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Sep 18, 2022 •29 likes •1.81k views

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

  1. 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 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 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". i

  2. 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. ii

  3. 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 or 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. iii

  4. 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 other applicable provision of the Securities and Futures Act. iv

  5. 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

  6. 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 of 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 This summary should be read as an introduction to the Prospectus. warnings 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 Not applicable; no consent is granted by the Company to the use of the Prospectus for use of the subsequent resale or final placement of the Shares. prospectus by financial intermediaries Section B – Issuer and any guarantor B.1 Legal and Western Bulk ASA (the "Company" or "Western Bulk" ). commercial name B.2 Domicile/ The Company is a public limited liability company incorporated and registered in Norway Legal form/ under the Public Limited Companies Act with business organisation number 980 747 026. Legislation/ Country of incorporation 2

  7. B.3 Key factors of The Group is an asset-light and trading-oriented dry bulk operator, using its shipping operations and experience, customer relationships, market intelligence and trading skills to generate a principal margin from a high-volume activity. The Group provides vessels and transportation activities 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 optionality, 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 opportunistic exposures towards the asset market, and (2) to provide WB Chartering with longer term access to vessels. B.4a Significant � During the first 8 months of 2013, the Supramax market was on average about recent trends 12.5% lower than during the same period in 2012, whereas the spot market affecting the 3

  8. Issuer and the volatility was 58% lower. industry in � The Group has continued to increase its trading volumes, and the average fleet which it operates 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 of The Company is the parent company of the Western Bulk Group. The Company has two group 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% of 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 operational activities are being conducted by the Company. B.6 Notifiable voting As the date of this Prospectus Kistefos AS and Kistefos Investment AS, controlled by rights 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. Different voting All Shares and shareholders have equal rights, including voting rights. rights Christen Sveaas will, through his indirect ownership in the Company, have the ability to Control significantly influence the outcome of matters submitted for vote by the shareholders of 4

  9. the Company. B.7 Selected The selected condensed financial information set forth in this Prospectus should be read in historical key conjunction with the relevant financial statements and the notes to those statements which financial can be found on the Company's webpage, www.westernbulk.com. information 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 6 months 3 months 3 months ended 30 ended 30 ended 30 ended 30 June 2013 June 2012 June 2013 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 operations -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 operations -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 5

  10. Consolidated Cash Flow Statement USD (1 000) IFRS N-GAAP 6 6 3 3 months months months months ended ended 30 ended 30 ended 30 30 June June June June 2013 2012 2013 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 of the period 56 524 36 614 56 524 36 614 59 810 71 759 71 759 73 600 6

  11. 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 IFRS N-GAAP EQUITY AND LIABILITIES 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 Not applicable. There is no pro forma financial information. B.8 Pro forma financial information 7

  12. B.9 Profit forecast Not applicable. No profit forecast or estimate is made. or estimate Not applicable. There are no qualifications in the audit reports. B.10 Audit report qualifications B.11 Working As of the date of this Prospectus, the Company is of the opinion that the Group's working Capital 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 Listing comprises all of the Company's issued Shares, hereunder 137 998 850 existing the type and Shares and minimum 13 636 364 and maximum 20 000 000 New Shares to be issued in the class of the connection with the Offering. securities and the security The Offering consists of minimum 43 324 061 and maximum 62 414 970 Offer Shares, of identification which minimum 13 636 364 and maximum 20 000 000 Offer Shares are New Shares to be code 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 of At the date of the Prospectus the Company's issued share capital is NOK 68 999 425 divided issued shares into 137 998 850 Shares each with a par value of NOK 0.50. All the issued Shares are fully and par value paid. C.4 Rights The New Shares will rank pari passu in all respects with the existing Shares. attached to the The Offer Shares will carry full shareholder rights in the Company from the time of shares registration of the share capital increase pertaining to the Offering in the Norwegian Register of 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 obligations which are standard under the Public Limited Companies Act, and are governed by Norwegian law. C.5 Restriction on Not applicable. The Shares of the Company are freely transferable. the free transferability of the shares C.6 Application The Company's Shares are not currently listed on Oslo Børs or any other stock exchange or for admission 8

  13. to trading on a regulated market. The Company has applied for listing of the Company's shares on Oslo Børs, regulated or alternatively Oslo Axess. The board of directors of Oslo Børs is expected to decide on the market Company's application in an extraordinary meeting to be held on 15 October 2013. C.7 Dividend The Company intends to pay regular dividends on a semi-annual basis of 75%-100% of its policy 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 The Group may not be able to enter into more long-term time charters and obtain relating to the financing and/or new equity, which may affect the ability to implement the Group's issuer and its growth strategy. business � 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 opportunities 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. 9

  14. � 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 of 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 of 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 10

  15. 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 The price of the Shares may fluctuate significantly relating to the � There is no existing market for the Shares, and a trading market that provides shares 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 The net proceeds of the Offering to the Company is expected to be approximately NOK 264 million. Total expenses 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 The Offering is intended to bring the Company in compliance with the requirements for listing offer on Oslo Børs of having at least 500 shareholders, 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 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 Use of proceeds 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 Net amount of the proceeds 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. E.3 Terms and Below is a brief overview of the terms and timetable for the Offering: conditions of the offer 11

  16. 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 ............................ 17 October 2013, at 12:00 p.m. CET (1) Expiry of the Order Period for the Retail Offering and the Employee Offering 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 other 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 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 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 12

  17. 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. The Managers or their affiliates have provided from time to time, and may provide in the E.4 Interests material to the future, investment and commercial banking services to the Company and its affiliates in the offer 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. 13

  18. 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 The Managers have entered into lock-up agreements with the Selling Shareholders. Under the and lock-up lock-up agreement, the Principal Selling Shareholder and the other Management Selling agreements 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 Not applicable. The expenses related to the Offering will be paid by the Company and the charged to the Selling Shareholders. investor 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 14

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

  20. 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 or 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 operations 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 operations 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 opportunities 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 16

  21. 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 of 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. 17

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

  23. 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 operations, 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 opposite 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 other 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. 19

  24. 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 vessels 1 . 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 other 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. 20

  25. 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 operators, 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, or 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, 21

  26. 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 or not. This could lead to the deterioration of existing customer relationships, and/or the Group's ability to 22

  27. 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% MVC 2 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. 23

  28. 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 operations 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 obligations 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 or 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. 24

  29. 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 25

  30. 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 occur, 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 other purposes. Any such additional offering could reduce the proportionate ownership and voting interests of 26

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

  32. 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

  33. 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 of 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 otherwise on which any statement in this Prospectus is based. Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of 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. 29

  34. 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 other 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 officers 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. 30

  35. 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 of 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. 31

  36. 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 or 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 own 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 offered 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 over-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 32

  37. 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 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 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 outside 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 33

  38. 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 on 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 34

  39. 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. 35

  40. 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 on 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 orders 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 or 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 one 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. 36

  41. 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. 37

  42. For late payment, interest will accrue at a rate 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 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 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 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 of 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 38

  43. 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 online 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. 39

  44. 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. 40

  45. 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 of 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 of 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. 41

  46. 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. 42

  47. 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 Pareto Securities AS Swedbank First Securities Munkedamsveien 45E Dronning Mauds gate 3 Filipstad Brygge 1 P.O. Box 1444 Vika P.O.Box 1411 Vika P.O.Box 1441 Vika N-0115 Oslo N-0115 Oslo N-0115 Oslo Norway Norway Norway Tel: +47 22 01 60 00 Tel: +47 22 87 87 00 Tel: +47 23 23 80 00 Fax: +47 22 01 60 60 Fax: +47 22 87 87 15 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 overall ordered level for the Offering and with regard to the requirement of free float and number of 43

  48. 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 of 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 of 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. 44

  49. A stock exchange notice will be made on or about 18 October 2013 announcing whether the Managers have over-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 of 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, or 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 45

  50. 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 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. 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 Shares to be sold Gross Proceeds Secondary Sale (min/max) Kistefos AS, Dronning Mauds gate 1, 0250 Oslo 132 168 890 27 272 727 – Between NOK (indirectly owned by the Chairman Christen Sveaas) 40 000 000* 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 2 759 980 1 379 990 NOK 20 699 850 - Jens Ismar) 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 1 379 990 689 990 NOK 10 349 850 - NOK Hieronymus Heyerdahls gate 1, 0160 Oslo (owned by 15 179 780. Exact value CRO Egil Husby) depending on Offer Price (assuming the Offer Price is set within the Indicative Price Range) 46

  51. Tryvert AS, c/o Håvard Furu Trasoppterrassen 69, 0672 689 990 344 990 NOK 5 174 850 - Oslo (owned by CFO Håvard Furu) NOK 7 589 780. Exact value depending on Offer Price (assuming the Offer Price is set within the Indicative Price Range) 136 998 850 29 687 697 - NOK 445 315 455 - NOK 42 414 970 933 129 340. Exact value depending on number of Secondary Shares sold Total 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 outside 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". 47

  52. 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 on 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. 48

  53. 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 of 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. 49

  54. 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 or 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 or 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 of the Offer Shares at any time other than to QIBs in the United States in accordance with Rule 144A or outside of 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 of 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. 50

  55. 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 other 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 or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the 51

  56. 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 originated 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 other 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. 52

  57. � 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 or 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 other 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. 53

  58. 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 other companies shown above are wholly owned subsidiaries. 54

  59. 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 owns 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 30 th 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 Partnership 3 . Western Bulk Shipowning III AS is incorporated in Norway. WB Shipowning V AS: Western Bulk Shipowning V AS owns 20% of Western Alterna GP LLC 3 . 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 one 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. 55

  60. 8.4 HISTORICAL BACKGROUND AND DEVELOPMENT The table below provides an overview of key events in the Group's development. Year Event 1 st 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 options. 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. Kistefos AS buys out remaining shareholders to become sole owner of Western Bulk, 24 th 2006 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 56

  61. 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 opportunities 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 bases 4 . 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 option 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 optimise 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 of those parties operates. This information is thus not exact, and may vary over time. 57

  62. 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 million 5 . 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 4 th 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. 58

  63. 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 operate 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 offices 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 or 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. 59

  64. 8.7 WESTERN BULK CHARTERING 8.7.1 Overview Western Bulk Chartering currently runs a fleet of about 135 vessels (1 st half 2013), all of which are chartered in on 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 result 6 . 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 operations, 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. 60

  65. 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 4 � 288 3 � 781 2 � 951 1 � 375 2 � 879 418 2 � 354 720 1 � 426 1 � 479 1 � 344 2 � 532 2 � 406 1 � 634 1 � 618 1 � 565 1 � 547 1 � 409 � 86 � 192 � 202 2007 2008 2009 2010 2011 2012 LTM Base � margin Positioning � margin 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. 61

  66. below, which shows quarterly Net TC margin per ship day for WB Chartering 8 plotted against the Baltic Exchange Supramax Index (BSI). Historical correlation between market index and Net TC margin per ship day created 9 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. 62

  67. 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 63

  68. 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 operations 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) 0 2 3 (1) Supramax 3 (3) 1 (1) 13 (4) 17 (8) Panamax 0 0 0 0 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 64

  69. 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 of 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 vessel 10 : 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 31 st 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 options embedded in the contracts with various head owners. All chartered-in vessels are considered as operational 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. 65

  70. 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 on 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 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 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 optional 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 2016 11 . 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 Charter out Coverage Period Ultramax 61' Q1-2014 8+1+1 years with purchase option from end of 8+1+1 to WB year 5 and annually throughout the charter Chartering period. 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. 66

  71. of year 5 and annually throughout the charter period. Ultramax 61' Sep-14 8+1+1+1 years with purchase option from end - to Feb- of year 4 and annually through year 8. 15 Ultramax 61' Nov-14 5+1+1+1 years with purchase option from end - to Mar- of year 3 and annually through year 5. 15 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 8+1+1+1 years with purchase option from end - to Jan-16 of year 4 and annually through year 8. Ultramax About Apr-16 8+1+1+1 years with purchase option from end - 61' to Oct-16 of year 4 and annually through year 8. (to be agreed) Ultramax 61' Feb-16 7+1+1+1/2 years with purchase option from end - to Aug- of year 5 and annually through the charter 16 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. Purchase � Option � Valid � Gross � Purchase � Vessel � name Type Built From Option � Price Comments Vessel � #1 Supramax 2008 2014 USD � 31.75m Annual � purchase � prices � after � 2014 � of � USDm � 30.0, � 28.0, �� 26.25, � 24.3, � 22.9, � 21.85 � and � 21.0 Vessel � #2 Supramax 2012 2017 Decreasing � annually � by � USD � 1.25m USD � 31.50m Vessel � #3 Supramax 2012 2015 Decreasing � annually � by � JPY � 135m JPY � 4.00bn Vessel � #4 Supramax 2012 2017 Decreasing � annually � by � JPY � 150m JPY � 3.20bn Vessel � #5 Supramax 2012 2017 Decreasing � annually � by � JPY � 135m JPY � 3.73bn Vessel � #6 Ultramax 2014 2019 Decreasing � annually � by � JPY � 230m JPY � 3.40bn Vessel � #7 Ultramax 2014 2019 JPY � 0.96bn � Decreasing � annually � by � JPY � 60m � + � USD � 750k. � Profit � split � + � USD � 11.90m owner/charterer � 55/45 Vessel � #8 Ultramax 2014 2019 JPY � 0.96bn � Decreasing � annually � by � JPY � 60m � + � USD � 750k. � Profit � split � + � USD � 11.90m owner/charterer � 45/55 Vessel � #9 Ultramax 2014 2018 Decreasing � annually � by � JPY � 170m JPY � 2.60bn Vessel � #10 Ultramax 2015 2018 Decreasing � annually � by � JPY � 200m JPY � 3.30bn Vessel � #11 Handysize 2015 2020 JPY � 2.90bn Decreasing � annually � by � JPY � 160m. � Profit � split � 50/50 � owner/charterer Vessel � #12 Handysize 2015 2020 JPY � 2.90bn Decreasing � annually � by � JPY � 160m. � Profit � split � 50/50 � 67

  72. owner/charterer Vessel � #13 Ultramax 2015 2018 Decreasing � annually � by � JPY � 150m JPY � 3.25bn Vessel � #14 Ultramax 2016 2020 Decreasing � annually � by � JPY � 170m JPY � 2.60bn Vessel � #15 Ultramax 2016 2020 Decreasing � annually � by � JPY � 170m � or � pro � rata JPY � 2.80bn Vessel � #16 Ultramax 2016 2021 JPY � 2.80bn Decreasing � annually � by � JPY � 150m � or � pro � rata � until � end � of � year � 7 � and � then � by � JPY � 100m 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 owner 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 on 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 market 12 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 of 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 68

  73. Type Size Delivery Period Charter out Purchase Gross Comments Period Coverage Option Purchase Valid Option From Price Ultramax 60' June-Nov 7+1+1+0.5 years with - Decreasing 2016 purchase option from end annually by JPY of year 5 and annually 150m until end throughout the charter JPY of year 7, and by 2021 period. JPY 100m 2.85bn annually throughout the optional periods Ultramax About Second 8+1+1+1 years with - Decreasing 61' half 2016 purchase option from end JPY annually by JPY 2020 (to be of year 4 and annually 2.91bn 110m agreed) through year 8. 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"). 69

  74. 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 of infrastructure. Of approximately 515 major cargo routes, Handysizes and Supramaxes/Ultramaxes service almost 500 exclusively. 70

  75. 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 ore 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. 71

  76. 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 USD/d 250000 200000 150000 100000 50000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 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 72

  77. 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 ore 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 Milliion metric � tonnes 6000 5000 4000 3000 2000 1000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Iron � Ore: Met � Coal: Steam � Coal: Grain: Steel � Product: Phosrock Alumina/Bauxite Other: 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. 73

  78. Global dry bulk demand split Milliionmetric � tonnes 6000.0 5000.0 4000.0 3000.0 2000.0 1000.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 China Rest � of � World 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 Milliionmetric � tonnes 1400.0 1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Europe Japan China 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 74

  79. 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 Milliion metric � tonnes 1600.0 1400.0 1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Other � Asia Japan Europe China 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 Production � (mt) Chinese consumption � (mt) 900 1600 800 1400 700 1200 600 1000 500 800 400 600 300 400 200 200 100 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Asutralia Brazil China Chinese � consumption 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. 75

  80. 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 of 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 Milliion metric � tonnes 600.0 500.0 400.0 300.0 200.0 100.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 China Japan Europe 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 ore 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 76

  81. 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 Milliionmetric � tonnes 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Japan China Other � Asia Brazil 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. 77

  82. Major grain importers Milliionmetric � tonnes � 120.0 � 100.0 � 80.0 � 60.0 � 40.0 � 20.0 �� 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Japan Africa Middle � East South � Korea Central � Am. � And � Carib 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 Milliion metric � tonnes 6000 5000 4000 3000 2000 1000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Minor � bulks Iron � Ore: Met � Coal: Steam � Coal: Grain: Source: Managers Metals and minerals like nickel ore, steel products lignite and bauxite/alumina constitute the largest contributors of 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. 78

  83. 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 on 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 on average from 2003. Minor bulks by segment Millionmetric � tonnes 1,800.00 1,600.00 1,400.00 1,200.00 1,000.00 800.00 600.00 400.00 200.00 0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Metals � and � Minerals Sugar Other � Agribulks Fertilizer 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 79

  84. ~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 BDI USD/day 8000 70,000 7000 60,000 6000 50,000 5000 40,000 4000 30,000 3000 20,000 2000 10,000 1000 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD BDI Handysize Supramax 2013 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. 80

  85. Annual fleet growth and orderbook Orderbook � mdwt Annual � fleet � growth 25% 350 300 20% 250 15% 200 10% 150 5% 100 0% 50 � 5% 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Orderbook � mdwt Capesize Panamax Supramax Handysize 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 mdwt 400 53% 350 300 148 250 200 10% 150 90 16% 100 10% 11% 42 71 20 35 5% 50 4% 31 2% 26 20 18 20 27 14 11 10 0 0 � 5 6 � 10 11 � 15 16 � 20 21 � 25 26 � 30 >30 Handysize Supramax Panamax Capesize 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, 81

  86. 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 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Supramax � 56 � 58K � DWT � Newbuilding Supramax � 56K � DWT � 5 � year � old 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. 82

  87. Demand, supply & vessel utilization Demand, supply mill. dwt Vessel capacity utilization 900 100.0% 800 95.0% 700 600 90.0% 500 400 85.0% 300 200 80.0% 100 0 75.0% 2003 2005 2007 2009 2011 2013 Demand Supply Utilization (right) Source: Managers 83

  88. 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 of 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. 84

  89. 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 Term Shares owned Options Since Christen Sveaas Chairman 2012 2 years 133 168 890 0 Henning E. Jensen Board Member 2011 2 years 0 0 Rolf A. Wikborg Board Member 2010 2 years 0 0 Benedicte Bakke Agerup Board Member 2013 2 years 0 0 Kristin Gjertsen Board Member 2013 2 years 0 0 85

  90. 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 Scorpion Offshore Ltd. (director), (chairman), AS Holding (chairman), AS Viking Drilling AS (chairman) 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) Henning E. Jensen Kistefos AS (CEO), RABT Translantic RHI AG (CEO), Dieder Werke AG AB (CEO and board member), Viking (chairman), Tyco Electronics Inc (Sr. VP Supply Ships A/S (board member), Automotive, CFO), around 50 subsidiaries to RGI AG (chairman/board Advanzia Bank SA (chairman), Atex Group Limited (chairman), AS Bagatelle member), around 45 subsidiaries to Tyco (chairman), Bergmoen AS (chairman), Electronics Inc (chairman/board Gardermoen Næringspark III AS member/managing director) (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) Rolf A. Wikborg DHT Maritime (Director), Wikborg AMA Capital Partners LLP (Director), Sons Ltd. AS (chairman), Scandinavian Tanker Management AS (Director) Capital AS (Chairman), Aluyca AS 86

  91. (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 og 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 Wilh. Wilhelmsen ASA (CFO), KLP Norwegian Car Carriers ASA (board Agerup Kapitalforvaltning AS (director), Den member), Protector Forsikring ASA norske krigsforsikring for skib (Board (Board member), Stiftelsen aksjekjøp for member), Puregas AS (chairman), Laer ansatte i WW Gruppen (board member), & Co AS (alternate director), Norwegian Wilh. Wilhelmsen Pesjonskasse Hull Club (Member of the committee), (chairman) 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) Kristin Gjertsen Det Norske Oljeselskap ASA (Head of Microsoft Norge AS (Director Business Partner Operated Licenses, deputy board Development & Online Business member) 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. 87

  92. 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: 88

  93. 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. 89

  94. 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 Oslo Shipowners' Association (committee member), Norwegian Hull (chairman), Oslo Shipbrokers' Club (election committee member), Organisation (director), Pareto World Exmar N.V. (director), Lisann AS Wide Shipping Fond II (director), (chairman), Vargheia AS (chairman), Bergesen Gas Shipping AS (general Western Alterna Partnership (director), manager), Partgas Shipping AS (general Western Alterna GP LLC (director), WA manager), The Green Tankers AS I LP (director), WA II LP (director), WA (general manager), Bergehus AS III LP (director) (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 90

  95. 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 CargoSpotter AS (Director) (director), Granly skole DELK (Chairman) Håvard Furu Tryvert AS (Chairman), Vargheia AS SLNG Yemen I AS (Chairman), SLNG (director), Markatunet Huseierforening Yemen II AS (Chairman), PR BW Gas (director), Western Alterna Partnership Fluxys DA (chairman), BW Gas (director) 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 Chief Executive Officer 2 759 980 0 investment company Lisann AS) Håvard Furu (through his 100% owned Chief Financial Officer 689 990 0 investment company Tryvert AS) Egil Husby (through his 100% owned Chief Risk Officer 1 379 990 0 investment company Valletua AS) 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. 91

  96. 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 2012 2011 2010 2013 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 92

  97. 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: 93

  98. Pension premium paid Accrued pension liability as in 2012 of 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- operation 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: 94

  99. 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 on 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 95

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