payment Date. If Offer Shares are sold on behalf of the applicant, such sale will be for the applicant's account and risk (however such that the applicant shall not be entitled to profits therefrom, if any) and the applicant will be liable for any loss, costs, charges and expenses suffered or incurred by the Company, the Selling Shareholders and/or the Managers as a result of, or in connection with, such sales, and the Company, the Selling Shareholders and/or the Mangers may enforce payment for any amount outstanding in accordance with applicable law.

38 For late payment, interest will accrue at a rate according to the Norwegian Act on Interest on Overdue Payments

• f 17 December 1976 no. 100. The interest rate is at the date of this Prospectus 9.5%.

6.7 THE RETAIL OFFERING 6.7.1 Overview and Offer Price The Retail Offering is a public offering to investors in Norway. The minimum application amount in the Retail Offering for each applicant shall be NOK 10 500, and the maximum application amount shall be NOK 1 999 999. Investors ordering Offer Shares in the Retail Offering may not order Offer Shares in the Institutional Offering and/ or the Employee Offering. The same applies for the personally related parties of the applicants, as defined in § 1-5 of the Norwegian Public Limited Companies Act. In the event an applicant applies in more than

• ne tranche, the applicant runs the risk of either having the multiple subscriptions accumulated, or run the risk
• f having all subscriptions annulled.

The Offer Price for the Offer Shares offered in the Retail Offering will be the same as in the Institutional

• Offering. However, an applicant in the Retail Offering will receive a discount of NOK 1 500 on the aggregate

Offer Price for Offer Shares allocated to such applicant. Each applicant in the Retail Offering will be permitted, but not required, to indicate on the Order Form Retail Offering or in the VPS online application system that the applicant does not wish to be allocated Offer Shares should the Offer Price be set above the high-point of the Indicative Price Range. If the applicant does so, the applicant will not be allocated any Offer Shares in the event that the Offer Price is set above the high-point of the Indicative Price Range at the time the Order Form Retail Offering is received by an Application Office. If the applicant does not expressly stipulate such reservation on the Order Form Retail Offering, the application will be binding regardless of whether the Offer Price is set within or above (or below) the indicative price range, so long as the Offer Price has been determined on the basis of orders placed during the bookbuilding process. 6.7.2 Order Period The Order Period when orders for Offer Shares will be accepted in the Retail Offering will last from 3 October 2013 at 09:00 a.m. (CET) to 17 October 2013 at 12:00 p.m. (CET). Any shortening or extension of the Bookbuilding Period, see Section 6.6.2 "Bookbuilding Period", might lead to a similar shortening or extension

• f the Order Period.

6.7.3 Delivery of orders in the Retail Offering All orders for Offer Shares in the Retail Offering must be made by completing the Order Form Retail Offering drawn up for this purpose attached to this Prospectus as Appendix 1 in English and Appendix 2 in Norwegian, and submitting such Order Form Retail Offering to one of the Application Offices set out in Section 6.9 – "The Application Offices", or through the VPS online application system as further described below. An Order Form Retail Offering that is incomplete or incorrectly completed, or that is received after the expiry of the Order Period, may be considered invalid in the Managers' sole discretion and may not be processed by the Managers without further notice to the applicant. A properly completed Order Form Retail Offering must be received by the Managers by 12:00 p.m. (CET) on 17 October 2013 in order to be considered (subject to any shortening or extension of the Order Period). Norwegian applicants in the Retail Offering may also apply for shares on the web-sites www.abgsc.com, www.paretosec.com or www.swedbank.no, where investors will be able to download this Prospectus including

39 the Order Forms (copies of which are attached as Appendices 1 and 2) once they have confirmed that they reside in Norway, have a Norwegian personal identification number, and have a valid VPS account. Applications made through the VPS online application system must be duly registered during the Order Period. Neither the Company nor any of the Managers may be held responsible for postal delays, unavailable fax lines, internet lines or servers or other logistical or technical matters that may result in applications not being received in time or at all by any of the Application Offices. All applications in the Retail Offering will be treated in the same manner regardless of which Application Office the applicant submits the application to, and regardless of whether it is placed by delivery of an Order Form Retail Offering to an Application Office or through the VPS online application system. All applications made in the Retail Offering will be irrevocable and binding upon receipt of a duly completed Order Form Retail Offering by an Application Office, or in the case of applications through the VPS online application system, upon registration of the application, irrespective of any extension of the Order Period, and cannot be withdrawn, cancelled or modified by the applicant after having been received by an Application Office, or in the case of applications through the VPS online application system, upon registration of the application. By making an application, the applicant irrevocably confirms its purchase and subscription, at the Offer Price, for the number of Offer Shares allocated to such applicant up to the aggregate application amount, and authorises and instructs each of the Managers acting jointly or severally (or someone appointed by them) to formally subscribe for any New Shares allocated to such applicant and to take all actions required to ensure delivery of the Offer Shares to such applicant (as regards the New Shares, in the form of borrowed Shares) in the VPS, on behalf of the applicant. The applicant is responsible for the correctness of the information filled in on the Order Form Retail Offering or in the VPS online application system submitted by the applicant. By signing and submitting an Order Form Retail Offering or submitting an application in the VPS online application system, the applicant confirms and warrants to have read this Prospectus and that the applicant is eligible to subscribe for Offer Shares under the terms set forth herein. If two or more identical Order Forms are received from the same applicant, the Order Forms will only be counted once, unless otherwise explicitly stated in one of the Order Forms. In the case of multiple applications through the VPS online system or orders made both on an Order Form Retail Offering and through the VPS

• nline application system, all orders will be counted, however so that multiple applications will be treated as one

application with regard to the discount offered in the Retail Offering and the maximum application amount. 6.7.4 Allocation date The allocation in the Retail Offering will take place after the expiry of the Order Period. Written notifications of allocations in the Retail Offering are expected to be issued by Swedbank First Securities acting as settlement agent for the Retail Offering on or about 18 October 2013 by post. Applicants may contact one of the Managers in order to be informed about their allocations on this date from 12:00 (CET) on 18 October and onwards during business hours. Applicants who have access to investor services through an institution that operates the applicant's VPS account should be able to see how many Offer Shares they have been allocated from 12:00 (CET) on 18 October 2013.

40 6.7.5 Payment and delivery of allocated shares In completing the Order Form, each applicant in the Retail Offering will authorise Swedbank First Securities (on behalf of the Managers) to debit the applicant's Norwegian bank account for the total amount due for the ordered and allocated Offer Shares on or about 23 October 2013 and there must be sufficient funds in the stated bank account from and including 22 October 2013. Investors not having a Norwegian bank account, must ensure that payment of the allocated Offer Shares is made on or before the payment due date (23 October 2013). Further details and instructions will be set out in the allocation notes to the applicant and can be obtained by contacting Swedbank First Securities by telephone at: + 47 23 23 80 00. The applicant's bank account number should be stated on the Order Form. Should applicants have insufficient funds in their accounts or should payment be delayed for any reason, a penalty interest will be payable on the delayed sum according to the Norwegian Act on Interest on Overdue Payments of 17 December 1976 no. 100. The interest rate is at the date of this Prospectus is 9.50%. Should payment not be made at the correct time, the Offer Shares allocated to such applicant will not be delivered to the applicant and the Managers, on behalf of the Company and the Selling Shareholders, reserve the right to cancel the order, to re-allot or to sell the allocated shares at the expense and risk of the applicant in accordance with sections 10-12 and 2-13 (3) of the Norwegian Public Limited Companies Act. Swedbank First Securities (on behalf of the Managers) reserves the right to (but has no obligation to) make up to three debits attempts within 26 October 2013 if there are insufficient funds on the account on the first debiting date. Pursuant to a payment guarantee agreement expected to be entered into by the Company and the Payment Guarantors, the Payment Guarantors will, subject to the terms and conditions of the payment guarantee agreement, guarantee payment of New Shares as further described in Section 6.6.5 – "Payment and delivery of allocated shares". The non-paying applicant will remain fully liable for payment of the New Shares allocated to them, irrespective of any payment by any of the Managers under the payment guarantee agreement. Such New Shares allocated to such applicants will be transferred to a VPS account operated by one of the Managers and will not be transferred to the non-paying applicant until payment for the relevant New Shares is received. The Managers reserve the right, without further notice, to sell, re-allot or assume ownership of such New Shares if payment has not been received by the third day after the payment due date. If Offer Shares are sold on behalf of the applicants, such sale will be for the applicant's account and risk (however so that the applicant shall not be entitled to profits therefrom, if any) and the applicant will be liable for any loss, costs, charges and expenses suffered or incurred by the Company, the Selling Shareholders and/or the Managers as a result of or in connection with such sales, and the Company, the Selling Shareholders and/or the Managers may enforce payment of any amount outstanding in accordance with Norwegian law. Subject to timely payment by the applicant, Offer Shares allocated to applicants in the Retail Offering is expected to be delivered to the applicants' VPS accounts and will be available for the applicant on or about 23 October 2013. In order to facilitate prompt delivery of the Offer Shares in the Retail Offering, it is expected that New Shares allocated in the Retail Offering will be delivered in the form of existing Shares borrowed by the Managers from the Principal Selling Shareholder pursuant to a share lending agreement between the Managers and the Principal Selling Shareholder. The borrowed Shares will be equal in all respects to the Offer Shares. A number of Shares equal to the number of borrowed Shares, will then be issued and delivered to the Managers for re-delivery to the Principal Selling Shareholder as re-delivery of the borrowed Shares on or about 23 October 2013.

41 6.8 THE EMPLOYEE OFFERING 6.8.1 Overview and Offer Price Only direct employees of Western Bulk Management AS who are located in Oslo and direct employees of Western Bulk Pte Ltd who are located in Singapore, both as of the last date of the Order Period, are eligible to participate in the Employee Offering (the "Eligible Employees"). The minimum application amount in the Employee Offering shall be NOK 10 500. There is no maximum application amount for each applicant in the Employee Offering. Investors ordering Offer Shares in the Employee Offering may not order Offer Shares in the Institutional Offering. The same applies for the personally related parties of the applicants, as defined in § 1-5 of the Norwegian Public Limited Companies Act. In the event a applicant applies in more than one tranche, the applicant runs the risk of either having the multiple subscriptions accumulated, or run the risk of having all subscriptions annulled. The Offer Price for the Offer Shares offered in the Employee Offering will be the same as in the Institutional Offering, however so that each Eligible Employee will receive a discount of NOK 3 000 on the aggregate Offer Price for Offer Shares allocated to such Eligible Employee (i.e. a discount of NOK 1 500 in addition to the discount offered in the Retail Offering). Each applicant in the Employee Offering will be permitted, but not required, to indicate on the Order Form Employee Offering that the applicant does not wish to be allocated Offer Shares should the Offer Price be set above the high-point of the Indicative Price Range. If the applicant does so, the applicant will not be allocated any Offer Shares in the event that the Offer Price is set above the high-point

• f the Indicative Price Range at the time the Order Form Employee Offering is received by an Application
• Office. If the applicant does not expressly stipulate such reservation on the Order Form Employee Offering, the

application will be binding regardless of whether the Offer Price is set within or above (or below) the indicative price range, so long as the Offer Price has been determined on the basis of orders placed during the bookbuilding process. 6.8.2 Order Period The Order Period, when orders for Offer Shares will be accepted in the Employee Offering, will last from 3 October 2013 at 09:00 a.m. (CET) to 17 October 2013 at 12:00 p.m. (CET). Any shortening or extension of the Bookbuilding Period, see Section 6.6.2 "Bookbuilding Period", might lead to a similar shortening or extension

• f the Order Period.

6.8.3 Delivery of orders in the Employee Offering All orders for Offer Shares in the Employee Offering must be made by completing the Order Form Employee Offering drawn up for this purpose attached to this Prospectus as Appendix 3 in English and Appendix 4 in Norwegian, and submitting such Order Form Employee Offering to one of the Application Offices set out in Section 6.9 – "The Application Offices". An Order Form Employee Offering that is incomplete or incorrectly completed, or that is received after the expiry of the Order Period, may be considered invalid in the Managers' sole discretion and may not be processed by the Managers without further notice to the applicant. A properly completed Order Form Employee Offering must be received by the Managers by 12:00 p.m. (CET) on 17 October 2013 in order to be considered (subject to any shortening or extension of the Order Period). Neither the Company nor any of the Managers may be held responsible for postal delays, unavailable fax lines, internet lines or servers or other logistical or technical matters that may result in applications not being received in time or at all by any of the Application Offices.

42 All applications in the Employee Offering will be treated in the same manner regardless of which Application Office the applicant submits the application to. All applications made in the Employee Offering will be irrevocable and binding upon receipt of a duly completed Order Form Employee Offering by an Application Office, irrespective of any extension of the Order Period, and cannot be withdrawn, cancelled or modified by the applicant after having been received by an Application Office. Applications in the Employee Offering may not be done online. By making an application, the applicant irrevocably confirms its purchase and subscription, at the Offer Price, for the number of Offer Shares allocated to such applicant up to the aggregate application amount, and authorises and instructs each of the Managers acting jointly or severally (or someone appointed by them) to formally subscribe for any New Shares allocated to such applicant and to take all actions required to ensure delivery of the Offer Shares to such applicant (as regards the New Shares, in the form of borrowed Shares) in the VPS, on behalf of the applicant. The applicant is responsible for the correctness of the information filled in on the Order Form Employee

• Offering. By signing and submitting an Order Form Employee Offering the applicant confirms and warrants to

have read this Prospectus and that the applicant is eligible to subscribe for Offer Shares under the terms set forth herein. If two or more identical Order Forms Employee Offering has been received from the same applicant, such Order Forms Employee Offering will only be counted once, unless otherwise explicitly stated in one of the Order Forms Employee Offering. Multiple Order Forms Employee Offering will be treated as one with regard to the discount. 6.8.4 Allocation date The allocation in the Employee Offering will take place after the expiry of the Order Period. Written notifications of allocations in the Employee Offering are expected to be issued by Swedbank First Securities acting as settlement agent for the Employee Offering on or about 18 October 2013 by post. Applicants who have access to investor services through an institution that operates the applicant's VPS account should be able to see how many Offer Shares they have been allocated from 12:00 (CET) on 18 October 2013. 6.8.5 Payment and delivery of allocated shares In completing the Order Form Employee Offering, each applicant in the Employee Offering authorises Swedbank First Securities (on behalf of the Managers) to debit the applicant's Norwegian bank account for the total amount due for the ordered and allocated Offer Shares on or about 23 October 2013 and there must be sufficient funds in the stated bank account from and including 22 October 2013. Investors not having a Norwegian bank account, must ensure that payment of the allocated Offer Shares is made on or before the payment due date (23 October 2013). Further details and instructions will be set out in the allocation notes to the applicant and can be obtained by contacting Swedbank First Securities by telephone at: + 47 23 23 80 00. The applicant's bank account number should be stated on the Order Form Employee Offering. Should applicants have insufficient funds in their accounts or should payment be delayed for any reason, a penalty interest will be payable on the delayed sum according to the Norwegian Act on Interest on Overdue Payments of 17 December 1976 no. 100. The interest rate is at the date of this Prospectus is 9.50%. Should payment not be made at the correct time, the Offer Shares allocated to such applicant will not be delivered to the applicant and the Managers, on behalf of the Company and the Principal Selling Shareholder, reserve the right to cancel the order, to re-allot or to sell the allocated shares at the expense and risk of the applicant in accordance with sections 10- 12 and 2-13 (3) of the Norwegian Public Limited Companies Act.

43 Swedbank First Securities (on behalf of the Managers) reserves the right to (but has no obligation to) make up to three debits attempts within 26 October 2013 if there are insufficient funds on the account on the first debiting date. Pursuant to a payment guarantee agreement expected to be entered into by the Company and the Payment Guarantors, the Payment Guarantors will, subject to the terms and conditions of the payment guarantee agreement, guarantee payment of New Shares as further described in Section 6.6.5 – "Payment and delivery of allocated shares". The non-paying applicant will remain fully liable for payment of the New Shares allocated to them, irrespective of any payment by any of the Managers under the payment guarantee agreement. Such New Shares allocated to such applicants will be transferred to a VPS account operated by one of the Managers and will not be transferred to the non-paying applicant until payment for the relevant New Shares is received. The Managers reserve the right, without further notice, to sell, re-allot or assume ownership of such New Shares if payment has not been received by the third day after the payment due date. If Offer Shares are sold on behalf of the applicants, such sale will be for the applicant's account and risk (however so that the applicant shall not be entitled to profits therefrom, if any) and the applicant will be liable for any loss, costs, charges and expenses suffered or incurred by the Company, the Selling Shareholders and/or the Managers as a result of or in connection with such sales, and the Company, the Selling Shareholders and/or the Managers may enforce payment of any amount outstanding in accordance with Norwegian law. Subject to timely payment by the applicant, Offer Shares allocated to applicants in the Employee Offering is expected to be delivered to the applicants' VPS accounts and will be available for the applicant on or about 23 October 2013. In order to facilitate prompt delivery of the Offer Shares in the Employee Offering, it is expected that New Shares allocated in the Employee Offering will be delivered in the form of existing Shares borrowed by the Managers from the Principal Selling Shareholder pursuant to a share lending agreement between the Managers and the Principal Selling Shareholder. The borrowed Shares will be equal in all respects to the Offer

• Shares. A number of Shares equal to the number of borrowed Shares, will then be issued and delivered to the

Managers for re-delivery to the Principal Selling Shareholder as re-delivery of the borrowed Shares on or about 23 October 2013. 6.9 THE APPLICATION OFFICES The Application Offices for the Offering are: ABG Sundal Collier Norge ASA Munkedamsveien 45E P.O. Box 1444 Vika N-0115 Oslo Norway Tel: +47 22 01 60 00 Fax: +47 22 01 60 60 Pareto Securities AS Dronning Mauds gate 3 P.O.Box 1411 Vika N-0115 Oslo Norway Tel: +47 22 87 87 00 Fax: +47 22 87 87 15 Swedbank First Securities Filipstad Brygge 1 P.O.Box 1441 Vika N-0115 Oslo Norway Tel: +47 23 23 80 00 Fax: +47 23 23 80 11 6.10 MECHANISM OF ALLOCATION The Offering is divided into an Institutional Offering, a Retail Offering and an Employee Offering. The expected allocation of Offer Shares between the (i) Institutional Offering and (ii) the Retail Offering and the Employee Offering is 90% and 10% respectively. However, the final allocation between the tranches will be decided on or about 17 October 2013 based on the subscription level in the respective tranches relative to the

• verall ordered level for the Offering and with regard to the requirement of free float and number of

44 shareholders pertaining to a listing of the Shares on Oslo Børs, or alternatively Oslo Axess. No shares have been reserved for any specific national market. The Company and the Manager reserve the right to deviate from the provisionally assumed allocation between the tranches without further notice and at its sole discretion. In the Institutional Offering, the Board will determine the allocation of shares after consultation with the

• Managers. An important aspect of the allocation principles is the desire to create an appropriate long-term

shareholder structure for the Company. The allocation principles will include factors such as subscribed amounts, timeliness of orders, price aggressiveness in the Bookbuilding Period, investor quality and the goal of establishing a strong, diversified shareholder structure. Priority may therefore be given to applicants believed to be long-term investors. In the Retail Offering, allocation will be made on a pro rata basis using the VPS automated standard allocation procedure, but no allocation shall be for a number of shares with a total Offer Price less than NOK 10 500. However, the Company will aim at, and reserves the right to, give full allocation in the Retail Offering to applicants who were direct employees of Kistefos AS or AS Holding as of the last day of the Order Period. The Company further reserves the right to limit the total number of applicants to whom shares will be issued if it deems this to be necessary in order to keep the number of shareholders in the Company at an appropriate level. If the Company should decide to limit the total number of applicants to whom shares will be issued, the identity

• f the applicants to whom shares will be issued will be determined by drawing lots or applying similar

mechanisms through the automated procedure applicable through VPS. The applicants in the Employee Offering will have priority over applicants in the Retail Offering. In the Employee Offering the applicants will receive full allocation for an application as long as the total number of Offer Shares applied for in the Employee Offering does not exceed such number of Offer Shares that the Board resolves to allocate to applicants in the Retail Offering and the Employee Offering (as opposed to the Institutional Offering). The Board reserves the right to reduce any applications in the Employee Offering should the Board, in consultation with the Managers, consider that required in order to obtain a diversified shareholder structure or to meet the conditions for listing on Oslo Børs, or alternatively Oslo Axess. 6.11 OVER-ALLOTMENT OPTION AND STABILIZATION ACTIVITIES 6.11.1 Over-allotment of additional shares In connection with the Offering, and pursuant to the Over-Allotment Facility, the Managers may, with consent

• f the Company, elect to over-allot a number of Shares equaling up to 10% of the number of Offer Shares

initially allocated in the Offering (amounting to 4 332 406 Shares if 43 324 061 Offer Shares are initially allocated, and 6 241 497 Shares if 62 414 970 Offer Shares are initially allocated), and the Principal Selling Shareholder will under the Lending Option grant the Managers a right to borrow a corresponding number of Shares in order to permit delivery in respect of over-allotments made. If the Over-Allotment Facility is utilised in full, the number of Offer Shares sold and issued in the Offering may amount to a maximum of 68 656 467 Offer Shares. In order to cover over-allotments made, the Principal Selling Shareholder will further grant the Managers a right, under the Over-Allotment Option, to buy a number of Shares equal to the number of Additional Shares at the Offer Price less the number of Shares acquired by the Stabilisation Manager through stabilisation activities, exercisable in whole or in part within a 30-day period from commencement of trading in the Shares on Oslo Børs, or alternatively Oslo Axess. To the extent that the Managers have over-allotted Shares in the Offering, the Managers have created a short position in the Shares. ABG Sundal Collier, the Stabilisation Manager may close out this short position by buying Shares in the open market through stabilisation activities and/or by exercising the Over-Allotment Option.

45 A stock exchange notice will be made on or about 18 October 2013 announcing whether the Managers have

• ver-allotted Shares in connection with the Offering. Any exercise of the Over-Allotment Option will be

promptly announced by the Stabilisation Manager through the information system of Oslo Børs. 6.11.2 Price stabilisation The Stabilisation Manager, ABG Sundal Collier, may, upon exercise of the Lending Option, effect transactions with a view to support the market price of the Shares at a level higher than what might otherwise prevail through buying Shares in the open market at prices equal to or lower than the Offer Price. There is no obligation of the Stabilisation Manager to conduct stabilisation activities and there is no assurance that stabilisation activities will be undertaken. Such stabilising activities, if commenced, may be discontinued at any time and will be brought to an end at the latest 30 calendar days after the first day of trading of the Shares on Oslo Børs, or alternatively Oslo Axess. Stabilisation activities might result in market prices that are higher than would otherwise prevail. Any stabilisation activities will be conducted in accordance with Section 3-12 of the Norwegian Securities Trading Act and the EC Commission Regulation 2273/2003 regarding buy-back programmes and stabilisation

• f financial instruments. The Company, the Principal Selling Shareholder and the Managers have agreed that the

net profit, if any, resulting from stabilisation activities conducted by the Stabilisation Manager, on behalf of the Managers, will be for the account of the Principal Selling Shareholder. Within one week after the expiry of the 30-day period of price stabilisation, the Stabilisation Manager will publish information as to whether or not price stabilisation activities were undertaken. If stabilisation activities were undertaken, the statement will also include information about: (a) the total amount of Shares sold and purchased; (b) the dates on which the stabilisation period began and ended; (c) the price range between which stabilisation was carried out, as well as the highest, lowest and average price paid during the stabilisation period; and (d) the date at which stabilisation activities last occurred. 6.12 SHAREHOLDERS' RIGHTS CONFERRED BY THE NEW SHARES The Offer Shares will in all respects rank pari passu with all other Shares already in issue, and will be eligible for any dividend that the Company may declare on the Shares after the registration of the share capital increase pertaining to the New Shares in the Norwegian Register of Business Enterprises. 6.13 TRADING OF ALLOCATED SHARES It is expected that the Company will be listed and that it will be possible to trade the Offer Shares on Oslo Børs,

• r alternatively Oslo Axess from and including 24 October 2013.

An applicant will not under any circumstances be entitled to sell or transfer its Offer Shares allocated in the Offering until the Offer Shares have been paid in full by the applicant and the share capital increase pertaining to the New Shares have been registered in the Norwegian Register of Business Enterprises. 6.14 LISTING 6.14.1 Listing The Company's Shares are not currently listed on Oslo Børs or any other stock exchange or regulated market. The Company has applied for listing of the Company's shares on Oslo Børs, or alternatively Oslo Axess. The board of directors of Oslo Børs is expected to decide on the Company's application in an extraordinary meeting to be held on 15 October 2013. If Oslo Børs approves the listing of the Company's Shares on Oslo Børs, or

46 alternatively Oslo Axess, and the conditions for completion of the Offering as set out in section 6.3 – "Conditions for completion of the Offering" have been fulfilled, the Listing will be effective, and the Company's current outstanding Shares and the New Shares issued in connection with the Offering, will begin trading on Oslo Børs, or alternatively Oslo Axess on or about 24 October 2013. However, there can be no assurance that the listing of the Shares can be achieved by this date. 6.14.2 Lock up agreements The Managers have entered into lock-up agreements with the Selling Shareholders. Under the lock-up agreement, the Principal Selling Shareholder and the Management Selling Shareholders have agreed not to

• ffer, sell, contract or otherwise dispose of shares in the Company for a period of 180 days and 365 days

respectively, following the first day of Listing, without the prior written consent of the Managers. 6.15 SELLING SHAREHOLDERS The Principal Selling Shareholder has committed to offer to sell minimum 27 272 727 and maximum 40 000 000 Secondary Shares, raising gross proceeds to the Principal Selling Shareholder of between NOK 600 million and NOK 880 million in the Offering. The Management Selling Shareholders have committed to offer to sell 2 414 970 Secondary Shares in the Offering raising gross proceeds of between NOK 36.22 million and NOK 53.13 million. The Managers have entered into an agreement with the Selling Shareholders, whereby each of the Selling Shareholders irrevocably has undertaken to sell Secondary Shares through the Offering as set out in the table below. The Secondary Shares will be sold at the Offer Price as determined by the

• Board. Prior to the announcement of the Offering the Selling Shareholders have irrevocably authorised the

Managers to transfer the maximum amount of Shares to be sold by them from their respective VPS accounts. The table below lists the Selling Shareholders and number of Secondary Shares that each Selling Shareholder has agreed to sell in the Offering, assuming that the Offer Price is set within the Indicative Price Range:

Principal Selling Shareholder Shares prior to the Secondary Sale Shares to be sold (min/max) Gross Proceeds Kistefos AS, Dronning Mauds gate 1, 0250 Oslo (indirectly owned by the Chairman Christen Sveaas) 132 168 890 27 272 727 – 40 000 000* Between NOK 600 000 000 and NOK 880 000 000. Exact value depending on number of Secondary Shares sold and Offer Price (assuming the Offer Price is set within the Indicative Price Range). Management Selling Shareholders Lisann AS, Lindebergveien 41, 1358 Jar (owned by CEO Jens Ismar) 2 759 980 1 379 990 NOK 20 699 850 - NOK 30 359 780. Exact value depending on Offer Price (assuming the Offer Price is set within the Indicative Price Range) Valletua AS, c/o Procurator Management AS Hieronymus Heyerdahls gate 1, 0160 Oslo (owned by CRO Egil Husby) 1 379 990 689 990 NOK 10 349 850 - NOK 15 179 780. Exact value depending on Offer Price (assuming the Offer Price is set within the Indicative Price Range)

47

Tryvert AS, c/o Håvard Furu Trasoppterrassen 69, 0672 Oslo (owned by CFO Håvard Furu) 689 990 344 990 NOK 5 174 850

• NOK 7 589 780. Exact

value depending on Offer Price (assuming the Offer Price is set within the Indicative Price Range) Total 136 998 850 29 687 697 - 42 414 970 NOK 445 315 455 - NOK 933 129 340. Exact value depending on number of Secondary Shares sold and Offer Price (assuming the Offer Price is set within the Indicative Price Range).

*Excluding any Shares sold pursuant to the Over-Allotment Option.

The Company and the Principal Selling Shareholder, together with the Managers, reserve the right to at any time increase or reduce the number of Secondary Shares sold as part of the Offering and the corresponding proceeds, depending on the number and size of orders or applications received in the Offering, if the Offer Price is set

• utside the prevailing Indicative Price Range at the time of the Prospectus, fluctuations in USD/NOK exchange

rate or other factors. The above figures do not include the Additional Shares that the Managers have a right to purchase from the Principal Selling Shareholder under the Over-Allotment Option. The Company will not receive any proceeds from the sale of Secondary Shares. The Principal Selling Shareholder is controlled by the chairman of the Board of Directors of the Company. The Management Selling Shareholders are controlled by the members of the executive management of the Company, namely the CEO, CFO and CRO. 6.16 PUBLICATION OF INFORMATION RELATED TO THE OFFERING The Company intends to use Oslo Børs' information system to publish information with respect to the Offering, such as any changes to the Bookbuilding Period and/or the Order Period, any changes to the Indicative Price Range, increase or reduction in the number of Offer Shares sold as part of the Offering, the final Offer Price and the definitive number of Offer Shares issued and sold, the total amount of the Offering and the first day of trading of the Shares on Oslo Børs, or alternatively on Oslo Axess. 6.17 VPS REGISTRATION The Shares are registered with VPS under the International Securities Identification Number ISIN NO 001 0691298. The registrar for the Shares is Nordea Bank Norge ASA. 6.18 MANAGERS The Managers for the Offering are ABG Sundal Collier Norge ASA, Pareto Securities AS and Swedbank First

• Securities. For the addresses and contact information of the Managers, please refer to section 6.9 "The

Application Offices".

48 6.19 LEGAL ADVISORS Wikborg Rein Advokatfirma DA has acted as legal advisor to the Company in relation to the Offering and the Listing and Advokatfirmaet Wiersholm AS has acted as legal advisor to the Managers. 6.20 EXPENSES AND NET PROCEEDS The Company and the Selling Shareholders will each pay to the Managers commissions in respect of the Offer Shares sold in the Offering on behalf of the Company and the Selling Shareholders, respectively. The Company estimates that its total costs in connection with the Offering will amount to approximately NOK 36 million, of which the Managers will receive a total of approximately NOK 27.6 million assuming full subscription of the

• Offering. The net proceeds from the Offering to the Company is expected to be approximately NOK 264

million. The Company will not receive any of the proceeds from the sale of the Secondary Shares or the Additional Shares. 6.21 ACQUISITION OF SHARES BY EXECUTIVE MANAGEMENT The table below indicates the number of shares acquired by members of the management during the last year before the date of this prospectus.* 20 February 2013 Lisann AS (CEO) 27 384 Valletua AS (CRO) 13 693 Tryvert AS (CFO) 6 846 Price per share (NOK) 69.08

* The number of shares reflected is prior to the share split resolved by the Company on 28 September 2013.

In a transaction completed on 20 February 2013, the members of the management acquired, through their wholly owned companies, shares in the Company at a price per share of NOK 69.08. The share price was based

• n the subscription price of NOK 72.50 in the private placements directed at Kistefos AS and completed in

November 2011 and June 2012. In connection with the private placements it was agreed that the other shareholders should have the right to subscribe for shares in the Company at a corresponding price per share. The shares were later sold directly from Kistefos AS, and the price per share was adjusted according to the USD/NOK exchange rate as of the date of the transaction. 6.22 JURISDICTION AND CHOICE OF LAW The Offering and this Prospectus are subject to Norwegian law. Any dispute arising in respect of the Offering or this Prospectus is subject to the exclusive jurisdiction of Oslo District Court.

49 6.23 VPS ACCOUNT In participating in the Offering, each applicant must have a VPS account. The VPS account number must be stated on the Order Form. VPS accounts can be established with authorised VPS registrars, which can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. Non-Norwegian investors may, however, use nominee VPS accounts registered in the name of a nominee. The nominee must be authorised by the Norwegian Ministry of Finance. Establishment

• f a VPS account requires verification of identity before the VPS registrar in accordance with the Anti-Money

Laundering Legislation. 6.24 MANDATORY ANTI-MONEY LAUNDERING PROCEDURES The Offering is subject to the Norwegian Money Laundering Act No. 11 of 6 March 2009 and the Norwegian Money Laundering Regulations No. 302 of 13 March 2009 (collectively the "Anti-Money Laundering Legislation"). All applicants who are not registered as existing customers with one of the Managers must verify their identity to one of the Mangers in accordance with requirements of the Anti-Money Laundering Legislation, unless an exemption is available. Applicants that have designated an existing Norwegian bank account and an existing VPS-account on the Order Form Retail Offering are exempted, provided the aggregate subscription price is less than NOK 100 000, unless verification of identity is requested by the Managers. The verification of identification must be completed prior to the end of the Order Period. Investors that have not completed the required verification of identification will not be allocated Offer Shares. 6.25 INTERESTS OF NATURAL AND LEGAL PERSONS IN THE OFFERING The Managers or their affiliates have provided from time to time, and may provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Managers do not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. Further, a portion of the commissions that are to be paid for the services of the Managers in respect of the Offering are calculated on the basis of the gross proceeds of the Offering. The Selling Shareholders have an interest in the Offering by virtue of being shareholders of the Company and as a consequence of the proposed sale of Secondary Shares which forms part of the Offering. The Company will receive the proceeds of the Offering, except the proceeds from the secondary sale which will be received by the Selling Shareholders. Other than as set out above, the Company is not aware of any interest of any natural and legal persons involved in the Offering that is material to the Offering. 6.26 DILUTION Assuming full subscription and depending on the final Offer Price, the Offering will result in a dilution of approximately 10% to 14% for the existing shareholders that do not participate in the Offer.

50 7. SELLING AND TRANSFER RESTRICTIONS This Prospectus does not constitute an offer of, or an invitation to purchase any of the Offer Shares in any jurisdiction in which such offer or sale would be unlawful. No one has taken any action that would permit a public offering of Shares to occur outside of Norway. Accordingly, neither this Prospectus nor any advertisement or any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. The Company and the Managers require persons in possession of this Prospectus to inform themselves about and to observe any such

• restrictions. The Offer Shares are subject to restrictions on transferability and resale and may not be transferred
• r resold except as permitted under applicable securities laws and regulations. Investors should be aware that

they may be required to bear the financial risks of this investment for an indefinite period of time. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. 7.1 SELLING RESTRICTIONS United States The Offer Shares have not been and will not be registered under the U.S. Securities Act and may not be offered

• r sold except (i) within the United States to QIBs as defined in, and in reliance on, Rule 144A or (ii) to certain

persons in offshore transactions in compliance with Regulation S under the U.S. Securities Act, and in accordance with any applicable securities laws of any state or territory of the United States or any other

• jurisdiction. Accordingly, each Manager has agreed that it has not offered or sold, and will not offer or sell, any
• f the Offer Shares at any time other than to QIBs in the United States in accordance with Rule 144A or outside
• f the United States in compliance with Rule 903 of Regulation S. Transfer of the Offer Shares will be restricted

and each purchaser of the Offer Shares in the United States will be required to make certain acknowledgements, representations and agreements, as described in Section 7.2 "—Transfer Restrictions". Any offer or sale in the United States will be made by broker-dealers registered under the US Exchange Act which are either affiliates of one of the Managers or broker-dealers to which one of the Managers have a contractual relationship. In addition, until 40 days after the commencement of the Offering, an offer or sale of Offer Shares within the United States by a dealer, whether or not participating in the Offering, may violate the registration requirements of the U.S. Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A of the U.S. Securities Act and in connection with any applicable state securities laws. United Kingdom Each Manager has represented, warranted and agreed that: (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21

• f the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or

sale of any Offer Shares in circumstances in which section 21(1) of the FSMA does not apply to the Company; and (b) it has complied and will comply with all applicable provisions of the FSMA with respect to everything done by it in relation to the Offer Shares in, from or otherwise involving the United Kingdom.

51 European Economic Area In relation to each Member State of the EEA which has implemented the Prospectus Directive (each, a "Relevant Member State"), an offer to the public of any Offer Shares may not be made in that Relevant Member State, other than the offers contemplated by this Prospectus in Norway once this Prospectus has been approved by the Norwegian FSA and published in accordance with the Prospectus Directive as implemented in Norway, except that an offer to the public of any Offer Shares in a Relevant Member State may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in the Relevant Member State: (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; (b) to fewer than 100, or if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Shares shall result in a requirement for the publication by the Company or any Manager of a prospectus pursuant to Article 3 of the Prospectus Directive or supplement to a prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes hereof, the expression an "offer to the public" in relation to any Offer Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase any Offer Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in each Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU. Singapore This Prospectus or any other offering material relating to the Offer Shares has not been and will not be registered as a prospectus with the Monetary Authority of Singapore, and the Offer Shares will be offered in Singapore pursuant to an exemption under Section 273(1)(f) of the Securities and Futures Act, Chapter 289 of Singapore (the "Securities and Futures Act"). Accordingly the Offer Shares may not be offered or sold, or be the subject of an invitation for subscription or purchase, nor may this Prospectus or any other offering material relating to the Offer Shares be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to a qualifying person (as defined in Section 273 of the Securities and Futures Act) in relation to the Group, and in accordance with the conditions specified in Section 273 of the Securities and Futures Act or (b) otherwise pursuant to, and in accordance with the conditions of, any

• ther applicable provision of the Securities and Futures Act.

7.2 TRANSFER RESTRICTIONS United States The Offer Shares have not been and will not be registered under the U.S. Securities Act and may not be offered

• r sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the

52 registration requirements of the U.S. Securities Act and applicable state securities laws. Terms defined in Rule 144A or Regulation S shall have the same meaning when used in this Section. Each purchaser of the Offer Shares outside the United States pursuant to Regulation S will be deemed to have acknowledged, represented and agreed that it has received a copy of this Prospectus and such other information as it deems necessary to make an informed decision and that:

• The purchaser is authorised to consummate the purchase of the Offer Shares in compliance with all

applicable laws and regulations.

• The purchaser acknowledges that the Offer Shares have not been and will not be registered under the

Securities Act or with any securities regulatory authority or any state of the United States, and are subject to significant restrictions on transfer.

• The purchaser is, and the person, if any, for whose account or benefit the purchaser is acquiring the

Offer Shares was located outside the United States at the time the buy order for the Offer Shares was

• riginated and continues to be located outside the United States and has not purchased the Offer Shares

for the benefit of any person in the United States or entered into any arrangement for the transfer of the Offer Shares to any person in the United States.

• The purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate, and is

not in the business of buying and selling securities or, if it is in such business, it did not acquire the Offer Shares from the Company or an affiliate thereof in the initial distribution of such Shares.

• The purchaser is aware of the restrictions on the offer and sale of the Offer Shares pursuant to

Regulation S described in this Prospectus.

• The Offer Shares have not been offered to it by means of any "directed selling efforts" as defined in

Regulation S.

• The Company shall not recognise any offer, sale, pledge or other transfer of the Offer Shares made
• ther than in compliance with the above restrictions.
• The purchaser acknowledges that the Company, the Selling Shareholders, the Managers and their

respective advisers will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. Each purchaser of the Offer Shares within the United States pursuant to Rule 144A acknowledges, represents and agrees that it has received a copy of this Prospectus and such other information as it deems necessary to make an informed investment decision and that:

• The purchaser is authorized to consummate the purchase of the Offer Shares in compliance with all

applicable laws and regulations.

• The purchaser acknowledges that the Offer Shares have not been and will not be registered under the

U.S. Securities Act or with any securities regulatory authority of any state of the United States and are subject to significant restrictions to transfer.

• The purchaser (i) is a QIB (as defined in Rule 144A), (ii) is aware that the sale to it is being made in

reliance on Rule 144A and (iii) is acquiring such Offer Shares for its own account or for the account of a QIB, in each case for investment and not with a view to any resale or distribution of the Offer Shares, as the case may be.

53

• The purchaser is aware that the Offer Shares are being offered in the United States in a transaction not

involving any public offering in the United States within the meaning of the U.S. Securities Act.

• If, in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such Offer Shares, as

the case may be, such shares may be offered, sold, pledged or otherwise transferred only (i) to a person whom the beneficial owner and/or any person acting on its behalf reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, (ii) in accordance with Regulation S, (iii) in accordance with Rule 144 (if available), (iv) pursuant to any other exemption from the registration requirements of the U.S. Securities Act, subject to the receipt by the Company of an opinion of counsel

• r such other evidence that the Company may reasonably require that such sale or transfer is in

compliance with the U.S. Securities Act or (v) pursuant to an effective registration statement under the U.S. Securities Act, in each case in accordance with any applicable securities laws of any state or territory of the United States or any other jurisdiction.

• The purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate, and is

not in the business of buying and selling securities or, if it is in such business, it did not acquire the Offer Shares from the Company or an affiliate thereof in the initial distribution of such Shares.

• The Offer Shares are "restricted securities" within the meaning of Rule 144A (3) and no representation

is made as to the availability of the exemption provided by Rule 144 for resales of any Offer Shares, as the case may be.

• The Company shall not recognise any offer, sale pledge or other transfer of the Offer Shares made
• ther than in compliance with the above-stated restrictions.
• The purchaser acknowledges that the Company, the Selling Shareholders, the Managers and their

respective advisers will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.

54 8. PRESENTATION OF THE COMPANY 8.1 INTRODUCTION Western Bulk ASA is a public limited liability company pursuant to the Public Limited Companies Act, incorporated under the laws of Norway. The Company was established on 5 May 1999 and registered in the Norwegian Register of Business Enterprises under the organisation number 980 747 026. The Company's registered business address is Henrik Ibsens gate 100, 0255 Oslo, Norway and the postal address is PO Box 2868 Solli, 0230 Oslo, Norway. The telephone number is +47 23 13 34 00. The Company converted from a private limited liability company to a public limited liability company on an extraordinary general meeting on 13 September 2013. The Company is a global operator of dry bulk vessels, operating vessels ranging from about 25 000 dwt (Handysize) to about 82 000 dwt (Kamsarmax). Its main activity is within the Supramax/Ultramax sizes. Supramax/Ultramax vessels are geared dry bulk vessels ranging from 40 000 to 65 000 dwt. Western Bulk ASA is the parent company of the Western Bulk Group. The business is operationally divided into two divisions; Western Bulk Chartering (WB Chartering) and Western Bulk Shipholding (WB Shipholding). WB Chartering is further split into two operating entities, Oslo-registered Western Bulk Carriers AS and Singapore-registered Western Bulk Pte Ltd. The operating activities in WB Chartering are organised in business units or teams that cover specific geographical areas and/or vessel sizes. Two of these units (Atlantic and Steel & Bulk) operate within Western Bulk Carriers AS, whereas Western Bulk Pte Ltd currently has five units (Pacific, Indian Ocean, US West Coast, Chile and Panamax). The Group is headquartered in Oslo, and has offices in Singapore, Seattle, Santiago and Monaco. 8.2 LEGAL STRUCTURE OF THE GROUP The Group consists of the holding company, Western Bulk ASA, and its wholly owned subsidiaries as illustrated below (dormant subsidiaries and immaterial subsidiaries not included). The Group's main business is executed mainly through the two subsidiaries WB Chartering AS and WB Shipholding AS. No operational activities are being conducted by the holding company. Western Bulk Shipowning II AS is owned 51% by WB Shipholding AS and 49% by external investors. All the

• ther companies shown above are wholly owned subsidiaries.

55 8.3 DESCRIPTION OF THE MAIN COMPANIES IN THE GROUP Below is a description of the main companies in the Group. Western Bulk ASA: Western Bulk ASA is the parent company of the Group. WB Chartering AS: Western Bulk Chartering AS with subsidiaries ("WB Chartering") represents the legal structure of the WB Group's Chartering division. WB Chartering AS acts as a centralized service unit for derivatives in the Group on behalf of the subsidiaries. WB Chartering AS is incorporated in Norway. WB Shipholding AS: Western Bulk Shipholding AS with subsidiaries ("WB Shipholding") represents the legal structure of the Group's Shipholding division. WB Shipholding AS is incorporated in Norway. WB Management AS: Western Bulk Management AS employs all personnel located at the main office in Oslo, Norway, and provides management services for various companies in the Group. WB Management AS is incorporated in Norway. WB Carriers AS: Western Bulk Carriers AS carries out parts of the chartering activities for the Group, together with WB Pte Ltd. WB Carriers AS is incorporated in Norway. WB Pte. Ltd: Western Bulk Pte. Ltd carries out parts of the chartering activities for the Group together with WB Carriers AS. WB Pte Ltd's business is supported by offices in Seattle (USA), Santiago (Chile), and Monaco. WB Pte. Ltd is incorporated in Singapore. WB Shipowning I AS: Western Bulk Shipowning I AS is the bare-boat charterer of MV Western Oslo, and also

• wns 5% of Lyngholmen Shipping IS/AS, the registered owner of MV Western Oslo. Western Bulk Shipowning

I AS is incorporated in Norway. WB Shipowning II AS: Western Bulk Shipowning II AS is the registered owner of the vessel MV Western

• Stavanger. The company is owned 51% by the Group and 49% by external investors. WB Shipowning II is the

borrower of the USD 12.3 million (outstanding amount as of 30th June 2013) mortgage loan in the Group. Western Bulk Shipowning II AS is incorporated in Norway. WB Shipowning III AS: Western Bulk Shipowning III AS owns 20% of Western Alterna Partnership3. Western Bulk Shipowning III AS is incorporated in Norway. WB Shipowning V AS: Western Bulk Shipowning V AS owns 20% of Western Alterna GP LLC3. Western Bulk Shipowning V AS is incorporated in Norway. WB Shipowning IV AS: Western Bulk Shipowning IV AS is the charterer for all of the Groups long-term timecharters with purchase options (excluding one contract, which is entered into in the name of WB Pte Ltd). Western Bulk Shipowning IV AS is incorporated in Norway.

3 Western Alterna Partnership and Western Alterna GP LLC are the two holding companies of three vessel-owning companies, each owning

• ne vessel (Western Wilton, Western Moscow and Western Texas) (the "WA Partnership"). The Group has, through WB Shipowning III

and WB Shipowning V invested in 20% ownership in the WA Partnership together with an external investor owning the remaining 80%. All three vessels are financed with DVB Bank SE (aggregate outstanding amount of USD 46 million as of 30th June 2013), and all three vessels are on time charter to the Group. Western Bulk ASA has provided parent company guarantees in favor of the DVB Bank SE, guaranteeing the performance of its subsidiary under the time charters. The guarantees do not guarantee any part of the principal amounts for outstanding debt incurred by the vessel-owning companies in the WA Partnership.

56 8.4 HISTORICAL BACKGROUND AND DEVELOPMENT The table below provides an overview of key events in the Group's development. Year Event 1st half 2013 WB Chartering's fleet counts 134 vessels operated on average. WB Shipholding expands activities by taking in three new vessels on time charter with purchase options. 2012 WB Chartering's fleet counts 129 vessels operated on average, and expands to Panamaxes and opens office in Monaco. Christen Sveaas elected Chairman of the Board. WB Shipholding expands activities by taking in five new vessels on time charter with purchase

• ptions.

2011 WB Chartering's fleet counts 103 vessels operated on average. WB Shipholding expands activities by taking in three new vessels on time charter with purchase options.The Western Alterna Partnership takes delivery of three Supramax vessels from Sinopacific Dayang. WB Shipholding enters into a sale-leaseback (incl purchase options) of the vessel Western Oslo. 2010 WB Chartering's fleet counts 95 vessels operated on average. WB Shipholding expands activities by taking in two new vessels on time charter with purchase options and Western Stavanger, the first Handysize vessel acquired in a joint venture with Vaagen Asset

• Management. Establishes and takes 20% ownership in Western Alterna Partnership. The

partnership orders three newbuilding Supramaxes at Sinopacific Dayang. 2009 WB Chartering's fleet counts 69 vessels operated on average. WB Shipholding established and buys first vessel, Western Oslo. 2008 WB Chartering's fleet counts 55 vessels operated on average. The Group enters into its first time charter with purchase options, for delivery in 2012. Jens Ismar new CEO from September. 2007 New business model and organizational structure fully in place and operational. WB Chartering's fleet counts 57 vessels operated on average. 2006 Kistefos AS buys out remaining shareholders to become sole owner of Western Bulk, 24th January. 2003 Kistefos AS becomes major shareholder, start of developing new business model. 2002-2004 Western Bulk Shipping ASA and Western Bulk Carriers Holding AS undergo various restructurings and the continued activities are organized as subsidiaries of Western Bulk Carriers Holding AS, which was renamed to Western Bulk AS (now Western Bulk ASA) in 2004. 2001 Western Bulk Shipping ASA delisted and taken private by the two main shareholders (including Kistefos AS) at the time, controlling 84% of the company. Minority shareholders are offered to sell their shares to the controlling shareholders. 1999-2001 Western Bulk Shipping ASA enters into financial difficulties and several activities are reduced/disposed and restructured. As part of this restructuring 49% of the shares in Western Bulk Carriers Holding AS are sold during 1999 to some of the major shareholders (including Kistefos AS) in Western Bulk Shipping ASA. 1999 Western Bulk Carriers Holding AS (now Western Bulk ASA) founded by Western Bulk Shipping ASA as sole shareholder, and activities/subsidiaries related to the trading name Western Bulk Carriers are transferred from Western Bulk Shipping ASA to Western Bulk Carriers Holding AS. 1998 Kistefos AS takes a 23% stake in Western Bulk Shipping ASA 1993-2001 Western Bulk Shipping ASA publicly traded on Oslo Børs. Western Bulk Shipping ASA controls Western Bulk Carriers. 1982 Parts of the current business of the Group established under the trading names Western Bulk Shipping/Western Bulk Carriers. 8.5 BUSINESS OVERVIEW The Group is an asset-light and trading-oriented dry bulk operator, using its shipping experience, customer relationships, market intelligence and trading skills to generate a margin from a high-volume activity. The Group provides vessels and transportation services for commodity producers, consumers and traders world- wide, while providing cargoes and vessel employment for vessel owners. Cargo services are provided through

57 freight contracts (Contracts of Affreightment, or COAs) of various durations, or through single voyages fixed in the spot market. To perform the services, the Group takes in vessels mainly on time charter basis but also from time to time on voyage basis, with durations ranging from one single trip (anything from 10 to 100 days) to several years. One of the core strategies of the Group has been to build a strong customer base which gives the Group access to cargo to be moved. Continuously expansion of this cargo-related customer base has allowed the Group to grow the business and activity level, and is one of the most important factors to develop further to fulfill the future growth strategy of the Group. The Group has a truly global operation, performing more than 1 000 voyages during 2012, and calling more than 600 different ports. This global reach, combined with five offices at various key locations world-wide, gives the Group a very good access to market intelligence and information about cargo movements, price developments and emerging patterns in relevant commodity trades. This intelligence is highly valuable, and puts the Group in a position where it is well placed to both offer competitive services and identify market

• pportunities with a good margin potential.

Through its customer relationship activities and ability to offer high quality services, and based on its highly efficient commercial organisation, the Group has been able to build a broad supplier and customer base. The Group has increased its activity and fleet volume significantly over the last few years growing from an average fleet size of about 50-60 vessels in 2007-2008 to run a fleet of 130-150 vessels currently. Since 2008 it has done business with more than 400 new customers, and in 2012 alone it did business with more than 300 individual

• customers. This makes the Group one of the world's largest operators of Supramax tonnage, with highly

diversified customer and cargo bases4. On the back of this activity, the Group gains access to significant amounts of market information which enables the Group to identify and act on arbitrage opportunities in the market, and to take small, calculated and controlled exposures to the freight market. As such, the Group utilizes its deal flow and informational advantage to identify and act on various trading opportunities. A significant part of these opportunities arise from the Group's access to physical optionality, typically the

• ption to extend the duration of a time charter contract at a fixed price, but also other options, such the option to

replace a nominated vessel with another vessel, the option to carry more or less volume, etc. These options give the Group flexibility to constantly optimize its portfolio, and provides upside exposure with limited downside risk. In addition, to be able to provide competitive pricing and to support its margin, the Group strives to improve and

• ptimise its operation at every step of its value chain. This includes, inter alia, picking the optimal vessel for the

trade in question, negotiating reasonable, robust and flexible contract terms, ensuring that the vessel conforms with the customer's requirements, sailing the vessel at optimal speed, routing the vessel in accordance with expected weather patterns and currents, selecting the best port to bunker the vessel, ensuring that the vessel is provided bunker fuel with the right quality, procuring bunker fuel at competitive prices, timing the arrival of the vessel to avoid unnecessary delays, seeking to ensure efficient and cost-effective port operations, minimizing the risk of cargo damage, having robust systems to ensure correct billing of services and collection of payments, systems and routines to handle any claims or disputes that could arise as a consequence of the operation, etc. A relentless attention to each of these decisions, as well as systems and routines to support decision-making is crucial to reduce operational risk and to ensure that the Group is able to earn a competitive margin on its chartering activities. Dry bulk operation is a volume-driven margin business that requires broad and detailed market insight, systems to effectively distribute information throughout the organization, highly professional risk management, efficient

4 This information is based on information the Company has received from three independent shipbroking companies. The Company asked

these companies to provide it with a rough overview of the largest parties in the supramax-sizes and an estimate of the size of the fleet each

• f those parties operates. This information is thus not exact, and may vary over time.

58 financial management and operational expertise. In particular, risk management is crucial to protect margins against unexpected losses and to provide a common framework to evaluate commercial decisions on a risk- adjusted basis. The Group has therefore spent significant resources to develop and implement a comprehensive risk management infrastructure including various models to quantify risks, as well as policies and procedures put in place to limit and control market, counterpart and operational risks. This infrastructure is supported by a strong risk management culture that acknowledges risk management as a key capability and a distinct value driver for the organisation.

(1) 2009 figures adjusted to exclude one-off loss from of a defaulted contract of USD 66 million5. 2007-2010 figures are according to NGAAP, and 2011 onwards are according to IFRS.

The risk management system ensures a robust downside protection on the Company's earnings. Market exposures are limited, controlled and constantly monitored. This enables the Group to quickly turn around its market positions if the market moves against the positions. The quality of the risk control system can be evidenced from the figure above, which shows the Group's consolidated Net TC result per quarter from 2007 and onwards. While the market rates (Baltic Exchange Supramax Index) has fallen more than 90% from its peak in 2007, the Group's earnings have been positive, stable and consistent. Note, for example, the strong earnings in fourth quarter of 2008, achieved as the market rates fell from more than 40 000 USD/d in 3rd quarter to less than 10 000 USD/d in the 4th quarter. The Group is an asset-light business, and the Group has very limited direct ownership in vessels or other tangible assets. Rather, its main assets are its brand name, its systems and its employees. However, the Company has, from 2009 entered into leases with purchase options in WB Shipholding to support and leverage from its core operation. The division has two main objectives: (1) to leverage from the Group's in-depth knowledge of the market and of the strengths and weaknesses of different vessel designs, as well from its relationships with yards and major ship owners, to take opportunistic exposures towards the asset market, and (2) to provide WB Chartering with longer term access to vessels.

5 The defaulted contract was related to two 5 year COAs entered into in 2008, before the market dropped. In January 2009, Group's Chinese

counterpart abandoned the contracts following the market crash, and the Group was left with hedges (chartered in vessel, FFAs and bunker swaps) that were out of the money, and consequently incurred a loss of USD 66 million. The loss has been fully charged to the 2009 result. For better comparison of the performance of the underlying business, the financial figures for 2009 presented in the Prospectus are excluding the one-off loss of USD 66 million related to the defaulted contracts. The Group has not been successful in its attempt to legally pursue the defaulting counterpart.

59 To achieve the first objective the Group has fixed in several newbuilding vessels on time charter with extension and purchase options. Through these structures the Group gains exposure to asset appreciation without having to provide equity and/or debt financing, other than for working capital purposes. To achieve the second objective, WB Shipholding can offer WB Chartering vessels for longer term time charter, typically if WB Chartering has concluded a new multi-year freight contract for which it requires a hedge. Any time charter contract done between WB Shipholding and WB Chartering would be done on an arms-length basis, and neither party is required to fix with the other. That is, WB Shipholding can choose to relet its vessels to third parties, and WB Chartering can choose to source all its vessels from third parties. 8.6 BUSINESS STRATEGY The Group's strategy is to maintain and build upon its position as one of the world's leading operators of medium-sized dry bulk tonnage, and to continue to refine and develop its unique business model to ensure that it is adapted to a changing market environment. Although being a major operator, its operated fleet is very modest compared to the world fleet of several thousand vessels in the Handysize, Supramax/Ultramax and Panamax sizes. The market is very fragmented with most owners and operators having only a small fleet. Consequently, the Group believes there is room for significant further growth, without being limited by the total size of the market. Specifically, the Group aims to grow in all of its three current vessel sizes, Handysize, Supramax/Ultramax and Panamax, and may also consider other vessels sizes if considered a fit with the business model. The target is to

• perate an average fleet of more than 160 vessels in 2014 and more than 180 vessels in 2015. To be able to

grow, the Group will need to expand the cargo base. To do this, the Group aims to strengthen its marketing activities towards existing and prospective customers, and to evaluate the creation of new business units and/or

• ffices in attractive growth markets. It will also seek to grow its Shipholding exposure by opportunistically

acquiring and trading assets at attractive points in the cycle. This could be done by taking in new leases with purchase options, but vessel acquisitions will also be considered. WB Shipholding will primarily target vessels that fit with the vessel sizes operated by WB Chartering. The Company believes the Offer will provide financial resources to support continued growth in both divisions, by giving access to funds that could be used as working capital for an increased fleet in WB Chartering and as risk capital and/or equity capital in WB Shipholding. In addition, the Offer will give the Company access to the equity market, should the need for additional resources be required to support further growth in the future. People are a crucial resource for the Group, which puts substantial efforts into developing talents internally. Through its trainee program, the Group regularly recruits fresh graduates that are trained to become operations

• r chartering managers. This ensures a steady flow of talent into the organisation. To complement the internally

trained resource base, and to make sure that the organisation is constantly challenged, the Group sometimes also recruits experienced staff externally. The Group seeks to uphold its disciplined approach to risk management, maintaining specific limits on market and counterparty risk, and continuously developing its systems and infrastructure to ensure that they remain relevant and adapted to the current risk environment. Diversification will remain a cornerstone of the Group's risk management thinking, while insurance will be used actively to control unwanted risks. In general, the advantages provided by scale, global reach, advanced systems and culture are not easy to replicate, and represent significant barriers to entry for competitors seeking to establish a sustainable position as a world-leading dry bulk operator.

60 8.7 WESTERN BULK CHARTERING 8.7.1 Overview Western Bulk Chartering currently runs a fleet of about 135 vessels (1st half 2013), all of which are chartered in

• n various time periods from a range of owners (including WB Shipholding). Historically, about 70% of the

activity has been in the Supramax segment, whereas most of the remaining fleet has been made up of Handysize

• vessels. However, since early 2012 the Company has also sought to build a Panamax activity to complement its

service offering against existing customers, and to leverage on its competence into a size category that share some key characteristics with its core Supramax sizes. WB Chartering has a highly diversified customer base consisting of commodity producers, consumers and

• traders. In 2012 alone, it did business with more than 300 different cargo customers, of which none accounted

for more than 4.2% of total revenues. The average for the last six years is about 5%. Whereas the Company has and seeks to further develop strong and long term relationships with industrial customers, it values this diversification as it reduces the Group's reliance on specific industries or trades. This can also be shown from the mix of commodities carried by WB Chartering in 2012, where the largest commodity by volume accounted for 19% of total volumes carried. WB Chartering combines operational expertise in dry bulk shipping with portfolio and risk management techniques and approaches adapted from the financial industry. Given the diversity and complexity of the markets in which the Company operates, it has chosen to build a flat and decentralized organisational structure where decision-making authority is moved out to the regional offices. Specifically, the chartering activity is split into teams (business units) with responsibility for specific geographical areas and/or vessel sizes. Within specific limits on risk exposure and duration, and in adherence with company policies, the teams have wide decision-making authority: a team in, for example, Singapore can fix in a vessel or a freight contract without seeking approval from the head office. This enables more nimble decision making, and also ensures that decisions are taken by those that know local markets, conditions and customers best. In some cases, a team in Singapore may position themselves for a market upturn in the Pacific, while a team in Oslo may take in more cargoes to prepare for a softening of the market. Both may be right, or – if one of the teams makes an incorrect judgment – the effect on the company is smaller than if the entire chartering book was positioned in the same

• way. Adding to this, the teams have somewhat different business models, focusing more or less on industrial

customers over spot positioning or arbitrage in ways that react differently to different market scenarios. The result is a significant diversification effect, leading to more stable earnings for the Group in total. To ensure alignment with Company interests, the teams are measured and incentivised on their direct contribution to the Group's Net TC result6. There are currently seven business units within WB Chartering: Atlantic, Steel & Bulk, Indian Ocean, Pacific, US West Coast, Chile and Panamax. The key performance measurement in WB Chartering is the Net TC result. This result is a function of the size of the fleet operated and the Net TC margin per vessel day, i.e. the average gross trading margin that WB Chartering is able to get out of the vessels in its fleet. The margin can conceptually be split into two main components; base and positioning margin. The base margin is the margin component created from the Group's skills as an operator. It includes the ability to select the right vessel for a trade, the ability to source bunker fuel at competitive prices, efficient port

• perations, strong customer relationships, access to off-market deals and opportunities, and the ability to

identify and act on various arbitrage opportunities across geography, segment, time or other parameters. This

6 The Net TC result equals gross revenues, less charter hire paid for the vessels, commissions, bunker fuel expenses, port charges and other

voyage related expenses including any realised gain/loss from hedging instruments related to the performed activity in the relevant period. Office expenses, administrative overhead, salaries and bonuses to on-shore staff are not included.

61 margin is to a certain extent independent on market conditions, and to a larger extent dependent on the Group's size and skill set. The positioning margin is the margin created from exposures towards the market, typically net long/short positions on the market, or on route differences. This margin is on the other hand highly market dependent, as higher volatility and/or higher market levels means increased opportunities to benefit from having exposures in the market. In fact the two components overlap, and it is not possible to calculate an exact split of the two. Composition of Net TC margin per ship day 2007-Last twelve months per 2Q 2013 ("LTM")7 2406 1409 2532 1634 1565 1618 1547 1375 2879 418 720 86 192 202 3781 4288 2951 2354 1479 1426 1344 2007 2008 2009 2010 2011 2012 LTM Basemargin Positioningmargin Historical levels for the Net TC margin per ship day per year for 2007 to last twelve months per 2Q 2013 is shown in the figure above. In the graph, the positioning margin is estimated as the margin WB Chartering earns through its net long/short position towards the market, while the base margin is the residual margin. This means that, for instance, geographical positioning goes into the base margin, and that the base margin also contains elements that depend on volatility (such as the volatility of rate differences between various geographical areas). Historically, the base margin has been relatively stable throughout the cycle, at between 1 000 and 2 000 USD per ship day, whereas the positioning margin has been a significantly more volatile. The latter seems to follow the cycle in terms of market level and volatility, and there has been a relatively clear correlation between market level and total margin, as well as between volatility and margin in the period. This is illustrated in the figure

7 2009 figures adjusted to exclude one-off loss from a defaulted contract of USD 66 million. All figures are exclusive of WB Shipholding's

• activities. 2007-2010 figures are according to NGAAP, and 2011 onwards are according to IFRS.

62 below, which shows quarterly Net TC margin per ship day for WB Chartering8 plotted against the Baltic Exchange Supramax Index (BSI). Historical correlation between market index and Net TC margin per ship day created9 8.7.2 Risk Control System The Group's risk control system consists of the risk management team and the in-house risk model software. The risk control system is of key importance for the business model, and the risk management team has wide authority, and is independent of the business units. The Chief Risk Officer is part of the executive management team and reports to the CEO. The Chief Risk Officer also interacts directly with the Chairman of the Board whenever deemed appropriate. The risk management team is responsible for safeguarding and cultivating the risk management culture of the Group, while the system is used to control and manage the various risks faced by the Group, and in particular to ensure that the Group does not take more risk than what is implied by the risk appetite defined by the Board of

• Directors. The given risk appetite and the risk capital allocated to WB Chartering defines the overall Value at

Risk (VaR) limit, which is the key risk measure used for the activities in WB Chartering. The VaR measure used is 1 week 95% VaR. Like all risk measures, VaR is only indicative of potential risks, and can only show parts of a very complex risk picture. To complement the VaR measure, the Group uses Cash Flow at Risk (CfaR), stress

8 Excluding certain non-recurring items not related to normal business operation. 2009 figures adjusted to exclude one-off loss from a

defaulted contract of USD 66 million. All figures are exclusive of WB Shipholding's activities. 2007-2010 figures are according to NGAAP, and 2011 onwards are according to IFRS. 9 Excluding certain non-recurring items not related to normal business operation. 2009 figures adjusted to exclude one-off loss from a defaulted contract of USD 66 million. All figures are exclusive of WB Shipholding's activities. 2007-2010 figures are according to NGAAP, and 2011 onwards are according to IFRS.

63 tests and several other risk measures to monitor risk. However, VaR is still very useful for discipline, focus and as a trigger for discussions. The risk control system tracks the market values of all contracts by benchmarking the commitments against applicable forward rates for freight and fuel on a daily basis. The tracking is done on a group level for WB Chartering as well as per business unit and trade strategy. VaR limits per business unit is given based on the track record of the respective units, the nature of business and the total group VaR limit for WB Chartering. If limits are breached, the risk management team talks to the business unit managers on how to remedy the situation and takes appropriate action to make sure that the business units stays within their limit. All measurement and reporting is done on a daily basis, providing updated information for business decisions as well as for monitoring risks. The risk model software is designed and developed internally, but the technical platform is delivered from third

• parties. The software provides an overview of market values and market exposures across the WB Chartering
• group. The overall goal is for the system to do this in a way that creates discussion and awareness without

creating undue bureaucracy and inefficiency. Performance and risk can be tracked by predefined aggregations, and also by highly customised cross-selections. The predefined aggregations include, but are not limited to, business unit, counterpart, trade type, trade strategy, period and vessel size. The system can track and monitor values and risks, including VaR, along many dimensions including measures for fuel and freight risk, cash flow risk, counterpart risk, spread risk, implied volatility risk and basin risk. In addition to tracking and control, the risk management team's main responsibility is to provide support for the Group and for the business units so that they are better able to evaluate their market exposures and trade strategies as efficiently as possible. The team works closely with commercial staff to make sure that the Group's trading strategies are founded on a healthy risk/reward ratio. The team also provide the business units with access to fuel and freight derivatives contracts which are used to hedge freight rate exposures and to hedge bunker price exposures inherent in freight contracts. The Group has a policy to hedge all oil exposure, and therefore buys significant volumes of crude and fuel oil swaps to minimise its oil price exposures. Freight derivative contracts (FFA) are currently used to a more limited extent, but are useful tools to quickly hedge net freight rate exposures in a portfolio of contracts, or sometimes as efficient hedges against specific cargo or TC contracts. In 2009 the Group suffered a severe loss on default by one counterpart. The defaulted contract was related to two 5 year COAs entered into in 2008, before the market dropped significantly. In January 2009, Group's Chinese counterpart abandoned the contracts following the market crash, and the Group was left with hedges (chartered in vessel, FFAs and bunker swaps) that were out of the money, and consequently incurred a loss of USD 66 million. The loss incurred was severe due to the market circumstances (market fell by around 85% from Q2 to Q4 2008), the long duration of the contracts and the difficulties with pursuing legal rights in the counterpart's jurisdiction. The Group has since then enhanced the counterparty control routines, and also changed to a conservative strategy with regards to counterparts with whom it will enter into long term cargo contracts with, to limit the risk related to defaults with similar magnitude. Counterpart analysis and approval is done by the risk management team. The Group continuously makes an effort to keep its counterpart risk at an acceptable level, both individually per exposure, and on an aggregated basis, the risk management team works together with the legal department and the commercial staff to ensure that charterparty and guarantee terms and wordings are as strong as possible in order to provide the best legal starting point for potential disputes. The Group's procedures regarding counterpart risks dictate that counterparts must be approved prior to fixture, both Owners and Charterers. Approval is done by the risk management team, CRO or the credit committee, or the Business Unit Manager depending on the value, size and duration of the contract. Counterparts are rated based on several factors, including credit risk, country risk, operational risk and reputational risk. There is no

64 automatisation in the relationship between risk rating and acceptable exposure. Counterparts are approved case by case depending on the business in question, and non-listing on the internal blacklist is not sufficient for commercial staff to fix. The Group's counterpart risk is also actively monitored via the risk model software and internal ratings of counterparts are actively assessed, discussed and acted on if necessary. 8.7.3 Customers and suppliers The Group's world-wide network of customers is based around the continuous development of key long-term relationships, and is complemented by on-going creation of new business relations with quality counterparts. Good customer relationships are developed and strengthened through the Group's ability to offer quality freight services with a high degree of flexibility. Good and long-term relations to customers not only fosters good deal flow for the Group, but also lays a good foundation for pragmatic resolution of both commercial and operational disputes, should they arise. In 2012, the Group did business with more than 300 cargo customers world-wide, with no single customer accounting for more than 4.2% of revenues. The customer base is diversified also for the Group's forward

• contracts. In terms of geographic diversification, the largest load area accounted for 11% of the loading
• perations of the Group in 2012, and the largest discharge area for 16% of the total discharge operations. The

distribution of cargoes carried in 2012 was as follows: coal (19%), ferrous ores (15%), Fertilizers (15%), Minerals (15%), cement (11%), agricultural products (7%), grains (5%) forestry products (1%) and other cargoes (1%). The Group's tonnage providers are not customers of the Group in the traditional sense, but they are nonetheless important relations. Building close, long-term relationships with tonnage providers over time is critical for the Group's ability to secure continuous access to high quality, flexible tonnage with good optionality attached to the charterparty. The ability to select and get access to the right tonnage for the Group's core chartering fleet is a crucial skill. This entails not only identifying the best vessels in terms of speed, performance and quality, but also establishing and maintaining relationships with owners that offer greater degrees of commercial flexibility. All new customers are vetted by the Group's risk management team prior to fixture. Exposures to new counterparts are usually initially kept a modest level until a relationship with the customer has been developed. 8.8 WESTERN BULK SHIPHOLDING 8.8.1 Overview WB Shipholding is a 100% owned subsidiary of the Company and was established in late 2009 to make investments in dry bulk tonnage and to enter into leases with optional period extensions and purchase options. The division currently has four full time employees that oversee sale & purchase, newbuilding orders and daily technical management, vessel employment, vessel operations and marine accounting. As of August 2013, the controlled fleet list comprises of: (number in brackets are delivered vessels) Vessel Type* Owned with investors Bare Boat Leases Time Charter leases Total Handysize 1 (1) 2 3 (1) Supramax 3 (3) 1 (1) 13 (4) 17 (8) Panamax Total 4 (4) 1 (1) 15 (4) 20 (9) * Handysize: 25-40 000 dwt; Supramax/Ultamax: 40-65 000 dwt; Panamax: 72-82 000dwt For the 5 partly owned and bare boat vessels, the Technical and Crewing management is outsourced to FML Shipmanagement Ltd. and Elegant Marine Services Private Limited Services, respectively (both part of Fleet

65 Ship Management group ("Fleet")). The management agreement covers the technical management of the vessels including crewing. The manager receives a monthly market based fixed fee for the service plus reimbursement

• f all direct costs related to the maintenance of the vessels and crewing etc. The management agreements can be

terminated with 3 months' notice. ISM compliance is delegated to Fleet who, in co-operation with WB Shipholding, are responsible for compliance with flag state and class requirements, including duties and responsibilities imposed by international conventions and all crew training, auditing and inspection. Vessel crew are employed on NIS ITF agreements. The vessel insurance, including P&I (Protection & Indemnity), Hull and Machinery, Off-hire/Strike is handled by WB Shipholding. For the leases with period and purchase options the vessel technical and crewing management and ISM compliance is handled by the head owner of the vessels. The vessels are commercially operated by WB Shipholding as disponent owners with continuous contact with the head owners for smooth operations of the vessels. 8.8.2 Direct ownership in vessels WB Shipholding has direct ownership in one vessel10: Western Stavanger was acquired as a resale of a vessel under construction in April 2010 and was delivered from the ship yard, Jiangsu Zhenjiang SY in China on August 31st 2010. The vessel is financed by a mortgage loan as further described in Section 13.6 – "Borrowings". The vessel is a 32 500dwt Handysize vessel and is owned by Western Bulk Shipowning II AS. Western Bulk Shipowning II AS is owned 51% by WB Shipholding AS and 49% by external investors in Bulk Skipsinvest AS. The vessel is registered in Oslo, Norway. Since delivery the vessel was on a three year TC out to WB Chartering. This time charter ended in August 2013, and the vessel is now trading spot/voyage for Western Bulk Shipowning II AS. As the vessel currently is traded in the spot/voyage market, the future utilisation of the vessel is dependent on the ability to source new employment and minimize ballasting. The vessel was dry docked in March/April 2013, where the major upgrades were new Hull paint, Propeller Boss Cap Fin and an automated lube oil lubricator for the main engine. 8.8.3 Leases with purchase options Through Western Bulk Shipowning I AS (WBSO I), Western Bulk Shipowning IV AS (WBSO IV) and Western Bulk Pte Ltd, the Group has entered into one bareboat (BB) and fifteen time charter contracts with purchase

• ptions embedded in the contracts with various head owners. All chartered-in vessels are considered as
• perational leases for accounting purposes. Of the sixteen contracts, five vessels have been delivered and are

currently trading world-wide: Western Oslo: The 56 000dwt Supramax vessel was delivered from IHI ship yard in Japan in February 2008 and was acquired by WBSO I in December 2009, and subsequently sold and leased back in February 2011 on a bareboat charter contract with current owners: 7 years firm +1+1+1 optional years in both owner's and WBSO I's option (put/call). As it is a "hell and high-water" bareboat charter contract, WBSO I is responsible for all technical and crewing management. WBSO I has the option to purchase the vessel from February 2014 to the end of the charter period. The vessel is currently trading on a four-year time charter contract to an external charterer, ending in May 2015. Thus, the vessel is 100% utilised until maturity of this contract. The future utilization of the vessel is dependent on the capability to source new employment. The Group intends to trade the vessel either in the spot market or a time charter contract, depending on the market level in the future.

10 Excluding the indirect 20% ownership in Western Alterna Partnership/Western Alterna GP LLC, which owns three vessels.

66 Western Kobe: The 58 000dwt Supramax vessel was delivered from Kawasaki HI ship yard in Japan in July

• 2012. WBSO IV has the vessel on a TC contract: 7 years firm +1+1+1 optional years in WBSO IV's option.

WBSO IV has purchase options after 5 years and through to the end of the charter period. The vessel is currently

• n a 12-18 month TC out contract to WB Chartering, ending in October 2013. Thus, the vessel is 100% utilized

until maturity of this contract. The future utilization of the vessel is dependent on the capability to source new

• employment. The Group intends to trade the vessel either in the spot market or a time charter contract,

depending on the market level in the future. Western Tokyo: The 56 000dwt Supramax vessel was delivered from IHI ship yard in Japan in June 2012. WBSO IV has the vessel on a TC contract: 7 years firm +1+1 optional years in WBSO IV's option. WBSO IV has purchase options after 5 years and through to the end of the charter period. The vessel is currently on short term TC out contract to WB Chartering, ending in October 2013. Thus, the vessel is 100% utilized until maturity

• f this contract. The future utilization of the vessel is dependent on the capability to source new employment.

The Group intends to trade the vessel either in the spot market or a time charter contract, depending on the market level in the future. Western Ehime: The 58 000dwt Supramax vessel was delivered from Tsuneishi Cebu ship yard in the Philippines in October 2012. Western Bulk Pte Ltd has the vessel on a TC contract: 8 years firm +1+1+1

• ptional years in Western Bulk Pte Ltd's option. Western Bulk Pte Ltd has purchase options after 3 years and

through to the end of the charter period. The vessel is currently on a short term TC out contract to an external charterer, ending in November 2013. Thus, the vessel is 100% utilized until maturity of this contract. The future utilization of the vessel is dependent on the capability to source new employment. The Group intends to trade the vessel either in the spot market or a time charter contract, depending on the market level in the future. Maine Dream: The 58 000dwt Supramax vessel was delivered from Tsuneishi Cebu ship yard in the Philippines in March 2012. WBSO IV has the vessel on TC contract: 7 years firm +1+1+1 optional years in WBSO IV's option. WBSO IV has purchase options after 5 years and through to the end of the charter period. The vessel is currently on a short term TC contract to WB Chartering, ending in December 2013. Thus, the vessel is 100% utilized until maturity of this contract. The future utilization of the vessel is dependent on the capability to source new employment. The Group intends to trade the vessel either in the spot market or a time charter contract, depending on the market level in the future. As of August 2013, eleven of the vessels on time charter in with purchase options will be delivered between Q1 2014 and Q3 201611. All have an initial firm period followed by optional years, where WBSO IV has the option to extend the charter period. All vessels have purchase options for WBSO IV. One vessel has been chartered out to WB Chartering on a longer term TC, with options for WB Chartering to extend the charter with 1+1 years. For the remaining vessels to be delivered, the Group intends to trade these vessels either in the spot market or on time charter contracts, depending on the market level in the future: Type Size Delivery Period Period Charter out Coverage Ultramax 61' Q1-2014 8+1+1 years with purchase option from end of year 5 and annually throughout the charter period. 8+1+1 to WB Chartering Ultramax 61' July-14 5+1+1 years with purchase option from end of year 5 and annually throughout the charter period.

• Ultramax

61' Oct-14 7+1+1+1 years with purchase option from end

• 11 Main terms for all lease agreements have been confirmed by the lessors, except for one vessel, where only minor details are yet to be
• confirmed. The lease agreements for five vessels are not formally signed as of the date of this Prospectus, and are subject to conditions being
• fulfilled. Some of the lease agreements have successful delivery of the vessel as a condition. There is a risk with any newbuild vessel that

the vessel can be delayed, resulting in a delay bringing the vessel into the fleet, or in a worst case the contract cancelled for excessive delays.

67

• f year 5 and annually throughout the charter

period. Ultramax 61' Sep-14 to Feb- 15 8+1+1+1 years with purchase option from end

• f year 4 and annually through year 8.
• Ultramax

61' Nov-14 to Mar- 15 5+1+1+1 years with purchase option from end

• f year 3 and annually through year 5.
• Ultramax

60' H1-2015 55-60 months + 14 months + 14 months with purchase option from end of year 3 and annually throughout the charter period.

• Ultramax

61' Aug-15 to Jan-16 8+1+1+1 years with purchase option from end

• f year 4 and annually through year 8.
• Ultramax

About 61' (to be agreed) Apr-16 to Oct-16 8+1+1+1 years with purchase option from end

• f year 4 and annually through year 8.
• Ultramax

61' Feb-16 to Aug- 16 7+1+1+1/2 years with purchase option from end

• f year 5 and annually through the charter

period.

• Handysize

37' Q2-2014 8+1+1 years with purchase option from end of year 5 and annually throughout the charter period.

• Handysize

37' Q2-2015 8+1+1 years with purchase option from end of year 5 and annually throughout the charter period.

• The below table gives details on the purchase options.

Vesselname Type Built Purchase OptionValid From GrossPurchase OptionPrice Comments Vessel#1 Supramax 2008 2014 USD31.75m Annualpurchasepricesafter2014ofUSDm30.0,28.0, 26.25,24.3,22.9,21.85and21.0 Vessel#2 Supramax 2012 2017 USD31.50m DecreasingannuallybyUSD1.25m Vessel#3 Supramax 2012 2015 JPY4.00bn DecreasingannuallybyJPY135m Vessel#4 Supramax 2012 2017 JPY3.20bn DecreasingannuallybyJPY150m Vessel#5 Supramax 2012 2017 JPY3.73bn DecreasingannuallybyJPY135m Vessel#6 Ultramax 2014 2019 JPY3.40bn DecreasingannuallybyJPY230m Vessel#7 Ultramax 2014 2019 JPY0.96bn +USD11.90m DecreasingannuallybyJPY60m+USD750k.Profitsplit

• wner/charterer55/45

Vessel#8 Ultramax 2014 2019 JPY0.96bn +USD11.90m DecreasingannuallybyJPY60m+USD750k.Profitsplit

• wner/charterer45/55

Vessel#9 Ultramax 2014 2018 JPY2.60bn DecreasingannuallybyJPY170m Vessel#10 Ultramax 2015 2018 JPY3.30bn DecreasingannuallybyJPY200m Vessel#11 Handysize 2015 2020 JPY2.90bn DecreasingannuallybyJPY160m.Profitsplit50/50

• wner/charterer

Vessel#12 Handysize 2015 2020 JPY2.90bn DecreasingannuallybyJPY160m.Profitsplit50/50

68

• wner/charterer

Vessel#13 Ultramax 2015 2018 JPY3.25bn DecreasingannuallybyJPY150m Vessel#14 Ultramax 2016 2020 JPY2.60bn DecreasingannuallybyJPY170m Vessel#15 Ultramax 2016 2020 JPY2.80bn DecreasingannuallybyJPY170morprorata Vessel#16 Ultramax 2016 2021 JPY2.80bn DecreasingannuallybyJPY150morproratauntilendof year7andthenbyJPY100m

In the case of vessels #7 and #8 the Group's purchase options also include an option for the owner to sell the vessel whereby the charterer retains rights of first and last refusal. For these two vessels either the charter or the

• wner has an option for the sale of the vessel. The wording can be open to different interpretations as to the

detail of the charterer's right to buy the vessel if the charterer declares the option to sell, but it is clear that whether the owner or the charterer exercises the option, then the Group would in either case be entitled to a share of the profit from the sale (if any), whether or not the Group became the new owner of the vessel. The off balance-sheet commitments related to the charter hire payable for the leased vessels is included in section 13.8 – "Off Balance Sheet Commitments". 8.8.4 Customers WB Shipholding's main customer is currently WB Chartering, as the charterer on most of the TC contracts fixed

• n WB Shipholding's vessels. However, the Japanese owners and trading houses that structure and own the TC

contracts with purchase options are also very important relationships for the Group. 8.9 OTHER ASSETS Other than the vessel Western Stavanger owned 51% by the Group, the Group has no material tangible assets. 8.10 TREND INFORMATION During the first 8 months of 2013, the Supramax market12 was in average about 12.5% lower than during the same period in 2012, whereas the spot market volatility was 58% lower. As the Group depends on market volatility and market rate levels to generate margins beyond the base level, the Net TC margin per vessel day has fallen somewhat. In general, the market environment has been significantly more challenging than it has been at any time during the last 10 years. The Group has continued to increase its trading volumes, and the average fleet size for the first 8 months of 2013 is about 12% larger than the average for the same period in 2012. In June 2013, one of the Company's largest competitors, STX Pan Ocean Co., Ltd. applied for Rehabilitation under Korean bankruptcy law. While STX Pan Ocean continues to trade its owned fleet, as well as what remains

• f its time chartered fleet, its activity level has been significantly reduced since the company went into

receivership. At the end of September 2013, the Group committed to two additional time charter contracts with purchase and extension options (in addition to the contracts discussed in section 8.8.1 and 8.8.3). The main details of the contracts are:

12 As given by the Baltic Exchange Supramax Index

69

Type Size Delivery Period Period Charter out Coverage Purchase Option Valid From Gross Purchase Option Price Comments Ultramax 60' June-Nov 2016 7+1+1+0.5 years with purchase option from end

• f year 5 and annually

throughout the charter period.

• 2021

JPY 2.85bn Decreasing annually by JPY 150m until end

• f year 7, and by

JPY 100m annually throughout the

• ptional periods

Ultramax About 61' (to be agreed) Second half 2016 8+1+1+1 years with purchase option from end

• f year 4 and annually

through year 8.

• 2020

JPY 2.91bn Decreasing annually by JPY 110m

The two lease agreements are not formally signed as of the date of this Prospectus. The two agreements have been confirmed by the lessors, but still with some conditions outstanding, which could, if not fulfilled by the lessor, result in a cancellation of the leases. The off balance-sheet commitments related to the charter hire payable for the leased vessels is included in section 13.8 – "Off Balance Sheet Commitments". 8.11 ENVIRONMENTAL REQUIREMENTS As at the date of this Prospectus, there are no environmental requirements preventing the Group's vessels to enter any trading ports. Implementation of coming international (and local) rules from IMO regarding ballast water treatment plants as well as new air emissions regulations, could however impose additional costs to the Group (see Section 2.3.11 – "Compliance with new environmental laws or regulations").

70 9. INDUSTRY OVERVIEW This Section discusses the industry and markets in which the Company operates. Certain of the information in this Section relating to market environment, market developments, growth rates, market trends, industry trends, competition and similar information are estimates based on data compiled by professional organisations, consultants and analysts; in addition to market data from other external and publicly available sources, and the Company’s knowledge of the markets. The following discussion contains forward-looking statements, see Section 4.1"General Information—Cautionary Note Regarding Forward-Looking Statements". Any forecast information and other forward-looking statements in this Section are not guarantees of future outcomes and these future outcomes could differ materially from current expectations. Numerous factors could cause or contribute to such differences, see Section 2 "Risk Factors" for further details. 9.1 GENERAL Bulk cargo transportation accelerated with the commercialization of steam-powered ships after the first dry bulk carrier was built in 1852. Dry bulk transportation has since evolved to become one of the main pillars of globalization and economic growth, as dependence on global trade of goods and commodities is increasing. Broadly viewed, the dry bulk shipping market is driven by supply and demand of different bulk commodities, constituting demand for transportation, as well as the supply of vessels. 9.2 DRY BULK VESSEL TYPES Modern day dry bulk carriers are specially designed for transportation of large quantities of a wide range of different commodities, and cargo is easily stowed in a single hold with minor risks of damage. Bulk vessels are categorized depending on capacity, measured in deadweight tonnes (dwt), and range from approximately 10 000dwt to 400 000dwt. Dry bulk carriers account for approximately 40 percent of the world’s merchant vessel fleet. Handysize/Supramax The Group operates mainly within the smaller vessel types of the dry bulk shipping industry, namely with Handysize and Supramax/Ultramax vessels. These range from approximately 10 000 – 50 000dwt and 50 000 – 65 000dwt respectively. The term "Handymax" refers to a subcategory within the Handysize sizes, and represents vessels between 40 000 and 50 000dwt. The term "Ultramax" is also often used for vessels above 60 000 dwt. Compared with the bigger bulk carriers, which are predominantly used for transportation of a few select commodities (essentially coal and iron ore), Handysize and Supramax/Ultramax vessels trade within a wider range of minor bulks such as ferrous ore, fertilizers, minerals, cement, steel, agricultural products, and

• forestry. Handysize and Supramax/Ultramax vessels are more versatile than their larger counterparts due to size

characteristics, and that they typically are equipped with cranes. Consequently, they have the advantage of being capable of servicing smaller ports with restrictions on vessel size dimensions, and ports that are lacking the necessary infrastructure with respect to cargo loading and unloading. Furthermore, the size advantage enables these vessels to circumvent congestion in major ports. This has led to Handysizes and Supramaxes/Ultramaxes servicing emerging economics with a multitude of bulk cargoes. Consequently, smaller vessels enjoy a substitution effect from the larger vessels, in which freight rate increases for larger vessels propagate in smaller vessel sizes due to potential vessel arbitrage. This effects is however weaker when considering reductions in freight rates because of the larger vessels’ incapability of servicing smaller ports with draft restrictions and lack

• f infrastructure. Of approximately 515 major cargo routes, Handysizes and Supramaxes/Ultramaxes service

almost 500 exclusively.

71

Handysize vessel's major trade routes and cargoes Source: Managers

Supramax vessels have increasingly absorbed market share from Panamaxes in the recent years. This is mainly due to their growing capacity, as well as relatively increasing fuel efficiency. Ship designers have managed to increase the deadweight capacity within the same, or slightly larger, physical dimensions, allowing larger vessels to trade into traditional Handysize and Supramax ports. Average Supramax capacity has according to the United Nations Conference on Trade and Development (UNCTAD) grown from 55 554dwt to 57 037dwt between 2008 and 2011 and some newbuilds, sub-categorized as Ultramaxes that were delivered in 2012 reached capacity of 63 000dwt. According to Clarksons, there is currently being developed Ultramax designs with expanded 5-hold capacity of 65 000dwt. The competitiveness of the Supramaxes relative to Panamaxes is also reflected in freight rate developments, as Supramaxes rates have been far more resilient than both Panamaxes and Capesizes in the recent tough dry bulk environment. The combination of growing capacity, cranes for loading and unloading of cargo, and preferable size dimensions enabling access to a wide number of ports, could represent a threat to Panamax vessels going forward. Panamax Panamaxes (60 000 – 100 000dwt) are larger than Supramaxes, but small enough to pass through the Panama Canal, including beam limitations of 32.3 meters. These vessels mainly transport coal, with minor shares of iron

• re and grain on longer hauls, and to bigger ports than the Handysizes and Supramaxes. Panamax freight rates

have seen a long-term downward trend, largely caused by a turbulent economic environment and mild weather conditions in Europe that have reduced coal demand. Moreover, Panamaxes have been exposed to increasing competition from Supramaxes/Ultramaxes growing in size and representing preferable size and fuel efficiency characteristics. Capesize The biggest vessels within the dry bulk shipping industry are known as Capesize. Capesize vessels are too large to traverse the Panama Canal, and must round Cape Horn to trade in the Pacific and Atlantic Oceans. Capesizes normally have nine cargo holds, and mainly transport iron ore and coal thus being largely affected by fluctuations in demand of these cargoes. A typical Capesize vessel measure around 175 000 dwt, although the category includes all dry bulk vessels with capacity of more than 100 000 dwt. Very large ore carriers (VLOC) are a subset of the Capesize category reserved for vessels over 230 000 dwt. As their name implies, carriers of this size almost always carry iron ore.

72

Source: Managers/Marsoft

Dry bulk freight rates The prices of transporting dry bulk cargo by sea, referred to as dry bulk charter rates, are set in highly competitive markets that broadly viewed are affected by the demand and supply of dry bulk tonnage. Dry bulk shipments are fixed under voyage charters, contracts of affreightment, time charters and bareboat charters, depending on preferences and/or market views. Freight rates for Capesize bulk carriers have started to improve in the course of 2013, and continued strengthening should positively affect smaller vessel sizes. As mentioned above, dry bulk freight rates have historically correlated across all vessel sizes and increases in freight rates for larger vessels generally translate into increases for smaller vessels because of freight rate arbitrage. Supramaxes/Ultramaxes and Handysizes do however enjoy versatility advantages; and hence declines in freight rates for larger vessels will affect smaller vessels’ freight rates to a lesser extent than improvements. Moreover, Capesize freight rates fluctuate significantly compared to smaller vessels, and have in the past years barely traded above opex levels.

Average vessel earnings 50000 100000 150000 200000 250000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 USD/d Capesize Panamax Supramax Handysize Source: Managers

The extent to which growth in the dry bulk market will match the net influx of vessels will determine the freight rate levels going forward. 9.3 DRY BULK CARGO DEMAND Dry bulk cargo is generally categorised as either major or minor bulk, where major bulks, such as iron ore, grain and different kinds of coal, constitute the majority of shipped cargo. Minor bulks include commodities such as

73 agricultural products, minerals, cement and forestry. Demand for dry bulk carrier capacity is determined by the underlying demand for commodities transported in dry bulk carriers, which in turn is affected by fluctuations in the global economy, seasonal variations and port congestion. The gross domestic product (GDP) is historically correlated with industrial production and peaks and troughs in seaborne transportation, thus acting as an indicator of dry bulk shipping demand. However, certain regions tend to act as a primary driver. In the 1990s, Japan saw significant growth in the construction sector and general industrial production, consequently increasing the activity in the dry bulk shipping market. Today, China is viewed as the primary driver due to its drastic increase in construction and steel production. Total dry bulk volumes have increased by almost 75% between 2003 and 2012, from approximately 2.5 to 4.3 billion tonnes of dry bulk cargo, and in 2012 comprised more than a third of all international seaborn trade. Iron

• re and steam coal constituted ~26% and ~33% of global dry bulk demand in 2012, and is expected to be the

largest contributer to further growth. The dry bulk market is expected to grow by more than 30% between 2012 and 2016, from 4.34bt to 5.5bt.

Global demand of dry bulk products 1000 2000 3000 4000 5000 6000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IronOre: MetCoal: SteamCoal: Grain: SteelProduct: Phosrock Alumina/Bauxite Other:

Milliion metrictonnes

Source: Managers

Being the fastest growing major economy, China is an important contributor to dry bulk demand and in 2012 accounted for more than 38% (1.68bt) of all dry bulk imports. China’s economic condition is therefore central for the dry bulk industry, but is expected to remain strong. Volumes imported to China are expected to further increase by close to 500 mill. tonnes between 2013 and 2016.

74

Global dry bulk demand split 0.0 1000.0 2000.0 3000.0 4000.0 5000.0 6000.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 China RestofWorld

Milliionmetrictonnes

Source: Managers

9.3.1 Iron Ore Iron ores are rocks and minerals from which metallic irons can be commercially extracted and is the key ingredient in steel, which represents almost 95% of all metal used per year. The biggest iron ore extractors are China, Australia, Brazil and India, of which India has reduced its role as an iron ore exporter due to increased domestic demand, while Australia has increased its share of global exports. Brazil's share of total exports has remained relatively stable, and China is by far a net importer. Although China is the world’s largest producer of iron ore, the domestic supply suffers from low iron content and import price competition. Demand for iron ore has increased by more than ~125% since 2003, and is expected to continue with Chinese steel production as the main demand driver. European and Japanese imports have been slightly declining throughout the latest decade.

Major importers of iron ore 0.0 200.0 400.0 600.0 800.0 1000.0 1200.0 1400.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Europe Japan China

Milliionmetrictonnes

Source: Managers

Growth in global steel production is centred on China, with Europe, Japan and other Asian countries constituting the minor share. Imports have remained strong despite weaker economic growth, and China’s 2012 fiscal stimulus package of RMB 1 trillion, equivalent of USD 150bn, is being directed primarily at steel sensitive infrastructure projects. Steel mills have been ramping up production focused on the construction

75 sector, as Chinese railroad projects have been made a priority of the stimulus. According to the World Steel Organization as of 20 August 2013, China have accounted for almost 50% (716mt) of global crude steel output so far this year and relies tremendously on the basic oxygen furnace method (BOF) that requires iron ore, metallurgical coal and limestone. Construction is one of the most important sectors in China, and just months after the financial crisis erupted in 2008 the Chinese central government channelled RMB 4 trillion into the construction sector, indicating a steady demand of iron ore.

Global Steel Production 0.0 200.0 400.0 600.0 800.0 1000.0 1200.0 1400.0 1600.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 OtherAsia Japan Europe China

Milliion metrictonnes Source: Managers

However, the impact on seaborne trade of iron ore from a slowing of the Chinese economy in general, and steel production in particular, should be somewhat offset by the increasing Chinese reliance on iron ore imports relative to its domestic production. The gap between Chinese production and consumption is expected to increase substantially in the coming years, with exports from Brazil and Australia as major providers. Hence, a decrease in aggregated iron ore demand should have limited effects on the activity in seaborne trade. Should Chinese steel production and iron ore demand continue at a similar pace as recent years, however, seaborne trade of iron ore could ramp up substantially going forward.

Iron ore Production Vs. Chinese Consumption 200 400 600 800 1000 1200 1400 1600 100 200 300 400 500 600 700 800 900 2010 2011 2012 2013 2014 2015 2016 2017 2018 Asutralia Brazil China Chineseconsumption Production(mt) Chinese consumption(mt)

Source: Bank of America Merrill Lynch

Moreover, the period between September and March tends to be the most active season for steel demand, and when steelmakers usually build up stocks of steel-related materials, thereby creating more activity in the dry bulk shipping market. The fourth quarter in particular tends to be a strong period due to declines in domestic Chinese iron ore supplies caused by the cold Chinese winter weather.

76 9.3.2 Steam coal Steam/thermal coal is a type of coal graded between bituminous coal and anthracite, and is primarily used for power generation. Europe was the major steam coal consumer until 2009 when Asian countries, specifically India and China, saw increased demand. With high oil and gas prices, developing countries have increasingly been building new power plants that utilise steam coal, which has resulted in a significant growth in the seaborne coal trade of 23% (270mt) between 2010 and 2012. China, India and other Asian countries are major importers today, and rely on steam coal for approximately 80% of their power usage. Although India is the third largest producer of steam coal (504mt according to the World Coal Association), domestic production is insufficient to cover the country’s rapidly growing needs. Consequently, India imports the deficit of its internal coal market. Total imports totalled 123mt in 2012, an increase of 15% from 2011. While ~40% of the population lacks access to electricity, the government has embarked on an extensive construction program of power plants, underpinning continued growth in Indian demand for steam coal. Given the gap between future domestic production and demand, imports could reach and exceed 200mt by 2016-2017. Ultimately, India could overtake China as the world’s largest coal importer, thus decisions taken in New Delhi would be vital for the international coal market. Furthermore, India was labelled “the fastest growing importer

• f thermal coal” by the Australian Bureau of Agricultural and Resource Economics (ABARE) in 2010.

However, the reliance on steam coal in India could be costly as the price of international coal is higher than domestic coal, thus would add a burden on power utilities and India’s trade balance. Chinese imports, on the other hand, have increased from 52.2mt in 2008 to 195.7 in 2012, and are in 2013 and 2016 expected to exceed 200mt and 300mt respectively. European and Japanese imports have remained stable and are expected to continue the current pattern, underpinning China and India's increasingly important role in the dry bulk market. Increases in steam coal imports between 2003 and 2012 from Europe (1.2%) and Japan (29.5%) have been very weak compared to China (1113.9%). Seasonality in the demand of coal used in steam- electricity generations fluctuates according to changes in temperatures, as the need for heating by households and offices will go up in times of low temperatures and vice versa.

Major steam coal importers 0.0 100.0 200.0 300.0 400.0 500.0 600.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 China Japan Europe

Milliion metrictonnes

Source: Managers

9.3.3 Met Coal Metallurgical coal, also known as coking coal, is used as a fuel and as a reducing agent in the smelting of iron

• re in blast furnaces. Thus, as with iron ore, met coal is largely affected by steel production. Met coal is

primarily extracted and exported from South Africa, the United States, Australia and Indonesia by using

77 Capesize and Panamax vessels. China and other Asian countries have since 2009 drastically increased their imports of met coal, and collectively imported 44.6% of all met coal in 2012, representing an increase of 144.9% since 2003. China alone has increased its imports between 2003-2012 and 2007-2012 with 707.5% and 997.4% respectively. Chinese imports of met coal are, along with their ramping up of steel production, expected to further increase over the coming years, and could reach 88.1mt in 2016, compared with 3.6mt in 2007. Japanese imports, however, has decreased by -6.6% between 2003 and 2012, but still represent 26.64% of global imports.

Major met coal importers 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Japan China OtherAsia Brazil

Milliionmetrictonnes

Source: Managers

9.3.4 Grain Grains are small, hard and dry seeds, such as corn, wheat, oats, rye and oil seeds, which primarily are harvested for human consumption. Coarse grains, however, are used as feed for livestock. Major importing regions of grain are Japan, Africa, the Middle East, South Korea, Central America and the Caribbean. Total grain production and exporting is dominated by the United States, followed by Argentina, Canada and Australia. Grains are primarily transported in Panamaxes, Supramaxes/Ultramaxes and Handysizes. Grain imports have been stable in the recent years with a somewhat increased seasonality since late 2010, with Africa representing the largest increase with 23.2% since 2000. Grain seasonality is largely driven by the second quarter southern hemisphere harvest in Argentina shipped from the River Plate, and the fourth quarter northern hemisphere harvest in North America shipped from the US Gulf. Demand for grain is expected to slightly increase in the coming years, owing to population growth and increased urbanization in developing countries.

78

Major grain importers

• 20.0

40.0 60.0 80.0 100.0 120.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Japan Africa MiddleEast SouthKorea CentralAm.AndCarib

Milliionmetrictonnes

Source: Managers

9.3.5 Minor Bulks Minor bulks comprise ferrous ore, fertilizers, minerals, cement, bauxite/alumina, agricultural products, sugar, steel products and forestry. Although demand for minor bulks have seen lower growth rates relative to the major bulks, minor bulk imports nevertheless increased by some 40% (347mt) between 2003 and today. Representing the second largest dry bulk cargo type, total demand for minor bulks is second to iron ore and above steam coal. The largest contributor to recent growth in seaborne transportation of minor bulks has been demand for forest products, with steel products, bauxite and aluminia, and cement slightly below. The most stable component of the minor bulk mix has been sugar, which has seen more or less no growth in the recent decade.

Major Vs. Minor Bulk Demand 1000 2000 3000 4000 5000 6000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Minorbulks IronOre: MetCoal: SteamCoal: Grain:

Milliion metrictonnes

Source: Managers

Metals and minerals like nickel ore, steel products lignite and bauxite/alumina constitute the largest contributors

• f growth in minor bulks, and have increased by 284mt collectively between 2003 and today, representing

almost half of all minor bulk volumes. Demand for steel products and nickel ore, which are used to produce pig iron needed for making of stainless steel, is as iron ore sensitive to Chinese steel production and infrastructure construction.

79 Bauxite is the main ore of aluminium, accounting for 99% of total aluminium production. According to the World Aluminium Organization, total aluminium production increased by ~70% between 2003 and 2012, from ~28 to ~48 million tonnes. Aluminium production has been steadily rising, with 2009 as the only year seeing negative growth. Bauxite demand has largely been driven by Chinese imports from other Asian countries, and Clarkson expects china to account for as much as half of all Bauxite demand in 2013. Demand for lignite, which is a lower quality coal that is used for cheaper electricity generation, reached 53 million tonnes in 2012. Chinese demand constitutes more or less all of the global lignite trade (97%), with the main exporter being Indonesia accounting for approximately 65%. Forest products have increased by 30 million tonnes (~19%) since 2003, and represent the third largest minor bulk cargo type after steel products, and metals and minerals. There was a steady but slow increase from 2003 until 2009, when demand declined by ~20 million tonnes or ~12%. The largest increase in demand of forest products has occurred in the second half of the recent decade, with demand increasing by ~23% from 2009. Fertilizers are organic or synthetic materials that are added to the soil to supply plant nutrients essential to the growth of plants. Demand for fertilizers is generally influenced by population and economic growth, and agricultural production. Imports of fertilizers have seen a stable relatively modest growth trend of ~3% annually

• n average. There was an increase of ~9% in 2010 relative to 2009, compared to the decrease in demand of ~5%

in 2008-2009. Phosrock is a mineral ingredient in the production of certain fertilizers, and is thus indirectly affected by the demand for fertilizers. The development in Phosrock has, as expected, been similar to the development of demand for fertilizers with a ~1.5% increase annually on average from 29 million tonnes. According to the International Fertilizer Industry Association (IFA), global phosrock production has increased by ~2.5% annually

• n average from 2003.

Minor bulks by segment 0.00 200.00 400.00 600.00 800.00 1,000.00 1,200.00 1,400.00 1,600.00 1,800.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 MetalsandMinerals Sugar OtherAgribulks Fertilizer

Millionmetrictonnes

Source: Managers

As with dry bulk in general and iron ore in particular, China has in recent years become a demand driver for minor bulks. Year to date imports of minor bulks in general have increased by approximately 13% in the first half of 2013. From 2010, Chinese imports of minor bulks have increased by ~60%, thus representing a substantial driver of the recent increase. Considering the diversity of minor bulks, the trend of increasing demand for minor bulks should continue along with the world economy, although skewed towards China. Furthermore, demand for minor bulks has in the recent decade seen relatively lower volatility compared to demand for major bulk cargoes. In the second half of 2008 major and minor bulks saw a decrease in demand of

80 ~2% and ~5% respectively. This is largely due to the diversity of minor bulk cargoes, and reflects a similarly low risk for vessels carrying a variety of these cargoes relative to the larger and more specialized vessels that are exposed to fluctuations in demand for one or two major cargoes. The major contributor to the volatility in minor bulks has however been steel products, which to a large degree is affected by Chinese steel production and infrastructure construction in emerging economies. 9.4 DRY BULK VESSEL SUPPLY The supply of dry bulk vessels is generally determined by the age profile and relative size of the vessel fleet, newbuilding deliveries and scrapping of older and uncompetitive vessels. As a result of a high number of newbuilds being delivered to the market between 2000 and 2010, combined with weaker economic conditions following the financial crisis, the dry bulk shipping market has in the recent years suffered the most severe downturn since the mid-80s. Historical lows occurred both with respect to charter rates and to newbuild and second-hand vessel prices. The Baltic Dry Index (BDI), which constitutes a weighed assessment of spot earnings for dry bulk carriers, reached its lowest point since 1986 of 698 in 2012, and spot rates for the largest vessels approached opex levels. Rates have somewhat improved for larger vessels in 2013, and BDI currently stands at 2 046. Handysize and Supramax rates are however still close to historical lows, with USD 8 450 and 11 150 respectively.

Baltic Dry Index & Recent Handysize and Supramax 1-year TC rates 10,000 20,000 30,000 40,000 50,000 60,000 70,000 1000 2000 3000 4000 5000 6000 7000 8000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD 2013 USD/day BDI BDI Handysize Supramax

Source: Managers

9.4.1 Vessel fleet and orderbook The existing fleet of dry bulk carriers consists of 9 730 vessels (706.1m DWT), and the current order book totals 126m dwt, representing 17.8% of the existing fleet. The order book stood at 75% in 2008, comprising 322m dwt and was been looming as an imminent threat to the market balance until late 2012. Those fears were at least partly realized with a lot of newbuildings entering the market, and the remaining order book appears moderate. The Handysize fleet has showed the smallest growth in the recent years, with below 5% growth in 2012.

81

Annual fleet growth and orderbook 50 100 150 200 250 300 350 5% 0% 5% 10% 15% 20% 25% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Orderbookmdwt Orderbookmdwt Capesize Panamax Supramax Handysize Annualfleetgrowth

Source: Managers

Furthermore, weak market conditions and high bunkers prices have prompted demand for new dry bulk carriers with substantially lower bunkers consumption. The first generation of eco-friendly designs were delivered in 2012, and more low-bunkers vessels have appeared from the shipyards in 2013. Most newbuilds are now expected to be of eco-friendly design, although their performance is expected to differ. 9.4.2 Fleet age Vessels over 21 and 26 years of age constitute approximately 10% and 5% of the current fleet respectively, implying that much of the fleet growth will be offset by scrapping of old vessels. 2013 scrapping is expected to decrease to 35m dwt from 2011 and 2012 levels of 40m dwt and 38m dwt respectively, and net fleet growth is expected to total 6.3% in 2013.

Age profile 148 42 20 35 18 90 31 26 20 71 20 14 11 27 10 50 100 150 200 250 300 350 400 05 610 1115 1620 2125 2630 >30 Handysize Supramax Panamax Capesize

mdwt 53% 16% 10% 11% 5% 4% 2% 10%

Source: Managers

9.4.3 Second-hand and newbuilding prices The market for Sale & Purchases (S&P) for drybulk carriers is considered to be both standardized and liquid, and the value of a drybulk vessel is generally viewed as the discounted cash flow of future freight rates plus the residual value of the vessel. Both second-hand and newbuild prices have declined substantially since 2009 due to drastic changes in access to funding, market views and the availability in the shipbuilding sector. Second- hand vessel prices increased considerably more than newbuilding prices prior to the peak in late 2007,

82 constituting an increase of 400% from the beginning of 2003. During the financial crises, second-hand prices also saw the largest decline relative to newbuilds with a drop of about -66% percent between July and November 2008. This triggered extensive buying of second-hand vessels relative to newbuilds, leading to a firming up of second-hand vessel prices and, as a result, over a thousand newbuilds were contracted, further leading to the recent oversupply.

Vessel prices 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Supramax5658KDWTNewbuilding Supramax56KDWT5yearold Source: Managers

9.4.4 Dry bulk capacity utilisation Dry bulk vessel capacity utilisation is the balance between vessel employment and the tonnage capacity. A general rule of shipping states that utilisation above 96% indicates very high activity, with charterers scrambling for the few, if any, available vessels. Charterers may need to postpone critical cargo shipments, and charter rates are at very high levels. With utilisation above 93%, freight rates are prone to increase exponentially, thus causing higher volatility, as vessel availability becomes increasingly scarce. Utilisation above 90% represents a shift in bargaining power from charterers to shipowners, while utilisation below 90% indicates low freight rates and activity relative to the available capacity. Following the relatively mild recession of 2001-2002, dry bulk vessel utilisation improved to over 90% in 2002 and averaged 95% from 2004 to the end of 2008. The severe recession in 2009 caused negative growth in the dry bulk market, despite the positive contributions from the Chinese stimulus program. Subsequently, the dry bulk shipping market has suffered from overcapacity of vessel supply. However, fleet capacity utilisation has improved from the 2012 low of 86% to 87% today, and is expected to further increase on the back of strong market growth and abating fleet growth. The quarterly average between 2000 and Q2 2013 is at 92.5%, implying room for further improvement.

83

Demand, supply & vessel utilization 75.0% 80.0% 85.0% 90.0% 95.0% 100.0% 100 200 300 400 500 600 700 800 900 2003 2005 2007 2009 2011 2013 Demand Supply Utilization (right)

Demand, supply mill. dwt Vessel capacity utilization

Source: Managers

84 10. BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE 10.1 BOARD OF DIRECTORS 10.1.1 Members of the Board of directors In accordance with Norwegian law, the Board is responsible for administering the Company's affairs and for ensuring that the Company's operations are organised in a satisfactory manner. The Company's Articles of Association provide that the Board shall have no fewer than 5 members and no more than 7 members. The members of the Board are elected by the general meeting of shareholders. The board is elected for a term of 2 years. Board members may be re-elected. In the event of equal voting, the chairman of the board shall have a double vote. The Board consists of 5 members, whereof 3 are independent of the management, main business associates and the main shareholder. The Board of Directors is presented below: Christen Sveaas, Chairman Christen Sveaas is the founder and sole owner of Kistefos AS.

• Mr. Sveaas has had several board positions including chairman of the Board at Treschow-Fritzøe AS, Viking

Supply Ships AS, Board member of Stolt-Nielsen AS, Orkla ASA, SkipsKredittforeningen AS, Vestenfjeldske Bykreditt AS, Tschudi & Eitzen Shipping AS, and served as senior advisor to EQT, Stockholm, Sweden. He is member of Dean's Council Executive Committee, Harvard Kennedy School, Boston, USA.

• Mr. Sveaas is presently Executive Chairman of Kistefos AS and A/S Kistefos Træsliberi, member of the board
• f The Kistefos Museum Foundation and Anders Sveaas' Allmennyttige Fond, a Norwegian charitable

foundation.

• Mr. Sveaas is a Norwegian citizen and has a business address at c/o Kistefos AS, Dronning Mauds gate 1, 0250

Oslo, Norway. Mr. Sveaas resides in Norway. Henning E. Jensen, Board Member Henning E. Jensen is CEO of Kistefos AS. Prior to joining Kistefos, Mr. Jensen was CEO of RHI AG, the publically traded (Vienna stock exchange) global leader in refractories. Before that he worked for Tyco Electronics (NYSE: TEL) in various leadership positions for almost 10 years including heading up its global automotive business and being CFO for electronic components, Tyco Electronics' largest business segment. He started his industrial career and spent close to 10 years with General Motors (NYSE: GM) and Delphi in various financial, strategic, and M&A leadership positions. Prior to his industrial career, Henning E. Jensen was a Professor of Finance at the University of San Francisco for five years.

• Mr. Jensen holds an MBA from University of San Francisco and has undertaken executive and post graduate

studies in St. Gallen and the Wharton School.

• Mr. Jensen is a Norwegian citizen and has a business address at c/o Kistefos AS, Dronning Mauds gate 1, 0250

Oslo, Norway. Mr. Jensen resides in Norway.

85 Rolf A. Wikborg, Board member Rolf A. Wikborg was from 1986 to 2011 founding partner and Director of AMA Capital Partners, a maritime merchant banking group based in New York. Today Mr. Wikborg manages his own merchant banking practice (Wikborg Sons Ltd AS). Mr. Wikborg is a director of NYSE listed DHT Maritime. He holds a Bachelor of Science (Honors) in Management Sciences at University of Manchester (1983) and was a Marine Insurance Candidate in marine law and marine insurance law from the Norwegian Shipping Academy (1980).

• Mr. Wikborg is a Norwegian citizen and has a business address at c/o Western Bulk ASA, Henrik Ibsens gate

100, 0255 Oslo, Norway. Mr. Wikborg resides in Norway. Benedicte Bakke Agerup Benedicte Bakke Agerup is currently Chief Financial Officer of Wilh. Wilhelmsen ASA. Ms. Agerup has held various positions in Wilh. Wilhelmsen ASA within the finance area since 2005, and has also worked for the

• Wilh. Wilhelmsen Group as Group Treasurer from 1996 – 2001. Ms. Agerup has also been employed at KLP

Insurance (CFO) and Bergen Bank / Den Norske Bank. Benedicte Agerup holds a master in business administration from the Norwegian School of Economics and Business Administration, and has also completed a Scandinavian Leadership Program (2006) and an Advanced Management Program from Harvard Business School (2007).

• Ms. Agerup is a Norwegian citizen and has a business address at c/o Western Bulk ASA, Henrik Ibsens gate

100, 0255 Oslo, Norway. Ms. Agerup resides in Norway. Kristin Gjertsen

• Ms. Gjertsen is responsible for all non-operator equities in Det norske oljeselskap ASA where she has been

working since 2010. She has more than 15 years experience from various management positions in the oil & gas

• industry. Kristin Gjertsen held various positions StatoilHydro ASA (incl. Hydro ASA and Saga Petroleum ASA)

from 1998 to 2008, and from 2008 to 2010 she held the position as Director Business Development & Online Business Group in Microsoft Norge

• Ms. Gjertsen holds a Master of Science degree from Norwegian Institute of Technology (NTH) and a Master of

Business Administration degree from Norwegian School of Economics and Business Administration (NHH).

• Ms. Gjertsen is a Norwegian citizen and has a business address at c/o Western Bulk ASA, Henrik Ibsens gate

100, 0255 Oslo, Norway. Ms. Gjertsen resides in Norway. The table below shows the Board of Directors direct and indirect ownership in Western Bulk: Name Position Member Since Term Shares owned Options Christen Sveaas Chairman 2012 2 years 133 168 890 Henning E. Jensen Board Member 2011 2 years Rolf A. Wikborg Board Member 2010 2 years Benedicte Bakke Agerup Board Member 2013 2 years Kristin Gjertsen Board Member 2013 2 years

86 The board of directors' term is 2 years from 21 September 2013 for the Chairman and all of the board members. The following table sets out current and past directorship held by the Company's board members in the past five years (apart from their directorships of the Company and its subsidiaries): Name Current directorships/partnerships Previous directorships/partnerships Board of directors Christen Sveaas Anders Sveaas' Almennyttige Fond (chairman), AS Holding (chairman), AS Kistefos Træsliberi (chairman), China Investments AS (chairman), Foskis Holding AS (chairman), Golconda Investments AS (chairman), Hans Eiendom AS (chairman), Hansy Eiendom AS (chairman), Høgfos AS (chairman), Kistefos AS (chairman), Kistefos Holding AS (chairman), Kistefos Investment AS (chairman), Kistefos Skog AS (chairman), Kistefos- Museet (vice-chairman), P.O. Eiendom AS (chairman), Portfolio Holding AS (chairman), Portfolio Management AS (chairman), Rederi Transatlantic AB (chairman), Senni Eiendom AS (chairman), Stall Mister Ess AS (chairman) Scorpion Offshore Ltd. (director), Viking Drilling AS (chairman) Henning E. Jensen Kistefos AS (CEO), RABT Translantic AB (CEO and board member), Viking Supply Ships A/S (board member), Advanzia Bank SA (chairman), Atex Group Limited (chairman), AS Bagatelle (chairman), Bergmoen AS (chairman), Gardermoen Næringspark III AS (chairman), Kistefos International Equity AS (chairman), Kistefos Eiendom AS (chairman), Kistefos Venture Capital AS (chairman), Kistefos Venture Capital Fond II AS (chairman), Kistefos Venture Capital II DA (chairman), Telecom Holding AS (board member), Viking Barge AS (chairman), Viking Barge DA (chairman), Viking Invest AS (chairman) RHI AG (CEO), Dieder Werke AG (chairman), Tyco Electronics Inc (Sr. VP Automotive, CFO), around 50 subsidiaries to RGI AG (chairman/board member), around 45 subsidiaries to Tyco Electronics Inc (chairman/board member/managing director) Rolf A. Wikborg DHT Maritime (Director), Wikborg Sons Ltd. AS (chairman), Scandinavian Capital AS (Chairman), Aluyca AS AMA Capital Partners LLP (Director), Tanker Management AS (Director)

87 (Chairman),Kr. Sørensen & Co. AS (Chairman), AMA Norway AS (Chairman), Travel Property Holding AS (Chairman), Mountainfjord AS, (Chairman), Eidsbugarden AS (Chairman), Hotel Mundal AS (Chairman), Morgedal Hotel AS (Director), Glenne Pensjonat AS (Chairman), Tørvis Eiendom AS (Chairman), Tørvis Bre Ski

• g

Fjordhotel AS (Chairman), Bøyum Pensjonat Kafe og Kunsthandel AS (Chairman), Turnus AS (Chairman), Nigardsbreen Gjesteheim AS (Chairman), DB Gruppen (Director), Circeline AS (deputy board member), Unholmen AS Deputy board member) Benedicte Bakke Agerup

• Wilh. Wilhelmsen ASA (CFO), KLP

Kapitalforvaltning AS (director), Den norske krigsforsikring for skib (Board member), Puregas AS (chairman), Laer & Co AS (alternate director), Norwegian Hull Club (Member of the committee), Wilhelmsen Lines Malta Ltd (board member), Wilhelmsen Lines Shipowning Malta Ltd (director), Wilhelmsen Lines AS (managing director), Wilhelmsen Lines Shipowning AS (managing director), Wilhelmsen Ships Holding AS (managing director), Den Norske Amerikalinje AS (managing director) Norwegian Car Carriers ASA (board member), Protector Forsikring ASA (Board member), Stiftelsen aksjekjøp for ansatte i WW Gruppen (board member),

• Wilh. Wilhelmsen Pesjonskasse

(chairman) Kristin Gjertsen Det Norske Oljeselskap ASA (Head of Partner Operated Licenses, deputy board member) Microsoft Norge AS (Director Business Development & Online Business Group), Viking Drilling AS (board member) 10.1.2 Independence of the board Rolf A. Wikborg, Benedicte Bakke Agerup and Kristin Gjertsen are independent of the Company's significant business relations and large shareholders. Christen Sveaas is indirectly the principal shareholder of the Company, while Henning E. Jensen is the CEO of the main shareholder in the Company. All of the members of the board of directors are independent from the Company's management, and no members of the Management are represented on the Board of Directors.

88 10.1.3 Board Committees Nomination committee: The nomination committee (the "Nomination Committee") consists of the following members: Klaus P. Tollefsen and Anne Birgitte Fossum (each elected for a term expiring at the annual general meeting of the Company in 2015). According to Section 9 of the Articles of Association the Nomination Committee shall be composed of minimum two members who are elected by the general meeting for a period of up to two years. Guidelines for the Nomination Committee are stipulated by the general meeting. The general meeting determines the committee's remuneration. The Nomination Committee proposes candidates for the Board of Directors, and remuneration for these members. Audit Committee: The audit committee ("Audit Committee") consists of the following members: Benedicte Bakke Agerup and Rolf A. Wikborg. The Audit Committee is elected by the Board of Directors. The Audit Committee is a committee of the board of Directors that supports the Board of Directors in fulfilling its requirements with respect to financial reporting, internal accounting controls and auditing matters. The Audit Committee is required to comply with laws, regulations and stock exchange requirements, which inter alia require that the majority of the members are independent and at least one of the members shall have relevant qualifications within accounting/auditing. The Audit Committee is responsible for contributing to the effective stewardship of the Group by assisting the Board of Directors in fulfilling its oversight of:

• The integrity of the Group's financial statements;
• The Groups' compliance with applicable legal and regulatory requirements;
• The independence, qualifications and appointment of the Group's external auditor;
• The performance of the Group's external auditor;
• The accounting and financial reporting processes of the Group; and
• Audits on the financial statements of the Group.

Remuneration Committee: The remuneration committee ("Remuneration Committee") consists of the following members: Christen Sveaas and Kristin Gjertsen. The committee is appointed by the Board of Directors to assist the Board in fulfilling its responsibilities to determine the remuneration policies of the Group. The role of the Remuneration Committee shall be to prepare matters for final decision by the Board. 10.1.4 Remuneration and benefits The compensation for the members of the Board of Directors for their service as directors is determined on an annual basis by the shareholders of the Company at the general meetings. The table below sets out the compensation for each of the members of the Board of Directors of the Company for the year ended 31 December 2012:

89 Name Position Amount 2012 (NOK) Christen Sveaas Chairman 0* Henning E. Jensen Board Member 0* Rolf A. Wikborg Board Member 250 000 Benedicte Bakke Agerup Board Member 0** Kristin Gjertsen Board Member 0** *Board Members representing the Company's main shareholder have not been paid any compensation for their directorship. ** Benedicte Bakke Agerup and Kristin Gjertsen were elected as board members 13 September 2013. 10.2 MANAGEMENT 10.2.1 Members of the Executive Management The Group's executive management is responsible for the daily management and the operations of the Company. The executive management consists of the CEO, the CFO and the CRO and is presented below: Jens Ismar, Chief Executive Officer

• Mr. Ismar has a long and diversified background from the shipping industry. Before joining the Group in

September 2008, he was with BW Gas as Director for the Chartering and Operations Division. He has also been employed by Inge Steensland AS, Stemoco Shipping AS and Lorentzen & Stemoco AS. At Lorentzen & Stemoco he held the position as Managing Director. Mr Ismar has a Bachelor of Business Administration from the Lund University in Sweden.

• Mr. Ismar is a Norwegian citizen and resides in Norway. He has a registered business address at c/o Western

Bulk ASA, Henrik Ibsens gate 100, 0255 Oslo, Norway. Håvard Furu, Chief Financial Officer

• Mr. Furu has a background from auditing and shipping. He joined the Group in November 2009 and was

formerly employed by BW Gas as Assistant Director Finance and Strategy Projects. From 1997 until 2005 he was an auditor with Pricewaterhouse Coopers. Mr. Furu holds a Master of Business Administration (MBA) from the Norwegian School of Business and Administration (NHH) in Bergen and is a State Authorized Public Accountant in Norway.

• Mr. Furu is a Norwegian citizen and resides in Norway. He has a registered business address at c/o Western

Bulk ASA, Henrik Ibsens gate 100, 0255 Oslo, Norway. Egil Husby, Chief Risk Officer

• Mr. Husby is responsible for risk management in the Group, and has been employed in the Group since late
• 2004. Prior to joining the Company, Mr. Husby worked as an Analyst/Senior Analyst in the Energy marketing

division of Norsk Hydro ASA where he worked with risk management and structuring for Hydro's energy trading activities. Mr Husby has an MBA from the University of Adelaide and an MSc in mathematical statistics from the Norwegian University of Science and Technology.

• Mr. Husby is a Norwegian citizen and resides in Norway. He has a registered business address at c/o Western

Bulk ASA, Henrik Ibsens gate 100, 0255 Oslo, Norway.

90 The following table sets out current and past directorships and senior management positions of corporate bodies held by executive management of the Company in the past five years (apart from their directorships of the Company and its subsidiaries): Management Current directorships/partnerships Previous directorships/partnerships Jens Ismar Ocean Yield ASA(director), Skuld (committee member), Norwegian Hull Club (election committee member), Exmar N.V. (director), Lisann AS (chairman), Vargheia AS (chairman), Western Alterna Partnership (director), Western Alterna GP LLC (director), WA I LP (director), WA II LP (director), WA III LP (director) Oslo Shipowners' Association (chairman), Oslo Shipbrokers' Organisation (director), Pareto World Wide Shipping Fond II (director), Bergesen Gas Shipping AS (general manager), Partgas Shipping AS (general manager), The Green Tankers AS (general manager), Bergehus AS (general manager),Bergesen d.y. Skipsfart AS (general manager), Partrederiet BW Gas/Distrigas LNG Transport DA (general manager and director), Berge Arzew Partner AS (general manager and director), SLNG Yemen I AS (general manager), SLNG Yemen II AS (general manager), Partrederiet Bergesen d.y. Shipping DA (chairman), Partrederiet Havpil DA (chairman), Partrederiet Havrim DA (chairman), Partrederiet Hekabe DA (chairman), Hekabe AS (chairman), A/S Centum (chairman), AS Hektorgas (chairman), AS Havgas Partners (chairman), Edda Gas KS (chairman), Edda Gas AS (general manager and chairman), Partrederiet BergeMar I DA (chairman), Partrederiet BergeMar II DA (chairman), Partrederiet BergeMar III DA (chairman), Partrederiet BergeMar IV DA (chairman), BW LNG Holding AS (general manager and chairman), BW LNG I AS (general manager), BW LNG II AS (general manager), BW LPG Holding AS (general manager and director), BW LPG I AS (general manager), BW LPG II AS (general manager), Hegas KS (chairman), Hegas AS (general manager), BW Green Gas AS (general manager), BW Green Carriers AS (general manager and chairman), BW Green Transport AS (general manager and chairman), Yara

91 Ammonia Chartering AS (general manager and chairman), BW Singa Gas AS (general manager and chairman), BW Gas KK (general manager and chairman). Egil Husby Valletua AS (Chairman), Vargheia AS (director), Granly skole DELK (Chairman) CargoSpotter AS (Director) Håvard Furu Tryvert AS (Chairman), Vargheia AS (director), Markatunet Huseierforening (director), Western Alterna Partnership (director) SLNG Yemen I AS (Chairman), SLNG Yemen II AS (Chairman), PR BW Gas Fluxys DA (chairman), BW Gas Pensjonskasse (chairman), BW LPG Holding AS (director), BW LPG I AS (director), BW LPG II AS (director), BW Gas LPG III AS (director), The Green Tankers AS (director), Bergesen Gas Shipping AS (director), BW Green Carriers AS (director), BW Green Transport AS (director), BW Green Gas AS (director), Hegas AS (director), Neskollen Invest AS (director) 10.2.2 Executive shareholdings The table below shows the management's direct and indirect ownership in the Company as at the date of the

• Prospectus. The management has agreed to sell parts of their Shares in the Secondary Sale, and their

shareholding after the Secondary Sale is listed in the table included in Section 6.15. Name Position Shares owned Options* Jens Ismar (through his 100% owned investment company Lisann AS) Chief Executive Officer 2 759 980 Håvard Furu (through his 100% owned investment company Tryvert AS) Chief Financial Officer 689 990 Egil Husby (through his 100% owned investment company Valletua AS) Chief Risk Officer 1 379 990 Please refer to section 15.5 for a description of the Company's option programme for members of the executive

• management. The Company has entered into agreement with each member of the management; however the

number of option to be allocated will be determined on the basis of the result of the Bookbuilding.

92 10.2.3 Remuneration and benefits Information about the remuneration and benefits granted to the members of the executive management for the financial year 2012 is set out in the table below: Name Position Amount 2012 (NOK) Jens Ismar Chief Executive Officer 7 515 472* Håvard Furu Chief Financial Officer 2 858 428* Egil Husby Chief Risk Officer 4 028 382* * Please also refer to information about paid-in pension premium and accrued pension liabilities for Mr. Ismar,

• Mr. Furu and Mr. Husby for 2012 in section 10.4.2 below.

10.3 EMPLOYEES As of the date of the Prospectus, the Group has approximately 102 employees. The table below illustrates the development in number of employees over the last three years, as per the end of each calendar year. 30 June 2013 2012 2011 2010 Total Number of employees 99 106 95 88 Location: Oslo 50 51 48 45 Singapore 30 39 35 32 Seattle 7 6 6 5 Santiago 8 8 6 6 Monaco 4 2

• 10.3.1 Employee incentive schemes

A bonus scheme has been established for the management and employees. The scheme has been in place since January 2010, with only small adjustment made since the inception. The bonus scheme is based on Net TC result in WB Chartering earned by each Business Unit ("BU") and the earnings before bonus and tax ("EBBT") in WB Chartering. The bonus programme differentiates between Business Unit Staff (BU Staff), including Business Unit Managers (BUM), and Management/Support Staff including senior management. Bonus to BU Staff is based on a model where each BU is awarded 20% of their Net-TC up to a profit of USD 15 million after a deduction of a hurdle that represents a share of the G&A in WB Chartering. For Net-TC above USD 15 million a bonus of 22.5% is earned. It is the BUM's responsibility to propose an allocation of bonus to each of the employees within the Business Unit. The proposed allocation is subject to approval by the Remuneration Committee. Bonus to Management and Support Staff is based on a model where 4% of the EBBT in WB Chartering is allocated to bonus. 2.5% of these 4% is earmarked for the executive management, where the CEO, CRO and

93 CFO shall receive 1.29%, 0.71% and 0.50% respectively of the EBBT in WB Chartering. The remaining 1.5% is allocated to the employees based on a discretionary evaluation of performance. The allocation is subject to approval by the Remuneration Committee. Bonuses are expensed and accrued for each accounting period. The total bonus expensed over the last three years (in USD million) has been as follows: 2012 2011 2010 Executive Management 1.0 1.0 1.7 Other employees 11.1 11.4 16.1 Total 12.1 12.4 17.8 Social security tax 1.1 1.3 1.5 Total incl. tax 13.2 13.7 19.3 For all employees including executive management, but excluding BUM, the bonus is paid out the following

• year. For BUMs, 60% of the bonus is paid out the following year whereas the remaining 40% of the bonus is

deferred to the second and third year (20% in each of the two years). The deferred bonus is at risk for each manager in case of negative Net TC for his BU in the following years or if the manager resigns from his position. In addition, the Company has established an option program for the members of the executive management, as further described in Section 15.5. 10.3.2 Benefits upon termination of employment No members of the Board of Directors have service contracts with the Company or any of its subsidiaries that provide for benefits upon termination of employment. The Chief Executive Officer is entitled to severance pay equivalent to 18 months' base salary following termination of his employment. Further, if the Company decides that non-competition clause shall apply, and this impedes the employee in finding a suitable alternative employment, the Chief Executive Officer has the right to receive salary for the period of time corresponding to the non-competition period (limited to 12 months), in addition to a payment equivalent to 6 months of base salary. The Chief Risk Officer is entitled to severance pay equivalent to 12 months' salary if the employee is given notice of termination or voluntary resigns on the grounds that his scope of responsibility and/or duties has been substantially reduced or amended due to change in the Company's structure, including merger or demerger of the Company. Further, if the employee is not entitled to severance pay, the Chief Risk Officer is entitled to compensation if the non-competition restriction impedes the employee in finding suitable alternative employment, equivalent to 100 percent of the monthly base salary each complete month the impediment persist for a period up to 12 months. The CFO of the Company does not have service contracts with the Company or any of its subsidiaries that provide for benefits upon termination of employment. 10.3.3 Pensions The Group has a pension scheme for the employees. The scheme is described in the annual report for 2012. No members of the Board of Directors are entitled to pension benefits from the Group. The CEO, CRO and CFO are entitled to pensions in accordance with the Group's scheme. The CEO has an additional clause that lowers his retirement age to 62 years, compared with the standard retirement age of 67 years in the Group's scheme. The CEO is entitled to receive 66% of his salary from 62 years until the standard terms apply from age 67 years. Pensions for executive management:

94 Pension premium paid in 2012 Accrued pension liability as

• f 31.12.2012

Jens Ismar NOK 843 544 NOK 8 110 285 Håvard Furu NOK 126 428 NOK 271 166 Egil Husby NOK 306 862 NOK 1 246 518 10.4 CONFLICT OF INTEREST The Chairman of the board Christen Sveaas is an indirect major shareholder in the Company as he controls Kistefos AS, the Company's largest shareholder. Henning E. Jensen is the CEO of Kistefos AS. Rolf A. Wikborg's partly owned company Wikborg Sons Ltd AS is about to enter into an co-operation with Capital Link, a company that provides information services to the Group. Wikborg Sons Ltd AS will, if the co-

• peration is entered into, act as a representative of Capital Link in Scandinavia and will receive a commission-

based fee from revenues that Capital Link receives from clients in Scandinavia, including fees paid by the Group. Rolf A. Wikborg was related to AMA Capital Partners LLP at the time the Company carried out the transactions with AMA Capital Partners LLP described in section 10.7.1. Mr. Wikborg is no longer related to AMA Capital Partners LLP. Apart from the above, there are no potential conflicts of interest between any duties to the Company, of any member of the executive management or the board of directors, and their private interests and other duties. 10.5 ADDITIONAL INFORMATION CONCERNING THE EXECUTIVE MANAGEMENT AND THE BOARD OF DIRECTORS Christen Sveaas was the chairman of the board and shareholder in Viking Drilling AS and Kristin Gjertsen was a board member in Viking Drilling AS at the time the board applied for Joint Non-consolidating Chapter 11 Plan of Liquidation and Disclosure Statement, Texas, USA, for the company in November 2009. Apart from the above, none of the members of the executive management or the board of directors as listed above have during the last five years preceding the date of this Prospectus:

• any convictions in relation to indictable offences or convictions in relation to fraudulent offences;
• received any official public incrimination and/or sanctions by any statutory or regulatory authorities

(including designated professional bodies) or ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company; or

• been declared bankrupt or been associated with any bankruptcy, receivership or liquidiation in his capacity

as a founder, director or senior manager of a company. 10.6 CORPORATE GOVERNANCE The Company maintains high standards of corporate governance and is committed to ensure that all shareholders of the Company are treated equally. The Company complies with the Norwegian Code of Practice for Corporate Governance (the "Code"), save for the following deviation:

95 The Company's bonus scheme (as described in section 10.3.1) and the option programme for the executive management (as described in section 15.5) are not in compliance with the Code Section 12 as these are not subject to an absolute limit. Further, the option programme deviates from the Code as there is no performance criteria linked to the allocation or execution of the options, and therefore the programme is not based on quantifiable factors over which the employee can offer influence. In addition, the acquired shares are not subject to a minimum period of ownership. The Board is of the opinion that both the option programme and the bonus scheme are in accordance with similar arrangements for comparable companies, and with particular regard to the option programme, that the programme in reality is limited in respect to how many options that will be issued. The Board has adopted corporate governance rules for the Company. Such rules will be made available on www.westernbulk.no and a report on compliance will be included in the annual report for 2013 in accordance with Oslo Børs' Continuing Obligations. 10.7 RELATED PARTY TRANSACTIONS 10.7.1 Transactions between the Group and its related parties The Group's related party transactions for the last three financial years are set out below. All transactions with related parties have been based on arm's length principle (estimated fair market value). 2013 (until the date of the prospectus)

• 1. Kistefos AS received a group contribution of NOK 50 million, and paid a group contribution to the

Group of NOK 50 million in April 2013. The transaction had no cash impact for the Group, but effectively transferred tax losses carried forward from the Group to Kistefos AS to optimise the overall taxation of Kistefos AS and its subsidiaries. The deferred tax asset related to these losses carried forward was not recognized in the balance sheet (IFRS) of the Group, and consequently had no impact

• n the financial statements presented herein;
• 2. A short term loan of USD 24 million was granted to Kistefos AS in January, and was subsequently

repaid (incl. interests) when it was netted off with the dividend declared in April 2013. Western Bulk charged Kistefos AS an interest of USD 0.1 million for this loan;

• 3. In relation to the financial assets acquired from Kistefos AS in 2012 (see below: item 1 in 2012)

Western Bulk invested USD 0.7 million as a capital contribution in exchange for new shares to fulfill parts of the uncalled capital commitment. Kistefos AS is a controlling shareholder in this company. The transaction included a put-option for Western Bulk, whereby Western Bulk can demand that Kistefos AS buys the financial assets back at a pre-agreed price. (See below: item 4);

• 4. It has been agreed to transfer the financial assets (including all remaining uncalled capital

commitments) acquired from Kistefos AS in 2012 (see below: item 1 in 2012) and in which Western Bulk made further investments in 2013 (see above: item 3), to Kistefos AS at a price of USD 27.25

• million. The price is in accordance with the put options described below (item 1 in 2012) and above

(item 3). The transaction is contingent upon completion of the contemplated listing of the Company, and will be effected on or about the first day of trading of the Company's shares on Oslo Børs, or alternatively on Oslo Axess. The purchase price will be settled in cash;

• 5. During the first six months of 2013 the Group had chartered in 3 vessels from Western Alterna

Partnership (in which the Group has a 20% ownership), for various lengths. During the first six months

96

• f 2013, USD 6.4 million charter hire was paid for these vessels, whilst USD 0.3 million was received

in management fee for management services carried out by the Group for the partnership. 2012

• 1. Western Bulk purchased financial assets for a total amount of USD 26.1 million from Kistefos AS.

Kistefos AS remained a controlling shareholder for the relevant financial assets following the

• transaction. The purchase price was based on a combination of valuation methods such as net present

value of estimated future cash flows and asset appraisal reports. The values were based on estimated future cash flows and were subsequently confirmed by an independent third party valuation report. Some of these financial assets have uncalled capital commitments. The transaction included a put-

• ption for Western Bulk, whereby Western Bulk can demand that Kistefos AS buys the financial assets

back at a pre-agreed price. See above (item 3 and 4 in 2013) for further information about subsequent events;

• 2. Kistefos AS injected additional equity of NOK 47.85 million to Western Bulk in exchange for 660 000

new shares issued in 2012;

• 3. During 2012 the Group had chartered in 3 vessels from Western Alterna Partnership (in which the

Group has a 20% ownership), for various lengths. During 2012, USD 14.5 million charter hire was paid for these vessels, whilst USD 0.6 million was received in management fee for management services carried out by the Group for the partnership. 2011

• 1. Interest on intercompany receivable, where Western Bulk charged Kistefos AS interest amounting to

USD 0.1 million for a loan to Kistefos AS, which was granted during second half 2011 and repaid on 30 December 2011;

• 2. The Group purchased listed shares and investments in private equity funds for a total amount of USD

29.4 million from Kistefos AS. The purchase price for listed shares was based on the quoted share price at the date of the transaction. The purchase price for the private equity funds was based on latest available valuation reports from the funds. (These listed shares and investment in private equity funds were disposed to third parties in 2011 and 2012);

• 3. Kistefos AS injected additional equity of NOK 50 million to Western Bulk in exchange for 709 220

new shares issued in 2011;

• 4. During 2011 the Group had chartered in 3 vessels from Western Alterna Partnership (in which the

Group has a 20% ownership), for various lengths. During 2011, USD 6.1 million charter hire was paid for these vessels, whilst USD 1.0 million was received in management fee for management services carried out by the Group for the partnership. 2010

• 1. The USD 10.0 million loan from Kistefos AS to Western Bulk granted in 2009, was repaid during 2010

and Western Bulk granted loans to Kistefos AS during the year (all were repaid by the end of 2010). Western Bulk earned interest on a receivable on Kistefos AS and paid interest on the short term debt to Kistefos AS. The net interest earned by Western Bulk amounted to NOK 0.7 million;

• 2. Western Bulk transferred shares in Imarex ASA to Kistefos AS at a price of NOK 17.5 million. The

shares were transferred based on the quoted price for the share on Oslo Børs on the transaction date;

97

• 3. During 2010 the Group received USD 0.2 million in management fee from Western Alterna

Partnership (in which the Group has a 20% ownership), for management services carried out by the Group for the partnership. No ships had been delivered as of 31 December 2010;

• 4. In 2010, AMA Capital Partners, a company related to board member Rolf A. Wikborg, was engaged as

financial advisor for the Group concerning two mandated transactions. AMA Capital Partners received a total fee of USD 1.1 million for the two mandates during 2010. 10.7.2 Transactions between the Company and its subsidiaries and associated companies The subsidiary Western Bulk Management AS performs management services for the Group and receives a fee for the services based on arm's length terms. The management fees for the financial years 2010, 2011, 2012 and first half 2013 are set out in the table below: Management fee 2010 NOK 5 682 741 Management fee 2011 NOK 4 820 798 Management fee 2012 NOK 3 307 441 Management fee first half 2013 NOK 1 615 178 (of which NOK 223 466 is unpaid) Total NOK 15 426 158 Loans to and from subsidiaries are subject to interest charges based on arm's length terms. Inter-company interest income and inter-company interest expense for the financial years 2010, 2011, 2012 and first half 2013 are set out in the table below: Financial year Net receivable/(liabilities) from group companies (NOK 1 000) Intercompany interest income (NOK 1 000) Intercompany interest expense (NOK 1000) 2010 (71 762) 19 417 25 144 2011 (100 669) 33 117 52 969 2012 2 597 27 774 42 943 First half 2013 (52 170) 9 431 17 307 Total (222 004) 89 739 138 363 During 2011, the Company received a 2.5% address commission related to the time charter hire of the tug Western Seqi from a subsidiary. The commission amounted to NOK 568 402. The tug was disposed in 2011 and the commission ceased.

98 11. SELECTED OPERATING AND FINANCIAL INFORMATION You should read the following discussion of the financial condition and results of operations in conjunction with the financial statements included in this Prospectus. 11.1 ACCOUNTING PRINCIPLES The consolidated financial statements of Western Bulk ASA and its subsidiaries (the "Group") are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). The accounting policies also comply with IFRS as issued by the International Standards Board (IASB). For all periods up to and including the year ended 31 December, 2012, the Group has prepared its financial statements in accordance with Norwegian generally accepted accounting principles (NGAAP). In connection with the contemplated listing, the financial statements for 2012 and for 1H/Q2 2013 have been converted to

• IFRS. These financial statements for the year ended 31 December, 2012, are the first the group has prepared in

accordance with IFRS. Please see Section 19.5 "Incorporated by Reference" in this Prospectus for link to the Group's significant accounting policies. 11.2 CONSOLIDATED HISTORICAL FINANCIAL INFORMATION The following tables present data extracted from selected financial information for the Group as of and for the three and six months ended 30 June 2013 and 2012, and for each of the three years ended 31 December 2010, 2011 and 2012. The tables should be read in conjunction with the financial statements as incorporated by reference in this Prospectus (see Section 19.5). The presented data for 2010 and 2011 are in accordance with NGAAP, while for 2011 and all succeeding periods presented, the data is in accordance with IFRS. 11.2.1 Selected Income Statement Information The table below sets out a summary of the Group's unaudited consolidated income statement information for the three and six months ended 30 June 2013 and 2012, and the Group's audited combined income statement information for the years ended 31 December 2012, 2011 and 2010 (USD 1 000).

99 11.2.2 Selected Consolidated Balance Sheet The table below sets out a summary of the Group's unaudited consolidated balance sheet information as of 30 June 2013 and 2012, and the Group's audited combined balance sheet information as of 31 December 2012, 2011 and 2010 (USD 1 000).

ASSETS IFRS N-GAAP 30.06.2013 30.06.2012 31.12.2012 31.12.2011 31.12.2011 31.12.2010 Non current assets Deferred tax asset 1 997 1 787 2 163 1 781 4 296 1 235 Property, plant and equipment 22 670 24 794 23 385 25 151 24 359 63 415 Investment in associates 9 296 10 374 9 940 10 833 9 825 5 034 Investment in financial assets 23 885 247 22 781 30 224 30 224

• Derivatives

5 882 1 521 6 537 4 657

• Long term receivable

1 787 1 628 1 710 1 556 1 556 17 Total non current assets 65 517 40 352 66 516 74 202 70 260 69 701 Current Assets Bunker stocks 58 372 56 072 52 276 44 831 44 831 22 051 Accounts receivable 44 443 38 275 52 488 36 718 38 293 38 362 Other receivables 5 783 13 891 3 981 41 41 21 203 Prepaid cost 3 070

• -
• Derivatives

1 308 11 365 9 141 5 777

• IFRS

N-GAAP 6 months ended 30 June 2013 6 months ended 30 June 2012 3 months ended 30 June 2013 3 months ended 30 June 2012 2012 2011 2011 2010 Gross revenues 521 139 548 728 278 004 278 797 1 143 580 1 027 843 1 027 843 1 081 976 Voyage expenses

• 257 323
• 275 056
• 130 455
• 137 034
• 560 257
• 435 662
• 435 662
• 338 182

T/C expenses

• 231 132
• 241 151
• 127 963
• 121 150
• 500 551
• 521 186
• 521 186
• 649 840

Other vessel expenses

• 5 899
• 5 854
• 3 027
• 2 933
• 11 617
• 11 558
• 11 558
• 7 496

Net T/C result 26 784 26 667 16 559 17 681 71 155 59 437 59 437 86 459 Administration expenses

• 17 314
• 18 138
• 8 405
• 9 099
• 39 922
• 37 372
• 37 235
• 42 172

Tonnage tax

• 428
• 453
• 214
• 226
• 906
• 613
• Result before depreciation and

impairment, finance items and income tax (EBITDA) 9 042 8 077 7 940 8 356 30 327 21 452 22 202 44 287 Impairment and provisions for onerous contracts

• 2 400
• 1 900
• 3 333

Depreciation

• 1 186
• 1 008
• 556
• 567
• 2 474
• 1 080
• 1 638
• 2 377

Gain/ (loss) disposal property, plant and equipment

• 1
• 1
• 1 531

2 529

• Operating profit/(loss)

7 856 7 069 7 384 10 189 27 853 23 803 23 093 45 243 Financial income 1 109 247 1 215 11 100 569 569 365 Financial costs

• 1 389
• 2 863
• 1 196
• 2 341
• 3 239
• 1 535
• 1 571
• 2 558

Share of profit/(loss) from associates

• 644
• 208
• 271
• 80
• 643
• 1 262
• 2 228
• 316

Unrealized fair value gain/ (loss) on derivatives

• 9 871
• 745
• 8 578
• 10 701

115

• 909
• Profit before tax from continuing
• perations
• 2 939

3 500

• 1 446
• 2 923

24 186 20 666 19 863 42 734 Income tax expense 1

• 64
• 4
• 60

325

• 1 663

240

• 3 636

Profit for the year from continuing

• perations
• 2 938

3 436

• 1 450
• 2 983

24 511 19 004 20 103 39 098 Attributable to : Equity holders of parent

• 2 958

3 367

• 1 468
• 2 924

24 386 18 001 19 356 39 228 Non-controlling interest 20 68 18

• 59

125 1 003 747

• 130

Total

• 2 938

3 436

• 1 450
• 2 983

24 511 19 004 20 103 39 098 Earnings per share (USD)

• 0.21

0.26

• 0.11
• 0.23

1.81 1.44 1.55 3.16

100

Other financial assets 4 21 714 3 3 3 3 Bank deposits 62 107 41 639 65 316 77 044 77 044 76 417 Total current assets 175 087 182 957 183 205 164 414 160 212 158 036 TOTAL ASSETS 240 604 223 308 249 721 238 615 230 472 227 737 EQUITY AND LIABILITIES IFRS N-GAAP 30.06.2013 30.06.2012 31.12.2012 31.12.2011 31.12.2011 31.12.2010 Equity Share capital 9 914 9 914 9 914 9 363 9 363 8 757 Share premium reserve 15 379 15 379 15 379 7 933 7 933

• Other paid-in capital

15 214 12 684 16 308 12 684 12 684 12 684 Retained earnings 29 799 36 783 59 346 31 687 29 080 47 314 Available-for-sale reserves

• 730
• 2 014
• 1 177
• Non-controlling interests

6 272 6 232 6 290 11 555 11 167 4 905 Total equity 75 848 78 978 106 059 73 221 70 226 73 660 Long term liabilities Deferred tax liability 1 064 2 028 1 152 2 025 2 025 2 629 Pension liabilities 1 345 3 755 1 399 3 594 457

• Derivatives

2 775 333 2 042 303

• Liabilities to financial institutions

60 700 12 256 11 594 12 919 14 244 42 769 Other long-term liabilities 1 556 1 773 6 662 8 711

• 285

Total long term liabilities 67 440 20 145 22 850 27 553 16 726 45 683 Current liabilities Accounts payable 32 018 34 129 28 704 36 493 36 493 18 879 Prepaid freight 13 147 19 722 21 927 36 030 36 030 21 010 Prepaid income

• 6 260

1 568

• 10 234

Taxes payable 506 1 463 1 439 3 102 3 102 2 100 Accrued cost 37 098 33 478 39 379 22 667 22 667 27 561 Provisions 5 200 5 200 5 200 5 500 5 500

• Derivatives
• 2 711
• 1 708
• Bank overdraft
• 9 639

31 18 114 18 114

• Liabilities to financial institutions

1 325 1 325 1 325 1 325

• Other current liabilities

8 022 10 258 21 238 12 904 21 614 28 609 Total current liabilities 97 316 124 185 120 812 137 842 143 520 108 394 Total liabilities 164 756 144 330 143 662 165 394 160 246 154 077 TOTAL EQUITY AND LIABILITIES 240 604 223 308 249 721 238 615 230 472 227 737

11.2.3 Selected Consolidated Cash Flow Statements The table below sets out a summary of the Group's unaudited consolidated cash flow information for the three and six months ended 30 June 2013 and 2012, and the Group's audited combined cash flow information for the years ended 31 December 2012, 2011 and 2010 (USD 1 000).

IFRS N-GAAP 6 months ended 30 June 2013 6 months ended 30 June 2012 3 months ended 30 June 2013 3 months ended 30 June 2012 2012 2011 2011 2010 CASH FLOW FROM OPERATIONS Profit/(loss) before tax

• 2 938

3 500

• 1 446
• 2 923

24 186 20 666 19 863 42 734 Taxes paid

• 1 331
• 2 176
• 663
• 1 026
• 3 347
• 2 339
• 2 339

43 Depreciation 1 186 1 008 556 567 2 474 1 080 1 638 2 377 Impairment and prov. for onerous contr.

• 2 400
• 1 900
• Unreal. fair value gain(loss) on derivatives

8 567 3 512 6 982 12 700 1 324 3 544

• Impairments

772

• 1 175

1 055

• 894
• 572
• 144
• 144

3 638 Share of (profit)/loss from associates 644 208 271 80 643 1 262 2 228 316 Gain/(loss) disposal assets

• 1
• 1
• 1
• 1 841
• 2 838
• Changes in current receivables and current

liabilities

• 32 165
• 29 438
• 23 548
• 24 101
• 23 197

8 232 10 153 12 854

101

Net cash flow from/(to) operating activities

• 25 266
• 24 562
• 16 794
• 17 998

1 510 28 560 28 560 61 963 CASH FLOW FROM INVESTMENTS Investments in fixed assets

• 471
• 650
• 403
• 167
• 707
• 187
• 187
• 25 405

Sales of fixed assets

• 40 133

40 133

• Investment in/disposal of financial assets
• 657

4 120

• 657

28 495 4 120

• 20 255
• 20 255
• Investment in associates
• 4

250

• 4
• 265
• 7 020
• 7 020
• 5 350

Changes in long term receivables

• 76
• 72
• 39
• 35
• 154
• 1 539
• 1 538
• Net cash flow from investments
• 1 208

3 648

• 1 102

28 293 3 524 11 132 11 133

• 30 755

CASH FLOW FROM FINANCING ACTIVITIES Changes in interest bearing short term and long term debt 51 100

• 9 138

41 450 9 307

• 19 408
• 10 411
• 10 411

13 329 Loan to related party

• 24 103
• 10 042

Dividend and group contribution paid

• 27 800
• 27 800
• 37 195
• 37 195
• 25 121

Equity received from/(paid to) non- controlling interest

• 34
• 5 352
• 34
• 1 874
• 5 352
• Share capital increase
• 7 997

8 539 8 539 5 035 Net cash flow from financing activities 23 266

• 14 490

37 719 7 433

• 16 763
• 39 067
• 39 067
• 16 800

Net change in cash/cash equivalents

• 3 209
• 35 405

19 822 17 728

• 11 728

626 626 14 408 Cash/cash equivalents at start of period 65 316 77 044 42 284 23 912 77 044 76 417 76 417 62 010 Cash/cash equivalents at end of period 62 107 41 639 62 107 41 639 65 316 77 044 77 044 76 417 Restricted cash at end of period 5 583 5 025 5 583 5 025 5 506 5 285 5 285 2 817 Available cash and cash equivalents at end

• f the period

56 524 36 614 56 524 36 614 59 810 71 759 71 759 73 600

11.2.4 Selected Consolidated Statement of Changes in Equity The table below sets out a summary of the Group's audited changes in equity information for the years ended 31 December 2010, 2011 and 2012, and the Group's unaudited changes in equity information for the three months ended 30 June 2013 (USD 1 000).

Total N-GAAP 2010 Total Equity as of December 31, 2009 54 648 Dividend/group contribution paid

• 25 121

Paid in from minority 5 035 Profit/(loss) for the year 39 098 Total Equity as of December 31, 2010 73 660 2011 Share capital increase 8 540 Dividend/group contribution paid

• 37 195

Transactions with non-controlling interest 5 118 Profit/(loss) for the year 20 103 Total Equity as of December 31, 2011 70 226 Total N-GAAP Total Equity as of December 31, 2010 73 660 Effect of IFRS conversion January 1, 2011 5 874 IFRS 2011 Total Equity as of January 1, 2011 79 534 Profit & loss for the year 19 004 Other comprehensive income

• 1 780

Share capital increase 8 540 Dividends paid

• 37 195

Transactions with non-controlling interest 5 118 Total equity as of December 31, 2011 73 221 201 2 Profit & loss for the year 24 511

102

Other comprehensive income 1 786 Share capital increase 7 998 Transactions with non-controlling interest

• 5 080

Fair value of financial instruments 3 624 Total equity as of December 31, 2012 106 059 Q1-2013 Profit & loss for the period

• 1 488

Other comprehensive income

• 529

Total Equity as of March 31, 2013 104 042 Q2-2013 Profit & loss for the period

• 1 450

Other comprehensive income 976 Dividend paid

• 27 800

Transactions with non-controlling interest

• 38

Fair value of financial instruments 118 Total Equity as of June 30, 2013 75 848

11.2.5 Transition effects from N-GAAP to IFRS In connection with the contemplated listing, the financial statements for 2012 and for 1H/Q2 2013 have been converted to IFRS. These financial statements for the year ended 31 December 2012, are the first the group has prepared in accordance with IFRS, and the financial statements also include comparable figures for 2011. The converted financial statements for 2012 have been audited, and 1H/Q2 has been subject to a limited audit review by the Group's auditor RSM Hasner Kjelstrup & Wiggen AS. Please see Section 19.5 "Incorporated by Reference" in this Prospectus for link to the Group's significant accounting policies and detailed note 24 explaining all transition effects. 11.2.6 Significant changes in financial trading position after 30 June 2013 Apart from as stated below, there have been no significant changes in the financial or trading position of the Group which have occurred since the end of the last financial period for which interim financial information have been published (i.e. 30 June 2013).

• In July 2013, a dividend of USD 7.7 million was paid to the shareholders.
• In July 2013, WB Shipholding concluded another TC in contract with extension and purchase options.

This was a Japanese design ECO Ultramax vessel, with delivery in 2016.

• In July 2013 one vessel which was on a longer term time-charter out to a third party was redelivered to

the Group. The Group has disputed the redelivery as a breach of contract. See section 18 for more information about the Group's claim related to the termination of the charter and a claim for damages for loss of future earnings.

• In September 2013, WB Shipholding concluded another two TC in contracts with extension and

purchase options. These were Japanese design ECO Ultramax vessels, with delivery in 2016. 11.3 SEGMENT INFORMATION The tables below set out certain selected information about the Group's reporting segments for the three and six months ended 30 June 2013 and 2012 (unaudited) and the year ended 31 December 2012, 2011 and 2010 (audited).

103 Due to the fact that both segments have worldwide activities and the fact that the dry cargo shipping market

• ffers a global service covering global trade routes, financial position is not allocated to geographical segments.

USD milll. WB Chartering WB Shipholding Other Group IFRS 6 months ending 30 June 2013 Gross revenue 510.1 23.2

• 12.2

521.1 Net TC revenue 25.1 1.7

• 26.8

EBITDA 8.9 0.7

• 0.5

9.0 Operating Profit/(Loss) 8.6

• 0.3
• 0.5

7.9 Profit/(Loss) for the Period after tax 1.5

• 1.3
• 3.1
• 2.9

6 months ending 30 June 2012 Gross revenue 543.7 15.1

• 10.1

548.7 Net TC revenue 24.6 2.1

• 26.7

EBITDA 7.4 1.2

• 0.5

8.1 Operating Profit/(Loss) 7.2 0.4

• 0.5

7.1 Profit/(Loss) for the Period after tax 4.9

• 0.1
• 1.4

3.4 3 months ending 30 June 2013 Gross revenue 272.1 11.7

• 5.8

278.0 Net TC revenue 16.0 0.6

• 16.6

EBITDA 8.0 0.1

• 0.2

7.9 Operating Profit/(Loss) 7.9

• 0.4
• 0.2

7.4 Profit/(Loss) for the Period after tax 1.0

• 0.8
• 1.6
• 1.5

3 months ending 30 June 2012 Gross revenue 276.5 8.2

• 5.9

278.8 Net TC revenue 16.5 1.2

• 17.7

EBITDA 7.8 0.8

• 0.2

8.4 Operating Profit/(Loss) 14.5 0.3

• 4.6

10.2 Profit/(Loss) for the Period after tax 1.5 0.2

• 4.6
• 3.0

2012 Gross revenue 1 130.5 37.2

• 24.1

1 143.6 Net TC revenue 67.3 3.9

• 71.2

EBITDA 29.3 1.9

• 0.9

30.3 Operating Profit/(Loss) 28.9

• 0.3
• 0.8

27.9 Profit/(Loss) for the Period after tax 28.3

• 1.0
• 2.8

24.5 2011 Gross revenue 1 024.8 17.1

• 14.1

1 027.8 Net TC revenue 58.5 3.7

• 2.7

59.4 EBITDA 23.6 1.8

• 4.0

21.5 Operating Profit/(Loss) 26.4 2.6

• 5.2

23.8 Profit/(Loss) for the Period after tax 25.7 0.9

• 7.7

19.0 N-GAAP 2011 Gross revenue 1 024.8 17.1

• 14.1

1 027.8 Net TC revenue 58.5 3.7

• 2.7

59.4 EBITDA 24.4 1.8

• 4.0

22.2 Operating Profit/(Loss) 24.0 3.1

• 4.0

23.1 Profit/(Loss) for the Period after tax 23.7 0.4

• 4.0

20.1 N-GAAP 2010 Gross revenue 1 079.3 7.3

• 4.7

1 082.0 Net TC revenue 78.9 4.8 2.8 86.5 EBITDA 40.0 2.9 1.4 44.3 Operating Profit/(Loss) 42.7 1.1 1.4 45.2 Profit/(Loss) for the Period after tax 40.9

• 0.8
• 1.0

39.1

"Other" contains parent company items and elimination of intra-group transactions.

104 11.4 KEY FINANCIAL FIGURES The table below details selected information about unaudited key financial and operation information for the Group.

USD mill. IFRS N-GAAP 6 months ended 30 June 2013 6 months ended 30 June 2012 3 months ended 30 June 2013 3 months ended 30 June 2012 2012 2011 2011 2010 Gross Revenues 521.1 548.7 278.0 278.8 1 143.6 1 027.8 1 027.8 1 082.0 Net TC result 26.8 26.7 16.6 17.7 71.2 59.4 59.4 86.5 EBITDA 9.0 8.1 7.9 8.4 30.3 21.5 22.2 44.3 EBIT 7.9 7.1 7.4 10.2 27.9 23.8 23.1 45.2 Profit/(loss) after tax

• 2.9

3.4

• 1.5
• 3.0

24.5 19.0 20.1 39.1 Total assets 240.6 223.3 240.6 223.3 249.7 238.6 230.5 227.7 Total equity 75.8 79.0 75.8 79.0 106.1 73.2 70.2 73.7 Total equity to total assets ratio (%) 31.5% 35.4% 31.5 % 35.4 % 42.5 % 30.7 % 30.5% 32.3 % Segment information: Net TC revenue, WB Chartering 25.1 24.6 16.0 16.5 67.3 58.5 58.5 78.9 Net TC revenue, WB Shipholding 1.7 2.1 0.6 1.2 3.9 3.7 3.7 4.8 Net TC revenue, Other*

• 2.7
• 2.7

2.8 Total Net TC revenue 26.8 26.7 16.6 17.7 71.2 59.4 59.4 86.5 EBITDA, WB Chartering 8.9 7.4 8.0 7.8 29.3 23.6 24.4 40.0 EBITDA, WB Shipholding 0.7 1.2 0.1 0.8 1.9 1.8 1.8 2.9 EBITDA, Other

• 0.5
• 0.5
• 0.2
• 0.2
• 0.9
• 4.0
• 4.0

1.4 Total EBITDA 9.0 8.1 7.9 8.4 30.3 21.5 22.2 44.3 KPI's for WB Chartering: Average number of ships operated 134 121 142 127 129 103 103 95 Number of ship days 24 215 22 002 12 879 11 561 47 194 37 693 37 693 34 704 Net TC margin per ship day (USD) 1 035 1 117 1 241 1 428 1 426 1 479 1 479 2 354

*) For 2010 and 2011 an elimination made under 'Other' has been allocated to WB Chartering for the purpose of calculating the Net TC

margin per ship day. The elimination was related to impairment charges in the WB Chartering segment in 2010, which reversed in 2011 and for both years the impairment and reversal was eliminated at Group level.

11.5 STATUTORY AUDITORS The Group's independent auditor is RSM Hanser Kjelstrup & Wiggen AS, Filipstad Brygge 1, 0252 Oslo, Norway. RSM Hasner Kjelstrup & Wiggen AS has been the Group's auditor since 2005. RSM Hasner Kjelstrup & Wiggen AS has audited the historical financial information for the years 2012, 2011 and 2010. The audit reports have been unqualified for all three years. RSM Hasner Kjestrup & Wiggen is a member of the Norwegian Institute of Public Accountants.

105 12. OPERATING AND FINANCIAL REVIEW You should read the following discussion of the financial condition and results of operations in conjunction with the financial statements included in this Prospectus. The following discussion may contain forward-looking statements that are based on current assumptions and estimates by the Group's management regarding future events and circumstances. The Group's actual results could differ materially from those expressed or implied by the forward-looking statements as a result of many factors, including those described in Section 2 "Risk factors". 12.1 COMMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS When commenting the consolidated financial statements, you should be aware of the following principal factors affecting the Group's Consolidated Results of Operation and Financial Condition:

• 1. Net TC Revenue: The Net TC revenue generated is a function of the gross revenue and the cost of carrying the

cargo the agreed distance, such as charter hire paid for the vessel, bunker oil consumed, port charges and fees paid etc. The Net TC revenue is depending on the size of the operated fleet and the margin that the Group is able to obtain on average per ship day for the operated fleet. Market rate levels and volatility in market rates are factors that are influencing the margin per ship day, as well as operational skills and other external factors. The Group has for the reporting periods split the comments into the two segments where appropriate: Western Bulk Chartering and Western Bulk Shipholding.

• 2. Operating result: The operating result equals the Net TC, less administration expenses, tonnage tax (since

2011), depreciations, impairment charges, provisions for onerous contracts and gain or loss on sale of fixed assets.

• 3. Mark-to-market ('MtM') adjustments: In order to hedge against fluctuations in bunker oil prices, freight rates,

currency exchange rates and interest rates, the Group enters into various derivative contracts. Although the Group intends to hold such financial instruments until maturity, IFRS requires the Group to record them at fair value in the financial statements. All realised gains and losses from these financial contracts are presented as part of the operating profit, unless entered into to hedge a financial income or expense or a currency risk related to a financial asset or liability. All unrealised mark-to-market changes are presented as a separate line item in the financial items of the Income Statement. Whenever there are major changes in the underlying market prices, the unrealized MtM changes can significantly influence the financial result of the Group.

• 4. Result for the period, after tax but excl. MtM on derivatives: The Result for the period, after tax but excl.

MtM on derivatives equals the Group's net result after tax, but excluding the mark-to-market adjustment explained in 3, above. 12.2 CONSOLIDATED RESULTS OF OPERATIONS – Q2 2013 (UNAUDITED) COMPARED TO Q2 2012 (UNAUDITED)

USD mill. WB Chartering WB Shipholding Other Group 3 months ending 30 June 2013 IFRS Net TC revenue 16.0 0.6

• 16.6

Operating result 7.4 Result for the period excl MtM derivatives. 7.1 MtM changes on derivatives

• 8.6

Result for the Period after tax

• 1.5

Number of vessels operated in WB Chart. 142 Net TC margin/ship day in WB Chart. (USD) 1 241

106

3 months ending 30 June 2012 IFRS Net TC revenue 16.5 1.2

• 17.7

Operating result 10.2 Result for the period excl MtM derivatives. 7.7 MtM changes on derivatives

• 10.7

Result for the Period after tax

• 3.0

Number of vessels operated in WB Chart. 127 Net TC margin/ship day in WB Chart. (USD) 1 428

Net TC: The Group's Net TC result was slightly lower, from USD 17.7 million in Q2-12 to USD 16.6 million in Q2-3. This was due to a lower Net TC margin per ship day from WB Chartering (USD 1241/day in Q2-13 and USD 1428/day in Q2-12), which was partly offset by an increase in the operated fleet from 127 vessels in Q2-12 to 142 vessels in Q2-13. Q2-13 market rates13 were at consistently lower levels than in Q2-12, along with very little volatility. In combination, this had a negative impact on the Net TC margin per ship day in WB

• Chartering. The main reason for lower Net TC result in WB Shipholding is lower net earnings on the traded

fleet, which had increased from 6 vessels in Q2-12 to 9 vessels in Q2-13. Operating result: Operating result decreased from USD 10.2 million in Q2-12 to USD 7.4 million in Q2-13. Operating result for Q2-12 was positively (USD 2.4 million) impacted by a reversal of an impairment charge taken in Q1-12, which netted to zero for the full year 2012. When disregarding this one-off adjustment in Q2-12, the operating results were almost the same as in Q2-13. Result for the period, after tax but excl. MtM on derivatives: When excluding unrealised change on MtM of derivatives, the Group recorded a profit after tax for the period Q2-13 of USD 7.1 million. This was slightly lower than the profit after tax of USD 7.7 million in Q2-12, mainly due to the reasons explained above (Net TC and Operating result), and higher net financial expenses in Q2-12 (USD -2.4 million) than in Q2-13 (USD -0.2 million). The Q2-12 financial expenses were impacted by a USD -1.4 million one-off expenses from the default

• f MF Global which was the Group's clearing central for bunker derivatives.

MtM changes on derivatives: The fluctuation in market values of the Group's derivatives had a negative impact

• n the results with USD – 8.6 million in Q2-13 versus USD -10.7 million in Q2-12.

12.3 CONSOLIDATED RESULTS OF OPERATIONS – FIRST SIX MONTHS (1H) 2013 (UNAUDITED) COMPARED TO FIRST SIX MONTHS (1H) 2012 (UNAUDITED)

USD mill. WB Chartering WB Shipholding Other Group 6 months ending 30 June 2013 IFRS Net TC revenue 25.1 1.7

• 26.8

Operating result 7.9 Result for the period excl MtM derivatives. 6.9 MtM changes on derivatives

• 9.9

Result for the Period after tax

• 2.9

Number of vessels operated in WB Chart. 134 Net TC margin/ship day in WB Chart. (USD) 1 035 6 months ending 30 June 2012 IFRS Net TC revenue 24.6 2.1

• 26.7

Operating result 7.1 Result for the period excl MtM derivatives. 4.1 MtM changes on derivatives

• 0.7

Result for the Period after tax 3.4 Number of vessels operated in WB Chart. 121 Net TC margin/ship day in WB Chart. (USD) 1 117

Net TC: The Group's Net TC result increased slightly from USD 26.7 million in 1H-12 to USD 26.8 million in 1H-13. This was due to a lower Net TC margin per ship day from WB Chartering (USD 1035/day in 1H-13 and

13 Average Baltic Exchange Supramax Index rate

107 USD 1117/day in 1H-12), which was more than offset by an increase in the operated fleet from 121 vessels in 1H-12 to 134 vessels in 1H-13. 1H-13 market rates14 were at consistently lower levels than in 1H-12, along with very little volatility, which had a negative impact on the Net TC margin per ship day in WB Chartering. The main reason for lower Net TC result in WB Shipholding is lower net earnings on the traded fleet. Operating result: 1H-13 Operating result was also stable compared to 1H-12, USD 7.9 million versus USD 7.1 million respectively. Result for the period, after tax but excl. MtM on derivatives: When excluding unrealised change on MtM of derivatives, the Group recorded a profit after tax for the period 1H-13 of USD 6.9 million. This was higher than the profit after tax (excluding unrealised change on MtM derivatives), of USD 4.1 million in 1H-12, mainly due to the reasons explained above (Net TC and Operating result), and higher net financial expenses in 1H-12 (USD

• 2.8 million) than in 1H-13 (USD -0.9 million). The 1H-12 financial expenses were impacted by a USD -1.4

million one-off expense from the default of MF Global which was the Group's clearing central for bunker derivatives. MtM changes on derivatives: The fluctuation in market values of the Group's derivatives had a negative impact

• n the results with USD – 9.9 million in 1H-13 versus USD -0.7 million in 1H-12.

12.4 CONSOLIDATED RESULTS OF OPERATIONS – 2012 COMPARED TO 2011

USD mill. WB Chartering WB Shipholding Other Group 2012 IFRS Net TC revenue 67.3 3.9

• 71.2

Operating result 27.9 Result for the period excl MtM derivatives. 24.4 MtM changes on derivatives 0.1 Result for the Period after tax 24.5 Number of vessels operated in WB Chart. 129 Net TC margin/ship day in WB Chart. (USD) 1 426 2011 IFRS Net TC revenue 58.5 3.7

• 2.7

59.4 Operating result 23.8 Result for the period excl MtM derivatives. 19.9 MtM changes on derivatives

• 0.9

Result for the Period after tax 19.0 Number of vessels operated in WB Chart. 103 Net TC margin/ship day in WB Chart. (USD) 1) 1 479 1) For 2010 and 2011 an elimination made under 'Other' has been allocated to WB Chartering for the purpose of calculating the Net TC margin per ship day. The elimination was related to impairment charges in the WB Chartering segment in 2010, which reversed in 2011, and for both years the impairment and reversal was eliminated at Group level.

Net TC: The Group's Net TC result increased from USD 59.4 million in 2011 to USD 71.2 million in 2012. This was due to a lower Net TC margin per ship day from WB Chartering (USD 1426/day in 2012 and USD 1479/day in 2011), which was more than offset by an increase in the operated fleet from 103 vessels in 2011 to 129 vessels in 2012. 2012 market rates15 were at consistently lower levels than in 2011 (a 34% decrease in average market rates for 2012 compared to 2011), but with some volatility throughout the year. In combination, this had a slightly negative impact on the Net TC margin per ship day in WB Chartering. Operating result: Operating result increased from USD 23.8 million in 2011 to USD 27.9 million in 2012. This was mainly due to the increased Net TC revenue, however the increased administration expenses, tonnage tax expenses and depreciations (total increase of USD 4.2 million), dampened the effect of the increased Net TC

14 Average Baltic Exchange Supramax Index rate 15 Average Baltic Exchange Supramax Index rate

108

• somewhat. The 2011 operating result was also positively impacted by USD 3.4 million from reversed provisions

and gain related to the sale of one vessel. Result for the period, after tax but excl. MtM on derivatives: When excluding unrealised change on MtM derivatives, the Group recorded a profit after tax for 2012 of USD 24.4 million. This was up from the profit after tax (excluding unrealised change on MtM derivatives) of USD 19.9 million in 2011. This mainly due to the reasons explained above (Net TC and Operating result), and higher net financial expenses in 2012 (USD -3.8 million) than in 2011 (USD -2.2 million). The 2012 financial expenses were impacted by a USD -1.4 million

• ne-off expense from the default of MF Global which was the Group's clearing central for bunker derivatives.

Income tax expense was also USD 2.0 million higher in 2011 than in 2012. MtM changes on derivatives: The fluctuation in market values of the Group's derivatives had an impact on the results with USD 0.1 million in 2012 versus USD -0.9 million in 2011. 12.5 CONSOLIDATED RESULTS OF OPERATIONS – 2011 COMPARED TO 2010

USD mill. WB Chartering WB Shipholding Other Group 2011 IFRS Net TC revenue 58.5 3.7

• 2.7

59.4 Operating Profit/(Loss) 23.8 Profit/(Loss) for the period excl MtM derivatives. 19.9 MtM changes on derivatives

• 0.9

Profit/(Loss) for the Period after tax 19.0 Number of vessels operated in WB Chart. 103 Net TC margin/shipday in WB Chart. (USD) 1) 1 479 2010 N-GAAP Net TC revenue 78.9 4.8 2.8 86.5 Operating Profit/(Loss) 45.2 Profit/(Loss) for the period excl MtM derivatives. 39.1 MtM changes on derivatives n.a. Profit/(Loss) for the Period after tax 39.1 Number of vessels operated in WB Chart. 95 Net TC margin/shipday in WB Chart. (USD) 1) 2 354 1) For 2010 and 2011 an elimination made under 'Other' has been allocated to WB Chartering for the purpose of calculating the Net TC margin per ship day. The elimination was related to impairment charges in the WB Chartering segment in 2010, which reversed in 2011, and for both years the impairment and reversal was eliminated at Group level.

IFRS 2011 compared to N-GAAP 2011: Net TC revenue was USD 59.4 million under IFRS and N-GAAP for 2011, and operating profit was USD 21.5 million under IFRS compared to USD 22.2 million under N-GAAP. Depreciations and gain on sale of property, plant and equipment was different under IFRS than N-GAAP but with only a small net effect. Profit for the period excluding MtM derivatives was USD 19.9 million under IFRS, and USD 20.1 million under N-GAAP. Hence, there are no material differences to comment when comparing IFRS and N-GAAP for 2011. IFRS 2011 compared to N-GAAP 2010: Net TC: The Group's Net TC result decreased to USD 59.4 million in 2011 from USD 86.5 million in 2010. This was due to a lower Net TC margin per ship day from WB Chartering (USD 2354/day in 2010 and USD 1479/day in 2011), which was only partly offset by an increase in the operated fleet from 95 vessels in 2010 to 103 vessels in 2011. 2011 market rates16 were at consistently lower levels than in 2010 (a 36% decrease in average market rates for 2011 compared to 2010), and with low volatility throughout the year. In combination, this had a significant negative impact on the Net TC margin per ship day in WB Chartering.

16 Average Baltic Exchange Supramax Index rate

109 Operating result: Operating result decreased from USD 45.2 million in 2010 to USD 23.8 million in 2011. This was mainly due to the decreased Net TC revenue, however lower administration expenses and depreciations (total decrease of USD 6.1 million), dampened the effect of the lower Net TC somewhat. The 2011 operating result was also positively impacted by USD 3.4 million from reversed provisions and gain related to the sale of

• ne vessel, whereas the 2010 operating result was positively impacted by a reversal of provisions of USD 3.3

million. Result for the period, after tax but excl. MtM on derivatives: When excluding unrealised change on MtM derivatives, the Group recorded a profit after tax for 2011 of USD 19.9 million. This was down from the profit after tax (excluding unrealised change on MtM derivatives) of USD 39.1 million in 2010. This mainly due to the reasons explained above (Net TC and Operating result). Lower net financial expenses and income tax in 2011 than 2010 gave a positive effect of USD 2.3 million. MtM changes on derivatives: The fluctuation in market values of the Group's derivatives had an impact on the results with USD -0.9 million in 2011, and zero for 2010, as this was not applicable under N-GAAP reporting. 12.6 FINANCIAL CONDITION – AS OF 30 JUNE 2013 COMPARED WITH AS OF 30 JUNE 2012 The Group's total assets as of 30 June 2013 amounted to USD 240.6 million against USD 223.3 million as of 30 June 2012. Total assets as of 30 June 2013 were mainly impacted by increase in bank deposits among other as a result of the issue in April 2013 of a NOK 300 million unsecured bond loan with four year duration and no amortisation until maturity. The Group's total equity as of 30 June 2013 amounted to USD 75.8 million against USD 79.0 million as of 30 June 2012. The equity ratio was 31.5% as of 30 June 2013, compared to 35.4% as of 30 June 2012. The Group's total liabilities as of 30 June 2013 amounted to USD 164.8 million, of which USD 62.0 million was interest bearing debt, against total liabilities of USD 144.3 million as of 30 June 2012, of which USD 23.2 million was interest bearing debt. Total liabilities as of 30 June 2013 were impacted by the issue in April 2013

• f a NOK 300 million unsecured bond loan with four year duration and no amortisation until maturity.

12.7 FINANCIAL CONDITION – AS OF 31 DECEMBER 2012 COMPARED WITH AS OF 31 DECEMBER 2011 The Group's total assets as of 31 December 2012 amounted to USD 249.7 million against USD 238.6 million as

• f 31 December 2011. Total assets as of 31 December 2012 were impacted mainly due to an increase in bunker

stocks and the amount of accounts receivables, which was a by-product of an increased volume and fleet. The Group's total equity as of 31 December 2012 amounted to USD 106.1 million against USD 73.2 million as

• f 31 December 2011. The difference primarily related to the profit for the year ended 31 December 2012. The

equity ratio was 42.5% as of 31 December 2012, compared to 30.7% as of 31 December 2011. The Group's total liabilities as of 31 December 2012 amounted to USD 143.7 million, of which USD 12.9 million was interest bearing debt, against total liabilities of USD 165.4 million, of which USD 32.4 million was interest bearing debt as of 31 December 2011. Total liabilities as of 31 December 2012 were mainly impacted due to a pay down of a bank overdraft facility.

110 12.8 FINANCIAL CONDITION – AS OF 31 DECEMBER 2011 COMPARED WITH AS OF 31 DECEMBER 2010 *) There were no major changes in the total assets, equity and total liabilities of the Group from 31 December 2010 to 31 December 2011:

• The Group's total assets as of 31 December 2011 amounted to USD 238.6 million against USD

227.7 million as of 31 December 2010. However, the composition of the assets changed by

the disposal of one vessel, and acquisition of various financial investments during 2011.

• The Group's total equity as of 31 December 2011 amounted to USD 73.2 million against USD 73.7

million as of 31 December 2010.

• The Group's total liabilities as of 31 December 2011 amounted to USD 165.4 million against USD

154.1 million as of 31 December 2010. * 2010 Based on NGAAP 12.9 FAVOURABLE TAX REGULATIONS The Group's activities are to a large extent subject to favourable tax regulations for the operating profits generated from shipping activities in Norway and Singapore. The Group's activities will to a large extent be governed by the fiscal legislation of the jurisdictions where it is

• perating. Thus, the Group as a whole is exposed to a material risk regarding the correct application of the tax

regulations as well as possible future changes in the tax legislation of those relevant countries. In addition, the Group is, to a certain extent, exposed to different rules of freight duty and withholding tax. Certain of the Company's subsidiaries operate within the Norwegian tonnage tax regime. There is a risk that these favourable tax regulations will be modified in the future, and/or that the Norwegian tonnage tax regime no longer will be applicable to any of the Group companies due to new requirements and/or changes in the Group structure. One of the Company's subsidiaries (Western Bulk Pte Ltd) operates within the MSI-Approved International Shipping Enterprise Award, which gives tax exemption on qualifying shipping income for 10-year renewable

• periods. Western Bulk Pte Ltd's future tax rate in Singapore depends on its ability to remain qualified for the

scheme, and on the future development or existence of the scheme.

111 13. LIQUIDITY AND CAPITAL RESOURCES The Group's primary sources of liquidity in addition to the operational cash flows have been equity capital and debt financing raised through the NOK 300 million bond loan issued in April 2013 and the mortgage loan raised in 2010 in connection with the purchase of the vessel Western Stavanger. In the past, the Group has also had a credit facility with a bank to finance short term liquidity needs. This credit facility was terminated in April 2013 and replaced by the bond loan as a more long term debt financing for the Group. 13.1 CASH FLOW The table below sets out a summary of the Group's unaudited consolidated cash flow information for the three and six months ended 30 June 2013 and 2012, and the Group's audited combined cash flow information for the years ended 31 December 2012, 2011 and 2010 (USD mill).

USD mill. IFRS N-GAAP 6 months ended 30 June 2013 6 months ended 30 June 2012 3 months ended 30 June 2013 3 months ended 30 June 2012 2012 2011 2010 Net cash flow from operating activities

• 25.3
• 24.6
• 16.8
• 18.0

1.5 28.6 62.0 Net cash flow from investing activities

• 1.2

3.6

• 1.1

28.3 3.5 11.1

• 30.8

Net cash flow from financing activities 23.3

• 14.5

37.7 7.4

• 16.8
• 39.1
• 16.8

Net change in cash and cash equivalents

• 3.2
• 35.4

19.8 17.7

• 11.7

0.6 14.4 Cash and cash equivalents at the beginning of the period 65.3 77.0 42.3 23.9 77.0 76.4 62.0 Cash and cash equivalents at the end

• f the period

62.1 41.6 62.1 41.6 65.3 77.0 76.4

13.2 COMPARISON OF THE CASH FLOW Cash flow for the three months ended 30 June 2013 compared with the three months ended 30 June 2012 The cash flow from operating activities in second quarter 2013 and 2012 was significantly impacted by an increase in working capital17 for the operated fleet including changes in margins paid/received for cleared derivative contracts. The Q2 2013 net increase in working capital of USD 23.5 million was mainly driven by increased bunker stocks (USD 5.5 million), margin calls paid on derivatives (USD 3.8 million), decreased accrued costs and other liabilities (USD 14.7 million). The Q2 2012 net increase in working capital of USD 24.1 million was mainly driven by increased bunker stocks (USD 18.1 million), increased accounts receivables (USD 6.4 million), margin calls paid on derivatives (USD 9.2 million), and was partly offset by increased accrued costs and other liabilities (USD 12.0 million). The cash flow from investing activities in second quarter 2013 was mainly related to investment in fixed assets and financial assets, whereas in second quarter 2012 cash flow from investing activities also includes a sale of financial assets (USD 28.5 million).

17 The working capital for the operated fleet relates to bunker stocks, accounts receivables, account payables, accrued expenses, margin calls paid/received for cleared derivatives and other cut-off related items in the balance sheet. The working capital typically fluctuates with fleet size, market rates, bunker oil price, trading pattern for the fleet and composition of the fleet, and can vary significantly from period to

• period. Increased market rates, bunker oil price and increased fleet size will typically give an increase in working capital, and vice versa.

Changes in trading pattern may give increased or decreased working capital, which is also the case for changes in the composition of the fleet (vessel size and contract type).

112 The cash flow from financing activities in second quarter 2013 reflects down-payments on the mortgage loan, the issue of the bond loan and repayment of the credit facility (net positive cash flow of USD 41.5 million), payment of a dividend (USD -27.8 million), and repayment of loan granted to Kistefos AS (USD 24.1 million) (loan and dividend to Kistefos AS were netted). The cash flow from financing activities in second quarter 2012 was mainly related to changes in amounts drawn on the credit facility (USD 9.6 million) and repayment of equity (USD -1.9 million) to non-controlling interests in the financial assets sold in the same quarter. Cash flow for the six months ended 30 June 2013 (1H 2013) compared with the six months ended 30 June 2012 (1H 2012) The cash flow from operating activities in 1H 2012 was approximately the same as in 1H 2013. In both periods the cash flow from operating activities was negative mainly due to increased working capital for the operated fleet during the period. The 1H 2013 net increase in working capital of USD 32.2 million was mainly driven by increased bunker stocks (USD 6.1 million), margin calls paid on derivatives (USD 4.6 million), decreased accrued costs and other liabilities (USD 20.7 million), decreased prepaid freight (USD 8.8 million), and was partly offset by decreased accounts receivables (USD 8.0 million). The 1H 2012 net increase in working capital

• f USD 29.4 million was mainly driven by increased bunker stocks (USD 11.2 million), decreased prepaid

freight (USD 16.3 million), increased accounts receivables and other receivables (USD 7.4 million), and was partly offset by margin calls received on derivatives (USD 6.3 million). The cash flow from investing activities in 1H 2012 was mainly related to the investment in and sale of financial assets (net USD 4.1 million), whereas in 1H 2013 cash flow was mainly related to investment in tangible assets and financial assets (USD -1.1 million). The cash flow from financing activities in 1H 2012 was mainly related to equity repaid to non-controlling interests (USD -5.4 million) and net repayment of debt (USD -9.2 million), whereas in 1H 2013 cash flow was mainly related to dividends paid (USD -27.8 million), and net increase in debt (USD 51.1 million), as a result of the bond loan issue and down payment on mortgage debt. Cash flow for the year ended 31 December 2012 compared with the year ended 31 December 2011 The cash flow from operating activities in 2012 was significantly lower than in 2011. In 2012 weak cash flow was mainly due to a USD 23.2 million increase in the working capital for the operated fleet during the year, whereas in 2011 the working capital (including changes in margins paid/received for cleared derivative contracts) changes had a positive effect of USD 8.2 million. The 2012 net increase in working capital of USD 23.2 million was mainly driven by increased bunker stocks (USD 7.4 million), increased accounts receivables and other receivables (USD 19.7 million), decreased prepaid freight (USD 14.1 million), decreased accounts payable (USD 7.8 million), and was partly offset by increased accrued costs and other liabilities (USD 23.8 million). The 2011 net decrease in working capital of USD 8.2 million was mainly driven by decrease in accounts receivables and other receivables (USD 18.5 million), increase in accounts payable (USD 17.6 million), increase in prepaid freight (USD 15.0 million) and was partly offset by increased bunker stocks (USD 22.8 million), margin calls paid on derivatives (USD 10.2 million) and decreased accrued costs and other liabilities (USD 10.4 million). The cash flow from investing activities in 2012 was mainly related to the investment in and sale of financial assets (USD 4.1 million), whereas in 2011 cash flow was mainly related to the sale of one vessel (USD 40.1 million) and investment in associates and financial assets (USD -27.3 million). The cash flow from financing activities in 2012 was mainly related to equity repaid to non-controlling interests (USD -5.4 million), a share capital increase (USD 8.0 million) and net repayment of debt (USD -19.4 million), whereas in 2011 cash flow were mainly related to dividends paid (USD -37.2 million), a share capital increase (USD 8.5 million) and net repayment of debt (USD -10.4 million). Cash flow for the year ended 31 December 2011 compared with the year ended 31 December 2010

113 The cash flow from operating activities in 2011 was significantly lower than in 2010. In 2010 cash flow was strong due to a significantly higher result in the period and USD 12.9 million decreased working capital for the

• perated fleet during the year. Also in 2011 the working capital changes were positive by USD 8.2 million, but

with a lower net result for the year the total cash flow from operating activities was lower than in 2010. The 2011 net decrease in working capital of USD 8.2 million was mainly driven by a decrease in accounts receivables and other receivables (USD 18.5 million), increase in accounts payable (USD 17.6 million), increase in prepaid freight (USD 15.0 million) and was partly offset by increased bunker stocks (USD 22.8 million), margin calls paid on derivatives (USD 10.2 million) and decreased accrued costs and other liabilities (USD 10.4 million). The 2010 net decrease in working capital of USD 12.9 million was mainly driven by an increase of accounts payable and accrued costs and other liabilities (USD 12.5 million), increase in prepaid freight (USD 13.3 million) and margins calls received on derivatives (USD 10.2 million), and was partly offset by an increase in accounts receivables and other receivables (USD 21.8 million). The cash flow from investing activities in 2011 was mainly related to the sale of one vessel (USD 40.1 million) and investment in associates and financial assets (USD -27.3 million), whereas in 2010 the main cash flow from investing activities was related to the acquisition of one vessel (USD -25.4 million) and investment in associates (USD -5.4 million). The cash flow from financing activities in 2011 was mainly related to dividends paid (USD -37.2 million), a share capital increase (USD 8.5 million) and net repayment of debt (USD -10.4 million), whereas in 2010 the main cash flow was net increase of debt (USD 13.3 million), loan repaid to Kistefos AS (USD -10.1 million), dividend paid (USD -25.1 million) and capital contributed from non-controlling interests related to investment in the vessel mentioned above (USD 5.1 million). 13.3 WORKING CAPITAL STATEMENT As of the date of this Prospectus, the Company is of the opinion that the Group's working capital is sufficient for its present requirements and, in particular, is sufficient for at least the next twelve months from the date of this Prospectus. 13.3.1 Key ratios The table below sets forth some unaudited consolidated key ratios for the Group as of the beginning of 2011, end of 2011, 2012 and as of 30 June 2012 and 30 June 2013.

Key ratios 30.06.13 30.06.12 31.12.12 31.12.11 01.01.11 Working capital ratio18 1.80 1.47 1.52 1.19 1.47 Debt to equity ratio19 0.45 0.23 0.11 0.31 0.35 Book Equity Ratio20 0.32 0.35 0.42 0.31 0.33

All periods are IFRS.

The working capital ratio varies with the changes in the operated fleet and the working capital tied up in the fleet, as well as dividend payments that are reducing the cash balance. The strengthening of the ratio from 31.12.12 to 30.06.13 is related to the bond loan issue which increased the current asset, net of the dividend payments made, both in April 2013.

18 Current assets/current liabilities. 19 Total interest bearing debt/total equity plus total interest bearing debt. 20 Equity/total capital.

114 Book equity ratio decreased from 31.12.12 to 30.6.2013 due to dividends paid in April 2013 and an increase in the total assets with the bond loan issued in April 2013. The table below sets forth some unaudited consolidated key ratios for the Group for 2010, 2011, 2012 and for the first six months of 2012 and 2013.

Key ratios 1H 2013 1H 2012 2012 2011 2010 EBITDA (USD mill) 9.0 8.1 30.3 21.5 44.3 Net interest cost (USD mill)

• 1.0
• 0.4
• 0.7
• 0.6
• 1.0

Interest coverage ratio21 9.0 20.3 43.3 35.8 44.3

All periods except 2010 are IFRS. 2010 is N-GAAP. For comments related to changes in the EBITDA, please refer to section 12-- "Operating and Financial Review". Net interest cost has increased in 2013 with the bond loan issued in April 2013. 13.4 FUNDING STRUCTURE AND RESTRICTIONS ON THE USE OF CAPITAL As of 30 June 2013 the Group was funded by USD 75.8 million in equity and had interest-bearing debt of USD 62.0 million. The interest-bearing debt consists of NOK 300 million bond loan and USD 12.3 million mortgage

• loan. The Group had, as of the same date, USD 102.7 million in non-interest-bearing liabilities (USD 96.0

million was current, and USD 6.7 million was non-current). In addition, the Group held USD 62.1 million in cash, of which USD 5.6 million was restricted. The adequacy of available funds will depend on many factors, including but not limited to the further growth of the business, capital expenditures, changes in working capital, market development (including but not limited to freight rates, time charter rates and bunker oil price), margin calls on derivatives and maturity of debt. The Group is party to loan agreements, which together with various guarantees provided, require the Group to have at least USD 20 million in liquidity at all times to be in compliance with its financial covenants. Accordingly, the Group may require additional funds and seek to raise such funds through issuing new equity and/or debt. As of the date of this Prospectus, the Company is not aware of any restrictions on transfer of funds from its subsidiaries other than general requirements as to dividend capacity and restrictions on distribution of dividends and other distributions under the subsidiaries' applicable company laws, and dividend and distribution restrictions and cash deposit requirements under the borrowing arrangements of the Group. The Company is of the opinion that none of these restrictions have, or could have, a material direct or indirect impact on the business of the Group. For a discussion about dividend restrictions and minimum cash deposit requirements under the Group's borrowing arrangements, see Section 13.6 "Borrowings" below. 13.4.1 Treasury and liquidity management The Group operates a centralised treasury function to manage the Group's funding requirements and financial

• risk. The Group's liquidity risk is described in the financial statements for 2012 (note 17), as incorporated by

reference in this Prospectus Section 19.5. The Group monitors the liquidity to ensure sufficient liquidity to manager potential margin calls on derivatives and potential changes in the working capital of the Group, as well as to maintain sufficient funds to be in compliance with the covenants in the Group's loan agreements and other agreements where applicable.

21 EBITDA to net interest cost for the period.

115 13.5 CAPITALISATION AND INDEBTEDNESS This Section provides information about (a) the Group's capitalisation and net financial indebtedness on an actual basis as of 30 June 2013 and (b) in the "As Adjusted" columns, the Group's capitalisation and net financial indebtedness on an adjusted basis to show the estimated effects of the following items only to the Group's capitalisation and net financial indebtedness as of consummation of the Offering (however based on the Group's actual capitalisation and net financial indebtedness figures as of 30 June 2013 as shown in the "Actual as of 30 June 2013" columns): (A) The consummation of the Offering, with estimated net proceeds to the Issuer of USD 44.0 million, based on a targeted share capital and share premium increase of USD 50 million and after deducting the estimated commissions and expenses to the Managers and other advisors, as well as other costs associated with the listing

• f the Shares on Oslo Børs, alternatively Oslo Axess. See Section 5 "Use of Proceeds; Reasons for the

Offering". (B) The sale of financial assets to Kistefos AS for a cash consideration of USD 27.25 million as discussed in section 10.7.1. (C) The dividend of USD 7.7 million paid to the shareholders in the Company in July 2013. Investors are cautioned that the As Adjusted figures included in the tables below are estimates and associated with significant uncertainties, and that the actual proceeds from the Offer may deviate from the amounts

• indicated. The information presented below should be read in conjunction with the other parts of this

Prospectus, in particular Section 11 "Selected Financial and Operating Information", Section 12 "Operating and Financial Review", and the Company's Financial Statements and the notes related thereto as incorporated by reference in this Prospectus Section 19.5. Capitalization

USD mill. As of 30 June 2013 As Adjusted Reference Total current debt:

• Guaranteed and secured

1.3 1.3

• Guaranteed and unsecured
• Secured but unguaranteed
• Unsecured and unguaranteed
• Total non-current debt (excluding portion of long-term debt)
• Guaranteed and secured

11.0 11.0

• Guaranteed and unsecured

49.7 49.7

• Secured but unguaranteed
• Unsecured and unguaranteed
• Shareholder's equity
• Share capital

9.9 11.3 A

• Share premium account

15.4 57.9 A

• Other paid-in capital

15.2 15.2

• Retained earnings

29.8 19.1 B, C

• Other reserves
• 0.7
• B
• Non-controlling interests

6.3 6.3 Total capitalization 137.9 171.9

116 Indebtedness

USD mill. As of 30 June 2013 As Adjusted Reference

• A. Cash

56.5 120.0 A, B, C

• B. Cash equivalents
• C. Restricted cash

5.6 5.6

• D. Liquidity (A)+(B)+(C)

62.1 125.6

• E. Current financial receivables
• F. Current bank debt
• G. Current portion of non-current debt

1.3 1.3

• H. Other current financial debt
• I. Current financial debt (F)+(G)+(H)

1.3 1.3

• J. Net current financial indebtedness (I)-(E)-(D)
• 60.8
• 124.3
• K. Non-current bank loans

11.0 11.0

• L. Bonds issued

49.7 49.7

• M. Other non-current loans
• N. Non-current financial indebtedness (K)+(L)+(M)

60.7 60.7

• O. Net financial indebteness (J)+(N)
• 0.1
• 63.6

13.6 BORROWINGS 13.6.1 Description The Group has two loan agreements; the NOK 300 million bond agreement (outstanding amount as of 30 June 2013 was NOK 300 million) and a USD 15.9 million mortgage loan agreement (outstanding amount as of 30 June 2013 was USD 12.3 million). The bond loan is listed on Nordic ABM with ISIN NO 0010675572. Below is a summary of the main terms and conditions for the two loan agreements: Bond Loan Mortgage Loan Borrower Western Bulk AS Western Bulk Shipowning II AS (51% owned, 100% consolidated) Outstanding amount as of 30 June 2013 NOK 300 million USD 12.3 million Security Unsecured Mortgage in vessel (Western Stavanger) Assignment

• f

earnings and insurances Assignment of rights under time charter Pledge of accounts and receivables Pledge of shares in Western Bulk Shipowning II AS Drawing date 19 April 2013 28 May 2010 Final maturity date 19 April 2017 28 May 2015 Repayment Balloon USD 331 250 per quarter. Balloon at maturity of USD 9 275 000. Interest 3m NIBOR + 6.75% LIBOR + 2.75%

117 Main covenants for Borrower

• Book equity ratio >25% until

April 2016, >30% thereafter

• Minimum equity of USD 50

million

• Minimum liquidity of USD

10 million

• NIBD/EBITDA <3.75x

(all on a consolidated basis)

• Minimum USD 500,000 in cash in

the vessel-owning company

• Broker value of vessel always to

exceed 125% of the outstanding amount. Other

• Dividends max 100% of the

Group's consolidated net profit on a semi-annual basis Guarantee by Western Bulk ASA with covenants (on consolidated basis):

• Book equity ratio >25%
• Minimum equity of USD 50

million

• Minimum liquidity of USD10

million

• Dividends max 100% of the

Group's consolidated net profit on a semi-annual basis As the Group's base currency is USD, the proceeds from the bond's principal amount have been exchanged to USD in several tranches, on average at a NOK/USD exchange rate of approximately 6.00. The Group has partly hedged the currency risk associated with the bond loan's principal amount of NOK 300 million, by entering into FX collars (Collar 1: NOK 150m, floor 5.40 and ceiling 7.09; Collar 2: NOK 100m, floor 5.75 and ceiling 6.93; Collar 3: NOK 50m, floor 5.60 and ceiling 6.795). The collars give the Group a downside protection if the NOK strengthens to a level where the USD/NOK falls below the floor, while the Group keeps the upside potential of a currency gain if the NOK weakens to a level where the USD/NOK increases to a level above the

• ceiling. For any fluctuations between the floor and the ceiling, the Group is exposed to the changes in the

exchange rate between the USD and NOK. The Mortgage Loan has quarterly repayments, which will be financed with the operating cash flow from the vessel and with existing cash held by the vessel-owning company:

• Repayment in 2H-13: USD 0.7 million
• Repayments in 2014: USD 1.3 million
• Repayments in 1H-2015: USD 10.3 million (including balloon)

Upon maturity of the loan in May 2015, the Group will either try to refinance the loan, or the Group will consider disposal of the vessel, depending on the market level and value of the vessel. The Bond Loan has no repayment until maturity in April 2017. The Group has a right to call the entire Bond Loan at any time from April 2016 until April 2017, at 102.25% of the par value. Upon maturity the Group expects to try to refinance the Bond Loan. 13.6.2 Restrictions inherent in the loan agreements As customary for such loan agreements, the loan agreements include cross-default provisions and restrictions on major changes to the business of the Group.

118 The bond loan agreement restricts further indebtedness in the WB Chartering segment (Western Bulk Chartering AS and its subsidiaries) of the Group, and includes a negative pledge provision (with certain carve-outs) for the assets of the WB Chartering segment. Further, the bond loan agreement restricts the Group from materially changing the risk profile of the WB Chartering segment. The bond loan agreement also restricts any further transactions with Kistefos-related companies as well as granting any financial assistance to any parties outside the Group. The sale of the financial assets from the Group to Kistefos AS upon the listing of the Company (as described in section 10.7.1), is a transaction that is allowed under the bond loan agreement. A dividend restriction applies for the Group in the bond loan agreement as well as the mortgage loan agreement. The maximum dividend that can be distributed is 100% of the consolidated net profits on a semi-annual basis. This restriction is based on the NGAAP consolidated accounts and the Company has requested the relevant parties to the Mortgage Loan and the Bond loan for a clarification of how certain profit/loss items related to unrealised changes in fair value of derivatives applicable under IFRS accounting principles shall be dealt with when calculating the maximum dividend allowed for future periods, as these items are treated materially different from NGAAP under IFRS. Furthermore, the Group has requested the relevant parties where financial covenants apply on a consolidated basis (see section 13.6.3) how the items related to unrealised changes in fair value of derivatives applicable under IFRS accounting principles shall be dealt with when calculating the covenants for future periods, as these items are treated materially different from NGAAP under IFRS, as well as certain other elements. The Company has received the following clarifications and confirmations as listed below:

• The relevant parties have confirmed that for the purpose of calculating the maximum dividend allowed

under the Mortgage Loan agreement and the Bond Loan, any unrealised gain/loss from fair value accounting of derivatives held to hedge future results, shall be excluded from the basis of calculation (both negative and positive effects). In addition, the relevant parties have also agreed to make a one-off adjustment to the basis of calculation of the maximum dividend in 2013 for any results related to the financial assets to be sold to Kistefos AS (see section 10.7.1), to arrive at same result that would have applied under NGAAP accounting.

• The relevant parties have confirmed that for the purpose of calculating the financial covenants related

to minimum equity amount and equity ratio, the fair value of the same derivatives shall be excluded from the total assets and equity as reported under IFRS.

• The relevant parties have confirmed that for the purpose of calculating the financial covenant related to

working capital, the fair value of the same derivatives shall be excluded from current assets and current liabilities as reported under IFRS.

• The relevant parties have confirmed that for the purpose of calculating the financial covenant related to

working capital, the bond loan shall be excluded from current liabilities as reported under IFRS when there is less than 12 months left to maturity. The amendments are subject to a successful completion of the IPO and the listing of the Company and agreement on the final wording for the amendments. The loan agreements have the following change of control provisions:

• Bond loan: Kistefos AS cannot reduce its ownership share to less than 30% without approval from the

bond holders. In addition, no other shareholder can acquire 50% or more of the shares in the Company without the approval of the bond holders, the Company cannot be delisted (if listed) without approval from the bond holders.

119

• Mortgage Loan: Kistefos AS cannot reduce its ownership share to less than 90% without approval from

the lender.

• Other agreements: In the guarantees provided by the Company in relation to the time charter

agreements that are part of the financing arrangement with DVB Bank SE of the three vessels Western Wilton, Western Moscow and Western Texas owned by the WA Partnership, these guarantees (the 'Guarantees') have a change of control provision stating that Kistefos cannot reduce its ownership share to less than 51% without approval from DVB Bank SE. The Company has requested the relevant parties to the Mortgage Loan and the Guarantees to accept a change of the change of control provision in the Mortgage Loan and in the Guarantees to ensure that the contemplated listing of the Company and IPO will not be in conflict with these provisions, and furthermore requested the change of control provision to be amended to the same provision that applies in the Bond Loan. The Company has received the following clarifications and confirmations as listed below:

• Subject to a successful IPO and listing of the Company, the lender has approved that the change of

control provision in the Mortgage Loan is amended to the following: Kistefos cannot reduce its

• wnership share to less than 30% without approval from the lender. In addition, no other shareholder

can acquire 33.33% or more of the shares in the Company without the approval of the lender, the Company cannot be delisted (if listed) without approval from the lender.

• Subject to a successful IPO and listing of the Company, DVB Bank has approved that the change of

control provision in the Guarantees is amended to the following: Kistefos cannot reduce its ownership share to less than 30% without approval from the lender. In addition, no other shareholder can acquire 50% or more of the shares in the Company without the approval of the lender, the Company cannot be delisted (if listed) without approval from the lender. The Group is also party to a clearing agreement with NOS Clearing ASA which general terms and conditions requires the Group to notify NOS Clearing ASA in the event of a business re-organisation affecting 33% or more of the equity of the Group. The occurrence of such change of ownership entitles NOS Clearing ASA to declare default of the agreement and take necessary actions thereby. NOS Clearing ASA has confirmed in writing that no default will be declared in relation to the IPO and the listing of the Company. 13.6.3 Covenants in loan agreements Bond loan agreement The bond loan agreement contains covenants for the Group, and applies to the consolidated figures:

• Book equity ratio > 25% until April 2016, >30% thereafter
• Minimum equity of USD 50 million
• Minimum liquidity of USD 10 million
• NIBD/EBITDA <3.75x

NIBD/EBITDA means Net Interest-bearing debt divided by the Earnings Before Interest, Tax, Depreciation and

• Amortizations. Net Interest-bearing debt means Interest-bearing debt less cash.

As of 30 June 2013 the Group was in compliance with the covenants described above.

120 Mortgage loan agreement The mortgage loan agreement contains covenants on two levels; for the borrower (Western Bulk Shipowning II AS) and for the Guarantor (Western Bulk ASA). Covenants applicable for the borrower relate to the market value of the vessel, which needs to be more than 125% of the outstanding loan amount. Further, the borrower must have at least USD 500 000 in cash at all times. Covenants applicable for the guarantor are related to the consolidated figures for the Group:

• Book equity ratio >25%
• Minimum equity of USD 50 million
• Minimum liquidity (including any undrawn credit lines) of USD 10 million

As of 30 June 2013 the Group was in compliance with the covenants described above. 13.6.4 Covenants in other agreements In addition to the covenants listed in the description of the loan agreements above, the Group is party to one bare-boat charter agreement22 with certain financial covenants applicable for the Group. The covenants are on a consolidated basis:

• Book equity ratio >25%
• Minimum equity of USD 50 million
• Always positive working capital
• Minimum liquidity (including any undrawn credit lines) of USD 20 million

In addition, the Company has undertaken the same financial covenants as listed above towards DVB Bank SE (on a consolidated basis) under the time charter agreements that are part of the financing arrangement with DVB Bank SE of the three vessels Western Wilton, Western Moscow and Western Texas owned by the WA Partnership. As of 30 June 2013 the Group was in compliance with the covenants described above. 13.7 INVESTMENTS 13.7.1 Principal investments Below is a summary of the Group's principal investments carried out in 2012, 2011 and 2010 and to the date of this Prospectus.

22 The Group has requested the relevant parties to the bare-boat charter agreement how the items related to unrealized changes in fair value

• f derivatives applicable under IFRS accounting principles shall be dealt with when calculating the covenants for future periods, as these

items are treated materially different from NGAAP under IFRS, as well as certain other elements. The relevant parties have confirmed that for the purpose of calculating the financial covenants related to minimum equity amount and equity ratio, the fair value of the same derivatives shall be excluded from the total assets and equity as reported under IFRS. The relevant parties have confirmed that for the purpose of calculating the financial covenant related to working capital, the fair value of the same derivatives shall be excluded from current assets and current liabilities as reported under IFRS. The relevant parties have confirmed that for the purpose of calculating the financial covenant related to working capital, the bond loan shall be excluded from current liabilities as reported under IFRS when there is less than 12 months left to maturity.

121 2010:

• The Group purchased the vessel Western Stavanger together with minority shareholders, who hold

49% of the investment. The purchase price was USD 25.4 million (100% basis). USD 15.9 million of the purchase price was financed with mortgage loan granted by Nordea Bank Norge ASA

• The Group established the Western Alterna Partnership jointly with a third party investor, who holds

80% of the investment. During 2010 the Group invested USD 4.4 million in equity into the partnership (in addition to USD 1.0 million in fee paid to the financial advisor involved in establishing the partnership), and the partnership entered into contracts to buy two vessels under construction and entered into a contract to build a third vessel, with all vessels to be delivered in 2011. 2011:

• The Group invested an additional USD 7.0 million in equity into Western Alterna Partnership, and the

partnership took delivery of all three vessels during 2011.

• The Group purchased various financial assets from Kistefos AS - see section 10.7.1 for a description of

related party transactions. All of these investments have been disposed by the Group during 2011 and 2012. 2012:

• The Group purchased various financial assets from Kistefos AS - see section 10.7.1 for a description of

related party transactions. 2013:

• The Group injected additional equity into a financial investment related to the purchase of financial

assets from Kistefos AS carried out in 2012 - see section 10.7.1 for a description of related party transactions. 13.7.2 Future commitments for investments As of the date of this Prospectus, the Group has no significant future commitments for investments, other than potential capital calls for its investment in Western Alterna Partnership, where the committed un-called capital for the Group as of 30 June 2013 was USD 2.3 million. The remaining uncalled capital commitment related to the financial assets being transferred to Kistefos AS (as described in Section 10.7.1) amounts to approximately USD 2.6 million. Upon completion of the transaction, expected to be before the first day of listing, this uncalled capital commitment will no longer apply for the Group. 13.8 OFF BALANCE SHEET COMMITMENTS The Group has chartered in a number of vessels for a period of time, for which the Group is committed to pay

• hire. These contracts are all classified as operating leases, with no obligations being included on the balance
• sheet. The nominal amount of the off-balance sheet charter hire commitments as of 30 June 201323 is shown in

the table below. The amounts shown are for the minimum duration of the contracts, excluding any additional

• ptional periods, where the Group has the option to extend the duration of the hire. The figures include the

combined commitments for WB Chartering and WB Shipholding, and are presented on a gross basis without taking into account any contract cover/employment of the vessels. Vessels chartered in on floating rates are included assuming a rate to be paid equal to the freight forward agreement rates for future periods:

23 The figures also include the hire commitments of one additional charter hire contract with purchase options concluded in July and two

charter hire contract with purchase options concluded in September in the WB Shipholding segment.

122 Period 1.7.13-31.12.13 2014 2015 2016 Beyond Total Charter-hire (USD mill.) 90.6 107.2 116.6 122.7 461.5 898.5 13.8.1 Details - forward vessel capacity and average charter rates When taking into account the firm freight forward agreements (FFA's) and optional periods that the Group may decide to utilize, the ship days capacity and rates for each of WB Chartering and WB Shipholding are as follows as per 30 June 2013: WB Chartering ship capacity and weighted average charter rates

9778 8537 5620 3713 2083 876 365 366 60 3595 6844 3066 2163 3152 3811 2645 1421 306 9564 10680 11394 11697 11897 12683 14800 14800 14553 9402 9685 9844 10932 11937 12576 12746 12931 14800 9000 4000 1000 6000 11000 16000

• 5000

10000 15000 20000 25000 H22013 2014 2015 2016 2017 2018 2019 2020 2021 Firmdays Optionsdays Firmrate(weightedavg.USD/day) Options(weightedavg.USD/day)

Source: the Company

Firm days include firm time charters and long FFAs. Vessels chartered in from WB Shipholding are included. Time charters with floating rate are excluded. Vessels chartered out on time charter to external parties are excluded for the firm period covered. Other contract coverage (cargo contracts etc) is not included. Weighted average charter rates for both firm days and optional days:

• Total 31 398 firm days, weighted average rate of USD 10 821 / day
• Total 27 003 option days, weighted average rate of USD 10 965 / day

123 WB Shipholding ship capacity and weighted average charter rates24

578 1796 3798 5311 6206 5882 5007 3613 3194 2859 1820 455 323 1199 2609 2310 1672 1783 2747 2674 1275 453 14054 14250 13778 13734 13677 13458 13274 13108 13038 13087 13132 13200 16389 15378 14856 14747 14472 13848 13801 14169 14507 14971 H22013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 FirmVesselHireDays OptionalVesselHireDays Ratefirmperiod(weightedavg.USD/day) Rateoptionalperiod(weightedavg.USD/day)

Source: the Company

Firm days include firm time charters, and also include one chartered in vessel with purchase options added in July 2013 and two chartered in vessels with purchase options added in September 2013. Excluding 4 partially

• wned vessels. Vessels chartered out on time charter to WB Chartering and external parties are excluded for the

firm period covered. Weighted average charter rates for both firm days and optional days:

• Total 40 519 firm days, weighted average rate of USD 13 470 / day
• Total 17 045 option days, weighted average rate of USD 14 463 / day

13.8.2 Other off balance lease liabilities The Group has entered into leases of office premises and leases of IT equipment etc. All of these contracts are considered as operational leases.

24 The figures also include the hire commitments of one additional charter hire contract with purchase options concluded in July and two

charter hire contract with purchase options concluded in September in the WB Shipholding segment.

124 14. DIVIDENDS AND DIVIDEND POLICY This Section provides information about the dividend policy and dividend history of the Company, as well as certain legal constraints on the distribution of dividends under the Public Limited Companies Act. Any future dividends declared by the Company will be paid in NOK as this is the currency that currently is supported by the VPS, although the Company prepares its financial statements in USD and its dividend policy refers to amounts in USD. 14.1 DIVIDEND POLICY The Company intends to pay regular dividends on a semi-annual basis of 75%-100% of its adjusted net profits25. There can be no assurances that in any given year a dividend will be proposed or declared, or if proposed or declared, that the dividend will be as contemplated by the above. In deciding whether to propose a dividend and in determining the dividend amount, the Company's board of directors will take into account legal restrictions, as set out in Section 14.3 "—Legal Constraints on the Distribution of Dividends", the Company's capital requirements, including capital expenditure requirements, its financial condition, general business conditions and any restrictions that its borrowing arrangements or other contractual arrangements in place at the time of the dividend may place on its ability to pay dividends and the maintaining of appropriate financial flexibility. Holders of Shares will be entitled to dividends resolved to be declared at general meetings held after consummation of the Offering. 14.2 DIVIDEND HISTORY The Company has paid the following dividends: Year: Dividends paid* in USD million: 2007 18.5 2008 19.4 2009 21.2 2010 25.1 2011 37.2 2012

• 1 January 2013 to date
• f this Prospectus:

35.5

* Dividends include group contribution paid to/received from Kistefos AS, net of any tax impact including amounts accrued at year end.

14.3 LEGAL CONSTRAINTS ON THE DISTRIBUTION OF DIVIDENDS Dividends may be paid in cash or, in some instances, in kind. The Public Limited Companies Act provides several constraints on the distribution of dividends in addition to the dividend restrictions inherent in the loan agreements, cf. Section 13.6.2 above:

• The Company may only distribute dividends to the extent that that it after the distribution has net assets

that provide coverage for the company's share capital and other restricted equity according to section 3-2 and 3-3 of the Public Limited Companies Act. The calculation shall be based on the balance sheet of the

25 Net result after tax excluding unrealised gains and losses on derivatives held to hedge future results, as further described in Section 13.6.2.

125 Company's most recent approved annual accounts, it is however the registered share capital at the time of the decision that shall be applied.

• The balanced equity shall be reduced with the total nominal value of treasury shares acquired for
• wnership or as security in previous fiscal years, and credit and security that, pursuant to Sections 8-7 to

8-10 of the Public Limited Companies Act, fall within the limits of distributable equity.

• Dividends can only be distributed to the extent that the equity is adequate in terms of the risk and scope
• f the Company's business.
• Companies may distribute dividends in respect of the current financial year on the basis of an interim

balance sheet to be prepared and audited on the same basis as the annual accounts and approved by the general meeting.

• Distribution of dividends is resolved by a majority vote at the general meeting of the shareholders of the

Company and on the basis of a proposal from the board of directors. The general meeting cannot distribute a larger amount than what is proposed or accepted by the board of directors. The general meeting may grant the board of directors the authority to distribute dividends. The Public Limited Companies Act does not provide for any time limit after which entitlement to dividends

• lapses. Subject to various exceptions, Norwegian law provides a limitation period of three years from the date
• n which an obligation is due. There are no dividend restrictions or specific procedures for non-Norwegian

resident shareholders to claim dividends. For a description of withholding tax on dividends applicable to non- Norwegian residents, see Section 17 "Taxation".

126 15. SHARES AND SHARE CAPITAL 15.1 GENERAL As of the date of this Prospectus, the issued share capital of the Company is NOK 68 999 425 divided into 137 998 850 Shares fully paid with a par value of NOK 0,50 and issued in accordance with Norwegian law and are freely transferable. The Shares are registered in the VPS register with ISIN NO 001 0691298 and the Registrar of the Company is Nordea Bank Norge ASA. The Shares are equal in all respects and each Share carry one vote at the Company' general meeting. The offering will represent an offer of up to 20 000 000 new shares to be issued by the Company and a sale of up to 42 414 970 of the existing shares from the current shareholders, please refer to section 6 "The terms of the

• ffering" for more detailed information regarding the Offering. Assuming full subscription and maximum

number of new Shares in the Offering, the new, issued share capital of the Company after the Offering will be NOK 78 999 425 divided into 157 998 850 shares with a par value of NOK 0.50 each. 15.2 SHARE CAPITAL DEVELOPMENT The following table presents the historical development in share capital and number of Shares issued by the Company for the period covered by the historical financial information: Per 31.12.2012 and per 01.01.2013 there were in total issued 13 799 885 shares in the Company. 15.3 AUTHORISATION TO INCREASE THE SHARE CAPITAL AND TO ISSUE SHARES At a general meeting of the Company held 28 September 2013, the board of directors of the Company was granted an authorisation to increase the share capital of the Company of up to NOK 22 500 000 through issuance of new Shares in connection with the Offering contemplated by this Prospectus and an authorisation to increase the share capital of the Company of up to NOK 2 500 000 through issuance of new Shares in connection with the Option Program as further described in Section 15.5 The board of directors may derogate

Date Type of change in share capital Change in issued share capital (NOK) Considera tion Change in number of shares Par value per Share (NOK) Total issued share capital (NOK) Total number

• f issued

Shares following change 31 Dec 2009 N/A 5 62 153 325 12 430 665 31 Dec 2010 No changes in 2010 N/A 5 62 153 325 12 430 665 7 Dec 2011 Share capital increase, subscription

• f new shares

3 546 100 Cash 709 220 5 65 699 425 13 139 885 22 Sept 2012 Share capital increase, subscription

• f new shares

3 300 000 Cash 660 000 5 68 999 425 13 799 885 28 Sept 2013 Share split N/A 124 198 965 0.50 68 999 425 137 998 850

127 from the shareholders pre-emptive rights to participate in the share issue as set out in the Public Limited Companies Act Section 10-4, cf. Section 10-5. 15.4 TREASURY SHARES The Company does not hold any treasury shares. 15.5 OPTIONS On 28 September 2013 the Board resolved to establish an option programme for the executive management to provide the management with a continued incentive and exposure to the development of the Company's share

• price. The number of options to be issued to each of the members of the executive management will depend on

the result from the bookbuilding, however the members of the executive management shall be allocated a number of options on the basis of the following: i. the number of options shall be equal to the number of shares sold by the Chief Executive Office, the Chief Financial Officer and the Chief Risk Officer, through their wholly owned investment companies in connection with the sale of the Secondary Shares ii. an additional number of options equal to 3.5% of the total number of New Shares to be issued by the Company in connection with the Offer. These options shall be distributed between the Chief Executive Office, the Chief Financial Officer and the Chief Risk Officer with 2%, 0.5% and 1% respectively. The options shall be issued in line with the following main elements:

• The exercise price shall be equal to the gross Offer Price (without taking into account any discounts

granted or fees paid), with customary adjustments for dividends paid in the period between issuance and exercise of the options

• The options will mature in the following manner:
• 1/3 shall vest at the earliest 10 months after the first day of the Listing, and will lapse 16

months after the first day of the Listing;

• 1/3 shall vest at the earliest 20 months after the first day of the Listing and will lapse 26

months after the first day of the Listing;

• The last 1/3 shall vest at the earliest 30 months after the first day of the Listing and will lapse

36 months after the first day of the Listing;

• The options will be subject to customary regulations relating to inter alia changes in the capitalisation,

change of control (trigger on 90%), statutory merger and delisting, wherein a change of control event, a statutory merger or de-listing will or may lead to immediate maturity of the outstanding options;

• The options shall be personal and not transferable;
• Unvested options will lapse if the option holder terminates his position at his own request;
• The options shall provide for a financial settlement at the discretion of the option holder, and the

Company shall be entitled to elect a financial settlement if it does not hold treasury shares or a mandate to issue new shares for this purpose at the time of exercise.

128 In connection with the Board’s approval of the main terms of the option programme, the Extraordinary General Meeting of the Company on 28 September 2013 resolved to grant the Board a mandate to issue shares under the

• ption programme:

"The Board of Directors is authorised to increase the Company's share capital on the following conditions:

• 1. The share capital may, in one or more occurrences, be increased by up to NOK 2 500 000.
• 2. The Board of Directors is authorised to amend the Company's Articles of Association to reflect the new

share capital of the Company when the mandate is utilised.

• 3. The pre-emptive rights of the existing shareholders under section 10-4 of the NPLCA may be set aside.
• 4. The mandate may only be used to issue shares to the Company's executive management in connection

with the Company's share option program.

• 5. The new shares shall be issued in the same class of shares as the existing shares of the Company.
• 6. In connection with a subdivision of shares or a combination of shares, the authority, including the

number of shares and the nominal value shall be adjusted equally to reflect such subdivision or combination of shares.

• 7. The mandate shall be valid until the next annual General Meeting, however no later than 30 June

2014. 15.6 SHAREHOLDER STRUCTURE As of the date of this Prospectus, the Company has 5 shareholders, all of which are Norwegian. The Company's shareholders are shown in the table below: Name of shareholder Number of Shares Percentage (%) 1 Kistefos Investment AS ................................................................ 1 000 000 0.72% 2 Kistefos AS .................................................................................. 132 168 890 95.78% 3 Lisann AS (CEO Jens Ismar) ...................................................... 2 759 980 2.00% 4 Valletua AS (CRO Egil Husby) ................................................... 1 379 990 1.00% 5 Tryvert AS (CFO Håvard Furu) ................................................... 689 990 0.5% Total 5 largest shareholders ...................................................... 137 998 850 100.0% Others ........................................................................................... Total ............................................................................................. 137 998 850 100.0% The only major shareholder of the Company is Kistefos AS. There are no differences in voting rights between the shareholders.

129 In accordance with the disclosure obligations under the Norwegian Securities Trading Act, shareholders acquiring ownership to or control over 5% or more of the share capital of a company listed on Oslo Børs or Oslo Axess must notify the stock exchange immediately. The table above shows the percentage held by the existing shareholders of the Company. At the date of this Prospectus, there are no other shareholders in the Company, besides Kistefos AS alone and consolidated with Kisefos Investments AS, holding a percentage of shares which is notifiable under national law. See also Section 16.6 "Disclosure Obligations" below for a detailed description

• f the disclosure obligations under the Norwegian Securities Trading Act.

15.7 KISTEFOS AS' OWNERSHIP IN THE COMPANY AFTER CONSUMMATION OF THE OFFERING As further set out in Section 6.15, Kistefos AS has undertaken to sell minimum 27 272 727 and maximum 40 000 000 Shares and the Management Shareholders have undertaken to sell up to 50% of their Shares in connection with the Offering. Assuming full subscription, Kistefos AS and Kistefos Investment AS will retain a shareholding in the Company of between approximately 59% and 70%. As stated above, such ownership percentage is notifiable under Norwegian Law. Christen Sveaas will, through his indirect ownership in the Company, have the ability to significantly influence the outcome of matters submitted for the vote of the shareholders of the Company. The shares held by Kistefos AS in the Company are equal in all respects, and carry one vote per Share, as any

• ther Shares in the Company, including the New Shares. The minority shareholders of the Company are

afforded a number of protections as set out in the Public Limited Companies Act, including, but not limited to those described Section 15.11.6. The Company's Board of Directors consists of 5 members of which 3 of the members are independent of the Company's large shareholders. 15.8 SHAREHOLDER AGREEMENT On 20 February 2013 the Company's shareholders Lisann AS, Valletua AS and Tryvert AS entered into shareholders' agreements with the Company's main shareholder Kistefos AS whereby Lisann AS, Valletua AS and Tryvert AS were given the right to sell their shares in the Company in connection with a listing of the Company on a regulated market at market value, on the same pro-rata basis and to the same market value as Kistefos AS when selling shares in connection with the listing. Further, Kistefos AS was given a pre-emption right to buy the shares to be sold by the other shareholders in connection with the listing. On 30 August 2013 Lisann AS, Valletua AS and Tryvert AS and Kistefos AS agreed an amendment to the existing shareholders' agreements whereby the shareholders’ agreements of 20 February 2013 will be terminated if and when the Company is listed on a stock exchange or Oslo Axess. Further it was agreed that Lisann AS, Valletua AS and Tryvert AS have the right to sell 50% of their shares in the Company in connection with a listing of the Company. 15.9 ARTICLES OF ASSOCIATION The following is a summary of certain provisions of the Company's Articles of Associations as of the date of this Prospectus. The Articles of Association were last amended on 28 September 2013 to inter alia reflect the required changes to the articles in connection with the conversion from a private limited liability company to a public limited liability company and to reflect the recent split of shares. The summary does not purport to be complete and is qualified in its entirety by the Articles of Associations and all applicable laws.

130 Objective of the Company The Objective of the Company is to own, lease and participate in the management of vessels, chartering and

• perational services, arrange for and participate in financial transactions as well as to participate in companies

with similar objectives. The Company's objective can be found in Article 3 of its Articles of Associations. Registered Office The Company's registered office is in the municipality of Oslo, Norway. Share capital and nominal value The Company's share capital is NOK 68 999 425 divided into 137 998 850 Shares, each Share with a nominal value of NOK 0.50. The Shares are registered with the Norwegian Central Securities Depository (VPS). Board of Directors The Company's Board of Directors is to consist of five to seven members. Restrictions on transfer of Shares The Company's Articles of Association do not provide for any restrictions on the transfer of shares, or a right of first refusal for its shareholders. Share transfers are not subject to approval by the Board of Directors. Nomination Committee The Company shall in accordance with its Articles of Association have a nomination committee consisting of minimum two members to be elected by the general meeting of the Company. The nomination committee shall make proposals to the general meeting for election of board members and the board members' remuneration. General Meetings The Annual General Meeting shall approve the annual accounts of the Company and resolve any distribution of

• dividend. The Annual General Meeting shall further deal with any other matters required by law.

Change of shareholder rights The Articles of Association do not contain stricter provisions than the Public Limited Companies Act with respect to actions necessary to change the rights of shareholders. A decision to amend the articles must receive the approval of at least two-thirds of the aggregate number of votes cast at a general meeting at which any such action is put before the shareholders for approval, as well as at least two-thirds of the share capital represented at such meeting. 15.10 SHAREHOLDER POLICY The Company will inform Oslo Børs, the Company's shareholders and the market on an ongoing basis of the Company's development, activities and special events, ensuring that as far as possible the pricing of the Company's Shares reflects the underlying values and expectations on future profits. Such information will, among other things, consist of annual reports, quarterly reports, stock exchange bulletins, press releases and investor presentations when appropriate. 15.11 CERTAIN ASPECTS OF NORWEGIAN CORPORATE LAW 15.11.1 General Meetings The shareholders of the Company exercise supreme authority of the Company through a general meeting.

131 Written notice of general meetings for listed companies shall be sent to all shareholders with known addresses at least three weeks prior to the date of the meeting. A shareholder may attend a general meeting either in person or by proxy appointed at their own discretion. The Articles of Association do not contain provisions obliging shareholders to notify the Company if they wish to participate at a general meeting. A company listed on Oslo Børs or Oslo Axess shall send proxy forms to its shareholders for the general meeting, or alternatively state to where such proxy form is electronically available. Appendices and attachments to the notice for the general meeting are not sent to the shareholders physically, but are made available at the Company's website. Nevertheless, any shareholder may request that such documents be sent to him or her free of charge. The Annual General Meeting of the Company shall, according to applicable law, be held no later than 30 June each year. The following matters must be discussed and decided at the Annual General Meeting of a listed company:

• approval of the annual accounts and annual report, including the distribution of any dividend, use of

profits and the coverage of any deficit

• the statement of the Board of Directors with regard to remuneration and other benefits to the

Company's senior management

• the Board of Directors report on Corporate Governance
• election of members to the Board of Directors that are up for election
• any other business required to be discussed at the general meeting pursuant to the Company's Articles
• f Association

In addition to the Annual General Meeting, an Extraordinary General Meeting of shareholders may be held if deemed necessary by the Company's Board of Directors. An Extraordinary General Meeting must also be convened if a written request is put forward by the Company's auditor or shareholders representing a total of at least 5% of the share capital to consider a specific matter. A shareholder is entitled to have a matter discussed at a general meeting if such shareholder provides the Board

• f Directors with notice of the matter in question at least seven days prior to the deadline for the notice of the

general meeting. A shareholder is entitled to propose resolutions for items listed on the agenda at the general meeting. 15.11.2 Voting rights Each outstanding Share represents one vote at the Company's general meeting. No shareholders have different voting rights. No voting rights can be exercised with respect to shares held in treasury by the Company. In general, decisions that shareholders are entitled to make may be made by a simple majority of the votes cast. In the case of elections, the persons who obtain the most votes are elected. However, certain resolutions require the approval of at least two-thirds of the votes cast, as well as two-thirds of the share capital represented at the general meeting, including but not limited to resolutions seeking:

• to authorize an increase or reduction of the Company's share capital
• to waive preferential rights in connection with a share issue
• to approve a merger or demerger
• to amend the Company's Articles of Association

132 There are no quorum requirements for general meetings. Certain types of changes in the rights of the Company's shareholders require the consent of all shareholders or 90% of the votes cast at a general meeting. In order to be entitled to vote, a shareholder must be registered as the owner of Shares in the VPS (see Section 16.3 – "The VPS and transfer of shares"), or, alternatively, report and show evidence of the shareholder's share acquisition to the Company prior to the general meeting. The Company may include in its Articles of Association the latest date by which the owner of the Shares must be registered in the VPS in order to vote in the general meeting. The Company has not included such provisions in its Articles of Associations. A beneficial

• wner of Shares registered through a VPS-registered nominee may be refused to vote unless ownership is re-

registered in the name of the beneficial owner prior to the relevant general meeting. 15.11.3 Additional issuances and pre-emptive rights If a Norwegian Public Limited Company issues new shares, including bonus share issues (involving the issuance of new shares by a transfer from the Company's share premium reserve or distributable equity to the share capital), its Articles of Association must be amended, which requires a two-thirds majority of the votes cast and the share capital represented at a general meeting of shareholders. In connection with an increase in the Company's share capital by a subscription for shares against cash contributions, Norwegian law provides the Company's shareholders with a pre-emptive right to subscribe for the new shares on a pro rata basis based on their current shareholdings in the Company. The pre-emptive right to subscribe for new shares may be waived by a resolution of the Company's shareholders at a general meeting passed by two-thirds of the votes cast, as well as two-thirds of the share capital represented at the general meeting. The general meeting may, with a two- thirds majority vote as described above, authorise the Board of Directors to issue new shares. Such authorisation may be effective for a maximum of two years, and the par value of the shares to be issued may not exceed 50%

• f the nominal share capital as at the time the authorisation is registered in the Norwegian Register of Business

Enterprises. To issue shares to shareholders who are residents of the United States upon the exercise of pre-emptive rights, the Company may be required to file a registration statement in the United States under U.S. securities laws. 15.11.4 Rights of redemption and repurchase of shares At the time of this Prospectus the Company has not issued any redeemable shares. A Company's share capital may be reduced by reducing the par value of the shares or by a redemption of shares. Such decision requires the approval of two-thirds of the votes cast at a general meeting, as well as two-thirds of the share capital represented in the general meeting. Redemption of individual shares requires the consent of the holders of the shares to be redeemed. A Norwegian Public Limited Company may purchase its own shares if the Board of Directors is so authorized by the shareholders at a general meeting with the approval of two-thirds of the votes cast at the general meeting, as well as two-thirds of the share capital represented at the general meeting. The aggregate nominal value of treasury shares so acquired and held by the Company may not exceed 10% of the Company's share capital. Treasury shares may only be acquired if the Company's distributable equity, according to the latest approved balance sheet, exceeds the consideration to be paid for the shares. The authorisation by the shareholders at the general meeting cannot be given for a period exceeding two years. A Norwegian Public Limited Company may not subscribe for its own shares.

133 15.11.5 Shareholder vote on mergers and demergers A decision to merge with another company or to demerge requires a resolution of the Company's shareholders at a general meeting passed by two-thirds of the votes cast, as well as two-thirds of the share capital represented at the general meeting. A merger plan or demerger plan signed by the Board of Directors along with certain other required documentation must be sent to all shareholders and registered with the Norwegian Register of Business Enterprises at least one month prior to the general meeting. 15.11.6 Minority Rights The Public Limited Companies Act contains regulations regarding the rights of minority shareholders, including but not limited to those described in this and preceding and subsequent sections. Any shareholder may petition the courts to have a decision of the Company's Board of Directors or general meeting declared invalid on grounds that it is in conflict with the Public Limited Companies Act, the Articles of Associations or, for instance, unreasonably favours certain shareholders or third parties to the detriment of other shareholders or the Company itself. In certain grave circumstances, shareholders may require the courts to dissolve the Company as a result of such decisions. Shareholders holding in the aggregate 5% or more of a Public Limited Company's share capital have a right to demand that the Company holds an Extraordinary General Meeting to discuss or resolve specific matters. In addition, any shareholder may demand that the Company places an item on the agenda for a general meeting if the Company is notified in time for such item to be included in the notice of the meeting. The Articles of Association do not contain stricter provisions than the Public Limited Companies Act with respect to actions necessary to change the rights of shareholders. 15.11.7 Liability of directors Members of the Board of Directors owe a fiduciary duty to the Company and its shareholders. Such fiduciary duty requires that the directors act in the best interests of the Company when exercising their powers as directors, and that they generally show loyalty and care towards the Company. The principal task of the directors, in their capacity as directors, is to safeguard the interests of the Company. Members of the Board of Directors may each be held liable for any damage they negligently or willfully cause the Company. Norwegian law permits the shareholders at general meetings to discharge any such person from liability, but such discharge is not binding on the Company if substantially correct and complete information was not provided to the shareholders when resolving upon the matter. If a resolution to discharge the Company's directors from liability or not to pursue claims against such a person has been passed by a general meeting of the Company's shareholders with a smaller majority than that required to amend the Company's Articles of Association, shareholders representing more than 10% of the share capital or, if there are more than 100 shareholders, more than 10% of the shareholders may pursue the claim on the Company's behalf and in its name. The cost of any such action is not the Company's responsibility but can be recovered from any proceeds that the Company receives as a result of the action. If the decision to discharge any of the directors from liability or not to pursue claims against the directors is made by such a majority as is necessary to amend the Articles of Association, the minority shareholders cannot pursue such claim in the Company's name. 15.11.8 Distribution of assets on liquidation According to the Public Limited Companies Act, a Company may be wound up by a resolution of the Company's shareholders in a general meeting passed by the same number of votes as are required with respect to amendments to the Articles of Association. As a general rule, upon liquidation the Companys assets should be

134 realised, any debt repaid and net profits distributed in cash to the shareholders. In the event of separate classes of shares the shares within each class of shares will rank equally in the event of a return of capital by the Company upon a winding-up or otherwise.

135 16. SECURITIES TRADING IN NORWAY 16.1 TRADING AND SETTLEMENT Trading of equities on Oslo Børs is carried out in the electronic trading system Millennium Exchange which is

• ne of the fastest and most advanced trading systems in the world. Millennium Exchange is supplied by the

London Stock Exchange (LSE), which has used the system for its own marketplaces since 2011. Official trading on Oslo Børs and Oslo Axess takes place between 09:00 a.m. (CET) and 4:20 p.m. (CET) each trading day, with pre-trade period between 08:15 a.m. (CET) and 09:00 a.m. (CET), a closing auction call at 4:25 a.m. (CET) and a post-trade period from 4:25 a.m. (CET) to 5:30 a.m. (CET). The settlement period for trading on Oslo Børs and Oslo Axess is three trading days (T+3). Oslo Clearing ASA has a license from the Norwegian FSA to act as a central clearing service, and has from June 18, 2010 offered clearing and counterparty services for equity trading on Oslo Børs. Investment services in Norway may only be provided by Norwegian investment firms holding a license under the Securities Trading Act and branches of investment firms from an EEA member state or investment firms from outside the EEA which have been licensed to operate in Norway. Investment firms established in an EEA member state may also provide cross-border investment services into Norway. It is possible for investment firms to undertake market-making activities in shares listed in Norway if they have a license to this effect under the Norwegian Securities Trading Act, or in the case of investment firms established in an EEA member state operating cross-border into Norway, a licence to carry out market-making activities in their home jurisdiction. Such market-making activities will be governed by the regulations of the Norwegian Securities Trading Act relating to brokers' trading for their own account. Such market-making activities do not as such require notification to the Financial Supervisory Authority of Norway or Oslo Børs except for the general obligation of investment firms that are members of Oslo Børs to report all trades in stock exchange listed securities. 16.2 INFORMATION, CONTROL AND SURVEILLANCE Under Norwegian law, Oslo Børs is required to perform a number of surveillance and control functions. The Surveillance and Corporate Control unit of Oslo Børs monitors all market activity on a continuous basis. Market surveillance systems are largely automated, promptly warning department personnel of abnormal market developments. The Norwegian FSA acts as the Norwegian prospectus authority. Under Norwegian law, a company that is listed on a Norwegian regulated market, or is subject to the application for listing on such market, must promptly and on its own initiative release any inside information (that is, precise information about financial instruments, the issuer thereof or other matters that are likely to have a significant effect on the price of the relevant financial instruments or related financial instruments, and that are not publicly available or commonly known in the market) to the market. A company may, however, delay the release of such information in order not to prejudice its legitimate interests, provided that it is able to ensure the confidentiality of the information and that the delayed release would not be likely to mislead the public. Such company must promptly and on its own initiative on a confidential basis inform Oslo Børs about the existence

• f undisclosed inside information and the reason for the delay in disclosure. Oslo Børs may levy fines on

companies violating these requirements.

136 16.3 THE VPS AND TRANSFER OF SHARES The Company's shareholder register is operated through the VPS. The VPS is the Norwegian paperless centralised securities register. The ownership, and all transaction relating to, securities which are listed on a Norwegian regulated market, such as Oslo Børs and Oslo Axess, are required to be registered in a securities register which is licensed to operate in Norway. Currently the VPS is the only securities register which is licensed to operate in Norway. The VPS and Oslo Børs are both wholly owned by Oslo Børs VPS Holding ASA. All transactions relating to securities registered with the VPS are made through computerised book entries. No physical share certificates are, or may be, issued. The VPS confirms each entry by sending a transcript to the registered shareholder irrespective of any beneficial ownership. To give effect to such entries, the individual shareholder must establish a share account with an account agent, licensed to operate in Norway. Norwegian banks, Norges Bank (that is, Norway's central bank), authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA, or credit institutions established within the EEA

• perating cross-border into Norway are allowed to act as account agents.

As a matter of Norwegian law, the entry of a transaction in the VPS is prima facie evidence in determining the legal rights of parties as against the issuing company or any third party claiming an interest in the given security. A transferee or assignee of shares may not exercise the rights of a shareholder with respect to such shares unless such transferee or assignee has registered such shareholding or has reported and shown evidence of such share acquisition, and the acquisition is not prevented by law, the relevant company's articles of association or

• therwise.

The VPS is liable for any loss suffered as a result of faulty registration or an amendment to, or deletion of, rights in respect of registered securities unless the error is caused by matters outside the VPS's control which the VPS could not reasonably be expected to avoid or overcome the consequences of. Damages payable by the VPS may, however, be reduced in the event of contributory negligence by the aggrieved party. The VPS must provide information to the Norwegian FSA on an ongoing basis, as well as any information that the Norwegian FSA requests. Further, Norwegian tax authorities may require certain information from the VPS regarding any individual's holdings of securities, including information about dividends and interest payments. 16.4 NOMINEE ACCOUNTS Under Norwegian law, shares are registered in the name of the beneficial owner of the shares. Norwegian shareholders are not allowed to register their shares in VPS through a nominee. However, foreign shareholders may register their shares in the VPS in the name of a nominee (bank or other nominee) approved by the Norwegian FSA. An approved and registered nominee has a duty to provide information on demand about beneficial shareholders to the company and to the Norwegian authorities. In case of registration by nominees, the registration in the VPS must show that the registered owner is a nominee. A registered nominee has the right to receive dividends and other distributions, but cannot vote in general meetings on behalf of the beneficial

• wners.

16.5 FOREIGN INVESTMENT IN NORWEGIAN SHARES Foreign investors may trade in shares listed on Oslo Børs and Oslo Axess through any broker that is a member

• f Oslo Børs, whether Norwegian or foreign.

137 16.6 DISCLOSURE OBLIGATIONS If a person's, entity's or consolidated group's proportion of the total issued shares and/or rights to shares in a company listed on a regulated market in Norway (with Norway as its home state, which will be the case for the Company) reaches, exceeds or falls below the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3

• r 90% of the share capital or the voting rights of that company, the person, entity or group in question has an
• bligation under the Norwegian Securities Trading Act to notify Oslo Børs and the issuer immediately. The

same applies if the disclosure thresholds are passed due to other circumstances, such as a change in the company's share capital, even if such persons' holding of shares does not change as a result of the change. 16.7 INSIDER TRADING According to Norwegian law, subscription for, purchase, sale or exchange of financial instruments that are listed, or subject to an application for listing on a Norwegian regulated marketplace, or incitement to such dispositions, must not be undertaken by anyone who has inside information. Inside information is defined in Section 3-2 of the Norwegian Securities Trading Act and refers to precise information about financial instruments issued by the listed company, about the listed company itself or about other circumstances which are likely to have a noticeable effect on the price of financial instruments issued by the listed company or related to financial instruments issued by the listed company, and which is not publicly available or commonly known in the market. Information that is likely to have a noticeable effect on the price shall be understood to mean information that a rational investor would probably make use of as part of the basis for his investment decision. The same applies to the entry into, purchase, sale or exchange of options or futures/forward contracts or equivalent rights whose value is connected to such financial instruments or incitement to such dispositions. 16.8 MANDATORY OFFER REQUIREMENT The Norwegian Securities Trading Act requires any person, entity or consolidated group that becomes the owner

• f shares representing more than one-third of the voting rights of a Norwegian company listed on a Norwegian

regulated market to, within four weeks, make an unconditional general offer for the purchase of the remaining shares in that company. A mandatory offer obligation may also be triggered where a party acquires the right to become the owner of shares that, together with the party's own shareholding, represent more than one-third of the voting rights in the company and Oslo Børs decides that this is regarded as an effective acquisition of the shares in question. The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares that exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was triggered. When a mandatory offer obligation is triggered, the person subject to the obligation is required to immediately notify Oslo Børs and the company in question accordingly. The notification is required to state whether an offer will be made to acquire the remaining shares in the company or whether a sale will take place. As a rule, a notification to the effect that an offer will be made cannot be retracted. The offer and the offer document required are subject to approval by Oslo Børs before the offer is submitted to the shareholders or made public. The offer price per share must be at least as high as the highest price paid or agreed by the offeror for the shares in the six-month period prior to the date the threshold was exceeded. However, if it is clear that that the market price was higher when the mandatory offer obligation was triggered, the offer price shall be at least as high as the market price. If the acquirer acquires or agrees to acquire additional shares at a higher price prior to the expiration of the mandatory offer period, the acquirer is obliged to restate its offer at such higher price. A

138 mandatory offer must be in cash or contain a cash alternative at least equivalent to any other consideration

• ffered.

In case of failure to make a mandatory offer or to sell the portion of the shares that exceeds the relevant threshold within four weeks, Oslo Børs may force the acquirer to sell the shares exceeding the threshold by public auction. Moreover, a shareholder who fails to make an offer may not, as long as the mandatory offer

• bligation remains in force, exercise rights in the company, such as voting in a General Meeting of the

Company's shareholders, without the consent of a majority of the remaining shareholders. The shareholder may, however, exercise his/her/its rights to dividends and pre-emption rights in the event of a share capital increase. If the shareholder neglects his/her/its duty to make a mandatory offer, Oslo Børs may impose a cumulative daily fine that runs until the circumstance has been rectified. Any person, entity or consolidated group that owns shares representing more than one-third of the votes in a Norwegian company listed on a Norwegian regulated market is obliged to make an offer to purchase the remaining shares of the company (repeated offer obligation) if the person, entity or consolidated group through acquisition becomes the owner of shares representing 40%, or more of the votes in the company. The same applies correspondingly if the person, entity or consolidated group through acquisition becomes the owner of shares representing 50% or more of the votes in the company. The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares which exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was triggered. Any person, entity or consolidated group that has passed any of the above mentioned thresholds in such a way as not to trigger the mandatory bid obligation, and has therefore not previously made an offer for the remaining shares in the company in accordance with the mandatory offer rules is, as a main rule, obliged to make a mandatory offer in the event of a subsequent acquisition of shares in the company. 16.9 COMPULSORY ACQUISITION Pursuant to the Norwegian Public Limited Companies Act and the Norwegian Securities Trading Act, a shareholder who, directly or through subsidiaries, acquires shares representing 90% or more of the total number

• f issued shares in a Norwegian public limited liability company, as well as 90% or more of the total voting

rights, has a right, and each remaining minority shareholder of the company has a right to require such majority shareholder, to effect a compulsory acquisition for cash of the shares not already owned by such majority

• shareholder. Through such compulsory acquisition the majority shareholder becomes the owner of the

remaining shares with immediate effect. If a shareholder acquires shares representing more than 90% of the total number of issued shares, as well as more than 90% of the total voting rights, through a voluntary offer in accordance with the Securities Trading Act, a compulsory acquisition can, subject to the following conditions, be carried out without such shareholder being obliged to make a mandatory offer: (i) the compulsory acquisition is commenced no later than four weeks after the acquisition of shares through the voluntary offer, (ii) the price offered per share is equal to or higher than what the offer price would have been in a mandatory offer, and (iii) the settlement is guaranteed by a financial institution authorized to provide such guarantees in Norway. A majority shareholder who effects a compulsory acquisition is required to offer the minority shareholders a specific price per share, the determination of which is at the discretion of the majority shareholder. However, where the offeror, after making a mandatory or voluntary offer, has acquired more than 90% of the voting shares

• f a company and a corresponding proportion of the votes that can be cast at the general meeting, and the offeror

pursuant to Section 4-25 of the Public Limited Companies Act completes a compulsory acquisition of the remaining shares within three months after the expiry of the offer period, it follows from the Norwegian Securities Trading Act that the redemption price shall be determined on the basis of the offer price for the mandatory/voluntary offer unless specific reasons indicate another price.

139 Should any minority shareholder not accept the offered price, such minority shareholder may, within a specified deadline of not less than two months, request that the price be set by a Norwegian court. The cost of such court procedure will, as a general rule, be the responsibility of the majority shareholder, and the relevant court will have full discretion in determining the consideration to be paid to the minority shareholder as a result of the compulsory acquisition. Absent a request for a Norwegian court to set the price or any other objection to the price being offered, the minority shareholders would be deemed to have accepted the offered price after the expiry of the specified deadline. 16.10 FOREIGN EXCHANGE CONTROLS There are currently no foreign exchange control restrictions in Norway that would potentially restrict the payment of dividends to a shareholder outside Norway, and there are currently no restrictions that would affect the right of shareholders of a Norwegian company who are not residents in Norway to dispose of their shares and receive the proceeds from a disposal outside Norway. There is no maximum transferable amount either to or from Norway, although transferring banks are required to submit reports on foreign currency exchange transactions into and out of Norway into a central data register maintained by the Norwegian customs and excise

• authorities. The Norwegian police, tax authorities, customs and excise authorities, the National Insurance

Administration and the Norwegian FSA have electronic access to the data in this register.

140 17. TAXATION Set out below is a summary of certain Norwegian tax matters related to the purchase, holding and disposal of the Offer Shares. The statements below regarding Norwegian taxation are based on the laws in force in Norway as of the date of this Prospectus, which may be subject to any changes in law occurring after such date. Such changes could possibly be made on a retroactive basis. The summary does not address foreign tax laws. The summary is of a general nature and does not purport to be a comprehensive description of all the Norwegian tax considerations that may be relevant for a decision to purchase, own or dispose of shares in the

• Company. Shareholders who wish to clarify their own tax situation should consult with and rely upon their own

tax advisers. Shareholders resident in jurisdictions other than Norway and shareholders who cease to be resident in Norway for tax purposes (due to domestic tax law or tax treaty) should specifically consult with and rely upon their own tax advisers with respect to the tax position in their country of residence and the tax consequences related to ceasing to be resident in Norway for tax purposes. The summary only applies to shareholders who are beneficial owners of the shares. Please note that for the purpose of the summary below, a reference to a Norwegian or non-Norwegian shareholder refers to the tax residency rather than the nationality of the shareholder. 17.1 NORWEGIAN SHAREHOLDERS 17.1.1 Taxation of dividends Norwegian Personal Shareholders Dividends from the Company received by shareholders who are individuals resident in Norway for tax purposes ("Norwegian Personal Shareholders") are taxable as ordinary income for such shareholders at a flat rate of 28% to the extent the dividend exceeds a tax-free allowance. The allowance is calculated on a share-by-share basis. The allowance for each share is equal to the cost price of the share multiplied by a determined risk free interest rate based on the effective rate after tax of interest on treasury bills (Norwegian: "statskasseveksler") with three months maturity. The allowance is calculated for each calendar year, and is allocated solely to Norwegian Personal Shareholders holding shares at the expiration of the relevant calendar year. Norwegian Personal Shareholders who transfer shares will thus not be entitled to deduct any calculated allowance related to the year of transfer. Any part of the calculated allowance one year exceeding the dividend distributed on the share ("excess allowance") may be carried forward and set off against future dividends received on, or gains upon realisation, of the same share. Any excess allowance will also be included in the basis for calculating the allowance on the same share the following years. Norwegian Corporate Shareholders Dividends from the Company received by shareholders who are limited liability companies (and certain similar entities) resident in Norway for tax purposes ("Norwegian Corporate Shareholders") are effectively taxed at a rate of 0.84 % (3% of net dividend income from such shares is included in the calculation of ordinary income. Ordinary income for Norwegian Corporate Shareholders and ordinary income is subject to tax at a flat rate of 28%. 17.1.2 Capital Gains Tax Norwegian Personal Shareholders Sale, redemption or other disposal of shares is considered a realisation for Norwegian tax purposes. A capital gain or loss generated by a Norwegian Personal Shareholder through a realisation of shares is taxable or tax deductible in Norway. Such capital gain or loss is included in or deducted from the shareholder's ordinary

141 income in the year of disposal. Ordinary income is taxable at a rate of 28%. The gain is subject to tax and the loss is tax-deductible irrespective of the duration of the ownership and the number of shares disposed of. The taxable gain/deductible loss is calculated per share, as the difference between the consideration for the share and the Norwegian Personal Shareholder's cost price of the share, including any costs incurred in relation to the acquisition or realisation of the share. From this capital gain, Norwegian Personal Shareholders are entitled to deduct a calculated allowance, provided that such allowance has not already been used to reduce taxable dividend income. See "Norwegian Personal Shareholders" under Section 17.1.1 above for a description of the calculation of the allowance. The allowance may only be deducted in order to reduce a taxable gain, and cannot increase or produce a deductible loss, i.e. any unused allowance exceeding the capital gain upon the realisation

• f a share will be annulled (and may not be set off against gains from realisation of other shares).

If the Norwegian Personal Shareholder owns shares acquired at different points in time, the shares that were acquired first will be regarded as the first to be disposed of, on a first-in first-out basis. If a Norwegian Personal Shareholder cease to be a tax resident of Norway certain specific regulations applies with regard to realisation of shares held by such person. Norwegian Corporate Shareholders Sale, redemption or other disposal of shares is considered a realisation for Norwegian tax purposes. Capital gains derived from the realisation of shares qualifying for the participation exemption are not taxable for Norwegian Corporate Shareholders and losses incurred upon realisation of such shares are not deductible for Norwegian Corporate Shareholders. 17.1.3 Net wealth tax The value of shares is included in the basis for the computation of wealth tax imposed on Norwegian Personal

• Shareholders. Currently, the marginal wealth tax rate is 1.1% of the value assessed. The value for assessment

purposes for shares listed on Oslo Børs or Oslo Axess is the listed value as of 1 January in the year of assessment. Norwegian Corporate Shareholders are not subject to wealth tax. 17.2 NON-NORWEGIAN SHAREHOLDERS 17.2.1 Taxation of dividends Non-Norwegian Personal Shareholders Dividends distributed to shareholders who are individuals not resident in Norway for tax purposes ("Non- Norwegian Personal Shareholders"), are as a general rule subject to withholding tax at a rate of 25%. The withholding tax rate of 25% is normally reduced through tax treaties between Norway and the country in which the shareholder is resident. The withholding obligation lies with the company distributing the dividends and the Company assumes this obligation. Non-Norwegian Personal Shareholders resident within the EEA for tax purposes may apply individually to Norwegian tax authorities for a refund of an amount corresponding to the calculated tax-free allowance on each individual share (see above). If a Non-Norwegian Personal Shareholder is carrying on business activities in Norway and the shares are effectively connected with such activities, the shareholder will be subject to the same taxation of dividends as a Norwegian Personal Shareholder, as described above.

142 Non-Norwegian Personal Shareholders who have suffered a higher withholding tax than set out in an applicable tax treaty may apply to the Norwegian tax authorities for a refund of the excess withholding tax deducted. Non-Norwegian Corporate Shareholders Dividends distributed to shareholders who are limited liability companies (or certain similar entities) not resident in Norway for tax purposes ("Non-Norwegian Corporate Shareholders"), are as a general rule subject to withholding tax at a rate of 25%. The withholding tax rate of 25% is normally reduced through tax treaties between Norway and the country in which the shareholder is resident. Dividends distributed to Non-Norwegian Corporate Shareholders resident within the EEA for tax purposes are exempt from Norwegian withholding tax provided that the shareholder is the beneficial owner of the shares and that the shareholder is genuinely established and performs genuine economic business activities within the relevant EEA jurisdiction. Non-Norwegian Corporate Shareholders who have suffered a higher withholding tax than set out in an applicable tax treaty may apply to the Norwegian tax authorities for a refund of the excess withholding tax deducted. Nominee registered shares will be subject to withholding tax at a rate of 25% unless the nominee has obtained approval from the Norwegian Tax Directorate for the dividend to be subject to a lower withholding tax rate. To

• btain such approval the nominee is required to file a summary to the tax authorities including all beneficial
• wners that are subject to withholding tax at a reduced rate.

The withholding obligation in respect of dividends distributed to Non-Norwegian Corporate Shareholders and

• n nominee registered shares lies with the company distributing the dividends and the Company assumes this
• bligation.

17.2.2 Capital Gains Tax Non-Norwegian Personal Shareholders Gains from the sale or other disposal of shares by a Non-Norwegian Personal Shareholder will not be subject to taxation in Norway unless the Non-Norwegian Personal Shareholder holds the shares in connection with business activities carried out or managed from Norway. Non-Norwegian Corporate Shareholders Capital gains derived by the sale or other realisation of shares by Non-Norwegian Corporate Shareholders are not subject to taxation in Norway. 17.2.3 Net Wealth Tax Shareholders not resident in Norway for tax purposes are not subject to Norwegian net wealth tax. Non- Norwegian Personal Shareholders can, however, be taxable if the shareholding is effectively connected to the conduct of trade or business in Norway. 17.3 INHERITANCE TAX When shares are transferred by way of inheritance or gift, such transfer may give rise to inheritance or gift tax in Norway if the decedent, at the time of death, or the donor, at the time of the gift, is a resident or citizen of Norway, or if the shares are effectively connected with a business carried out through a permanent establishment in Norway. However, in the case of inheritance tax, if the decedent was a citizen but not a resident of Norway,

143 Norwegian inheritance tax will not be levied if inheritance tax or a similar tax is levied by the decedent's country of residence. Inheritance tax will be applicable to gifts if the donor is a citizen of Norway at the time the gift was given. However, for taxes paid in the donor's country of residence a credit will be given in the Norwegian gift taxes. The basis for the computation of inheritance tax is the market value at the time the transfer takes place. The rate is progressive from 0% to 15%. For inheritance and gifts from parents to children, the rate is progressive from 0% to 10%. For both categories the first NOK 470 000 is tax free. 17.4 DUTIES ON TRANSFER OF SHARES No stamp or similar duties are currently imposed in Norway on the transfer or issuance of shares in Norwegian companies.

144 18. LEGAL AND ARBITRATION PROCEEDINGS From time to time, the Group is involved in litigation, disputes and other legal proceedings arising in the normal course of its business. Accruals are made for potential liabilities as defendant in legal proceedings (see annual report 2012, note 21 for details). The Group maintains standard marine insurances (such as Hull, Loss of Hire, War Risks, and Protection and Indemnity ("P&I") Risks) for claims arising out of ship operations which may give rise to damage to property, third party liability and associated legal costs. The exposure for claims covered by the insurance is limited to deductibles which are in line with standard market terms. The Group also has Freight Defence and Demurrage ("FDD") insurance for vessels which covers the cost of necessary legal assistance (subject to a 25% deductible) in relation to other types of disputes directly connected with the operation of the vessel. The marine insurances are limited to an agreed insurance sum, and subject to a large number of exclusions, all

• f which are in accordance with market practice. There is therefore a risk that some claims will be uninsured, in

whole or in part. There are claims made against the Group on a regular basis, and there may from time to time be discussions with the insurers whether these claims are covered or not. In that regard there is also a risk that the insurance company incorrectly denies insurance coverage. The Group is involved in litigation for events dating back to 2004/2005 when a subsidiary, seeking to enforce a judgment debt and further claims originally estimated at about USD 6 million from a defaulting counterpart, arrested a vessel believed to be beneficially owned by the debtor. The original debtor has since been dissolved and the registered owner of the vessel has claimed about USD 15 million after having obtained a judgment on liability for wrongful arrest in Angola in 2006. The judgment is not enforceable until such time as damages have been assessed in Angola. Angola is not a party to international conventions relating to the recognition and enforceability of judgments. The claimant attempted to obtain security for their claim in New York in an unsuccessful attempt to enforce the Angolan liability judgment. The case in New York was ultimately

• dismissed. In parallel to the Angolan proceedings, the claimant has commenced proceedings in Norway seeking

to obtain a judgment in the amount of about USD 15 million plus interest and costs. The case has by agreement between the parties been stayed for about two years, but was at the request of the claimant recommenced by the court's decision of 29 August 2013. No date for an assessment of damages in Angola or a hearing in Norway has been set. The outcome of the case is uncertain both with regards to timing and any amounts receivable or payable by the subsidiary. A subsidiary of the Company had a 10 year charter party to STX Panocean Ltd ('STXPO') who on 17 June 2013 entered into Rehabilitation Proceedings in Korea (court organized restructuring giving protection from creditors). STXPO thereafter wrongfully terminated the charter party. A claim for hire and damages for loss of future earnings of about USD 34m resulting from the early redelivery has been filed in the Rehabilitation

• Proceedings. The Receivers are expected to make substantial write downs of creditors' claims. No amount has

yet been recognized in the balance sheet for potential payments related to this claim. A subsidiary of the Company is in arbitration regarding the imposition of additional costs midpoint in a 9 year COA, which ended in 2010. USD 4.92m in disputed costs is held in escrow; an interim award on liability in favour of the subsidiary has been made and the subsidiary has recognized the estimated amount to be received in the balance sheet. The actual amount to be received is pending a final award on quantum, expected Q4 2013-Q1

• 2014. The amount receivable may be subject to change depending on the final award.

Other than the instances described above, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened) which separately may have significant effects on the Group's financial position of which the Company is aware, during a period covering at least the previous 12

145 months which may have, or have had in the recent past, a significant effect on the Group's financial position or profitability.

146 19. ADDITIONAL INFORMATION 19.1 DOCUMENTS ON DISPLAY Copies of the following documents will be available for inspection at the Company's registered office during normal business hours from Monday to Friday each week (excluding public holidays) for a period of 12 months from the date of this Prospectus:

• i. the Memorandum of Association and Articles of Association of the Company;
• ii. the historical financial information of the Company and its subsidiary undertakings for each of the two

financial years preceding the publication of this Prospectus,

• iii. Stock Exchange notices, including quarterly reports, distributed by the Company through Oslo Børs'

information system after the submission of the application for listing.

• iv. all reports, letters, and other documents and statements prepared by any expert at Company's request

any part of which is included or referred to in the Prospectus 19.2 INDUSTRY AND MARKET DATA – SOURCED INFORMATION This Prospectus contains historical economic and industry data, and forecasts of such data. This information has been obtained from industry publications, market research and other independent third-party sources. The information in this Prospectus that has been sourced from third parties has been accurately reproduced and, as far as the Company is aware and able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. 19.3 STATEMENT REGARDING EXPERT OPINIONS This Prospectus does not refer to any expert opinions. 19.4 ADVISORS AND MANAGERS Wikborg, Rein & Co DA Advokatfirma is the Company's legal counsel in connection with the Offering and the

• Listing. Advokatfirmaet Wiersholm AS is the Managers' legal counsel in connection with the Offering and the

Listing. The Company has engaged ABG Sundal Collier, Pareto Securities and Swedbank First Securities as Managers in connection with the Offering and the Listing. 19.5 DOCUMENTS INCORPORATED BY REFERENCE The information incorporated by reference to this Prospectus should be read in connection with the cross reference list as set out in the table below. The following documents have been incorporated hereto by reference:

147

Section in Prospectus Disclosure requiremen ts of the Prospectus Reference document and link Page (P) in reference document 1, 11, 12, 13 Audited consolidated historical financial information (Annex 1, Section 20.1) Western Bulk AS – Consolidated Annual Report 2012 (IFRS): http://www.westernbulk.no/financials/ 5-51 52-53 (auditor's report) Western Bulk AS – Consolidated Annual Report 2011 (NGAAP): http://www.westernbulk.no/m/main/WB_Annual_Report_2011_with_Not ice.pdf 1-2 (important notice), 13-32 41-42 (auditor's report) Western Bulk AS – Consolidated Annual Report 2010 (NGAAP): http://www.westernbulk.no/m/main/WB_Annual_Report_2010_with_Not ice.pdf 1-2 (important notice), 17-36 45 (auditor's report) 1, 11, 12, 13 Interim and

• ther

financial information (Annex 1, Section 20.6) Western Bulk AS – IFRS condensed Financial Report Q2 and 1st Half 2013: http://www.westernbulk.no/financials/ 5-17 18 (auditor's report) 1, 11, 12, 13 Accounting Policies (Annex 1, Section 20.1) Western Bulk AS - Consolidated Annual Report 2012 (IFRS): http://www.westernbulk.no/financials/ 11-15 Western Bulk AS – Consolidated Annual Report 2011 (NGAAP): http://www.westernbulk.no/m/main/WB_Annual_Report_2011_with_Not ice.pdf 17-19 Western Bulk AS – Consolidated Annual Report 2010 (NGAAP): http://www.westernbulk.no/m/main/WB_Annual_Report_2010_with_Not ice.pdf 21-23

148 20. DEFINITIONS AND GLOSSARY OF TERMS ABG Sundal Collier ABG Sundal Collier Norge ASA Additional Shares Over-alloted shares equalling up to 10% of the Offer Shares Anti-Money Laundering Legislation The Norwegian Money Laundering Act No. 11 of 6 March 2009 ("Hvitvaskingsloven") and the Norwegian Money Laundering Regulations no 302 of 13 march 2009 Application Offices The offices at which (i) orders in the Institutional Offering (ii) orders in the Retail Offering (in the form of delivery of Order Form Retail Offering), and (iii) orders in the Employee Offering (in the form of delivery of Order Form Employee Offering) can be made Articles of Associations The Company's articles of associations dated 28 September 2013 BB Bare Boat BDI Baltic Dry Index Board of Directors or Board The board of directors of the Company BOF Basic oxygen furnace method Bookbuilding Period The period in which orders may be forwarded to the Managers in respect of the Offering COA Contract of Affreightment Code The Norwegian Code of Practice for Corporate Governance Company Western Bulk ASA DWT Deadweight tonnes EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization Eligible Employees Direct employees of Western Bulk Management AS who are located in Oslo and direct employees of Western Bulk Pte Ltd who are located in Singapore, both as of the last date of the Order Period Employee Offering A tranche of the Offering in which Offer Shares are being offered to the Eligible Employees in Norway and Singapore. FDD Freight Defense and Demurrage FSMA Financial Services and Markets Act GDP Gross Domestic Product, the total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. Group The Company and its subsidiaries (as defined by section 1-3 of the Norwegian Public Companies Act). IFRIC International Financial Reporting Interpretation Committee.

149 IFRS International Financial Reporting Standards IMO International Maritime Organisation Indicative Price Range The indicative price range set by the Board in consultation with the Managers prior to the Offering, being NOK 15 to NOK 22 per Offer Share. The Indicative Price Range may be amended, and the final price per Offer Share may be set within, higher or lower Indicative Price Range. Institutional Offering The offering directed a) to institutional and professional investors in Norway, (b) to investors outside Norway and the United States, pursuant to applicable exemptions from local prospectus requirements and other filing requirements and in compliance with Regulation S under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and (c) in the United States to qualified institutional buyers ("QIBs") as defined in, and in reliance on Rule 144A under the U.S. Securities Act; subject to a minimum application of NOK 2 000 000 ISM International Management Safety Code LIBOR London Interbank Offered Rate Listing The listing and trading of the Company's shares on Oslo Børs, or alternatively Oslo Axess. Management Selling Shareholders Lisann AS (owned by CEO Jens Ismar), Valletua AS (owned by CRO Egil Husby) and Tryvert AS (owned by CFO Håvard Furu). Managers ABG Sundal Collier Norge ASA, Pareto Securities AS and Swedbank First Securities. MVC Minimum Value Clause. N-GAAP Norwegian GAAP. New Shares Minimum 13 636 364 and maximum 20 000 000 new shares to be issued by the Company in the Offering. NIBOR Norwegian Inter Bank Offered Rate. NOK Norwegian Kroner, the lawful currency in Norway. Non-Norwegian Corporate Shareholders Shareholders who are limited liability companies (and certain similar entities) not resident in Norway for tax purposes. Non-Norwegian Personal Shareholders Shareholders who are individuals not resident in Norway for tax purposes. Norwegian Corporate Shareholders Shareholders who are limited liability companies (and certain similar entities) resident in Norway for tax purposes. Norwegian FSA The Financial Supervisory Authority of Norway. Norwegian Personal Shareholders Shareholders who are individuals resident in Norway for tax purposes. Norwegian Securities Trading Act The Norwegian Securities Trading Act

• f

29 June 2007 ("Verdipapirhandelloven"). Offer Shares Minimum 43 324 061 and maximum 62 414 970 Shares to be offered in the

150 Offering, consisting of minimum 13 636 364 and maximum 20 000 000 New Shares and minimum 29 687 697 and maximum 42 414 970 Secondary Shares. Offering The offering contemplated by this Prospectus, pursuant to the terms and conditions set out herein. Offer Price The price to be paid per Offer Share in the Offering, which will be determined by the Board of the Company after the end of the Bookbuilding Period and the Order Period. Offer Shares Both New Shares and Secondary Shares offered in the Offering. Order Form Employee Offering The form of application form to be used by investors when ordering Offer Shares in the Employee Offering, attached to this Prospectus as Appendix 3 (English language version) or Appendix 4 (Norwegian language version). Order Form Retail Offering The form of application form to be used by investors when ordering Offer Shares in the Retail Offering, attached to this Prospectus as Appendix 1 (English language version) or Appendix 2 (Norwegian language version). Order Period The period when orders for Offer Shares will be accepted in the Retail Offering and the Employee Offering, starting at 3 October 2013 at 09:00 a.m. (CET) and ending on 17 October 2013 at 12:00 p.m. (CET). Oslo Axess A regulated market place operated by Oslo Børs ASA. Oslo Børs Oslo Børs ASA. Over-Allotment Facility The Managers right to, with consent of the Company, over-allot a number of Additional Shares in the Offering equaling up to 10% of the number of Offer Shares. Over-Allotment Option The over-allotment option granted by the Principal Selling Shareholder to ABG Sundal Collier on behalf of the Managers to purchase a corresponding number of Additional Shares to cover any over-allotments Pareto Securities Pareto Securities AS Principal Selling Shareholder Kistefos AS Prospectus This Prospectus dated 2 October 2013 prepared in connection with the Offering and the application for listing on Oslo Børs, or alternatively on Oslo Axess. Prospectus Directive The EC Commission Regulation EC/809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 regarding information contained in prospectuses. Public Limited Companies Act The Norwegian Public Limited Liability Companies Act of 13 June 1997 no. 45 ("Allmennaksjeloven"). P&I Protection and Indemnity. QIB Qualified Institutional Buyer, as defined in Rule 144A under the U.S. Securities Act.

151 Relevant Member State Each member state of the EEA which has implemented the Prospectus Directive Retail Offering The tranche of the Offering in which Offer Shares are being offered to the public in Norway subject to a lower limit per application of NOK 10 500 and an upper limit per application of NOK 1 999 999 for each investor. Secondary Shares The existing Shares offered by the Selling Shareholders in the Offering. Selling Shareholders The Principal Selling Shareholder and the Management Selling Shareholders Shares The shares in the Company as of 2 October 2013. Stabilisation Manager ABG Sundal Collier U.S. Securities Act The Securities Act of 1933, as amended. TC Time charter VaR Value at risk VPS Verdipapirsentralen (Norwegian Central Securities Depository), which

• rganises the Norwegian paperless securities registration system.

VPS account An account with VPS for the registration of holdings of securities. WB Chartering AS Western Bulk Chartering AS WB Chartering or Western Bulk Chartering Western Bulk Chartering AS with subsidiaries (as defined by section 1-3 of the Norwegian Public Companies Act). WB Shipholding AS Western Bulk Shipholding AS WB Shipholding or Western Bulk Shipholding Western Bulk Shipholding AS with subsidiaries (as defined by section 1-3 of the Norwegian Public Companies Act). Western Bulk The Company

I

Appendix 1: Order Form for the Retail Offering (English)

ORDER FORM - RETAIL OFFERING – WESTERN BULK ASA For complete information about the Retail Offering, please refer to the Prospectus dated 2 October 2013 which has been issued in connection with the initial public offering of Shares in Western Bulk ASA. All capitalised terms not defined herein shall have the meaning as assigned to them in the Prospectus. The Company's Articles of Association, excerpts of the corporate resolutions to authorise increase of the share capital of the Company, as well as the Company's annual accounts and the annual report for the last two years, are available at the Company's office. Application Process: Applications for Offer Shares in the Retail Offering must be made by submitting this Order Form Retail Offering to one of the Application Offices or through the VPS online application system (only available for applicants who are residents of Norway with a Norwegian personal identification number and have a VPS account) by following the link to such online application system on any of the following web-sites: www.abgsc.com; www.paretosec.com; and www.swedbank.no. An Order Form Retail Offering must be correctly completed and submitted to one of the following Application Offices: ABG Sundal Collier Norge ASA Munkedamsveien 45E P.O. Box 1444 Vika N-0115 Oslo Norway Tel: +47 22 01 60 00 Fax: +47 22 01 60 60 Pareto Securities Dronning Mauds gate 3 P.O.Box 1411 Vika N-0115 Oslo Norway Tel: +47 22 87 87 00 Fax: +47 22 87 87 15 Swedbank First Securities Filipstad Brygge 1 P.O.Box 1441 Vika N-0115 Oslo Norway Tel: +47 23 23 80 00 Fax: +47 23 23 80 11 Subject to any extension of the Order Period, a properly completed Order Form Retail Offering must be received by one of the Application Offices by 12:00 CET on 17 October 2013. An Order Form Retail Offering that is incomplete or incorrectly completed, or that is received after expiry of the Order Period, may be disregarded without further notice to the applicant. Binding nature of the order: All orders made in the Retail Offering will be irrevocable and binding upon receipt of a duly completed Order Form Retail Offering by an Application Office, or in the case of applications through the VPS online application system, upon registration of the order, irrespective of any extension of the Order Period, and cannot be withdrawn, cancelled or modified by the applicant after having been received by an Application Office, or in the case of orders through the VPS online subscription system, upon registration of the application. Allocation, Payment and Delivery of Offer Shares: Swedbank First Securities, acting as settlement agent for the Retail Offering, expects to issue notifications of allocation of Offer Shares in the Retail Offering on or about 18 October 2013, by issuing allocation notes to the applicants by mail. Any applicant wishing to know the precise number of Offer Shares allocated to it, may contact one of the application offices from 12:00 CET on 18 October 2013 and onwards during business hours. Applicants who have access to investor services through an institution that operates the applicant's VPS account should be able to see how many Offer Shares they have been allocated from 12:00 CET on 18 October 2013. In completing an Order Form Retail Offering, or registering an application through the VPS online subscription system, each applicant in the Retail Offering will authorise Swedbank First Securities (on behalf of the Managers) to debit the applicant's Norwegian bank account for the total amount due for the Offer Shares allocated to the applicant. The applicant's account number must be stipulated on the Order Form Retail Offering. Accounts will be debited on or about 23 October 2013 (the payment due date), and there must be sufficient funds in the stated bank account from and including 22 October 2013. Applicants who do not have a Norwegian bank account must ensure that payment of the allocated Offer Shares is made on or before the payment due date (23 October 2013). Further, details and instructions will be set out in the allocation notes to the applicant, and can be obtained by contacting Swedbank First Securities: + 47 23 23 80 00. Offer Price: The Indicative Price Range for the Offering is from NOK 15 to NOK 22 per Offer Share, but might be amended during the Bookbuilding Period. The Company and the Manager will determine the final Offer Price on the basis of the orders placed in the Institutional Offering during the bookbuilding process. The Offer Price will be announced before trading commences on 18 October 2013. The Offer Price may be set below, within or above the Indicative Price Range. Each applicant in the Retail Offering will be permitted, but not required, to indicate on the Order Form Retail Offering that the applicant does not wish to be allocated Offer Shares should the Offer Price be set above the high-point of the Indicative Price Range. If the applicant does so, the applicant will not be allocated any Offer Shares in the event that the Offer Price is set above the high-point of the prevailing Indicative Price Range at the time the Order Form Retail Offering is received by the relevant Application Office. If the applicant does not expressly stipulate such reservation on the Order Form Retail Offering, the application will be binding regardless of whether the Offer Price is set within or above (or below) the Indicative Price Range, so long as the Offer Price has been determined

• n the basis of orders placed during the Bookbuilding process. An applicant in the Retail Offering will receive a discount of NOK 1 500 on the aggregate Offer Price for Offer Shares

allocated to such applicant. Applicant’s VPS-account (12 digits): I/we apply for shares for a total of NOK (minimum NOK 10 500 and maximum NOK 1 999 999): Applicant’s bank account to be debited (11 digits): OFFER PRICE: My/our application is conditional upon the final Offer Price not being set above the high-point of the Indicative Price Range as of the date of your receipt of this Order Form Retail Offering (insert cross) (must only be completed if the application is conditional upon the final Offer Price not being set above the prevailing high- point of the Indicative Price Range): I/we hereby (i) confirm to have read the Prospectus and that I/we are aware of the risks associated with an investment in the Offer Shares, (ii) irrevocably (a) order the number of Offer Shares allocated to me/us up to the amount as specified above subject to the terms and conditions as set out in the Prospectus, (b) authorise and instruct each of the Managers (or someone appointed by them) to subscribe for up to such number of Offer Shares at the Offer Price on my behalf and to take all actions required to ensure delivery of the Offer Shares allocated to me/us in the VPS, on my/our behalf, and (c) authorise Swedbank First Securities to debit my/our bank account as set out above for the amount of the Offer Shares allotted to me/us. Date and place(1): Binding signature(2):

(1) Must be dated during the Order Period (2)

The applicant must be of age. If the Order Form Retail Offering is signed by a proxy, documentary evidence of authority to sign must be attached in the form of a Power of Attorney or Company Registration Certificate. DETAILS OF THE APPLICANT — ALL FIELDS MUST BE COMPLETED First name: Surname / Family name / Company name: Home address / For companies: registered business address: Zip code and town: Identity number (11 digits) / For companies: registration number: Nationality: Telephone number (daytime):

II

See next page for additional application guidance.

III

ADDITIONAL ORDER GUIDANCE Regulatory Matters: Legislation passed throughout the EEA pursuant to the Markets in Financial Instruments Directive (“MiFID”) implemented in the Norwegian Securities Trading Act, imposes requirements in relation to business investment. In this respect the Managers must categorise all new clients in one of three categories: Eligible counterparties, Professional and Non-professional clients. All applicants applying for Offer Shares in the Offering who/which are not existing clients of one of the Managers will be categorised as Non-professional

• clients. The applicant can by written request to the Managers ask to be categorised as a Professional client if the applicant fulfils the provisions of the Norwegian Securities Trading Act.

For further information about the categorisation the applicant may contact the Managers. The applicant represents that it has sufficient knowledge, sophistication and experience in financial and business matters to be capable of evaluating the merits and risks of an investment decision to invest in the Company by applying for Offer Shares, and the applicant is able to bear the economic risk, and to withstand a complete loss of an investment in the Company. Execution Only: As the Managers are not in the position to determine whether the application for Offer Shares is suitable for the applicant, the Managers will treat the application as an execution only instruction from the applicant to apply for Offer Shares in the Offering. Hence, the applicant will not benefit from the corresponding protection of the relevant conduct of business rules in accordance with the Norwegian Securities Trading Act. About the Managers; Information Barriers: The Managers are securities firms, offering a broad range of investment services. In order to ensure that assignments undertaken in the Managers’ corporate finance departments are kept confidential, the Managers’ other activities, including analysis and stock broking, are separated from their corporate finance departments by information barriers known as “Chinese walls”. The applicant acknowledges that the Managers’ analysis and stock broking activity may act in conflict with the applicant’s interests with regard to transactions in the Offer Shares as a consequence of such Chinese walls. VPS Account; Anti-Money Laundering: To apply for Offer Shares the applicant must have a VPS account or a custodian for Norwegian shares. Such account can only be established by personal appearance with sufficient identification at a VPS book entry agent or an authorised investment firm. The Offering is subject to the Anti-Money Laundering Legislation. All applicants not registered as existing customers with one of the Managers must verify their identities to one of the Managers in accordance with requirements of the Anti-Money Laundering Legislation unless an exemption is available. Applicants that have designated an existing Norwegian bank account and an existing VPS account on the Order Form Retail Offering are exempted, provided the aggregate subscription price is less than NOK 100 000 unless verification of identity is requested by the Managers. The verification of identification must be completed prior to the end of the Order Period. Applicants that have not completed the required verification of identification will not be allocated Offer Shares. Applicants who are not registered as clients with the Managers must therefore complete one of the Managers’ Customer Registration Forms and send it to the Managers immediately by fax or e-mail in

• rder to be considered for an allocation of shares under the Offering unless an exemption is available.

Selling Restrictions: The Offering is subject to specific legal or regulatory restrictions in certain jurisdictions, see Section 7 “Selling and Transfer Restrictions” of the Prospectus. Neither the Company nor the Managers assumes any responsibility in the event there is a violation by any person of such restrictions. Late or Missing Payments: Should any investor have insufficient funds on his or her account, or should payment be delayed for any reason, or if it is not possible to debit the account, interest will accrue on the amount due at a rate equal to the prevailing interest rate under the Norwegian Act on Interest on Overdue Payments of 17 December 1976, No. 100, which at the date of this Prospectus was 9.50% per annum. Swedbank First Securities (on behalf of the Managers) reserves the right (but has no obligation) to make up to three debit attempts through 26 October 2013 if there are insufficient funds on the account on the payment due date. Pursuant to a payment guarantee agreement expected to be entered into by the Company and the Managers, the Managers will, subject to the terms and conditions of the payment guarantee agreement, guarantee payment of any New Shares not paid by the investors when due. The non-paying investor will remain fully liable for payment of the New Shares allocated to them, irrespective of any payment by any of the Managers under the payment guarantee

• agreement. The New Shares allocated to such investors will be transferred to a VPS account operated by one of the Managers and will be transferred to the non-paying investor when

payment of the relevant New Shares is received. The Managers reserve the right, without further notice, to sell or assume ownership of such New Shares if payment has not been received by the third day after the payment due date. If Offer Shares are sold on behalf of the investor, such sale will be for the investor’s account and risk (however so that the investor shall not be entitled to profits therefrom, if any) and the investor will be liable for any loss, costs, charges and expenses suffered or incurred by the Company, the Selling Shareholders and/or the Managers as a result of or in connection with such sales, and the Company, the Selling Shareholders and/or the Managers may enforce payment of any amount outstanding in accordance with Norwegian law. Terms and Conditions for Payment by Direct Debiting; Securities Trading: Payment by direct debiting is a service provided by cooperating banks in Norway. In the relationship between the payer and the payer’s bank the following standard terms and conditions apply:

• 1. The service "Payment by direct debiting — securities trading" is supplemented by the account agreement between the payer and the payer’s bank, in particular Section C of the account

agreement, General terms and conditions for deposit and payment instructions.

• 2. Costs related to the use of “payment by direct debiting — securities trading” appear from the bank’s prevailing price list, account information and/or information is given by other

appropriate manner. The bank will charge the indicated account for incurred costs.

• 3. The authorisation for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank who in turn will charge the payers

bank account.

• 4. In case of withdrawal of the authorisation for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act the payer’s

bank shall assist if payer withdraws a payment instruction which has not been completed. Such withdrawal may be regarded as a breach of the agreement between the payer and the beneficiary.

• 5. The payer cannot authorise for payment a higher amount than the funds available at the payer’s account at the time of payment. The payer’s bank will normally perform a verification
• f available funds prior to the account is being charged. If the account has been charged with an amount higher than the funds available, the difference shall be covered by the payer

immediately.

• 6. The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorisation for direct debiting, the account will be charged

as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the authorisation has expired as indicated above. Payment will normally be credited the beneficiary’s account between one and three working days after the indicated date of payment/delivery.

• 7. If the payer’s account is wrongfully charged after direct debiting, the payer’s right to repayment of the charged amount will be governed by the account agreement and the Norwegian

Financial Contracts Act.

IV

Appendix 2: Order Form for the Retail Offering (Norwegian)

BESTILLINGSBLANKETT OFFENTLIG TILBUD - WESTERN BULK For fullstendig informasjon om det Offentlige Tilbudet henvises det til Prospektet datert 2. oktober 2013 som har blitt offentliggjort i forbindelse med det offentlige tilbudet og børsnoteringen av Aksjer i Western Bulk ASA. Alle uttrykk med stor forbokstav som ikke er definert i dette dokumentet skal ha samme meningsinnhold som i Prospektet. Selskapets vedtekter, utdrag fra selskapsbeslutningene om å gi fullmakt til å øke Selskapets aksjekapital i tillegg til Selskapets årsregnskap og årsberetning for de siste to årene er tilgjengelige på Selskapets kontor. Bestillingsprosedyre: Bestilling av Tilbudsaksjer i det Offentlige Tilbudet må gjøres ved å sende inn denne Bestillingsblanketten for det Offentlige Tilbudet til et av Bestillingskontorene eller gjennom VPS sitt elektroniske bestillingssystem (kun tilgjengelig for bestillere bosatt i Norge med norsk fødsels- og personnummer som har en VPS-konto) ved å følge linken til det elektroniske bestillingssystemet på en av de følgende nettsidene: www.abgsc.com; www.paretosec.com; og www.swedbank.no. Bestillingsblanketter for det Offentlige Tilbudet må være korrekt utfylt og sendes inn til et av de følgende Bestillingskontorene: ABG Sundal Collier Norge ASA Munkedamsveien 45E P.O. Box 1444 Vika N-0115 Oslo Norge Tel: +47 22 01 60 00 Fax: +47 22 01 60 60 Pareto Securities Dronning Mauds gate 3 P.O.Box 1411 Vika N-0115 Oslo Norge Tel: +47 22 87 87 00 Fax: +47 22 87 87 15 Swedbank First Securities Filipstad Brygge 1 P.O.Box 1441 Vika N-0115 Oslo Norge Tel: +47 23 23 80 00 Fax: +47 23 23 80 11 Med forbehold for eventuell forlengelse av Bestillingsperioden må korrekt utfylte Bestillingsblanketter for det Offentlige Tilbudet være mottatt av et av Bestillingskontorene innen 12.00 CET den 17. oktober 2013. Bestillingsblanketter for det Offentlige Tilbudet som ikke er korrekt eller komplett utfylt, eller som mottas etter utløpet av Bestillingsperioden, kan bli ignorert uten at bestilleren får nærmere beskjed om dette. Bindende bestilling: Alle bestillingene som gjøres i det Offentlige Tilbudet er ugjenkallelige og bindende når en korrekt utfylt Bestillingsblankett for det Offentlige Tilbudet er mottatt av et Bestillingskontor, eller, dersom bestilling skjer gjennom VPS sitt elektroniske bestillingssystem, ved registrering av bestilling, uavhengig av en eventuell forlengelse av Bestillingsperioden, og kan ikke trekkes tilbake, kanselleres eller endres av bestilleren etter mottak hos Bestillingskontoret, eller dersom bestilling skjer gjennom VPS sitt elektroniske bestillingssystem, ved registrering av bestillingen. Tildeling, betaling og levering av Tilbudsaksjene: Swedbank First Securities, som er oppgjørsagent for det Offentlige Tilbudet, forventer å sende ut melding om tildeling av Tilbudsaksjer i det Offentlige Tilbudet på eller rundt den 18. oktober 2013, ved å sende tildelingsmeldinger til bestillerne med post. Dersom bestilleren ønsker å få vite det eksakte antall Tilbudsaksjer han er tildelt, kan han kontakte et av Bestillingskontorene fra 12.00 CET den 18. oktober 2013 og utover i kontortiden. Bestillere som har tilgang til investortjenester gjennom en institusjon som forvalter bestillerens VPS-konto skal kunne se hvor mange Tilbudsaksjer han har fått tildelt fra 12.00 CET den 18. oktober 2013. Ved å fylle ut en Bestillingsblankett for det Offentlige Tilbudet, eller registrere en bestilling gjennom VPS sitt elektroniske bestillingssystem, gir hver bestiller i det Offentlige Tilbudet fullmakt til Swedbank First Securities (på vegne av Tilretteleggerne) til å belaste bestillerens norske bankkonto for totalbeløpet som skal betales for Tilbudsaksjene tildelt bestilleren. Bestillerens kontonummer må oppgis i Bestillingsblanketten for det Offentlige Tilbudet. Belastning av konto vil skje på eller rundt den 23. oktober 2013 (betalingsdagen), og det må være tilstrekkelige midler på den oppgitte bankkonto fra og med 22. oktober 2013. Bestillere som ikke har en norsk bankkonto må sørge for at betaling av de tildelte Tilbudsaksjene gjøres på eller før betalingsdagen (23. oktober 2013). Videre detaljer og instruksjoner vil følge av tildelingsmeldingene til bestillerne som kan mottas ved å kontakte Swedbank First Securities: +47 23 23 80 00. Tilbudsprisen: Det Indikative Prisintervallet for Tilbudet er fra NOK 15 til NOK 22 per Tilbudsaksje, men kan endres i løpet av perioden med bookbuilding. Selskapet og Tilretteleggerne vil fastsette den endelige Tilbudsprisen på basis av innkomne bestillinger i det Institusjonelle Tilbudet i løpet av bookbuildingen. Tilbudsprisen vil offentliggjøres før handelsdagen starter 18. oktober 2013. Tilbudsprisen kan bli fastsatt under, innenfor eller over det Indikative Prisintervallet. Hver bestiller i det Offentlige Tilbudet vil få anledning, men ikke være tvunget til, å indikere i Bestillingsblanketten for det Offentlige Tilbudet at bestilleren ikke ønsker å bli tildelt Tilbudsaksjer dersom Tilbudsprisen overstiger den høyeste prisen i det Indikative Prisintervallet. Hvis bestilleren gjør dette, vil ikke bestilleren ble tildelt noen Tilbudsaksjer dersom Tilbudsprisen overstiger den høyeste prisen i det Indikative Prisintervallet på det tidspunktet Bestillingsblanketten for det Offentlige Tilbudet mottas av det relevante Bestillingskontoret. Hvis bestilleren ikke uttrykkelig inntar en slik reservasjon i sin Bestillingsblankett for det Offentlige Tilbudet, vil bestillingen være bindende uavhengig av om Tilbudsprisen settes innenfor eller over (eller under) det Indikative Prisintervallet, så lenge Tilbudsprisen har vært fastsatt på bakgrunn av bestillinger i perioden med bookbuilding. En bestiller i det Offentlige Tilbudet vil få en rabatt på NOK 1 500 på den totale Tilbudsprisen for de Tilbudsaksjer som blir tildelt den enkelte bestiller. VPS-konto (12 sifre): Jeg/vi bestiller aksjer for et totalbeløp på NOK (minimum NOK 10 500 og maksimum NOK 1 999 999): Bestillerens bankkonto som skal belastes (11 sifre): TILBUDSPRISEN: Min/vår bestilling forutsetter at den endelige Tilbudsprisen ikke er høyere enn den høyeste prisen i det Indikative Prisintervallet på datoen for ditt mottak av denne Bestillingsblanketten for det Offentlige Tilbudet (kryss av) (må bare fylles ut hvis bestillingen forutsetter at den endelige Tilbudsprisen ikke er høyere enn den gjeldende høyeste prisen i det Indikative Prisintervallet). Jeg/vi bekrefter herved (i) å ha lest Prospektet og at jeg/vi er klar over risikoene knyttet til en investering i Tilbudsaksjene, (ii) at jeg/vi ugjenkallelig (a) bestiller det antall Tilbudsaksjer tildelt til meg/oss opp til det beløpet angitt ovenfor på de vilkårene som følger av Prospektet, (b) at jeg/vi gir fullmakt til og instruerer hver av Tilretteleggerne (eller noen oppnevnt av dem) til å tegne seg for opp til slikt antall Tilbudsaksjer til Tilbudsprisen på mine/våre vegne og til å foreta alle handlinger som er nødvendige for å besørge levering av Tilbudsaksjene tildelt til meg/oss i VPS, på mine/våre vegne, og (c) at vi gir fullmakt til Swedbank First Securities til å belaste min/vår bankkonto angitt ovenfor for betaling av Tilbudsaksjer tildelt meg/oss. Dato og sted (1): Bindende signatur (2):

(1) Må være datert i Bestillingsperioden (2) Bestilleren må være myndig. Hvis Bestillingsblanketten for det Offentlige Tilbudet er signert av en fullmektig, må det vedlegges dokumentasjon på fullmakten i form av en fullmakt eller en firmaattest.

INFORMAJON OM BESTILLEREN — ALLE FELT MÅ FYLLES UT Fornavn: Etternavn / Selskapsnavn: Hjemmeadresse / For selskaper: registrert forretningsadresse: Postnummer og sted: Fødsels- og personnummer (11 sifre) / For selskaper: organisasjonsnummer: Nasjonalitet: Telefonnummer (dagtid): Se neste side for ytterligere veiledning til bestilling.

V

BESTILLINGSVEILEDNING Regulatoriske forhold: Lovgivning vedtatt i EØS gjennom verdipapirmarkedsdirektivet ("MiFID") implementert i verdipapirhandelloven, inneholder krav knyttet til investering i

• verdipapirer. I henhold til MiFID må Tilretteleggerne klassifiserer alle nye kunder i en av tre kategorier: Kvalifiserte motparter, profesjonelle og ikke-profesjonelle kunder. Alle bestillere

av Tilbudsaksjer i det Offentlige tilbudet som ikke er eksisterende kunder av en av Tilretteleggerne vil bli klassifisert som ikke-profesjonelle kunder. Bestilleren kan be om å bli klassifisert som profesjonell ved skriftlig henvendelse til en av Tilretteleggerne hvis bestilleren oppfyller vilkårene for dette i verdipapirhandelloven. For ytterligere informasjon om klassifiseringen kan bestilleren kontakte en av Tilretteleggerne. Bestilleren bekrefter at han er en sofistikert investor med tilstrekkelig kunnskap og erfaring innenfor finans og investeringsvirksomhet til å være i stand til å vurdere fordelene og ulempene ved en beslutning om å investere i Selskapet ved å bestille Tilbudsaksjer, og bestilleren kan bære den økonomiske risikoen investeringen innebærer, også dersom hele investeringen i Selskapet går tapt. Kun ordreutførelse: Ettersom Tilretteleggerne ikke er i en posisjon til å vurdere hvorvidt bestillingen av Tilbudsaksjer egner seg for bestilleren, vil Tilretteleggerne behandle bestillingen som en ren instruks om ordreutførelse fra bestilleren om å bestille Tilbudsaksjer i det Offentlige Tilbudet. Som en følge av dette vil ikke bestilleren være beskyttet av beskyttelsesregimet i verdipapirhandelloven. Om Tilretteleggerne; Informasjonsbarrierer: Tilretteleggerne er verdipapirforetak som tilbyr et bredt spekter av investeringstjenester. For å forsikre seg om at oppgaver som utføres av Tilretteleggernes corporate finance-avdelinger holdes konfidensielle, er Tilretteleggernes andre aktiviteter, herunder analyse og aksjemegling, skilt fra corporate finance-avdelingene med informasjonsbarrierer kjent som "chinese walls". Bestilleren erkjenner at Tilretteleggernes analyse- og aksjemeglingsavdelinger kan handle i strid med bestillerens interesser hva gjelder transaksjoner i Tilbudsaksjene som en følge av disse informasjonsbarrierene. VPS-konto; Hvitvasking: For å bestille Tilbudsaksjer må bestilleren ha en VPS-konto eller en forvalter for norske aksjer. Slik konto kan bare opprettes ved personlig oppmøte med nødvendig identifikasjon hos en VPS-agent eller et autorisert verdipapirforetak. Det Offentlige Tilbudet er underlagt regler om hvitvasking. Alle bestillere som ikke er registrert som kunder hos en av Tilretteleggerne må verifisere sin identitet overfor en av Tilretteleggerne i samsvar med gjeldende hvitvaskingsregler med mindre et unntak er anvendelig. Bestillere som har oppgitt en eksisterende norsk bankkonto og VPS-konto i Bestillingsblanketten for det Offentlige Tilbudet er unntatt, forutsatt at den samlede tegningsprisen er mindre enn NOK 100 000 med mindre verifisering av identitet kreves av en av Tilretteleggerne. Verifisering av identitet må gjennomføres før utløpet av Bestillingsperioden. Bestillere som ikke har gjennomført påkrevd verifisering av identifikasjon vil ikke bli tildelt Tilbudsaksjer. Bestillere som ikke er registrert som kunder hos en av Tilretteleggerne må derfor fylle ut en av Tilretteleggernes kunderegistreringsskjemaer og sende det til Tilretteleggerne umiddelbart på faks eller e-post for å bli vurdert i tildelingen av aksjer i det Offentlige Tilbudet med mindre et unntak er anvendelig. Omsetningsbegrensninger: Det Offentlige Tilbudet er underlagt spesifikke restriksjoner i visse jurisdiksjoner, se kapittel 7 "Selling and Transfer Restrictions" i Prospektet. Verken Selskapet eller Tilretteleggerne påtar seg noe ansvar for noens brudd på disse restriksjonene. Forsinket eller manglende betaling: Dersom en investor har manglende dekning på sin konto, eller dersom betaling av en annen grunn forsinkes, eller hvis det ikke er mulig å belaste kontoen, vil det påløpe rente fra betalingsdagen tilsvarende den gjeldende forsinkelsesrente etter forsinkelsesrenteloven av 17. desember 1976, som på datoen for Prospektet er 9.50 % per år. Swedbank First Securities (på vegne av Tilretteleggerne) forbeholder seg retten (men har ingen forpliktelse) til å gjennomføre opp til tre belastningsforsøk frem til 26. oktober 2013 hvis det ikke er tilstrekkelig dekning på kontoen på betalingsdatoen. I henhold til en betalingsgarantiavtale som det er forventet at Selskapet og Tilretteleggerne vil inngå, vil Tilretteleggerne, på vilkårene som følger av betalingsgarantiavtalen, garantere for betalingen av Nye Aksjer som ikke betales av investorene ved forfall. Den ikke-betalende investor vil fortsatt være fullt ut ansvarlig for betaling av Nye Aksjer han har blitt tildelt, uavhengig av hvorvidt en av Tilretteleggerne har foretatt betaling i henhold til betalingsgarantiavtalen. Nye Aksjer tildelt slike investorer vil bli overført til en VPS-konto forvaltet av en av Tilretteleggerne og vil bli overført til den ikke-betalende investor når betaling for de relevante Nye Aksjene mottas. Tilretteleggerne forbeholder seg retten til, uten nærmere beskjed, å selge eller overta eierskapet til de Nye Aksjene hvis betaling ikke er mottatt innen tre dager etter

• betalingsdatoen. Dersom Tilbudsaksjer selges på vegne av investoren, vil slikt salg være for investorens regning og risiko (likevel slik at investor ikke får rett til eventuell fortjeneste) og

investoren vil være ansvarlig for tap, kostnader og utgifter som påføres Selskapet, de Selgende Aksjonærer og/eller Tilretteleggerne som et resultat av eller i forbindelse med slike salg,

• g Selskapet, de Selgende Aksjonærer og/eller Tilretteleggerne kan tvangsinndrive betaling av utestående beløp i samsvar med norsk lov.

Vilkår for Betaling med engangsfullmakt; Verdipapirhandel: Betaling med engangsfullmakt er en tjeneste tilbudt av samarbeidende banker i Norge. I forholdet mellom betaleren og betalerens bank gjelder følgende standardvilkår:

• 1. Tjenesten "Betaling ved engangsfullmakt – verdipapirhandel" suppleres av kontoavtalen mellom betaleren og betalerens bank, særlig Punkt C i kontoavtalen, standardvilkår for

innskudd og betalingsinstrukser.

• 2. Kostnader forbundet med bruk av "Betaling ved engangsfullmakt – verdipapirhandel" følger av bankens gjeldende prisliste, kontoinformasjon og/eller informasjon er gitt på annen

passende måte. Banken vil belaste den angitte konto for påløpte kostander.

• 3. Engangsfullmakten signeres av betaleren og leveres til betalingsmottaker. Betalingsmottaker vil levere instruksjonene til sin bank som igjen vil belaste betalerens bankkonto.
• 4. I tilfelle engangsfullmakten trekkes tilbake skal betaleren gjøre betalingsmottaker oppmerksom på dette. I henhold til finansavtaleloven skal betalerens bank være behjelpelig hvis

betaleren trekker tilbake en betalingsinstruks som ikke er gjennomført. Slik tilbaketrekking kan anses som et brudd på avtalen mellom betaleren og betalingsmottaker.

• 5. Betaleren kan ikke autorisere et beløp for betaling som er høyere enn beløpet som er tilgjengelig på betalerens konto på betalingstidspunktet. Betalerens bank vil vanligvis gjennomføre

en verifisering av tilgjengelige midler før kontoen belastes. Hvis kontoen belastes for et beløp som er høyere enn det som er tilgjengelig, skal betaleren dekke forskjellen umiddelbart.

• 6. Betalerens konto vil belastes på den angitte betalingsdatoen. Hvis betalingsdatoen ikke har blitt angitt i engangsfullmakten, vil kontoen bli belastet så snart som mulig etter at

betalingsmottaker har levert instruksjonene til sin bank. Belastningen vil likevel ikke finne sted etter at engangsfullmakten har utløpt som beskrevet ovenfor. Betaling vil vanligvis krediteres betalingsmottakers konto mellom en og tre arbeidsdager etter den angitte datoen for betaling/levering.

• 7. Hvis betalerens konto feilaktig belastes på grunnlag av en engangsfullmakt, vil betalerens krav på tilbakebetaling av det belastede beløp reguleres av kontoavtalen og

finansavtaleloven.

VI

Appendix 3: Order Form for the Employee Offering (English)

ORDER FORM - EMPLOYEE OFFERING – WESTERN BULK ASA

NOTE: THIS "ORDER FORM EMPLOYEE OFFERING" MAY ONLY BE USED BY "ELIGIBLE EMPLOYEES" OF THE COMPANY AS DEFINED IN THE PROSPECTUS

For complete information about the Employee Offering, please refer to the Prospectus dated 2 October 2013 which has been issued in connection with the initial public offering of Shares in Western Bulk ASA. All capitalised terms not defined herein shall have the meaning as assigned to them in the Prospectus. The Company's Articles of Association, excerpts of the corporate resolutions to authorise increase of the share capital of the Company, as well as the Company's annual accounts and the annual report for the last two years, are available at the Company's office. Application Process: Applications for Offer Shares in the Employee Offering must be made by submitting a correctly completed Order Form Employee Offering to one of the Application Offices as set out below. Application for Offer Shares in the Employee Offering may not be done online. ABG Sundal Collier Norge ASA Munkedamsveien 45E P.O. Box 1444 Vika N-0115 Oslo Norway Tel: +47 22 01 60 00 Fax: +47 22 01 60 60 Pareto Securities Dronning Mauds gate 3 P.O.Box 1411 Vika N-0115 Oslo Norway Tel: +47 22 87 87 00 Fax: +47 22 87 87 15 Swedbank First Securities Filipstad Brygge 1 P.O.Box 1441 Vika N-0115 Oslo Norway Tel: +47 23 23 80 00 Fax: +47 23 23 80 11 Subject to any extension of the Order Period, a properly completed Order Form Employee Offering must be received by one of the Application Offices by 12:00 CET on 17 October

• 2013. An Order Form Employee Offering that are incomplete or incorrectly completed, or that are received after expiry of the Order Period, may be disregarded without further

notice to the applicant. Binding nature of the order: All orders made in the Employee Offering will be irrevocable and binding upon receipt of a duly completed Order Form Employee Offering by an Application Office, irrespective of any extension of the Order Period, and cannot be withdrawn, cancelled or modified by the applicant after having been received by an Application Office. Allocation, Payment and Delivery of Offer Shares: Swedbank First Securities, acting as settlement agent for the Employee Offering, expects to issue notifications of allocation of Offer Shares in the Employee Offering on or about 18 October 2013, by issuing allocation notes to the applicants by mail. Any applicant wishing to know the precise number of Offer Shares allocated to it, may contact one of the application offices from 12:00 CET on 18 October 2013 and onwards during business hours. In completing an Order Form Employee Offering each applicant in the Employee Offering will authorise Swedbank First Securities (on behalf of the Managers) to debit the applicant's Norwegian bank account for the total amount due for the Offer Shares allocated to the applicant. The applicant's account number must be stipulated on the Order Form Employee Offering. Accounts will be debited on or about 23 October 2013 (the payment due date), and there must be sufficient funds in the stated bank account from and including 22 October 2013. Applicants who do not have a Norwegian bank account must ensure that payment of the allocated Offer Shares is made on or before the payment due date (23 October 2013). Further, details and instructions will be set out in the allocation notes to the applicant, and can be obtained by contacting Swedbank First Securities: + 47 23 23 80 00. Offer Price: The Indicative Price Range for the Offering is from NOK 15 to NOK 22 per Offer Share, but might be amended during the Bookbuilding Period. The Company and the Manager will determine the final Offer Price on the basis of the orders placed in the Institutional Offering during the bookbuilding process. The Offer Price will be announced before trading commences on 18 October 2013. The Offer Price may be set below, within or above the Indicative Price Range. Each applicant in the Employee Offering will be permitted, but not required, to indicate on the Order Form Employee Offering that the applicant does not wish to be allocated Offer Shares should the Offer Price be set above the high-point of the Indicative Price Range. If the applicant does so, the applicant will not be allocated any Offer Shares in the event that the Offer Price is set above the high-point of the prevailing Indicative Price Range at the time the Order Form Employee Offering is received by the relevant Application Office. If the applicant does not expressly stipulate such reservation on the Order Form Employee Offering, the application will be binding regardless of whether the Offer Price is set within or above (or below) the Indicative Price Range, so long as the Offer Price has been determined on the basis of orders placed during the Bookbuilding process. An applicant in the Employee Offering will receive a discount of NOK 3 000 on the aggregate Offer Price for Offer Shares allocated to such applicant. Applicant’s VPS-account (12 digits): I/we apply for shares for a total of NOK (minimum NOK 10 500): Applicant’s bank account to be debited (11 digits): OFFER PRICE: My/our application is conditional upon the final Offer Price not being set above the high-point of the Indicative Price Range as of the date of your receipt of this Order Form Employee Offering (insert cross) (must only be completed if the application is conditional upon the final Offer Price not being set above the prevailing high-point of the Indicative Price Range): I/we hereby (i) confirm to have read the Prospectus and that I/we are aware of the risks associated with an investment in the Offer Shares, (ii) irrevocably (a) order the number of Offer Shares allocated to me/us up to the amount as specified above subject to the terms and conditions as set out in the Prospectus, (b) authorise and instruct each of the Managers (or someone appointed by them) to subscribe for up to such number of Offer Shares at the Offer Price on my behalf and to take all actions required to ensure delivery of the Offer Shares allocated to me/us in the VPS, on my/our behalf, and (c) authorise Swedbank First Securities to debit my/our bank account as set out above for the amount of the Offer Shares allotted to me/us. Date and place(1): Binding signature(2):

(1) Must be dated during the Order Period (2)

The applicant must be of age. If the Order Form Employee Offering is signed by a proxy, documentary evidence of authority to sign must be attached in the form of a Power of Attorney or Company Registration Certificate. DETAILS OF THE APPLICANT — ALL FIELDS MUST BE COMPLETED First name: Surname / Family name / Company name: Home address / For companies: registered business address: Zip code and town: Identity number (11 digits) / For companies: registration number: Nationality: Telephone number (daytime): See next page for additional application guidance.

VII

ADDITIONAL ORDER GUIDANCE Regulatory Matters: Legislation passed throughout the EEA pursuant to the Markets in Financial Instruments Directive (“MiFID”) implemented in the Norwegian Securities Trading Act, imposes requirements in relation to business investment. In this respect the Managers must categorise all new clients in one of three categories: Eligible counterparties, Professional and Non-professional clients. All applicants applying for Offer Shares in the Offering who/which are not existing clients of one of the Managers will be categorised as Non-professional

• clients. The applicant can by written request to the Managers ask to be categorised as a Professional client if the applicant fulfils the provisions of the Norwegian Securities Trading Act.

For further information about the categorisation the applicant may contact the Managers. The applicant represents that it has sufficient knowledge, sophistication and experience in financial and business matters to be capable of evaluating the merits and risks of an investment decision to invest in the Company by applying for Offer Shares, and the applicant is able to bear the economic risk, and to withstand a complete loss of an investment in the Company. Execution Only: As the Managers are not in the position to determine whether the application for Offer Shares is suitable for the applicant, the Managers will treat the application as an execution only instruction from the applicant to apply for Offer Shares in the Offering. Hence, the applicant will not benefit from the corresponding protection of the relevant conduct of business rules in accordance with the Norwegian Securities Trading Act. About the Managers; Information Barriers: The Managers are securities firms, offering a broad range of investment services. In order to ensure that assignments undertaken in the Managers’ corporate finance departments are kept confidential, the Managers’ other activities, including analysis and stock broking, are separated from their corporate finance departments by information barriers known as “Chinese walls”. The applicant acknowledges that the Managers’ analysis and stock broking activity may act in conflict with the applicant’s interests with regard to transactions in the Offer Shares as a consequence of such Chinese walls. VPS Account; Anti-Money Laundering: To apply for Offer Shares the applicant must have a VPS account or a custodian for Norwegian shares. Such account can only be established by personal appearance with sufficient identification at a VPS book entry agent or an authorised investment firm. The Offering is subject to the Anti-Money Laundering Legislation. All applicants not registered as existing customers with one of the Managers must verify their identities to one of the Managers in accordance with requirements of the Anti-Money Laundering Legislation unless an exemption is available. Applicants that have designated an existing Norwegian bank account and an existing VPS account on the Order Form Employee Offering are exempted, provided the aggregate subscription price is less than NOK 100 000 unless verification of identity is requested by the Managers. The verification of identification must be completed prior to the end of the Order Period. Applicants that have not completed the required verification of identification will not be allocated Offer Shares. Applicants who are not registered as clients with the Managers must therefore complete one of the Managers’ Customer Registration Forms and send it to the Managers immediately by fax or e-mail in

• rder to be considered for an allocation of shares under the Offering unless an exemption is available.

Selling Restrictions: The Offering is subject to specific legal or regulatory restrictions in certain jurisdictions, see Section 7 “Selling and Transfer Restrictions” of the Prospectus. Neither the Company nor the Managers assumes any responsibility in the event there is a violation by any person of such restrictions. Late or Missing Payments: Should any investor have insufficient funds on his or her account, or should payment be delayed for any reason, or if it is not possible to debit the account, interest will accrue on the amount due at a rate equal to the prevailing interest rate under the Norwegian Act on Interest on Overdue Payments of 17 December 1976, No. 100, which at the date of this Prospectus was 9.50% per annum. Swedbank First Securities (on behalf of the Managers) reserves the right (but has no obligation) to make up to three debit attempts through 26 October 2013 if there are insufficient funds on the account on the payment due date. Pursuant to a payment guarantee agreement expected to be entered into by the Company and the Managers, the Managers will, subject to the terms and conditions of the payment guarantee agreement, guarantee payment of any New Shares not paid by the investors when due. The non-paying investor will remain fully liable for payment of the New Shares allocated to them, irrespective of any payment by any of the Managers under the payment guarantee

• agreement. The New Shares allocated to such investors will be transferred to a VPS account operated by one of the Managers and will be transferred to the non-paying investor when

payment of the relevant New Shares is received. The Managers reserve the right, without further notice, to sell or assume ownership of such New Shares if payment has not been received by the third day after the payment due date. If Offer Shares are sold on behalf of the investor, such sale will be for the investor’s account and risk (however so that the investor shall not be entitled to profits therefrom, if any) and the investor will be liable for any loss, costs, charges and expenses suffered or incurred by the Company, the Selling Shareholders and/or the Managers as a result of or in connection with such sales, and the Company, the Selling Shareholders and/or the Managers may enforce payment of any amount outstanding in accordance with Norwegian law. Terms and Conditions for Payment by Direct Debiting; Securities Trading: Payment by direct debiting is a service provided by cooperating banks in Norway. In the relationship between the payer and the payer’s bank the following standard terms and conditions apply:

• 1. The service "Payment by direct debiting — securities trading" is supplemented by the account agreement between the payer and the payer’s bank, in particular Section C of the account

agreement, General terms and conditions for deposit and payment instructions.

• 2. Costs related to the use of “payment by direct debiting — securities trading” appear from the bank’s prevailing price list, account information and/or information is given by other

appropriate manner. The bank will charge the indicated account for incurred costs.

• 3. The authorisation for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank who in turn will charge the payers

bank account.

• 4. In case of withdrawal of the authorisation for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act the payer’s

bank shall assist if payer withdraws a payment instruction which has not been completed. Such withdrawal may be regarded as a breach of the agreement between the payer and the beneficiary.

• 5. The payer cannot authorise for payment a higher amount than the funds available at the payer’s account at the time of payment. The payer’s bank will normally perform a verification
• f available funds prior to the account is being charged. If the account has been charged with an amount higher than the funds available, the difference shall be covered by the payer

immediately.

• 6. The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorisation for direct debiting, the account will be charged

as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the authorisation has expired as indicated above. Payment will normally be credited the beneficiary’s account between one and three working days after the indicated date of payment/delivery.

• 7. If the payer’s account is wrongfully charged after direct debiting, the payer’s right to repayment of the charged amount will be governed by the account agreement and the Norwegian

Financial Contracts Act.

VIII

Appendix 4: Order Form for the Employee Offering (Norwegian)

BESTILLINGSBLANKETT ANSATTETILBUD - WESTERN BULK MERK: DENNE "BESTILLINGSBLANKETTEN FOR ANSATTETILBUDET" KAN BARE BENYTTES AV "KVALIFISERTE ANSATTE" I SELSKAPET SLIK DEFINERT I PROSPEKTET. For fullstendig informasjon om Ansattetilbudet henvises det til Prospektet datert 2. oktober 2013 som har blitt offentliggjort i forbindelse med det børsnoteringen av Aksjer i Western Bulk ASA. Alle uttrykk med stor forbokstav som ikke er definert i dette dokumentet skal ha samme meningsinnhold som i Prospektet. Selskapets vedtekter, utdrag fra selskapsbeslutningene om å gi fullmakt til å øke Selskapets aksjekapital i tillegg til Selskapets årsregnskap og årsberetning for de siste to årene er tilgjengelige på Selskapets kontor. Bestillingsprosedyre: Bestilling av Tilbudsaksjer i Ansattetilbudet må gjøres ved å sende inn en korrekt utfylt Bestillingsblankett for Ansattetilbudet til et av Bestillingskontorene angitt

• under. Bestilling av Tilbudsaksjer i Ansattetilbudet kan ikke gjøres via internett.

ABG Sundal Collier Norge ASA Munkedamsveien 45E P.O. Box 1444 Vika N-0115 Oslo Norge Tel: +47 22 01 60 00 Fax: +47 22 01 60 60 Pareto Securities Dronning Mauds gate 3 P.O.Box 1411 Vika N-0115 Oslo Norge Tel: +47 22 87 87 00 Fax: +47 22 87 87 15 Swedbank First Securities Filipstad Brygge 1 P.O.Box 1441 Vika N-0115 Oslo Norge Tel: +47 23 23 80 00 Fax: +47 23 23 80 11 Med forbehold for eventuell forlengelse av Bestillingsperioden må korrekt utfylte Bestillingsblanketter for Ansattetilbudet være mottatt av et av Bestillingskontorene innen 12.00 CET den 17. oktober 2013. Bestillingsblanketter for Ansattetilbudet som ikke er korrekt eller komplett utfylt, eller som mottas etter utløpet av Bestillingsperioden, kan bli ignorert uten at bestilleren får nærmere beskjed om dette. Bindende bestilling: Alle bestillingene som gjøres i det Offentlige Tilbudet er ugjenkallelige og bindende når en korrekt utfylt Bestillingsblankett for Ansattetilbudet er mottatt av et Bestillingskontor, uavhengig av en eventuell forlengelse av Bestillingsperioden, og kan ikke trekkes tilbake, kanselleres eller endres av bestilleren etter mottak hos Bestillingskontoret. Tildeling, betaling og levering av Tilbudsaksjene: Swedbank First Securities, som er oppgjørsagent for det Offentlige Tilbudet, forventer å sende ut melding om tildeling av Tilbudsaksjer i det Offentlige Tilbudet på eller rundt den 18. oktober 2013, ved å sende tildelingsmeldinger til bestillerne med post. Dersom bestilleren ønsker å få vite det eksakte antall Tilbudsaksjer han er tildelt, kan han kontakte et av Bestillingskontorene fra 12.00 CET den 18. oktober 2013 og utover i kontortiden. Ved å fylle ut en Bestillingsblankett for Ansattetilbudet, gir hver bestiller i det Offentlige Tilbudet fullmakt til Swedbank First Securities (på vegne av Tilretteleggerne) til å belaste bestillerens norske bankkonto for totalbeløpet som skal betales for Tilbudsaksjene tildelt bestilleren. Bestillerens kontonummer må oppgis i Bestillingsblanketten for Ansattetilbudet. Belastning av konto vil skje på eller rundt den 23.

• ktober 2013 (betalingsdagen), og det må være tilstrekkelige midler på den oppgitte bankkonto fra og med 22. oktober 2013. Bestillere som ikke har en norsk bankkonto må sørge for at

betaling av de tildelte Tilbudsaksjene gjøres på eller før betalingsdagen (23. oktober 2013). Videre detaljer og instruksjoner vil følge av tildelingsmeldingene til bestillerne som kan mottas ved å kontakte Swedbank First Securities: +47 23 23 80 00. Tilbudsprisen: Det Indikative Prisintervallet for Tilbudet er fra NOK 15 til NOK 22 per Tilbudsaksje, men kan endres i løpet av perioden med bookbuilding. Selskapet og Tilretteleggerne vil fastsette den endelige Tilbudsprisen på basis av innkomne bestillinger i det Institusjonelle Tilbudet i løpet av bookbuildingen. Tilbudsprisen vil offentliggjøres før handelsdagen starter 18. oktober 2013. Tilbudsprisen kan bli fastsatt under, innenfor eller over det Indikative Prisintervallet. Hver bestiller i det Offentlige Tilbudet vil få anledning, men ikke være tvunget til, å indikere i Bestillingsblanketten for Ansattetilbudet at bestilleren ikke ønsker å bli tildelt Tilbudsaksjer dersom Tilbudsprisen overstiger den høyeste prisen i det Indikative Prisintervallet. Hvis bestilleren gjør dette, vil ikke bestilleren ble tildelt noen Tilbudsaksjer dersom Tilbudsprisen overstiger den høyeste prisen i det Indikative Prisintervallet på det tidspunktet Bestillingsblanketten for Ansattetilbudet mottas av det relevante Bestillingskontoret. Hvis bestilleren ikke uttrykkelig inntar en slik reservasjon i sin Bestillingsblankett for Ansattetilbudet, vil bestillingen være bindende uavhengig av om Tilbudsprisen settes innenfor eller over (eller under) det Indikative Prisintervallet, så lenge Tilbudsprisen har vært fastsatt på bakgrunn av bestillinger i perioden med bookbuilding. En bestiller i det Offentlige Tilbudet vil få en rabatt på NOK 3 000 på den totale Tilbudsprisen for de Tilbudsaksjer som blir tildelt den enkelte bestiller. VPS-konto (12 sifre): Jeg/vi bestiller aksjer for et totalbeløp på NOK (minimum NOK 10 500): Bestillerens bankkonto som skal belastes (11 sifre): TILBUDSPRISEN: Min/vår bestilling forutsetter at den endelige Tilbudsprisen ikke er høyere enn den høyeste prisen i det Indikative Prisintervallet på datoen for ditt mottak av denne Bestillingsblanketten for Ansattetilbudet (kryss av) (må bare fylles ut hvis bestillingen forutsetter at den endelige Tilbudsprisen ikke er høyere enn den gjeldende høyeste prisen i det Indikative Prisintervallet). Jeg/vi bekrefter herved (i) å ha lest Prospektet og at jeg/vi er klar over risikoene knyttet til en investering i Tilbudsaksjene, (ii) at jeg/vi ugjenkallelig (a) bestiller det antall Tilbudsaksjer tildelt til meg/oss opp til det beløpet angitt ovenfor på de vilkårene som følger av Prospektet, (b) at jeg/vi gir fullmakt til og instruerer hver av Tilretteleggerne (eller noen oppnevnt av dem) til å tegne seg for opp til slikt antall Tilbudsaksjer til Tilbudsprisen på mine/våre vegne og til å foreta alle handlinger som er nødvendige for å besørge levering av Tilbudsaksjene tildelt til meg/oss i VPS, på mine/våre vegne, og (c) at vi gir fullmakt til Swedbank First Securities til å belaste min/vår bankkonto angitt ovenfor for betaling av Tilbudsaksjer tildelt meg/oss. Dato og sted (1): Bindende signatur (2):

(1) Må være datert i Bestillingsperioden (2) Bestilleren må være myndig. Hvis Bestillingsblanketten for Ansattetilbudet er signert av en fullmektig, må det vedlegges dokumentasjon på fullmakten i form av en fullmakt eller en firmaattest.

INFORMAJON OM BESTILLEREN — ALLE FELT MÅ FYLLES UT Fornavn: Etternavn / Selskapsnavn: Hjemmeadresse / For selskaper: registrert forretningsadresse: Postnummer

• g

sted: Fødsels- og personnummer (11 sifre) / For selskaper: organisasjonsnummer: Nasjonalitet: Telefonnummer (dagtid): Se neste side for ytterligere veiledning til bestilling.

IX

BESTILLINGSVEILEDNING Regulatoriske forhold: Lovgivning vedtatt i EØS gjennom verdipapirmarkedsdirektivet ("MiFID") implementert i verdipapirhandelloven, inneholder krav knyttet til investering i

• verdipapirer. I henhold til MiFID må Tilretteleggerne klassifiserer alle nye kunder i en av tre kategorier: Kvalifiserte motparter, profesjonelle og ikke-profesjonelle kunder. Alle bestillere

av Tilbudsaksjer i det Offentlige tilbudet som ikke er eksisterende kunder av en av Tilretteleggerne vil bli klassifisert som ikke-profesjonelle kunder. Bestilleren kan be om å bli klassifisert som profesjonell ved skriftlig henvendelse til en av Tilretteleggerne hvis bestilleren oppfyller vilkårene for dette i verdipapirhandelloven. For ytterligere informasjon om klassifiseringen kan bestilleren kontakte en av Tilretteleggerne. Bestilleren bekrefter at han er en sofistikert investor med tilstrekkelig kunnskap og erfaring innenfor finans og investeringsvirksomhet til å være i stand til å vurdere fordelene og ulempene ved en beslutning om å investere i Selskapet ved å bestille Tilbudsaksjer, og bestilleren kan bære den økonomiske risikoen investeringen innebærer, også dersom hele investeringen i Selskapet går tapt. Kun ordreutførelse: Ettersom Tilretteleggerne ikke er i en posisjon til å vurdere hvorvidt bestillingen av Tilbudsaksjer egner seg for bestilleren, vil Tilretteleggerne behandle bestillingen som en ren instruks om ordreutførelse fra bestilleren om å bestille Tilbudsaksjer i det Offentlige Tilbudet. Som en følge av dette vil ikke bestilleren være beskyttet av beskyttelsesregimet i verdipapirhandelloven. Om Tilretteleggerne; Informasjonsbarrierer: Tilretteleggerne er verdipapirforetak som tilbyr et bredt spekter av investeringstjenester. For å forsikre seg om at oppgaver som utføres av Tilretteleggernes corporate finance-avdelinger holdes konfidensielle, er Tilretteleggernes andre aktiviteter, herunder analyse og aksjemegling, skilt fra corporate finance-avdelingene med informasjonsbarrierer kjent som "chinese walls". Bestilleren erkjenner at Tilretteleggernes analyse- og aksjemeglingsavdelinger kan handle i strid med bestillerens interesser hva gjelder transaksjoner i Tilbudsaksjene som en følge av disse informasjonsbarrierene. VPS-konto; Hvitvasking: For å bestille Tilbudsaksjer må bestilleren ha en VPS-konto eller en forvalter for norske aksjer. Slik konto kan bare opprettes ved personlig oppmøte med nødvendig identifikasjon hos en VPS-agent eller et autorisert verdipapirforetak. Det Offentlige Tilbudet er underlagt regler om hvitvasking. Alle bestillere som ikke er registrert som kunder hos en av Tilretteleggerne må verifisere sin identitet overfor en av Tilretteleggerne i samsvar med gjeldende hvitvaskingsregler med mindre et unntak er anvendelig. Bestillere som har oppgitt en eksisterende norsk bankkonto og VPS-konto i Bestillingssblanketten for Ansattetilbudet er unntatt, forutsatt at den samlede tegningsprisen er mindre enn NOK 100 000 med mindre verifisering av identitet kreves av en av Tilretteleggerne. Verifisering av identitet må gjennomføres før utløpet av Bestillingsperioden. Bestillere som ikke har gjennomført påkrevd verifisering av identifikasjon vil ikke bli tildelt Tilbudsaksjer. Bestillere som ikke er registrert som kunder hos en av Tilretteleggerne må derfor fylle ut en av Tilretteleggernes kunderegistreringsskjemaer og sende det til Tilretteleggerne umiddelbart på faks eller e-post for å bli vurdert i tildelingen av aksjer i det Offentlige Tilbudet med mindre et unntak er anvendelig. Omsetningsbegrensninger: Det Offentlige Tilbudet er underlagt spesifikke restriksjoner i visse jurisdiksjoner, se kapittel 7 "Selling and Transfer Restrictions" i Prospektet. Verken Selskapet eller Tilretteleggerne påtar seg noe ansvar for noens brudd på disse restriksjonene. Forsinket eller manglende betaling: Dersom en investor har manglende dekning på sin konto, eller dersom betaling av en annen grunn forsinkes, eller hvis det ikke er mulig å belaste kontoen, vil det påløpe rente fra betalingsdagen tilsvarende den gjeldende forsinkelsesrente etter forsinkelsesrenteloven av 17. desember 1976, som på datoen for Prospektet er 9.50 % per år. Swedbank First Securities (på vegne av Tilretteleggerne) forbeholder seg retten (men har ingen forpliktelse) til å gjennomføre opp til tre belastningsforsøk frem til 26. oktober 2013 hvis det ikke er tilstrekkelig dekning på kontoen på betalingsdatoen. I henhold til en betalingsgarantiavtale som det er forventet at Selskapet og Tilretteleggerne vil inngå, vil Tilretteleggerne, på vilkårene som følger av betalingsgarantiavtalen, garantere for betalingen av Nye Aksjer som ikke betales av investorene ved forfall. Den ikke-betalende investor vil fortsatt være fullt ut ansvarlig for betaling av Nye Aksjer han har blitt tildelt, uavhengig av hvorvidt en av Tilretteleggerne har foretatt betaling i henhold til betalingsgarantiavtalen. Nye Aksjer tildelt slike investorer vil bli overført til en VPS-konto forvaltet av en av Tilretteleggerne og vil bli overført til den ikke-betalende investor når betaling for de relevante Nye Aksjene mottas. Tilretteleggerne forbeholder seg retten til, uten nærmere beskjed, å selge eller overta eierskapet til de Nye Aksjene hvis betaling ikke er mottatt innen tre dager etter

• betalingsdatoen. Dersom Tilbudsaksjer selges på vegne av investoren, vil slikt salg være for investorens regning og risiko (likevel slik at investor ikke får rett til eventuell fortjeneste) og

investoren vil være ansvarlig for tap, kostnader og utgifter som påføres Selskapet, de Selgende Aksjonærer og/eller Tilretteleggerne som et resultat av eller i forbindelse med slike salg,

• g Selskapet, de Selgende Aksjonærer og/eller Tilretteleggerne kan tvangsinndrive betaling av utestående beløp i samsvar med norsk lov.

Vilkår for Betaling med engangsfullmakt; Verdipapirhandel: Betaling med engangsfullmakt er en tjeneste tilbudt av samarbeidende banker i Norge. I forholdet mellom betaleren og betalerens bank gjelder følgende standardvilkår:

• 8. Tjenesten "Betaling ved engangsfullmakt – verdipapirhandel" suppleres av kontoavtalen mellom betaleren og betalerens bank, særlig Punkt C i kontoavtalen, standardvilkår for

innskudd og betalingsinstrukser.

• 9. Kostnader forbundet med bruk av "Betaling ved engangsfullmakt – verdipapirhandel" følger av bankens gjeldende prisliste, kontoinformasjon og/eller informasjon er gitt på annen

passende måte. Banken vil belaste den angitte konto for påløpte kostander.

• 10. Engangsfullmakten signeres av betaleren og leveres til betalingsmottaker. Betalingsmottaker vil levere instruksjonene til sin bank som igjen vil belaste betalerens bankkonto.
• 11. I tilfelle engangsfullmakten trekkes tilbake skal betaleren gjøre betalingsmottaker oppmerksom på dette. I henhold til finansavtaleloven skal betalerens bank være behjelpelig hvis

betaleren trekker tilbake en betalingsinstruks som ikke er gjennomført. Slik tilbaketrekking kan anses som et brudd på avtalen mellom betaleren og betalingsmottaker.

• 12. Betaleren kan ikke autorisere et beløp for betaling som er høyere enn beløpet som er tilgjengelig på betalerens konto på betalingstidspunktet. Betalerens bank vil vanligvis

gjennomføre en verifisering av tilgjengelige midler før kontoen belastes. Hvis kontoen belastes for et beløp som er høyere enn det som er tilgjengelig, skal betaleren dekke forskjellen umiddelbart.

• 13. Betalerens konto vil belastes på den angitte betalingsdatoen. Hvis betalingsdatoen ikke har blitt angitt i engangsfullmakten, vil kontoen bli belastet så snart som mulig etter at

betalingsmottaker har levert instruksjonene til sin bank. Belastningen vil likevel ikke finne sted etter at engangsfullmakten har utløpt som beskrevet ovenfor. Betaling vil vanligvis krediteres betalimgsmottakers konto mellom en og tre arbeidsdager etter den angitte datoen for betaling/levering.

• 14. Hvis betalerens konto feilaktig belastes på grunnlag av en engangsfullmakt, vil betalerens krav på tilbakebetaling av det belastede beløp reguleres av kontoavtalen og

finansavtaleloven.

X

Appendix 5: Norwegian Summary (Norsk sammendrag)

Sammendrag består av informasjon som skal gis i form av ”Elementer”. Elementene er nummerert i punktene A – E (A.1 – E.7) nedenfor. Dette sammendraget inneholder alle Elementer som skal være inkludert i et sammendrag for denne type verdipapir og utsteder. Som følge av at enkelte Elementer ikke må beskrives, kan det være huller i nummereringen av Elementene. Selv om man kan være pålagt å innta et Element i sammendraget på grunn avtypen verdipapir og utsteder, er det mulig at det ikke kan gis relevant informasjon knyttet til Elementet. I så fall er det inntatt en kort beskrivelse av Elementet i sammendraget sammen med benevnelsen ”ikke aktuelt”. I dette norske sammendraget skal definerte ord og uttrykk (angitt med stor forbokstav) som er oversatt til norsk forstås i samsvar med tilsvarende engelskspråklige ord eller uttrykk slik disse er definert i det engelskspråklige

• Prospektet. Noen eksempler på slike engelskspråklige motstykker til definerte ord og uttrykk som er oversatt til

norsk er som følger: Med "Prospektet" forstås "Prospectus", med "Konsernet" forstås "Group" eller "Western Bulk", med "Selskapet" forstås "Company", med "Tilbudet" forstås "Offering", med "Aksjene" forstås "Shares", med "Salgsaksjene" forstås "Sale Shares", med "Tilbudsaksjene" forstås "Offer Shares". og med "Tilleggsaksjene" forstås “Additional Shares”. Avsnitt A – Introduksjon og advarsel A.1 Advarsel Dette sammendraget bør leses som en innledning til Prospektet. Enhver beslutning om å investere i verdipapirene bør baseres på investorens vurdering av Prospektet i sin helhet. Dersom et krav knyttet til informasjonen i prospektet fremsettes for en domstol, kan saksøkende investor, i henhold til nasjonal lovgivning i sitt Medlemsland, bli pålagt å dekke kostnadene med å oversette Prospektet før rettsforhandlingene igangsettes. Sivilrettslig ansvar kan kun pådras for de personer som har satt opp sammendraget, herunder oversatt dette, men kun dersom sammendraget er misvisende, ikke korrekt eller usammenhengende når det leses i sammenheng med andre deler av Prospektet eller dersom sammendraget, når det leses sammen med andre deler av Prospektet, ikke gir nøkkelinformasjon som investorene behøver når de vurderer om de skal investere i slike verdipapirer. A.2 Samtykke til bruk av Prospektet Ikke aktuelt; Selskapet har ikke gitt samtykke til bruk av Prospektet for etterfølgende videresalg eller ved endelig plassering av Aksjene. Avsnitt B – Utsteder B.1 Juridisk og forretningsnavn Western Bulk ASA (the "Selskapet" eller "Western Bulk"). B.2 Hjemstat og rettslig

• rganisering,

Selskapet er et allmennaksjeselskap, gyldig stiftet og registrert i Norge etter reglene i allmennaksjeloven, og har organisasjonsnummer 980 747 026.

XI

lovgivning og stiftelsesland B.3 Nøkkelfaktorer ved virksomheten og hovedaktiviteter Konsernet er en tørrbulk- operatør med begrenset eierskap i skip, som benytter sin erfaring innen shipping, sine kunderelasjoner, markedsinformasjon og kommersiell forståelse til å generere marginer gjennom et høyt aktivitetsnivå. Konsernet leverer skip og transporttjenester for råvareprodusenter, forbrukere og forhandlere over hele verden, samtidig som de leverer last og tjenester for skipsredere. Frakttjenester leveres ved fraktkontrakter med ulik varighet, eller ved enkeltreiser gjennom spotmarkedet. For å kunne levere disse tjenestene, innbefrakter Konsernet i hovedsak skip på tidscertepartier (TC), men tidvis også på reisecerterpartier, med varighet som varierer fra én enkel reise (alt fra 10 til 100 dager) til flere år. Gjennom sine kundeorienterte fokus og evne til å levere tjenester av høy kvalitet, samt gjennom sin effektive organisering, har Konsernet vært i stand til å bygge en betydelig leverandør- og kundebase. Konsernet har økt volumet på sine aktiviteter og opererte flåte i betydelig grad over de siste fem årene. Fra en gjennomsnittlig flåte på rundt 50-60 skip i 2007-2008, opererer Konsernet i dag en flåte på mellom 130-150 skip. Siden 2008 har Konsernet gjort forretninger med mer enn 400 nye kunder, og gjorde i 2012 alene forretninger med mer enn 300 individuelle kunder. Gjennom denne aktiviteten får Konsernet tilgang til unik markedsinformasjon som gjør at Konsernet kan agere på arbitrasje muligheter i markedet, og også foreta mindre, kalkulerte og kontrollerte eksponeringer i fraktmarkedet. På slik måte benytter Konsernet sin kontraktmasse og informasjonsfordel til å identifisere og agere på kommersielle muligheter. En vesentlig del av disse fordelene oppstår fra Konsernets tilgang til fysisk opsjonalitet, særlig i form av opsjoner til å forlenge varigheten av tidscerterparier til en forhåndsavtalt

• pris. I tillegg har også Konsernet muligheten til å utnytte andre opsjoner, ved eksempelvis

å erstatte et gitt skip med et annet skip, eller ved å kunne variere kvantitet på last. Disse

• psjonene gir Konsernet fleksibiliteten til hele tiden å optimalisere sin portefølje, og gir
• ppside-potensiale med begrenset nedsiderisiko.

Forretningsmodellen er en volumdrevet marginvirksomhet som krever både bred og detaljert markedsinnsikt, systemer for effektivt å kunne distribuere informasjon innad i

• rganisasjonen, svært profesjonell riskostyring, effektiv økonomistyring og operativ
• kompetanse. Risikostyring er særlig avgjørende for å beskytte marginene mot uventede tap
• g for å gi et felles rammeverk for å vurdere kommersielle avgjørelser på en risikojustert
• basis. Konsernet har derfor brukt betydelige ressurser på å utvikle og implementere en

helhetlig risikostyring som inkluderer ulike modeller for å kvantifisere risiko, samt retningslinjer og rutiner igangsatt for begrense og kontrollere markedet, motparter og

• perasjonell risiko. Denne infrastrukturen er støttet av en sterk kultur for risikostyring,

som anerkjenner risikostyring som en vesentlig faktor og en særskilt verdidriver for

• rganisasjonen.

Konsernet har svært begrenset direkte eierskap i skip og andre varige driftsmidler. De viktigste eiendelene er Konsernets merkenavn, dets systemer og dets ansatte. Imidlertid har Konsernet, siden 2009 inngått leiekontrakter med kjøpsopsjoner i WB Shipholding for å støtte og dra nytte av sin kjernevirksomhet. WB Shipholding har to hovedmål: (1) dra fordel av Konsernets inngående kjennskap til markedet, blant annet styrker og svakheter ved ulike skipsdesign, men også fra sine relasjoner med verft og store rederier, til å ta

• pportunistiske eksponeringer i skipsmarkedet, og (2) forsyne WB Chartering med mer

langsiktig tilgang til skip.

XII

B.4a Vesentlige aktuelle trender som påvirker utsteder

• g

industrien som utsteder operer i

• I løpet av de første 8 månedene av 2013, var Supramax-markedet gjennomsnittlig

rundt 12,5 % lavere sammenliknet med samme periode i 2012, hvorav spotmarkedets volatilitet var 58 % lavere.

• Konsernet har fortsatt å øke sine handelsvolumer, og den gjennomsnittlige

flåtestørrelsen var for de første 8 månedene i 2012 rundt 12 % høyere enn for tilsvarende periode i 2012

• I juni 2013, søkte en av Selskapets største konkurrenter STX Pan Ocean Co.

gjeldsforhandling under koreansk konkursrett. STX Pan Ocean trader fortsatt sin egen flåte, samt det som gjenstår av den innleide flåten, men ellers har dets aktiviteter blitt betydelig redusert siden selskapet søkte gjeldsforhandling. B.5 Beskrivelse av Konsernet Selskapet er morselskapet i Western Bulk Konsernet. Selskapet har to heleide datterselskaper; WB Chartering AS og WB Shipholding AS (eiere av WB Management AS, WB Carriers AS, WB Pte LTD, WB Shipowning I AS, WB Shipowning III AS, WB Shipowning IV AS og WB Shipowning V AS som illustrert under, og av 51 % av aksjene i Western Bulk Shipowning II AS). Konsernets hovedvirksomhet blir i hovedsak utført gjennom datterselskapene WB Chartering AS og WB Shipholding AS. Selskapet utfører ingen operasjonelle aktiviteter. B.6 Meldepliktige stemmeretter Ulike stemmeretter Kontroll På datoen for dette Prospekter er Kistefos AS og Kistefos Investment AS, selskaper kontrollert av Christen Sveaas, eiere av 96,5 % av Selskapets aksjekapital. Etter gjennomføring av Tilbudet, og forutsatt full tegning av det maksimale antall Nye Aksjer

• g det maksimale salg av Sekundæraksjer (uten å ta i betraktning hvorvidt

Overtildelingsfasiliteten utnyttes), vil selskaper kontrollert av Christen Sveaas eie cirka 59 % av Selskapets utstedte aksjekapital. Etter gjennomføring av Tilbudet, og forutsatt full tegning av det minste antall Nye Aksjer og salg det minste antall Sekundæraksjer (uten å ta i betraktning hvorvidt Overtildelingsfasiliteten utnyttes), vil selskaper kontrollert av Christen Sveaas eie cirka 70 % av Selskapets utstedte aksjekapital. Såvidt Selskapet er klar over, fines det ingen annen fysisk eller juridisk person enn

• vernevnte som direkte eller indirekte har en aksjebeholding i Selskapet som overstiger 5

%, som er meldepliktig etter norsk rett. Aksjeeiere med eierandel på over 5 % må

• verholde reglene om meldeplikt som fremgår av Verdipapirhandelloven § 4-2.

Alle aksjer og aksjeeiere har like retter, herunder like stemmeretter. Christen Sveaas vil, gjennom sitt indirekte eierskap i Selskapet, ha muligheten til i betydelig grad å påvirke utfallet av saker som blir forelagt Selskapets generalforsamling for stemmegivning.

XIII

B.7 Utvalgt historisk finansiell nøkkelinformasj

• n

Den utvalgte kondenserte finansielle informasjonen som er inntatt i dette Prospektet bør leses i sammenheng med det aktuelle årsregnskapet og tilhørende noter som finnes på Selskapets hjemmeside, www.westernbulk.com. De utvalgte økonomiske data som presenters i dette avsnittet er hentet fra Konsernets reviderte og konsoliderte årsregnskaper for regnskapsårene som utløp desember 2012, 2011 og 2010. De følgende tabellene viser data som er utvalgt finansiell informasjon for Konsernet fra og for de tre og seks måneder som avsluttes 30. juni 2013 og 2012, og for hvert av de siste tre årene som ble avsluttet 31. desember 2010, 2011 og 2012. De presenterte tallene for 2010 og 2011 er i samsvar med NGAAP, mens tallene fra 2011 og samtlige etterfølgende perioder er i samsvar med IFRS. Konsolidert resultatregnskap USD (1 000)

IFRS N-GAAP 6 mnd avsluttet

• 30. juni

2013 6 mnd avsluttet

• 30. juni

2012 3 mnd avsluttet

• 30. juni

2013 3 mnd avsluttet

• 30. juni

2012 2012 2011 2011 2010 Bruttoinntekt 521 139 548 728 278 004 278 797 1 143 580 1 027 843 1 027 843 1 081 976 Reiseavhengige kostnader

• 257 323
• 275 056
• 130 455
• 137 034
• 560 257
• 435 662
• 435 662
• 338 182

Leiekostnader skip

• 231 132
• 241 151
• 127 963
• 121 150
• 500 551
• 521 186
• 521 186
• 649 840

Andre utgifter knyttet til skip

• 5 899
• 5 854
• 3 027
• 2 933
• 11 617
• 11 558
• 11 558
• 7 496

Netto TC resultat 26 784 26 667 16 559 17 681 71 155 59 437 59 437 86 459 Administrasjonsutgifter

• 17 314
• 18 138
• 8 405
• 9 099
• 39 922
• 37 372
• 37 235
• 42 172

Tonnasjeskatt

• 428
• 453
• 214
• 226
• 906
• 613
• Resultat før avskrivninger og

nedskrivninger, finansposter og inntektsskatt (EBITDA) 9 042 8 077 7 940 8 356 30 327 21 452 22 202 44 287 Nedskrivning og avsetning for tapsbringende kontrakter

• 2 400
• 1 900
• 3 333

Avskrivninger

• 1 186
• 1 008
• 556
• 567
• 2 474
• 1 080
• 1 638
• 2 377

Gevinst/ (tap) salg av driftsmidler

• 1
• 1
• 1 531

2 529

• Driftsresultat

7 856 7 069 7 384 10 189 27 853 23 803 23 093 45 243 Finansinntekter 1 109 247 1 215 11 100 569 569 365 Finanskostnader

• 1 389
• 2 863
• 1 196
• 2 341
• 3 239
• 1 535
• 1 571
• 2 558

Andel av resultat fra tilknyttede selskaper

• 644
• 208
• 271
• 80
• 643
• 1 262
• 2 228
• 316

Urealisert verdiendring på derivater

• 9 871
• 745
• 8 578
• 10 701

115

• 909
• Resultat før skatt fra videreført

virksomhet

• 2 939

3 500

• 1 446
• 2 923

24 186 20 666 19 863 42 734 Skattekostnad 1

• 64
• 4
• 60

325

• 1 663

240

• 3 636

Årets resultat fra videreført virksomhet

• 2 938

3 436

• 1 450
• 2 983

24 511 19 004 20 103 39 098 Tilskrives: Aksjeeiere i morselskapet

• 2 958

3 367

• 1 468
• 2 924

24 386 18 001 19 356 39 228 Minoritetsinteresser 20 68 18

• 59

125 1 003 747

• 130

Totalt

• 2 938

3 436

• 1 450
• 2 983

24 511 19 004 20 103 39 098 Resultat per aksje (USD)

• 0.21

0.26

• 0.11
• 0.23

1.81 1.44 1.55 3.16

XIV

Konsolidert kontantstrømoppstilling USD (1 000)

IFRS N-GAAP 6 mnd avsluttet

• 30. juni

2013 6 mnd avsluttet

• 30. juni

2012 3 mnd avsluttet

• 30. juni

2013 3 mnd avsluttet

• 30. juni

2012 2012 2011 2011 2010 KONTANTSTRØM FRA DRIFTEN Resultat før skatt

• 2 938

3 500

• 1 446
• 2 923

24 186 20 666 19 863 42 734 Betalt skatt

• 1 331
• 2 176
• 663
• 1 026
• 3 347
• 2 339
• 2 339

43 Avskrivninger 1 186 1 008 556 567 2 474 1 080 1 638 2 377 Avsetning for tapsbringende kontrakter

• 2 400
• 1 900
• Urealisert verdiendring på derivater.

8 567 3 512 6 982 12 700 1 324 3 544

• Nedskrivninger

772

• 1 175

1 055

• 894
• 572
• 144
• 144

3 638 Andel av resultat fra tilknyttede selskaper 644 208 271 80 643 1 262 2 228 316 Gevinst/(tap) fra avhendelse driftsmidler

• 1
• 1
• 1
• 1 841
• 2 838
• Endringer i kortsiktige fordringer og

kortsiktig gjeld

• 32 165
• 29 438
• 23 548
• 24 101
• 23 197

8 232 10 153 12 854 Netto kontantstrøm fra/ (til) operasjonelle aktiviteter

• 25 266
• 24 562
• 16 794
• 17 998

1 510 28 560 28 560 61 963 Kontantstrøm fra investeringer Investeringer i varige driftsmidler

• 471
• 650
• 403
• 167
• 707
• 187
• 187
• 25 405

Salg av varige driftsmidler

• 40 133

40 133

• Investeringer i / salg av finansielle eiendeler
• 657

4 120

• 657

28 495 4 120

• 20 255
• 20 255
• Investeringer i tilknyttede selskaper
• 4

250

• 4
• 265
• 7 020
• 7 020
• 5 350

Endringer langsiktige fordringer

• 76
• 72
• 39
• 35
• 154
• 1 539
• 1 538
• Netto kontantstrøm fra investeringer
• 1 208

3 648

• 1 102

28 293 3 524 11 132 11 133

• 30 755

Kontantstrøm finansieringer Endringer i rentebærende kortsiktig og langsiktig gjeld 51 100

• 9 138

41 450 9 307

• 19 408
• 10 411
• 10 411

13 329 Lån til nærstående

• 24 103
• 10 042

Betalt utbytte og konsernbidrag

• 27 800
• 27 800
• 37 195
• 37 195
• 25 121

Egenkapital mottatt fra / (betalt til) minoritetsinteresser

• 34
• 5 352
• 34
• 1 874
• 5 352
• Kapitalforhøyelse
• 7 997

8 539 8 539 5 035 Netto kontantstrøm finansieringer 23 266

• 14 490

37 719 7 433

• 16 763
• 39 067
• 39 067
• 16 800

Netto endring i kontanter / kontantekvivalenter

• 3 209
• 35 405

19 822 17 728

• 11 728

626 626 14 408 Kontanter / kontantekvivalenter ved periodens begynnelse 65 316 77 044 42 284 23 912 77 044 76 417 76 417 62 010 Kontanter / kontantekvivalenter ved periodens utløp 62 107 41 639 62 107 41 639 65 316 77 044 77 044 76 417 Bundne midler ved utgangen av perioden 5 583 5 025 5 583 5 025 5 506 5 285 5 285 2 817 Tilgjengelige kontanter og kontantekvivalenter ved periodens utløp 56 524 36 614 56 524 36 614 59 810 71 759 71 759 73 600

Konsolidert balanse USD (1 000)

EIENDELER IFRS N-GAAP 30.06.2013 30.06.2012 31.12.2012 31.12.2011 31.12.2011 31.12.2010 Anleggsmidler Utsatt skattefordel 1 997 1 787 2 163 1 781 4 296 1 235 Driftsmidler 22 670 24 794 23 385 25 151 24 359 63 415 Investering i tilknyttede selskaper 9 296 10 374 9 940 10 833 9 825 5 034 Investering i finansielle eiendeler 23 885 247 22 781 30 224 30 224

• Derivater

5 882 1 521 6 537 4 657

• Langsiktige fordringer

1 787 1 628 1 710 1 556 1 556 17 Totale anleggsmidler 65 517 40 352 66 516 74 202 70 260 69 701 Omløpsmidler

XV

Beholdninger 58 372 56 072 52 276 44 831 44 831 22 051 Kundefordringer 44 443 38 275 52 488 36 718 38 293 38 362 Andre fordringer 5 783 13 891 3 981 41 41 21 203 Forskuddsbetalte kostnader 3 070

• -
• Derivater

1 308 11 365 9 141 5 777

• Andre finansielle eiendeler

4 21 714 3 3 3 3 Bankinnskudd 62 107 41 639 65 316 77 044 77 044 76 417 Totale omløpsmidler 175 087 182 957 183 205 164 414 160 212 158 036 TOTALE EIENDELER 240 604 223 308 249 721 238 615 230 472 227 737 EGENKAPITAL OG GJELD IFRS N-GAAP 30.06.2013 30.06.2012 31.12.2012 31.12.2011 31.12.2011 31.12.2010 Egenkapital Aksjekapital 9 914 9 914 9 914 9 363 9 363 8 757 Overkursfond 15 379 15 379 15 379 7 933 7 933

• Annen innskutt egenkapital

15 214 12 684 16 308 12 684 12 684 12 684 Opptjent egenkapital 29 799 36 783 59 346 31 687 29 080 47 314 Fond for eiendeler tilgjengelig for salg

• 730
• 2 014
• 1 177
• Minoritetsinteresser

6 272 6 232 6 290 11 555 11 167 4 905 Total egenkapital 75 848 78 978 106 059 73 221 70 226 73 660 Langsiktig gjeld Utsatt skatteforpliktelse 1 064 2 028 1 152 2 025 2 025 2 629 Pensjonsforpliktelser 1 345 3 755 1 399 3 594 457

• Derivater

2 775 333 2 042 303

• Gjeld til kredittinstitusjoner

60 700 12 256 11 594 12 919 14 244 42 769 Annen langsiktig gjeld 1 556 1 773 6 662 8 711

• 285

Total langsiktig gjeld 67 440 20 145 22 850 27 553 16 726 45 683 Kortsiktig gjeld Leverandørgjeld 32 018 34 129 28 704 36 493 36 493 18 879 Forhåndsbetalt fraktinntekter 13 147 19 722 21 927 36 030 36 030 21 010 Forskuddsbetalte andre inntekter

• 6 260

1 568

• 10 234

Betalbar skatt 506 1 463 1 439 3 102 3 102 2 100 Påløpte utgifter 37 098 33 478 39 379 22 667 22 667 27 561 Avsetninger 5 200 5 200 5 200 5 500 5 500

• Derivater
• 2 711
• 1 708
• Kassekreditt
• 9 639

31 18 114 18 114

• Forpliktelser til kredittinstitusjoner

1 325 1 325 1 325 1 325

• Annen kortsiktig gjeld

8 022 10 258 21 238 12 904 21 614 28 609 Total kortsiktig gjeld 97 316 124 185 120 812 137 842 143 520 108 394 Total gjeld 164 756 144 330 143 662 165 394 160 246 154 077 TOTAL EGENKAPITAL OG GJELD 240 604 223 308 249 721 238 615 230 472 227 737

B.8 Pro forma finansiell informasjon Ikke aktuelt. Det finnes ingen pro forma finansiell informasjon. B.9 Resultatprognose eller estimat Ikke aktuelt. Det er ikke utarbeidet noen resultatprognose eller estimat. B.10 Forbehold i revisjonsrapporten Ikke aktuelt. Det er ingen forbehold i revisjonsrapportene. B.11 Arbeidskapital På datoen for dette Prospektet, er Selskapet av den oppfatning av Konsernets arbeidskapital er tilstrekkelig for dets nåværende behov, særskilt hva gjelder de neste 12 måneder fra datoen for dette Prospektet. Avsnitt C – Verdipapirene

XVI

C.1 Type

• g

klasse verdipapir tatt opp til notering og identifikasjonsnummer Noteringen innbefatter samtlige av Selskapets utstedte Aksjer, herunder 137 998 850 eksisterende aksjer og minimum 13 636 364 og maksimum 20 000 000 Nye Aksjer som skal utstedes i forbindelse med Tilbudet. Tilbudet består av minimum 43 324 061 og maksimum 62 414 970 Tilbudsaksjer, hvorav minimum 13 636 364 og maksimum 20 000 000 Tilbudsaksjer er Nye Aksjer som skal utstedes av Selskapet og som skal besluttes utstedt av Styret i henhold til en fullmakt gitt fra Selskapets generalforsamling den 28. september 2013, og minimum 29 687 697 og maksimum 42 414 970 Tilbudsaksjer er eksisterende Annenhåndsaksjer som tilbys fra Selgende Aksjeeiere. Selskapet har én aksjeklasse, og samtlige aksjer har like rettigheter. De Nye Aksjene vil fra tidspunktet for levering, være registrert på det samme ISIN- nummer som de nye aksjene, som er ISIN-nummer 001 0691298. C.2 Valuta NOK C.3 Antall aksjer utstedt

• g pålydende verdi

Per datoen for dette Prospektet er Selskapets autoriserte aksjekapital NOK 68 999 425 bestående av 137 998 850 Aksjer, hver pålydende NOK 0,50. Samtlige Aksjer er fullt innbetalte. C.4 Rettigheter knyttet til verdipapirene. De Nye Aksjene skal i alle henseender likestilles med de eksisterende Aksjer. Tilbudsaksjene vil bære fulle aksjeeierrettigheter i Selskapet fra kapitalforhøyelsen som ligger til grunn for Tilbudet er registrert i Foretaksregisteret, som forventes å skulle skje på eller rundt 23. oktober 2013. Tilbudsaksjene vil være kvalifisert for eventuelt utbytte som Selskapet måtte vedta etter den overnevnte registreringen. Samtlige Aksjer, inkludert Tilbudsaksjene, vil ha stemmerettigheter og andre rettigheter og plikter som følger allmennaksjeloven, og reguleres av norsk rett. C.5 Begrensninger i verdipapirenes

• msettelighet

Ikke aktuelt. Selskapets Aksjer er fritt omsettelige. C.6 Søknad for opptak til notering på regulert marked Selskapets Aksjer er ikke notert på Oslo Børs eller på annen børs eller annet notert

• marked. Selskapet har søkt om notering av Selskapets aksjer på Oslo Børs, eller

alternativt på Oslo Axess. Styret i Oslo Børs forventes å avgjøre Selskapets søknad i et ekstraordinært styremøte som avholdes 15. oktober 2013. C.7 Utbyttepolitikk Selskapet tar sikte på å utbetale regulært utbytte på en halvårlig basis tilsvarende 75 %

• 100 % av sitt justerte netto overskudd (netto overskudd etter skatt eksklusive

urealisert gevinst og tap på derivater inngått for sikring fremtidige resultater). Se avsnitt 14 vedrørende utbytte og avsnitt 13.6.2 for begrensninger på utbytte som følger av låneavtaler. Avsnitt D – Risiko

XVII

D.1 Vesentlige risiki knyttet til Selskapet eller dets bransje

• Det foreligger risiko for at Konsernet ikke får inngått ytterligere langsiktige avtaler
• m tidsbefraktninger og at det ikke oppnår ny finansiering og/eller ikke får innhentet

ny egenkapital, hvilket kan påvirke muligheten for å implementere Konsernets vekststrategi.

• For å opprettholde igangværende virksomhet og for å ivareta Konsernets

vekststrategi, er Konsernet avhengig av å opprettholde og utvide eksisterende kundeforhold, samt av å tiltrekke seg nye kunder.

• Dersom selskapet ikke evner å tiltrekke seg og beholde nøkkelpersonell, vil dette

kunne ha negativ innvirkning på suksessen til Selskapet og Konsernet, og på Konsernets muligheter for utvidelse av virksomheten og for opprettholdelsen og videreutviklingen av et avansert system for risikohåndtering.

• Det foreligger risiko for at Konsernet utsettes for svikaktige handlinger av ansatte
• g/eller tredjepersoner i strid med Konsernets interesser og/eller at Konsernet ikke

evner å implementere tilfredsstillende prosedyrer for motvirkning av bestikkelser for å unngå ansvar for korrupsjonshandlinger begått av en ansatt.

• Konsernets retningslinjer og prosedyrer for risikohåndtering har tidligere ikke vist

seg å fungere fullt ut tilfredsstillende og kan heller ikke i fremtiden garanteres å fungere fullt ut tilfredsstillende, hvilket kan utsette Konsernet for uidentifisert eller uforutsett risiko.

• Konsernets fremtidige overskudd avhenger dels av dets evne til å identifisere og dra

nytte av arbitrasjemuligheter og volatilitet, og der slike muligheter ikke eksisterer som følge av blant annet et lavt marked, begrenset likviditet og/eller informasjon, vil dette kunne ha negativ innvirkning på Konsernets økonomiske resultat. Videre vil evnen til å dra nytte av slike muligheter som har sitt utspring i markedsvolatilitet avhenge av en rekke ulike faktorer som tilgang til en strøm av forretningsmuligheter, kjennskap til og forståelse av all risikoeksponering og av evnen til å ha en disiplinert tilnærming til markedsdisponering, hvilke alle kan bli tapt for Konsernet.

• Det er ingen garanti for at WB Chartering vil klare å opprettholde det historiske

forholdet mellom markedsnivået og netto TC margin. Det foreligger videre risiko for at det nåværende og historiske forholdet ikke er representativt for fremtidige forhold,

• g ikke representerer årsaksforholdene mellom margin og markedsnivå og/eller
• volatilitet. Dette kan ha negativ innvirkning på Konsernets driftsresultat og

finansielle stilling.

• Konsernet er involvert i tvister og krav som kan ha negativ innvirkning på

Konsernets resultat og kontantstrøm.

• Konsernet er som helhet eksponert mot betydelig risiko med hensyn til endringer i

eller fortolkninger av gjeldende skatteregler og/eller med hensyn til eventuelle fremtidige restruktureringer av Konsernet som kan påvirke Konsernets virksomhet, driftsresultat og finansielle stilling.

• Konsernet er utsatt for betydelig motpartsrisiko. Med hensyn til den innleide delen

av flåten, dersom fraktmarkedet skulle styrke seg fra nivået fartøyet er innleid på, vil en skipseier kunne fristes til å trekke fartøyet tilbake fra Konsernet for å oppnå alternativ beskjeftigelse. På fraktsiden, dersom markedsratene skulle falle til et lavere nivå enn det nivået som Konsernet har forpliktet seg til, vil en lastekunde kunne fristes til å misligholde en avtale med Konsernet for isteden å forsøke å redusere fraktkostnadene til et lavere nivå.

• Flere av Konsernets langsiktige tidscertepartier er nybygg som kan få utsatt
• leveringstid. Videre er noen av de langsiktige tidscertepartiene betinget av at skipet

faktisk leveres fra verft til eieren, hvilket kan avhenge av omstendigheter utenfor Konsernets kontroll, herunder at eieren kansellerer byggekontrakten.

• Tørrlastmarkedet er særlig konkurransepreget og avhenger av faktorer som lave

etableringsbarrierer, lav transparens, et særlig fragmentert marked med mange

XVIII

markedsaktører, samt tilgang til finansiering, hvilket kan utgjøre et hinder for Konsernets evne til fullt ut å realisere sine ambisjoner om vekst og/eller ha betydelig negativ innvirkning på Konsernets samlede virksomhet.

• Endringer med hensyn til nivåer og mønstre for global økonomisk vekst, det særlig

konkurransepregede klimaet i den globale shippingindustrien og endringer i tilbud og etterspørsel for skipskapasitet medfører at tørrlastshipping har et sterkt syklisk preg

• g kan medføre en betydelig negativ innvirkning på Konsernets virksomhet,

finansielle stilling, driftsresultat og likviditet.

• Terrorangrep, piratvirksomhet, større grad av konfliktsituasjoner, politisk uro eller

krig kan føre til økonomisk ustabilitet, økte kostnader og sammenbrudd av Selskapets virksomhet.

• Operasjonelle og andre feil kan medføre ansvar for Konsernet.
• Innehavere av sjørettslige krav kan ta arrest i skip eid eller innleid av Konsernet.
• Ettersom enkelte låneavtaler inngått av Selskapet eller Konsernet inneholder

kombinerte misligholdsklausuler og krever oppfyllelse av bestemte finansielle gjeldsbetingelser, vil Konsernets evne til å oppfylle slike finansielle gjeldsbetingelser kunne innvirke på Selskapets evne til å unngå mislighold under gjeldsinstrumenter

• g befraktningsavtaler.
• Konsernet vil måtte refinansiere hele eller deler av gjelden sin i fremtiden, hvilket

innebærer en refinansieringsrisiko på forfallsdatoen for nåværende gjeldsforpliktelser.

• Konsernet handler betydelige volumer av derivater, hvilke er gjenstand for daglig

marginering, hvilket kan medføre betydelig inn- og utstrømminger av kontanter dersom det forekommer betydelige bevegelser i fraktrater og oljepriser.

• Konsernet er eksponert mot valutakurssvingninger med hensyn til inntekter og

utgifter i andre valutaer enn amerikanske dollar (USD).

• Konsernet er eksponert mot svingninger i arbeidskapital. Konsernet har inngått

låneavtaler, hvilke sammen med en rekke andre stilte garantier fordrer at Konsernet til enhver tid har 20 million USD i likvider for å oppfylle sine avtaler. Derav kan Konsernet få behov for ytterligere midler og komme til å søke å reise slike midler ved utstede aksjer eller gjeldsinstrumenter. D.3 Vesentlige risiki knyttet til aksjene

• Kursen på Aksjene kan fluktuere betydelig.
• Det foreligger ikke et eksisterende market for Aksjene, og det foreligger risiko for at

det ikke utvikles et marked med tilstrekkelig likviditet.

• Fremtidige salg av Aksjene av kontrollerende aksjeeier kan redusere kursen på

Aksjene.

• Investorer i De forente stater kan møte vanskeligheter med hensyn til

gjennomføringen i Norge av rettsavgjørelser mot Selskapet, dets styremedlemmer eller ledelse oppnådd i De forente stater.

• Overdragelse av Aksjer er gjenstand for restriksjoner etter gjeldende rettsregler om

verdipapirer i De forente stater og andre jurisdiksjoner.

• Aksjeeiere utenfor Norge vil være utsatt for valutakursrisiko.

Avsnitt E – Tilbudet

XIX

E.1 Nettoproveny Totale utgifter Nettoprovenyet av Tilbudet forventes å utgjøre cirka cirka NOK 264 millioner. Selskapets totale utgifter i forbindelse med Tilbudet, inkludert utgifter forbundet med utarbeidelsen av dette Prospektet, vil utgjøre cirka NOK 36 millioner. E.2a Bakgrunnen for tilbudet Bruk av provenyet Nettoprovenyet Tilbudet har til hensikt å bringe Selskapet i samsvar med kravene for notering på Oslo Børs ved å ha minst 500 aksjeeiere, eller alternativt kravene for notering på Oslo Axess ved å ha minst 100 aksjeeiere. En notering på Solo Børs, alternativt på Oslo Axess, vil gi et regulert sted for handel i Aksjene, gi større likviditet i Aksje og gjøre dem til mer attraktive

• investeringsobjekter. Det vil også ytterligere legge til rette for bruk av kapitalmarkedene for å

øke egenkapitalen dersom Selskapet skulle trenge dette i fremtiden, og gjør Selskapet i stand til å bruke sine Aksjer som oppgjørsvaluta i fremtidige oppkjøp og fusjoner, dersom dette blir aktuelt. Selskapet har til hensikt å bruke nettoprovenyet av Tilbudet som egenkapital for å støtte videre vekst i WB Chartering og som opportunistisk vekst i WB Shipholdings aktiva, inkludert flere leieavtaler med kjøpsopsjoner. Selskapet anslår at nettoprovenyet av Tilbudet til Selskapet etter fradrag for estimerte provisjoner og utgifter til Managere og øvrige rådgivere, samt andre utgifter I forbindelse med Noteringen vil være utgjøre cirka NOK 264 millioner. E.3 Vilkår for tilbudet Under følger en kort oversikt over vilkårene og tidstabellen for Tilbudet:

Date Oppstart Bookbuildingperioden for det Institusjonelle Tilbudet .................................................... 3. oktober 2013, kl. 09:00 Oppstart av Tilbudsperioden for det Offentlige Tilbudet og Ansattetilbudet ................................ 3. oktober 2013, kl. 09:00 Utløpet av Tilbudsperioden for det Offentlige Tilbudet og Ansattetilbudet .................................. 17. oktober 2013, kl. 12:00(1) Lukking av Bookbuildingperioden for det Institusjonelle Tilbudet ............................................... 17. oktober 2013, kl. 16:30(1) Fordeling av Tilbudsaksjer .............................................................................................................. På eller rundt 18. oktober 2013 Distribution of contract notes .......................................................................................................... På eller rundt 23. oktober 2013 Betalingsfrist .................................................................................................................................... På eller rundt 23. oktober 2013 Registrering av kapitalforhøyelsen og utstedelse av de Nye Aksjene ............................................ På eller rundt 23. oktober 2013 Levering av Tilbudsaksjene............................................................................................................. På eller rundt 23. oktober 2013 Første handelsdag på Oslo Børs ...................................................................................................... På eller rundt 24. oktober 2013 _______________ (1) Forbehold om forkortelse eller forlengelse. I den grad Bookbuilding perioden eller Tilbudsperioden fremskyndes eller utvides, kan alle andre datoer som er nevnt i denne tabellen forlenges tilsvarende

Tilbudet består av minimum 43 324 061 og maksimum 62 414 970 Tilbudsaksjer, hvorav minimum 13 636 364 og maksimum 20 000 000 Tilbudsaksjer er Nye Aksjer som skal utstedes av Selskapet og som skal vedtas av Styret i henhold til fullmakt besluttet av Selskapets generalforsamling 28. september 2013, og minimum 29 687 697 og maksimum 42 414 970 Tilbudsaksjer som er eksisterende Annenhåndsaksjer tilbudt av de Selgende

• Aksjeeierne. Gjennom Tilbudet har Selskapet til hensikt å utstede Nye Aksjer til en total

Tilbudspris på NOK 300 millioner og de Selgende Aksjeeierne har til hensikt å selge Annenhåndsaksjer tilsvarende en total Tilbudspris mellom NOK 636 millioner og NOK 953

• millioner. Det endelige antall Tilbudsaksjer som skal utstedes og selges i forbindelse med

Tilbudet vil bli endelig avgjort av Selskapet og Tilretteleggene etter utløpet av Bookbuildingperioden. Tilbudet omfatter tre transjer:

• Det Institusjonelle Tilbudet, hvorav Tilbudsaksjer tilbys til (i) institusjonelle og

profesjonelle investorer i Norge, (ii) til investorer utenfor Norge og De forente Stater i henhold til gjeldende unntak for lokale prospektkrav og andre krav til registrering,

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• g (iii) i De forente Stater til kvalifiserte institusjonelle kjøpere (QIBs) som definert i

Rule 144A av U.S. Securities Act, betinget av en nedre bestilling per investor på NOK 2 000 000.

• Et Offentlig Tilbud, hvor Tilbudsaksjer tilbys til allmennheten med en nedre grense

per bestilling på NOK 10 500 og en øvre grense per bestilling på NOK 1 999 999 for hver investor. Investorer i det Offentlige Tilbudet vil motta en rabatt på NOK 1 500 på den samlede kjøpesummen for Tilbudsaksjene tildelt slike investorer.

• Et Ansattetilbud, hvor Tilbudsaksjene tilbys Kvalifiserte Ansatte i Konsernet, og som

er betinget av en nedre grense per bestilling på NOK 10 500 for hver Kvalifisert

• Ansatt. Hver Kvalifiserte Ansatt vil motta en rabatt på NOK 3 000 på den samlede

kjøpesummen for Tilbudsaksjene tildelt slik Kvalifisert Ansatt (dvs. en rabatt på NOK 1 500 i tillegg til rabatten i det Offentlige Tilbudet). Kvalifiserte Ansatte som deltar i Ansattetilbudet vil, betinget av særskilte begrensninger, motta full tildeling av sin bestilling av Tilbudsaksjer; og Bookbuildingperioden for det Institusjonelle Tilbudet er forventet å løpe fra kl. 09:00 norsk tid 3. oktober 2013 til klokken 16:30 norsk tid 17. oktober 2013. Bestillingsperioden for det Offentlige Tilbudet og Ansatte Tilbudet vil løpe fra kl. 09:00 norsk tid 3. oktober 2013 til klokken 12:00 norsk tid 17. oktober 2013. Bookbuildingperioden og/eller Bestillingsperioden kan forkortes eller forlenges ved Selskapets eget skjønn, men vil ikke i noe tilfelle avsluttes tidligere enn 10. oktober 2013 kl. 16:30 norsk tid eller forlenges utover 31. oktober 2013 kl. 16:30 norsk tid. Det er foreløpig lagt til grunn at 10 % av Tilbudet vil bli reservert for bestillinger gjennom det Offentlige Tilbudet og Ansattetilbudet, og at 90 % av Tilbudet i første omgang blir reservert for det Offentlige Tilbudet. Den endelige fordelingen mellom transjene vil imidlertid avgjøres av Styret i samråd med Tilretteleggerne den 17. oktober 2013 på grunnlag av nivået på bestillingene i de respektive transjer i forhold til den samlede bestillingen i Tilbudet, og med hensyn til kravene om fri flyt av aksjer og antallet aksjeeiere knyttet til notering av aksjene på Oslo Børs, alternativt på Oslo Axess. Selskapet forbeholder seg retten til å gå bort fra den foreløpig antatte fordelingen mellom transjene uten ytterligere varsel og etter eget skjønn. Tildeling av de Nye Aksjene i det Institusjonelle Tilbudet er forventet formelt å avgjøres av Selskapet i samråd av Tilretteleggerne på eller rundt 17. oktober 2013. Meldinger om fordelingen i det Institusjonelle Tilbudet forventes å utstedes av Tilretteleggerne på eller rundt

• 18. oktober 2013. Tildelingen i det Offentlige Tilbudet og i Ansattetilbudet vil finne sted etter

utløpet av Bestillingsperioden. Skriftlige meldinger om tildelinger i det Offentlige Tilbudet og i Ansattetilbudet forventes å bli sendt ut av Swedbank First Securities, i egenskap av

• ppgjørsagent i det Offentlige Tilbudet på eller omkring 17. oktober 2013.

Betaling for Tilbudsaksjene tildelt tegnere i det Institusjonelle Tilbudet vil finne sted mot levering av Tilbudsaksjene (når det gjelder de Nye Aksjene i form av lånte aksjer) til den norske VPS-kontoen som angitt av investoren. Betaling og levering av Tilbudsaksjene er forventet å finne sted på eller rundt 23. oktober 2013. Ved å fullføre Bestillingsskjemaet, vil hver investor i det Offentlige Tilbudet og Ansattetilbudet autorisere Swedbank First Securities (på vegne av tilretteleggerne) til å belaste investorens norske bankkonto for den totale kjøpesummen for de bestilte og tildelte Tilbudsaksjer på eller rundt den 23. oktober 2013, og det må være dekning for den totale kjøpesummen på den oppgitte bankkonto fra og med 22. oktober 2013. Forutsatt rettidig betaling fra investoren, vil Tilbudsaksjene tildelt til investorer i det Offentlige Tilbudet og i Ansattetilbudet forventes å bli levert til investorens VPS-konto og være tilgjengelig for

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investoren på eller rundt 23. oktober 2013. E.4 Vesentlige interesser Tilretteleggerne eller deres nærstående har fra tid til annen ytet, og vil I fremtiden yte, investeringstjenester og kommersielle banktjenester til Selskapet og dets nærstående som ledd i ordinær virksomhet. For slike tjenester kan de ha mottatt og vil kunne fortsette å motta vanlige honorarer og provisjoner. Tilretteleggerne har ikke til hensikt å fremlegge omfanget av slike investeringer eller transaksjoner med mindre de er juridisk eller regulatorisk forpliktet til dette. Videre er en del av provisjonen som skal utbetales til Tilretteleggerne for deres tjenester i forbindelse med Tilbudet, kalkulert på basis av bruttoprovenyet av Tilbudet. De Selgende Aksjeeiere har interesse i Tilbudet i egenskap av å være aksjeeiere i Selskapet og som en konsekvens av det foreslåtte salget av Annenhåndsaksjer som utgjør en del av Tilbudet. Selskapet vil motta provenyet av Tilbudet, bortsett fra provenyet fra Annenhåndssalget, som vil mottas av Selgende Aksjeeiere. Utover det overnevnte er Selskapet ikke kjent med noen interesse noen fysiske eller juridiske personer involvert i Tilbudet har, som er vesentlig for Tilbudet. E.5 Selgende aksjeeiere

• g

bindingsavtaler Tilretteleggerne har inngått bindingsavtaler med de Selgende Aksjeeiere. Under bindingsavtalene har Hovedselgende Aksjeeiere og de øvrige Selgende Aksjeeiere avtalt at de ikke skal tilby, selge, forplikte eller på annen måte overføre Aksjer i Selskapet i en periode på henholdsvis 180 dager og 365 dager etter Noteringen uten skriftlig forhåndssamtykke fra Tilretteleggerne. E.6 Utvanning Forutsatt fulltegning av Tilbudet og avhengig av endelig Tilbudspris vil Tilbudet medføre en utvanning på cirka 10 % og 14 % for Aksjeeiere som ikke tegner Aksjer i Tilbudet. E.7 Kostnader som vil kreves fra investorene Ikke aktuelt. Kostnadene relater til Tilbudet vil bli dekket av Selskapet og de Selgende Aksjeeierne.

Western Bulk ASA Henrik Ibsens gate 100 P.O. Box 2868 Solli 0230 Oslo Norway Telephone: +47 23 13 34 00 Telefax: +47 23 13 34 91 www.westernbulk.no

Joint Lead Managers and Bookrunners

ABG Sundal Collier Norge ASA Munkedamsveien 45E P.O. Box 1444 Vika N-0115 Oslo Norway Tel: +47 22 01 60 00 Fax: +47 22 01 60 60 www.abgsc.com Pareto Securities AS Dronning Mauds gt 3 P.O. Box 1411 Vika NO-0115 Oslo Norway Telephone: +47 22 87 87 00 Telefax: +47 22 87 87 15 www.pareto.no Swedbank First Securities Filipstad Brygge 1 P.O.Box 1441 Vika N-0115 Oslo Norway Tel: +47 23 23 80 00 Fax: +47 23 23 80 11 www.swedbank.no