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General information on financing process and current status

24rd September 2009

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Disclaimer

The information and views presented in this report are prepared by Arctic Securities ASA (“Arctic”) and Pareto Private Equity AS (“Pareto”) two investment banking firms domiciled in Norway, under the supervision of The Financial Supervisory Authority of Norway (Kredittilsynet), and member of The Oslo Stock Exchange. This document has been prepared in accordance with the guidelines from the Norwegian Securities Dealers Association.

The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Arctic and Pareto nor any person connected with Arctic and Pareto accepts any liability arising from the use of this information and views mentioned in this document.

Arctic and Pareto may have holdings in the companies described herein as a result of market making operations and/or underlying shares as a result of derivatives trading. Arctic and Pareto may buy or sell such shares both for own account, and as a principal agent.

There are no agreements or understandings in force between Arctic and Pareto and the companies mentioned above; i.e. related to market making activities.

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This report does not constitute or form any part of any offer for sale or subscription of or solicitation of any offer to buy or subscribe for any securities; nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.

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Background

Master Marine ASA (“MAMA”) is in the process of building two service vessels at Drydock World Graha shipyard in Batam, Indonesia

— The vessels are at ~75% and ~67% completion, respectively, and have planned delivery from yard in Q1 and Q3 2010

Both vessels have employment contracts at a total value of EUR 341 mill

— Unit 1 3 years firm + 2 x 1 year (EUR 263 mill for fixed period)

— Unit 2 210 days/ 88 wind mills fixed (EUR 78 mill)

So far the vessels have been financed by EUR 207 mill as follows

— Equity EUR 101 mill

— Convertible EUR 46 mill*

— HY Bond EUR 60 mill

A further financing gap of EUR ~300 mill still remains

— To be covered by senior secured loan / bond loan and new equity

— HY and Convertible to be renegotiated

Requires negotiated solution with other stakeholders

Arctic and Pareto Private Equity appointed as financial advisors to the Company

(*) NOK 420m at NOKEUR 9.08

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Company overview

Company established in 1997

— Specialised in transportation and installation of heavy structures in the marine environment

Construction of 2 high-end Service Jacks at Drydocks World Graha, Batam, Indonesia (previously Labroy)

— Experienced sub-suppliers

— Scheduled delivery Q1 and Q3 2010

Exposure to attractive offshore wind market in addition to traditional oil & gas market

— Master Marine’s vessels are highly capable of serving both these markets

Management with more than 25 years of experience from complex marine operations and offshore transportation and installation projects. Fully developed and capable organization of 29 permanent employees and 59 project consultants

— 54 at headquarters in Oslo

— Site team of 34 at the yard

In-house operating team in place fully capable of serving both units post delivery

Frame agreements in place with experienced players

— SEMAR AS for engineering support services

— Maritime GMC for offshore labour support

Classification: ABS

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Construction update and contract overview

Service Jack II (“L206”) – construction updateService Jack I (“L205”) – construction update

Service Jack II – contract overviewService Jack I – contract overview

Currently reported ~75% mechanically complete

Contract delivery date from yard 30 Jan 2010, mobilization originally planned July 2010

Temporary stop in payments to contracting parties initiated as of 1st September 2009, now causing delays and cost increases

Delay currently estimated ~11 weeks

Mitigating actions initiated to minimize delay & cost impact

Currently ~67% mechanically complete

To be delivered 3Q 2010

Mobilization planned 4Q 2010

Counterparty: ConocoPhillips

Field: Ekofisk, North Sea

3 years starting 1 July 2009 + 2 x 12 months options (for the client)

Contract value of EUR 263 mill incl. EUR 86 mill fixed payment from COP

Day rate of EUR 164,000 excl. the fixed payment from COP

Contractual Mobilization start 1 July 2010

— Grace period : 80 days

— LD per day EUR 135,000 for 180 days, capped at EUR 22.3m

— COP termination right after 245 days

Delays may have significant cost impact for MaMa

Counterparty: Scira Offshore Energy (50/50 JV between Statoil and Statkraft)

Project: Sheringham Shoal (UK)

Installation of 88 wind turbines and 2 substation modules

Project engineering started 2Q 2009 with a planned 7 months installation campaign, to be completed during 3Q 2011

Contract value: EUR 78 mill

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Unique resources with exceptional experience

Offshore lifting and installation of large modules (up to 10,000 T)

Topside mating operations of deck structures up to 50,000 T(ex. Hibernia, Gullfaks, Snorre A, etc)

Load out operations by trailers and skidding

Heavy transport of drilling rigs and other large structures

Sub sea installation

Towage and positioning

Pre installation of suction anchors and mooring spreads

Salvage operations

Decommissioning

Master Marine and resources behind the company have more than 25 years experience from complex marine operations all over the world for clients such as ExxonMobil, Statoil, ConocoPhillips, Bergesen, etc.

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Organization for construction follow up and operations fully developed

Organisation in place

Fully developed and capable organization of 29 permanent employees and 59 project consultants

— 54 at headquarters in Oslo

— Site team of 34 at the yard

In-house operating team in place fully capable of serving both units post delivery

— Sales and marketing

— Operations planning and preparations

— Field operations and project execution

Frame agreements in place with experienced players

— SEMAR AS for engineering support services

— Maritime GMC for offshore labor support

Results delivered

Two strong contracts with tier 1 clients;

— 3 year (+ 2 x 1 year options) contract with ConocoPhillips for accommodation services

— 210 day contract with Statoil/ Statkraft

Very demanding clients with strict requirements with respect to;

— Quality

— Workmanship

— Experience and expertise

— HSE

The established contracts demonstrate that the Master Marine organizations’ qualities and capabilities are well perceived and appreciated in the market

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Master Marine - general situation

The Company is running out of cash

— Current prognosis is that existing EUR 1.9* million in a best case can be stretched to 30.09.09

— Outstanding capital requirements EUR 126 million of payments over-due and falling due in Sep/ Oct 2009

— Company failed to meet interest payment on the EUR 60m bond loan in Sep 09, and is currently in breach of the loan agreement

Yard, suppliers and other creditors were notified in writing on 1st September that the Company is not in position to meet it’s payment obligations going forward, and has requested

— Acceptance of postponement of payments until 15 th October

— Minimal stop or slowdown in critical activities

L205 is currently on critical line and any delay will be value destructive

— Delays in L 205 increase risk for LD’s from COP (> 80 days delay)

— Delays in L 205 increase risk of cancellation by COP(> 245 days)

*As per 23rd September 2009*As per 23rd September 2009

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An extensive process has been conducted in search of financial or strategic solutions

The Company has together with its financial advisors explored all possible alternatives

— Bank financing (including GIEK contribution)

— Sale of assets

— Merger / combination of businesses

— Industrial sponsors

— Financial sponsors

— Debt and equity providers

— Clients

As of 24rd September this process has been ongoing for 14 weeks

— More than 50 potentially interested parties have been contacted

Should an unconditional solution for the recapitalisation of the Company not be in place on 28 September 2009, the Board will have to consider whether continued operation of the company is prudent or if the company immediately will have to file for bankruptcy

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Summary of market feedback

Generally positive feedback on MaMa’s vessels, personnel, commercial contracts, concept and strategy

However, the total financing need is very large and the transaction risk is considered to be high

— Complete corporate re-financing is complex and challenging within required timeline

— Sale of assets depends on consent from yard, COP and/or StatoilHydro– Fear of renegotiation of terms– Makes simple novation sale relatively difficult

— Perception that remaining construction risk is still high– Specialized vessels, additional engineering content in contracts– Organisation and competence key to secure delivery of units of time and cost– Risk that delays will negatively impact earnings from COP-contract

“Cost of cash” is very high in today’s market

— High degree of risk aversion

— Potentially interested parties may depend on expensive (external) financing as well

— Even parties with financial capacity are very cautious and restrained with respect to new projects

Bank debt – very difficult to get banks to accept pre-delivery financing in current market

— After 9 months of actively seeking bank financing, only one bank and GIEK finally submitted firm term sheets against very strict terms– However, the term sheet contains a number of conditions and covenants not currently met by the Company

— Banks provide debt against cash-flow only (i.e. 3 year contract = 3 years loan profile)

— The L206 contract ”not bankable” (7 months duration)

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Status as of 24rd September

Indicative non-binding offer for re-capitalisation of the Company received from Nordic Capital on 4 th September

— Financing in place, with funds readily available

— As per 24th September, the Board has not received confirmation from Nordic Capital that conditions have been lifted

Industrial operator re-confirmed interest 23th September

— Still uncertainty related to financing, subject to full due diligence

— Tentative closing 7th October, funds available from 15th October

Offer for the vessel L205 received from a financial consortium

— Deemed legally not feasible according to Legal opinion from Advokatfirmaet Selmer, discrimination of creditors

— Will give close to zero for Convertholders and Shareholders, and remaining MaMa will go bankrupt if Offer accepted

— Offeror lacks financing to meet remaining commitments, depends on transferring MaMa bank financing (which is not generally transferable, will require new round of bank negotiations)

— Subject to full due diligence, not feasible given critical timing of MaMa’s funding need

No other formal offer or indication of interest received

Discussions have been held with industrials regarding potential interest for L205

— No offers or proposals received

Limited interest for acquiring L206

— Short contract duration seen as main challenge, not bankable

— Pre delivery financing a major challenge

— Sustainability of achieved rate levels questioned

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Indication of interest from Nordic Capital

Indicative, non-binding offer for full recapitalisation of Company was received on 4 th September

— EUR 130 million in new equity at NOK 0.60 per share

— EUR 150 million in senior secured loan at 12% interest

— High Yield bond including accrued interest to be bought by Nordic Capital at an aggregate price of EUR 20 million

— Convertible bond to be converted into 140 million new shares in the Company @ NOK 3.436/ share (no cash)

Transaction completed within September 2009 with following main subjects (which have not yet been lifted):

— Satisfactory DD and no MAC

— Approval of bondholders and EGM

Due Diligence subject to be lifted by 22th September (still not lifted)

Exclusivity granted to 25th September

Break fee of EUR 2.5 million agreed

— Shall not be applicable in a situation of bankruptcy or compulsory composition of Company

Provided that the transaction is completed as planned, the Company will have funds available immediately after

closing

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Rationale for granting of exclusivity

Only alternative that can lead to a successfully completed transaction within the end of September

Financing in place – funds can be supplied within end of September

Not dependant upon banks or any other form of external financing (bond or equity issues)

No consent from COP/ Statoil/ Statkraft required

Uncertainty related to the other alternative (the Industrial solution)

— Dependent upon a EUR 170 million bank facility

– EUR 70 million from GIEK

– EUR 100 million from commercial bank

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Summary of Nordic Capital’s offer to stakeholders according to LoI

Current Offer Recovery

Master Marine AS 08/11 FRN Call (high yield)

- EUR 60 mill

- EUR003M + 1200 bp

- Maturity 20.06.2011

EUR 20 mill 33.3% (nom. ex acc interest)

~32.2% (nom. incl. acc interest)

Cash

Master Marine AS Convertible PIK Bond Issue 2007/10

- NOK 420 mill (+ acc. Int.)

- Coupon 6.00%

- Conversion price NOK 13.65

- Maturity 16.05.2012

140M shares@~NOK3.436

20% (nom. excl. acc interest)

~17.8% (nom. incl. acc interest)

Shares (no cash)

Equity

- 77,421,634 shares @ NOK 0.10 par value

- NOK 600 mill @ NOK 12.5/share (May 2007)

- NOK 258 mill @ NOK 10.5/share (June 2008)

NOK 0.60/ share ~5%

Shares (no cash)

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Comparison of alternatives

Financial alternative (Nordic Capital) Industrial alternative (updated 23rd Sep)

High Yield bond bought at EUR 20 million (incl. acc. int.) High Yield bond — TBD

Convertible bond converted to 140 million new shares TBD

New equity injected at NOK 0.60 per share TBD

No financing risk – funds available Still financing risk, although somewhat reduced since original offer

— Bank financing— New equity

Transaction can be completed by end September Uncertain timing

Satisfactory DD required Satisfactory DD required

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Offer received for L205 - evaluation

Legally not feasible, discrimination of creditors

— Bondholders only have assignment over the yard contracts and certain original OFE-contracts. Bondholders do not have assignment over the COP charter and the related subsequent OFE-contracts, incl living quarters and footings

— Following the proposed sale, the Company will be insolvent. The Company cannot undertake a sale of assets and let only a limited number of creditors benefit from the proceeds from such a sale

Financing not in place, lack of documentation regarding ability to finance remaining commitments

— Subject to transfer of debt facility with DVB and GIEK (which is not generally transferable, will require new round of bank negotiations)

— Still major outstanding issues

Outstanding commitments for L206 of EUR 116m + HQ/ overhead commitments not covered

Conditional on COP release of award payments of EUR 85.9 million

Subject to release of key MaMa personnel

Offer will require consent from yard and COP

Offer subject to due diligence

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Summary – recommendation from MaMa Board of Directors

Proposal from NC secures MaMas EUR 300m capital need, and is the only feasible solution currently available

Voting YES in EGM/ bondholder meeting will secure MaMa with necessary financing until delivery

Voting NO in EGM/ bondholder meeting will put MaMa in a very difficult situation, and the Board will have to consider whether continued operation of the company is prudent or if the company immediately will have to file for bankruptcy

— This will be value destructive for all involved parties

— Existing employment contracts will be cancelled

— Disintegration of MaMa organisation with implications for yard follow-up and approval processes

— Loss of progress for construction projects, which may increase construction costs

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Contact

Pareto Private Equity AS Dronning Mauds gate 3 PO Box 1411 Vika NO-0115 Oslo

Christian Jomaas Corporate Finance Direct: +47 2201 5804 Fax: +47 2287 8700 Mobile: +47 9019 8406E-mail: christian.jomaas@pareto.no

Arctic Securities ASA Haakon VII’s gt. 5 P.O. Box 1833 Vika NO-0123 Oslo

Arne Wenger Corporate Finance Direct: +47 2101 3116 Fax: +47 2101 3137 Mobile: +47 4840 3116 E-mail: arne.wenger@arcticsec.no

Master Marine ASA Drammensveien 288 NO-0283 Oslo

Geir SandvikChairman of the Board Mobile: +47 9202 5318E-mail: geir.sandvik@sancoconsult.no

Master Marine ASA Drammensveien 288 NO-0283 Oslo

Per JohanssonCEOMobile: +47 9174 3860E-mail: per.johansson@master-marine.no