SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 


Form 6-K
 

 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934
 
For the month of May 2018

Commission File Number 001-32640
 

 
DHT HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
 

 
Clarendon House
2 Church Street, Hamilton HM 11
Bermuda
(Address of principal executive offices)
 

 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F                                 Form 40-F
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b )(7): _____
 

 

 
Press Release

The press release issued by DHT Holdings, Inc. (the Company or DHT ) on May 7, 2018 related to its results for the first quarter of 2018 is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Credit Agreement

On April 24, 2018, DHT, as guarantor, entered into a senior secured term loan facilities and revolving credit facility agreement (the Term Loan and Revolving Credit Facility ) with the companies listed in the schedules thereto, as joint and several borrowers, and ABN AMRO Bank N.V., Oslo Branch, Nordea Bank AB (Publ), filial i Norge, ING Bank, a branch of ING-DiBa AG, DNB Bank ASA, Crédit Agricole Corporate and Investment Bank, Danish Ship Finance A/S, Skandinaviska Enskilda Banken AB, DVB Bank SE and Swedbank AB, as lenders. Maximum availability under the Term Loan and Revolving Credit Facility is $485 million, which the Company intends to use primarily to refinance certain of its existing credit facilities and for general corporate purposes. Borrowings will bear interest at a rate equal to LIBOR plus 2.40% and will have a 20-year repayment profile. To the extent used to fund a vessel acquisition, borrowings will be secured by customary ship mortgages on the applicable acquired vessels. The Term Loan and Revolving Credit Facility is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

This discussion under the heading Credit Agreement does not purport to be complete and is qualified in its entirety by the attached Exhibit 10.1.

Incorporation by Reference

Exhibits 10.1 and 99.1 to this Report on Form 6-K shall be incorporated by reference into the Company s registration statements on Form F-3 (file Nos. 333-199697 and 333-219069), initially filed with the Securities and Exchange Commission on October 30, 2014 and June 30, 2017, respectively, as amended, in each case to the extent not superseded by information subsequently filed or furnished (to the extent the Company expressly states that it incorporates such furnished information by reference) by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended.

 


 
EXHIBIT LIST
Exhibit
 
Description
     
99.1 
 
Press Release dated May 7, 2018
     
10.1
 
Senior Secured Term Loan Facilities and Revolving Credit, dated as of April 24, 2018, among ABN AMRO Bank N.V. Oslo Branch, Nordea Bank AB (Publ), filial i Norge, ING Bank, a branch of ING-DiBa AG, DNB Bank ASA, Crédit Agricole Corporate and Investment Bank, Danish Ship Finance A/S, Skandinaviska Enskilda Banken AB, DVB Bank SE, Swedbank AB, DHT Mustang, Inc., DHT Bronco, Inc., DHT Puma Limited, DHT Panther Limited, DHT Lion Limited, DHT Leopard Limited, Samco Theta Ltd., Samco Iota Ltd., Samco Kappa Ltd., DHT Hawk, Inc., Samco Epsilon Ltd., DHT Falcon, Inc., DHT Condor, Inc., ABN AMRO Bank N.V. and DHT Holdings, Inc.
     
 

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
  DHT Holdings, Inc.  
  (Registrant)  
       
Date: May 9, 2018
By:
/s/ Eirik Ub ø e  
    Name:  Eirik Ub ø e  
    Title:    Chief Financial Officer  
       
 
 
 
Exhibit 99.1
 
 

 
DHT Holdings, Inc. First Quarter 2018 Results


HAMILTON, BERMUDA, May 7, 2018 – DHT Holdings, Inc. (NYSE:DHT) (“DHT” or the “Company”) today announced:

FINANCIAL AND OPERATIONAL HIGHLIGHTS:
 
USD in mill. (except per share)
Q1 2018
Q4 2017
Q3 2017
Q2 2017
Q1 2017
2017
2016
Adjusted Net Revenue 1
            46.2
             56.6
            54.8
            59.6
            70.7
          241.8
          290.7
Adjusted EBITDA
24.0 33.5 31.4 36.7 50.6 152.1 209.4
Net income/(Loss)
             (9.2)
             (7.5) 2
             (5.1)
              4.8
            14.3 2
              6.6 2
              9.3 2
EPS – basic
                     (0.06)
                     (0.05)
                 (0.04)
                 0.04
                    0.15
                  0.05
                  0.10
EPS – diluted 3
                   (0.06)
                  (0.05)
                    (0.04)
                0.04
                0.15
                0.05
                    0.10
Interest Bearing Debt
                 764.4
                786.2
             826.0
                841.1
                674.6
             786.2
             701.5
Cash
             69.8
            77.3
            86.5
              104.0
              72.2
            77.3
            109.3 4
Dividend 5
                   0.02
                  0.02
                  0.02
                  0.02
                  0.08
                0.14
                  0.58
Spot Exposure 6
                 70.7%
                73.6%
                67.9%
                63.5%
                58.1%
                66.4%
                57.8%
Unscheduled off hire 6
                      0.1%
              0.1%
                     0.3%
                     0.2%
              0.2%
              0.2%
            1.8%
Scheduled off hire 6
             0.7%
            0.3%
            2.7%
            2.8%
            2.4%
            2.0%
            1.7%

HIGHLIGHTS:

Adjusted EBITDA for the quarter of $24.0 million. Net loss for the quarter of $9.2 million or loss of $0.06 per basic share.
   
The Company’s VLCCs achieved time charter equivalent earnings of $21,400 per day in the first quarter of 2018 of which the Company’s VLCCs on time-charter earned $25,000 per day and the Company’s VLCCs operating in the spot market achieved $20,200 per day (after adoption of IFRS 15 as per January 1, 2018).
   
For the quarter the Company generated positive cash flow from operations after payment of ordinary debt amortization and drydocking costs.
   
So far in the second quarter of 2018, 55% of the available VLCC spot days have been booked at an average rate of $14,200 per day.
   
For the first quarter of 2018, the Company will return $2.9 million to shareholders in the form of a cash dividend of $0.02 per share, payable on May 30, 2018 for shareholders of record as of May 21, 2018.
   
In April 2018 the Company entered into a $485 million secured credit facility agreement with a six year tenor for the refinancing of 13 of the Company’s VLCCs. The new credit facility will bear interest at a rate equal to Libor + 2.40% and will have a 20-year repayment profile.
   
In April 2018, the Company also entered into an agreement with ABN Amro to increase the Company’s revolving credit facility to $57.0 million from the current availability of $43.4 million. The revolving credit is currently undrawn.
 
 
1

 
On April 27, 2018 the Company took delivery of the first of its two VLCC newbuildings from DSME. The vessel is named DHT Stallion. The second newbuilding from DSME will be delivered in May 2018 while the two newbuildings from HHI are expected to be delivered in June 2018 and September 2018.
   
DHT has a fleet of 27 VLCCs, 24 in the water and three under construction scheduled for delivery in 2018, as well as two Aframaxes. The total dwt of the fleet is 8,590,740.  Six of the VLCCs and one of the Aframaxes are on time charters. For more details on the fleet, please refer to our web site: http://dhtankers.com/index.php?name=About_DHT%2FFleet.html .

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Footnotes:
1 Shipping Revenues net of voyage expenses.
2 Q4 2017 includes a non-cash impairment charge of $1.1 million and a net loss of $3.3 million related to the sale of DHT Eagle and DHT Utah. Q1 2017 includes a non-cash impairment charge of $7.5 million related to the sale of DHT Ann and DHT Phoenix. 2017 includes  impairment charges of $8.5 million and net loss of $3.5 million related to sale of vessels. 2016 includes total impairment charges of $84.7 million.
3 Diluted shares include the dilutive effect of the convertible senior notes and restricted shares granted to management and members of the board of directors.
4 The cash balance as of December 31, 2016 includes $48.7 million relating to the financing for DHT Tiger which was drawn in 2016 in advance of the delivery of the DHT Tiger on January 16, 2017.
5 Per common share.
6 As % of total operating days in period.

 
2

 
FIRST QUARTER 2018 FINANCIALS

Shipping revenues for the first quarter of 2018 of $79.9 million compared to shipping revenues of $92.1 million in the first quarter of 2017.   The change from the 2017 period to the 2018 period was due lower tankers rates partly offset by an increase in the fleet and non-cash IFRS 15 adjustment of $3.7 million.

Voyage expenses for the first quarter of 2018 were $33.7 million, compared to voyage expenses of $21.4 million in the first quarter of 2017. The increase was mainly due to a larger fleet in the 2018 period in addition to a non-cash IFRS 15 adjustment of $1.0 million.

The Company’s VLCCs achieved time charter equivalent earnings for the vessels operating in the spot market of $20,200 per day in the first quarter of 2018. If IFRS 15 had not been adopted in the first quarter of 2018, the time charter equivalent earnings would have been $18,400 per day.

Vessel operating expenses for the first quarter of 2018 were $17.2 million, compared to $13.9 million in the first quarter of 2017. The increase was due to an increase in the fleet.

Depreciation and amortization was $23.7 million for the first quarter of 2018, compared to $20.9 million in the first quarter of 2017. The increase was due to an increase in the fleet.

General & administrative expense (“G&A”) for the first quarter of 2018 was $5.0 million, consisting of $3.8 million cash and $1.2 million non-cash charges, compared to $6.3 million in the first quarter of 2017, consisting of $4.3 million cash and $2.0 million non-cash charges. Non-cash G&A includes accrual for social security tax.

Net financial expenses for the first quarter of 2018 were $9.5 million compared to $7.7 million in the first quarter of 2017. The increase is mainly due to increased borrowings in connection with an increase in the fleet.

The Company had net loss in the first quarter of 2018 of $9.2 million, or loss of $0.06 per basic share and $0.06 per diluted share, compared to net income in the first quarter of 2017 of $14.3 million, or $0.15 per basic share and $0.15 per diluted share.

Net cash provided by operating activities for the first quarter of 2018 was $17.4 million compared to $41.4 million for the first quarter of 2017 . The decrease is mainly due to net loss of $9.2 million in the first quarter 2018 compared to net income of $14.3 million in the first quarter 2017 due to a weaker tanker market.

Net cash provided by investing activities was $1.5 million in the first quarter of 2018 comprising $20.7 million related to sale of vessel offset by $17.5 million related to investment in vessels under construction and $1.7 million related to vessel undergoing special survey and drydocking. Net cash used in investing activities was $46.7 million in the first quarter of 2017 comprising $6.0 million related to investment in vessels and $63.9 million related to investment in vessels under construction, offset by $23.3 million related to the sale of DHT Chris.

Net cash used in financing activities for the first quarter of 2018 was $26.4 million comprising $2.9 million related to cash dividend paid, $14.8 million related to scheduled repayment of long term debt and $8.7 million related to repayment of long term debt in connection with sale of vessels. Net cash used in financing activities for the first quarter of 2017 was $31.8 million comprising $7.6 million related to cash dividend paid, $11.6 million related to scheduled repayment of long term debt and $12.0 million related to repayment of long term debt in connection with sale of vessels .

As of March 31, 2018, our cash balance was $69.8 million, compared to $77.3 million as of December 31, 2017.

We declared a cash dividend of $0.02 per common share for the first quarter of 2018 payable on May 30, 2018 for shareholders of record as of May 21, 2018.

We monitor our covenant compliance on an ongoing basis. As of the date of our most recent compliance certificates submitted for the first quarter of 2018, we are in compliance with our financial covenants.
 
 
3

 
As of March 31 , 2018 , we had 143,572,543 shares of our common stock outstanding compared to 142,417,407 as of December 31 , 2017.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

USD in thousands except per share
Q1 2018
Q4 2017
Q3 2017
Q2 2017
Q1 2017
2017
2016
Reconciliation of Adjusted Net Revenue
             
               
Shipping revenues
            79,911
            92,244
            84,374
            86,335
            92,100
          355,052
          356,010
Voyage expenses
          (33,721)
          (35,619)
          (29,594)
          (26,701)
          (21,387)
        (113,301)
          (65,349)
Adjusted Net Revenue
            46,191
            56,625
            54,780
            59,634
            70,712
          241,751
          290,661
               
Reconciliation of Adjusted EBITDA
             
               
Net income/(loss) after tax
             (9,213)
             (7,514)
             (5,067)
              4,836
            14,346
              6,602
              9,260
Income tax expense/(income)
                    18
                     (2)
                    55
                    39
                    40
                  131
                    95
Other financial (income)/expenses
                  (92)
                  253
                    81
                (460)
                (318)
                (443)
                    40
Fair value (gain)/loss on derivative financial instruments
                (359)
                (435)
                (478)
                (521)
                (719)
             (2,154)
             (3,235)
Interest expense
            10,244
            10,664
            10,586
              9,902
              8,956
            40,109
            35,070
Interest income
                  (71)
                  (41)
                  (28)
                  (36)
                  (35)
                (140)
                  (66)
Share of profit from associated companies
                (258)
                (172)
                (235)
                (208)
                (187)
                (802)
                (649)
(Profit)/loss, sale of vessel
                    46
              3,257
                     -
                  228
                    55
              3,540
                (138)
Impairment charges
                     -
              1,053
                     -
                     -
              7,487
              8,540
            84,700
Depreciation and amortization
            23,674
            26,417
            26,468
            22,940
            20,933
            96,758
            84,340
Adjusted EBITDA
            23,990
            33,479
            31,382
            36,720
            50,559
          152,141
          209,415

EARNINGS CONFERENCE CALL AND WEBCAST INFORMATION
The company will host a conference call and webcast which will include a slide presentation at 8:00 a.m. EDT/14:00 CEST on Tuesday May 8, 2018   to discuss the results for the quarter.

All shareholders and other interested parties are invited to join the conference call, which may be accessed by calling 1 323 701 0225 within the United States, 21002610 within Norway and +44 330 336 9105 for international callers . The passcode is “DHT” or “4264945”.

The webcast which will include a slide presentation will be available on the following link:
https://edge.media-server.com/m6/p/i8sjfybn and can also be accessed in the Investor Relations section on DHT's website at http://www.dhtankers.com .

An audio replay of the conference call will be available through May 15, 2018.  To access the replay, dial 1 719 457 0820   within the United States, 23500077 within Norway or +44 207 660 0134 for international callers and enter “4264945” as the pass code.


ABOUT DHT HOLDINGS, INC.

DHT is an independent crude oil tanker company. Our fleet trades internationally and consists of crude oil tankers in the VLCC and Aframax segments. We operate through our integrated management companies in Oslo, Norway and Singapore. You shall recognize us by our business approach with an experienced organization with focus on first rate operations and customer service, quality ships built at quality shipyards, prudent capital structure with robust cash break even levels to accommodate staying power through the business cycles, a combination of market exposure and fixed income contracts for our fleet and a transparent corporate structure maintaining a high level of integrity and good governance.   For further information: www.dhtankers.com .
 

 
4

 
FORWARD LOOKING STATEMENTS

This press release contains certain forward-looking statements and information relating to the Company that are based on beliefs of the Company’s management as well as assumptions, expectations, projections, intentions and beliefs about future events, in particular regarding dividends (including our dividend plans, timing and the amount and growth of any dividends), daily charter rates, vessel utilization, the future number of newbuilding deliveries, oil prices and seasonal fluctuations in vessel supply and demand. When used in this document, words such as “believe,” “intend,” “anticipate,” “estimate,” “project,” “forecast,” “plan,” “potential,” “will,” “may,” “should” and “expect” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.  These statements reflect the Company's current views with respect to future events and are based on assumptions and subject to risks and uncertainties.  Given these uncertainties, you should not place undue reliance on these forward-looking statements.  These forward-looking statements represent the Company’s estimates and assumptions only as of the date of this press release and are not intended to give any assurance as to future results.  For a detailed discussion of the risk factors that might cause future results to differ, please refer to the Company's Annual Report on Form 20-F, filed with the Securities and Exchange Commission on April 24, 2018.

The Company undertakes no obligation to publicly update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, except as required by law.  In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur, and the Company's actual results could differ materially from those anticipated in these forward-looking statements.


CONTACT:
Eirik Uboe, CFO
Phone: +1 441 299 4912 and +47 412 92 712
E-mail:   eu@dhtankers.com

 
 
 
 
 
 
 
 
 
5

 













DHT HOLDINGS, INC.




UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018





 
 
 
 
 
 
 
 
6

 
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
($ in thousands)

 
Note
 
March 31, 2018
 
December 31, 2017
ASSETS
         
Current assets
         
Cash and cash equivalents
 
$
                                  69,761
 
                                  77,292
Accounts receivable and accrued revenues
2, 8
 
                                  35,286
 
                                  42,212
Capitalized voyage expenses
2
 
                                    1,291
 
                                           -
Prepaid expenses
   
                                    5,505
 
                                    3,197
Bunkers, lube oils and consumables
   
                                  22,003
 
                                  23,675
Asset held for sale
 
 
                                           -
 
                                  20,762
Total current assets
 
$
                               133,845
 
                               167,137
           
Non-current assets
         
Vessels and time charter contracts
5
$
                            1,422,261
 
                            1,444,146
Advances for vessels under construction
5
 
                               132,237
 
                               114,759
Other property, plant and equipment
   
                                       459
 
                                       464
Investment in associated company
   
                                    4,294
 
                                    3,992
Total non-current assets
 
$
                            1,559,252
 
                            1,563,360
           
TOTAL ASSETS
 
$
                            1,693,096
 
                            1,730,497
           
LIABILITIES AND STOCKHOLDERS' EQUITY
         
Current liabilities
         
Accounts payable and accrued expenses
 
$
                                  17,519
 
                                  17,427
Derivative financial liabilities
   
                                       187
 
                                       545
Current portion long term debt
4
 
                                  55,824
 
                                  65,053
Total current liabilities
 
$
                                  73,531
 
                                  83,026
           
Non-current liabilities
         
Long term debt
4
 
                               708,620
 
                               721,151
Other non-current liabilities
 
$
                                       435
 
                                       428
Total non-current liabilities
 
$
                               709,055
 
                               721,579
           
TOTAL LIABILITIES
 
$
                               782,585
 
                               804,605
           
Stockholders' equity
         
Stock
6, 7
$
                                    1,436
 
                                    1,424
Additional paid-in capital
6, 7
 
                            1,147,005
 
                            1,140,794
Accumulated deficit
2
 
                              (238,906)
 
                              (222,087)
Translation differences
   
                                       129
 
                                          85
Other reserves
   
                                       846
 
                                    5,676
Total stockholders equity
 
$
                               910,511
 
                               925,892
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
1,693,096
 
1,730,497
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
 
 
7

 
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
($ in thousands except per share amounts)

     
1Q 2018
 
1Q 2017
 
Note
 
Jan. 1 - Mar. 31 2018
 
Jan. 1 - Mar. 31 2017
Shipping revenues
2
$
                                   79,911
 
                                      92,100
           
Operating expenses
         
Voyage expenses
2
 
                                 (33,721)
 
                                     (21,387)
Vessel operating  expenses
   
                                 (17,238)
 
                                     (13,873)
Depreciation and amortization
5
 
                                 (23,674)
 
                                     (20,933)
Impairment charge
5
 
                                            -
 
                                       (7,487)
Profit /( loss), sale of vessel
5
 
                                         (46)
 
                                             (55)
General and administrative expense
   
                                   (4,963)
 
                                       (6,280)
Total operating expenses
 
$
                                 (79,642)
 
                                     (70,016)
           
           
Operating income/(loss)
 
$
                                        270
 
                                      22,084
           
Share of profit from associated companies
   
                                        258
 
                                            187
Interest income
   
                                           71
 
                                              35
Interest expense
   
                                 (10,244)
 
                                       (8,956)
Fair value gain/(loss) on derivative financial instruments
   
                                        359
 
                                            719
Other financial income/(expenses)
   
                                           92
 
                                            318
Profit/(loss) before tax
 
$
                                   (9,195)
 
                                      14,386
           
Income tax expense
   
                                         (18)
 
                                             (40)
Net income/(loss) after tax
 
$
                                   (9,213)
 
                                      14,346
Attributable to the owners of parent
 
$
                                   (9,213)
 
                                      14,346
           
           
Basic net income/(loss) per share
   
                                      (0.06)
 
                                           0.15
Diluted net income/(loss) per share
   
                                      (0.06)
 
                                           0.15
           
Weighted average number of shares (basic)
   
                        143,044,483
 
                              94,134,052
Weighted average number of shares (diluted)
   
                        143,044,483
 
                            112,617,393
           
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
         
Profit/(loss) for the period
 
$
                                   (9,213)
 
                                      14,346
           
Other comprehensive income:
         
Items that will not be reclassified to income statement:
         
Remeasurement of defined benefit obligation (loss)
   
                                            -
 
                                                -
Total
 
$
                                            -
 
                                                -
Items that may be reclassified to income statement:
         
Exchange gain (loss) on translation of foreign currency
         
denominated associate and subsidiary
   
                                           44
 
                                              65
Total
 
$
                                           44
 
                                              65
           
Other comprehensive income
 
$
                                           44
 
                                              65
           
Total comprehensive income for the period
 
$
                                   (9,169)
 
                                      14,411
           
Attributable to the owners of parent
 
$
                                   (9,169)
 
                                      14,411
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
 
 
8

 
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED )
($ in thousands)

     
Q1 2018
 
Q1 2017
 
Note
 
Jan. 1 - Mar. 31, 2018
 
Jan. 1 - Mar. 31, 2017
CASH FLOW FROM OPERATING ACTIVITIES
         
Net income / (loss)
2
$
                                       (9,213)
 
                                        14,346
           
Items included in net income not affecting cash flows
   
                                      26,224
 
                                        31,471
     Depreciation
5
 
                                     23,674
 
                                       20,933
     Impairment charge
5
 
                                               -
 
                                          7,487
     Amortization of debt issuance costs
   
                                        1,727
 
                                          1,879
     (Profit) / loss, sale of vessel
5
 
                                             46
 
                                               55
       Fair value (gain) / loss on derivative financial instruments       (359)     (719)
     Compensation related to options and restricted stock
   
                                        1,393
 
                                          2,275
     (Gain) / loss purchase of convertible bond
   
                                               -
 
                                           (253)
     Share of profit in associated companies
   
                                         (258)
 
                                           (187)
Income adjusted for non-cash items
 
$
                                      17,011
 
                                        45,817
           
Changes in operating assets and liabilities
   
                                            364
 
                                         (4,428)
     Accounts receivable and accrued revenues
2, 8
 
                                         (511)
 
                                          1,992
     Capitalized voyage expenses
2
 
                                           597
 
                                                 -
     Prepaid expenses
   
                                      (2,307)
 
                                        (1,251)
     Accounts payable and accrued expenses
   
                                           907
 
                                          3,784
     Deferred shipping revenues
   
                                               -
 
                                        (1,109)
     Bunkers, lube oils and consumables
   
                                        1,672
 
                                        (7,844)
     Pension liability
   
                                                7
 
                                                 -
Net cash provided by operating activities
 
$
                                      17,375
 
                                        41,389
           
CASH FLOW FROM INVESTING ACTIVITIES
         
Investment in vessels
   
                                       (1,715)
 
                                         (6,046)
Investment in vessels under construction
5
 
                                    (17,479)
 
                                      (63,871)
Sale of vessels
   
                                      20,715
 
                                        23,339
Investment in property, plant and equipment
   
                                            (69)
 
                                              (87)
Net cash provided by/(used in) investing activities
 
$
                                        1,452
 
                                      (46,666)
           
CASH FLOW FROM FINANCING ACTIVITIES
         
Cash dividends paid
7
 
                                       (2,871)
 
                                         (7,570)
Issuance of long term debt
4
 
                                               -
 
                                            (624)
Scheduled repayment of long-term debt
4
 
                                    (14,824)
 
                                      (11,620)
Repayment of long-term debt, sale of vessels
4
 
                                       (8,663)
 
                                      (12,024)
Net cash used in financing activities
 
$
                                    (26,359)
 
                                      (31,837)
           
Net increase/(decrease) in cash and cash equivalents
   
                                       (7,531)
 
                                      (37,114)
Cash and cash equivalents at beginning of period
   
                                      77,292
 
                                      109,295
Cash and cash equivalents at end of period
 
$
                                      69,761
 
                                        72,182
           
Specification of items included in operating activities:
         
Interest paid
   
                                        6,717
 
                                          8,017
Interest received
   
                                              71
 
                                                35
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
 
 
9

 
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
($ in thousands except shares)

           
Paid-in
               
           
Additional
 
Retained
 
Translation
 
Other
 
Total
 
Note
Shares
 
Stock
 
Capital
 
Earnings
 
Differences
 
Reserves
 
Equity
Balance at January 1, 2017
 
         93,433,804
 $
                      934
 $
              881,097
 $
             (205,195)
 $
                     (108)
 $
                   8,283
 $
              685,011
Net income/(loss) after tax
             
                 14,346
         
                 14,346
Other comprehensive income
                 
                         65
     
                         65
Total comprehensive income
             
                 14,346
 
                         65
     
                 14,411
Cash dividends declared and paid
             
                 (7,570)
         
                 (7,570)
Purchase of convertible bonds
         
                     (760)
             
                     (760)
Compensation related to options and restricted stock
 
           1,189,099
 
                         12
 
                   7,173
         
                 (4,910)
 
                   2,275
Balance at March 31, 2017
 
         94,622,903
 $
                      946
 $
              887,509
 $
             (198,419)
 $
                       (43)
 $
                   3,373
 $
              693,367
 
 
           
Paid-in
               
           
Additional
 
Retained
 
Translation
 
Other
 
Total
 
Note
Shares
 
Stock
 
Capital
 
Earnings
 
Differences
 
Reserves
 
Equity
Balance at January 1, 2018, as previously reported
 
      142,417,407
 $
                   1,424
 $
           1,140,794
 $
             (222,087)
 $
                         85
 $
                   5,676
 $
              925,892
Impact of change in accounting policy
2
           
                 (4,734)
         
                 (4,734)
Adjusted balance at January 1, 2018
 
      142,417,407
 
                   1,424
 
           1,140,794
 
             (226,821)
 
                         85
 
                   5,676
 
              921,158
Net income/(loss) after tax
             
                 (9,213)
         
                 (9,213)
Other comprehensive income
             
                          -
 
                         44
     
                         44
Total comprehensive income
             
                 (9,213)
 
                         44
     
                 (9,169)
Cash dividends declared and paid
             
                 (2,871)
         
                 (2,871)
Compensation related to options and restricted stock
 
           1,155,136
 
                         12
 
                   6,211
         
                 (4,829)
 
                   1,393
Balance at March 31, 2018
 
      143,572,543
 $
                   1,436
 $
           1,147,005
 $
             (238,906)
 $
                      129
 $
                      846
 $
              910,511
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
 
 
10

 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 2018

 
Note 1 – General information
DHT Holdings, Inc. (“DHT” or the “Company”) is a company incorporated under the laws of the Marshall Islands whose shares are listed on the New York Stock Exchange. The Company’s principal executive office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The Company is engaged in the ownership and operation of a fleet of crude oil carriers.

The financial statements were approved by the Company’s Board of Directors (the “Board”) on May 4, 2018 and authorized for issue on May 7, 2018.


Note 2 – General accounting principles
The condensed consolidated interim financial statements do not include all information and disclosure required in the annual financial statements and should be read in conjunction with DHT’s audited consolidated financial statements included in its Annual Report on Form 20-F for 2017. Our interim results are not necessarily indicative of our results for the entire year or for any future periods.

The interim condensed financial statements have been prepared in accordance with IAS 34 “Interim Financial Reporting” as issued by the International Accounting Standards Board (“IASB”).

The interim condensed financial statements have been prepared on a historical cost basis, except for derivative financial instruments that have been measured at fair value. The accounting policies that have been followed in these interim condensed financial statements are the same as presented in the 2017 audited consolidated financial statements.

These interim condensed consolidated financial statements have been prepared on a going concern basis.

Application of new and revised International Financial Reporting Standards (“IFRSs”)
New and revised IFRSs, and interpretations mandatory for the first time for the financial year beginning January 1, 2018 are listed below. With the exception of IFRS 15, the adoption did not have any effect on the financial statements:

IFRS 9 Financial Instruments
IFRS 15 Revenue from Contracts with Customers
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions
Annual Improvements to IFRS Standards 2014-2016 Cycle
IFRIC 22 Foreign Currency Transactions and Advance Consideration

Adoption of IFRS 15 Revenue from Contracts with Customers
Effective from January 1, 2018, we adopted the new accounting standard IFRS 15 Revenue from Contracts with Customers using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

For vessels operating on spot charterers, voyage revenues are, under the new revenue standard, recognized ratably over the estimated length of each voyage, calculated on a load-to-discharge basis. Voyage expenses are capitalized between the previous discharge port, or contract date if later, and the next load port if they qualify as fulfillment costs under IFRS 15. To recognize costs incurred to fulfil a contract as an asset, the following criteria shall be met: (i) the costs relate directly to the contract, (ii) the costs generate or enhance resources of the entity that will be used in satisfying performance obligations in the future and (iii) the costs are expected to be recovered. Reference is also made to note 2 in the Annual Report on Form 20-F for 2017.

 
11

 
Time charters continue to be accounted as operating leases in accordance with IAS 17 and related interpretations and the implementation of the new revenue standard therefore did not have an effect on income recognition from such contracts.

The cumulative effect of the adjustments made to our condensed consolidated statement of financial position at January 1, 2018 from the adoption of IFRS 15 Revenue from Contracts with Customers was as follows:
 
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
 
Balance at
Adjustments
Balance at t
$ in thousands
December 31, 2017
due to IFRS 15
January 1, 2018
ASSETS
     
Accounts receivable and accrued revenues
                           42,212
                            (7,437)
                           34,775
Capitalized voyage expenses
                                     -
                              1,888
                              1,888
LIABILITIES
     
Accounts payable and accrued expenses
                           17,427
                                (815)
                           16,613
EQUITY
     
Accumulated deficit
                       (222,087)
                            (4,734)
                       (226,821)
 
The impact of the adoption of IFRS 15 Revenues from Contracts with Customers on our condensed consolidated statement of financial position, condensed consolidated income statement and condensed consolidated statement of cash flow for the three-month period ending March 31, 2018 were as follows:
 
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
 
Balance at March 31, 2018 
   
Adjustments
Balance without
$ in thousands
As reported
due to IFRS 15
adoption of IFRS 15
ASSETS
     
Accounts receivable and accrued revenues
                           35,286
                              3,694
                           38,980
Capitalized voyage expenses
                              1,291
                            (1,291)
                                     -
LIABILITIES
     
Accounts payable and accrued expenses
                           17,519
                                 384
                           17,903
EQUITY
     
Accumulated deficit
                       (238,906)
                              2,019
                       (236,887)
 
 
CONDENSED CONSOLIDATED INCOME STATEMENT
 
For the period ended March 31, 2018
   
Adjustments
Balance without
$ in thousands
As reported
due to IFRS 15
adoption of IFRS 15
Shipping revenues
                           79,911
                            (3,743)
                           76,168
Voyage expenses
                          (33,721)
                              1,028
                          (32,693)
Net income/(loss) after tax
                            (9,213)
                            (2,715)
                          (11,928)
 
 
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
 
For the period ended March 31, 2018
   
Adjustments
Balance without
$ in thousands
As reported
due to IFRS 15
adoption of IFRS 15
Net income / (loss)
                            (9,213)
                            (2,715)
                          (11,928)
Accounts receivable and accrued revenues
                                (511)
                              3,743
                              3,232
Capitalized voyage expenses
                                 597
                                (597)
                                     -
Accounts payable and accrued expenses
                                 907
                                (431)
                                 476
Net cash provided by operating activities
                           17,375
                                     -
                           17,375
 
 
12

 
Voyage expenses are capitalized between the previous discharge port, or contract date if later, and the next load port and amortized between load port and discharge port. The closing balance of assets recognized from the costs to obtain or fulfil a contract was $1.3 million as per March 31, 2018. During first quarter of 2018, $1.0 million was amortized and no impairment losses were recognized in the period.

IFRS 15 requires disclosure on the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period and an explanation of when an entity expects to recognize these amounts as revenue. We have applied the practical expedient related to performance obligation with reference to IFRS 15:121 (a), as the original expected duration of the underlying contract is one year or less. Consequently, no disclosure is presented in the notes to the interim condensed consolidated financial statements.

According to IFRS 15:114 an entity shall disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. DHT’s business is to operate a fleet of crude oil tankers and management has organized the entity as one segment based upon on the service provided. Consequently, the Company does not disaggregate revenue recognized from contracts with customers.

 
Note 3 – Segment reporting
Since DHT’s business is limited to operating a fleet of crude oil tankers, management has organized the entity as one segment based upon the service provided. Consequently, the Company has one operating segment as defined in IFRS 8, Operating Segments.

As of March 31, 2018, the Company had 25 vessels in operation; 7 vessels were on time charters and 18 vessels operating in the spot market.

Information about major customers:
For the period from January 1, 2018 to March 31, 2018 five customers represented $11.5 million, $10.8 million, $7.2 million, $6.5 million and $5.8 million, respectively, of the Company’s revenues.

For the period from January 1, 2017 to March 31, 2017 five customers represented $13.8 million, $10.5 million, $10.0 million, $7.7 million and $6.1 million, respectively, of the Company’s revenues.
 
 
13


Note 4 – Interest bearing debt
As of March 31, 2018, DHT had interest bearing debt totaling $764.4 million (including the $105.8 million convertible senior notes) .
 
Scheduled debt repayments (USD million) and margin above Libor
 
 
Margin
Q2
Q3-Q4
 
 
 
 
 
$ in thousands
above
Libor
2018
2018
2019
2020
2021
Thereafter
Total
ABN Amro Credit Facility *
2.60%
         2,283
         3,941
           7,882
           7,882
         96,371
 
       118,360
Nordea Samco Credit Facility
2.50%
         5,008
      10,015
       200,177
 
 
 
       215,199
Credit Agricole Credit Facility
2.19%
         1,649
         3,299
           6,597
           6,597
           6,597
         42,925
         67,665
Danish Ship Finance Credit Facility
2.25%
         1,300
         1,300
           2,600
         39,000
 
 
         44,200
Nordea/DNB Credit Facility
2.25%
            625
         1,250
           2,500
         40,000
 
 
         44,375
Nordea/DNB Credit Facility
2.75%
            434
            869
           8,251
 
 
 
           9,554
Nordea BW VLCC Acquisition Credit Facility
2.40%
         4,200
         8,400
         16,800
         16,800
         16,800
      109,483
       172,483
ABN Amro Revolving Credit Facility **
2.50%
 
 
 
 
 
 
 
Convertible Senior Notes
 
 
 
       105,826
 
 
 
       105,826
Total
 
      15,499
      29,073
       350,634
      110,280
      119,769
      152,408
       777,663
Unamortized upfront fees bank loans
 
 
 
 
 
 
 
          (6,695)
Difference amortized cost/notional amount convertible note 
 
 
 
 
 
 
 
  (6,523)
Total interest bearing debt
 
 
 
 
 
 
 
       764,444
 
*In addition to the scheduled installments under the ABN Amro/Nordea/DVB credit facility we are, through the first quarter 2020, required to pay quarterly installments equal to free cash flow during the preceding quarter, capped at $0.3 million per borrower per quarter. Free cash flow is defined as an amount calculated as of the last day of each quarter equal to the positive difference, if any, between (a) the sum of the earnings of the vessels during the quarter and (b) the sum of ship operating expenses, voyage expenses, estimated capital expenses for the following two quarters, general & administrative expenses, interest expenses and change in working capital.
**$43.4 mill. available as of March 31, 2018.  Quarterly reduction of $1.3 million.
 
 
14


ABN Amro Credit Facility
In July 2014 we entered into a credit facility with ABN Amro, Nordea and DVB as lenders and DHT Holdings, Inc. as guarantor for the financing of three VLCC newbuildings.  Borrowings bear interest at a rate equal to Libor + 2.60% and the loan is repayable in quarterly installments of $2.0 million through Q3 2021 and a final payment of $91.2 with the last installment. In addition to the scheduled instalments, each borrower shall the first three years make additional repayments of a variable amount equal to free cash flow in the prior quarter capped at $0.3 million per quarter to be applied against the balloon. Free cash flow is defined as an amount calculated as of the last day of each quarter equal to the positive difference, if any, between (a) the sum of the earnings of the vessels during the quarter and (b) the sum of ship operating expenses, voyage expenses, estimated capital expenses for the following two quarters, general & administrative expenses, interest expenses and change in working capital.

The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
 
Value adjusted* tangible net worth of $300 million
 
Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets
 
Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

Nordea Samco Credit Facility
The credit facility is guaranteed by DHT Holdings, Inc., borrowings bear interest at a rate equal to Libor + 2.50% and are repayable in quarterly installments of $5.0 million with a final payment of $180.2 in December 2019. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
 
Value adjusted* tangible net worth of $300 million
 
Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets
 
Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

Credit Agricole Credit Facility
In June 2015 Samco Gamma Ltd and DHT Tiger Limited entered into a credit agreement with Credit Agricole for the financing of the Samco Scandinavia and the newbuilding DHT Tiger that was delivered in January 2017.  In June 2016 we made a voluntary prepayment of $5.0 million and the financing of the Samco Scandinavia is repayable with 30 quarterly installments of $0.97 million each. The $48.7million financing of DHT Tiger was drawn in 2016 in advance of the delivery of the DHT Tiger which took place in January 2017 and is repayable in quarterly installments of $0.7 million with a final payment of $29.7 in December 2023 .  The loan bears interest at Libor plus a margin of 2.1875%.  The credit agreement is guaranteed by DHT and contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
 
Value adjusted* tangible net worth of $200 million
 
Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets
 
Unencumbered consolidated cash of at least the higher of (i) $20 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).
 
 
15



Danish Ship Finance Credit Facility
In November 2014 we entered into a credit facility totaling $49.4 million with Danish Ship Finance (“DSF”) as lender and DHT Holdings, Inc. as guarantor for the financing of the VLCC newbuilding DHT Jaguar delivered in Q4 2015.  The full amount of the credit facility was drawn in November 2015.  Borrowings bear interest at a rate equal to Libor + 2.25% and are repayable in 10 semiannual installments of $1.3 million each from May 2016 to November 2020 and a final payment of $36.4 million in November 2020. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessel that secure the credit facility be no less than 130% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
 
Value adjusted* tangible net worth of $300 million
 
Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets
 
Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

Nordea/DNB Credit Facility
In October 2015 we entered into a credit facility totaling $50.0 million with Nordea and DNB as lenders and DHT Holdings, Inc. as guarantor for the financing of the VLCC newbuilding DHT Leopard delivered in Q1 2016.  The full amount of the credit facility was drawn on December 29, 2015 in advance of the delivery of the DHT Leopard on January 4, 2016.  Borrowings bear interest at a rate equal to Libor + 2.25% and are repayable in 20 quarterly installments of $0.625 million from March 2016 to December 2020 and a final payment of $37.5 million in December 2020. In September 2016, the four vessels financed by RBS (DHT Ann, DHT Chris, DHT Cathy and DHT Sophie) were included in the credit facility as a separate tranche totaling $40.0 million.  Borrowings under the $40.0 million tranche bear interest at a rate equal to Libor + 2.75% and are repayable in 11 quarterly installments of $2.1 million from December 2016 to June 2019 and a final payment of $17.3 million in August 2019. Subsequent to the sale of DHT Chris which was delivered to the buyers in January 2017 and the sale of the DHT Ann which was delivered to the buyers in May 2017, the separate tranche is repayable in quarterly installments of $0.4 million and a final payment of $6.9 million in August 2019. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
 
Value adjusted* tangible net worth of $300 million
 
Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets
 
Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

Nordea BW VLCC Acquisition Credit Facility
$204 million of the $300 million credit facility was borrowed during the second quarter of 2017 in connection with delivery of the nine VLCCs in water from BW.  The final $96 million is expected to be borrowed in connection with the delivery of the two VLCC newbuildings from DSME in the second quarter of 2018.  The credit facility is guaranteed by DHT Holdings, Inc., borrowings bear interest at a rate equal to Libor + 2.40%. Subsequent to the sale of the DHT Utah and DHT Utik, the current outstanding is repayable in quarterly installments of $4.2 million with a final payment of $84.3 million in the second quarter of 2023. When the facility is fully drawn, the quarterly installments will be $5.4 million with a final payment of $156.3 million in the second quarter of 2023. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
 
Value adjusted* tangible net worth of $300 million
 
Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets
 
Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).
 
 
16

 
ABN Amro Revolving Credit Facility
In November 2016, we entered into a secured five year revolving credit facility with ABN Amro totaling $50.0 million to be used for general corporate purposes, including security repurchases and the acquisition of ships. The financing bears interest at a rate equal to Libor + 2.50%.  Availability under the facility is reduced by $1.3 million quarterly. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
 
Value adjusted* tangible net worth of $300 million
 
Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets
 
Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt

* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

Convertible Senior Notes
In February 2016 we repurchased $3.0 million of the convertible senior notes in the open market at a price of 99% of par and in April 2016 we repurchased $1.0 million of the convertible senior notes in the open market at a price of 99% of par .  During the fourth quarter of 2016 we repurchased $23.0 million of the convertible senior notes in the open market at an average price of 90.4% of par.   During the first quarter of 2017 we repurchased $5.0 million of the convertible senior notes in the open market at a price of 100.4% of par. During the second quarter of 2017 we repurchased $12.2 million of the convertible senior notes in the open market at a price of 98.4% of par.

Interest rate swaps
As of March 31, 2018, DHT has three interest rate swaps totaling $73.5 million with maturity in the second quarter of 2018.  The fixed interest rates range from 2.86% to 3.57%.  As of March 31, 2018, the fair value of the derivative financial liability related to the swaps amounted to $0.2 million.

Covenant compliance
As of the date of our most recent compliance certificates submitted to the banks, we are in compliance with our financial covenants.

 
Note 5 – Vessels
The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of constructing new vessels. Historically, both charter rates and vessel values have been cyclical. The carrying amounts of vessels held and used by us are reviewed for potential impairment or reversal of prior impairment charges whenever events or changes in circumstances indicate that the carrying amount of a particular vessel may not accurately reflect the recoverable amount of a particular vessel. The Company is of the view that there were no events or changes in circumstances indicating that the carrying amount of a particular vessel may not accurately reflect the recoverable amount of a particular vessel as of March 31, 2018.

Cost of Vessels
   
Depreciation, impairment and amortization*
 
$ in thousands
   
$ in thousands
 
At January 1, 2018
1,810,158
 
At January 1, 2018
366,012
Additions
1,715
 
Depreciation and amortization
23,600
Retirement **
(1,244)
 
Retirement **
(1,244)
At March 31, 2018
1,810,629
 
At March 31, 2018
388,368

Carrying Amount
 
$ in thousands
 
At January 1, 2018
1,444,146
At March 31, 2018
1,422,261

*Accumulated numbers
**Relates to completed depreciation of drydocking for DHT Sophie.
 
 
17

 
Vessels under construction
We have entered into agreements with HHI for the construction of two VLCCs with a contract price of $82.4 million each (including scrubbers). As of March 31, 2018 we have paid pre-delivery installments totaling $49.4 million for the two newbuildings to be delivered in 2018. Borrowing costs are capitalized as part of vessels under construction.

In connection with the acquisition of BW Group’s VLCC fleet, DHT novated the agreement with the shipbuilder Daewoo Shipbuilding & Marine Engineering Co., Ltd for the construction of two VLCCs. First and second installments were already paid by BW Group and the agreed purchase price was $29.9 million each. As of March 31, 2018 we have paid pre-delivery installments totaling $17.4 million for the two newbuildings to be delivered in 2018. Borrowing costs are capitalized as part of vessels under construction.

Cost of vessels under construction
 
$ in thousands
 
At January 1, 2018
114,759
Additions
17,479
At March 31, 2018
132,237
   
   
Carrying Amount
 
$ in thousands
 
At January 1, 2018
114,759
At March 31, 2018
132,237
 
The following table is a timeline of future expected payments and dates relating to vessels under construction as of March 31, 2018:

Vessels under construction
$ in thousands
March 31, 2018
January 1, 2018
Not later than one year
202,094
218,565
Later than one year and not later than three years
-
-
Later than three years and not later than five years
-
-
Total
202,094
218,565


 
18


Note 6 – Equity and Convertible Bond Offerings

Convertible Senior Note Offering
On September 16, 2014 we completed a private placement of $150 million aggregate principal amount of convertible senior notes due 2019 (the "Notes"). DHT will pay interest at a fixed rate of 4.5% per annum, payable semiannually in arrears. Net proceeds to DHT were approximately $145.9 million after the payment of placement agent fees. The value of the conversion right has been estimated to $21.8 million; hence $21.8 million of the aggregate principal amount of $150.0 million was classified as equity. The Notes will be convertible into common stock of DHT at any time after placement until one business day prior to their maturity. The initial conversion price was $8.125 per share of common stock (equivalent to 18,461,538 shares of common stock), and is subject to customary anti-dilution adjustments. As a result of the cumulative effect of previously announced cash dividends, the conversion price was adjusted to $6.3282 effective November 27, 2017. Based on the adjusted conversion price and after adjusting for the repurchase of $44.2 million of the convertible senior notes in the open market at an average price of 94.5% of par, the total number of shares to be issued would be 16,722,923.

We have concluded that the adjustment of the conversion rate upon the payment of cash dividends does not result in an accounting entry as the liability and equity components of the instrument are not re-measured as a result of the cash dividend. This is based on the fact that we have determined that the Notes are non-derivative financial instruments that contain both liability and equity components. The financial liability is the contractual obligation to make interest and principal payments and the equity component is the right of the holders of the Notes to convert the Notes into a fixed number of the Company’s common shares. In accordance with IAS 32, the liability component was measured first and is recorded at its amortized cost over the life of the instrument. The equity component was assigned the residual amount after deducting the amount separately determined for the liability component. The equity component was recorded as part of additional paid-in capital and is never re-measured.

The determination that the conversion feature is an equity instrument (rather than a derivative liability accounted for under IAS 39) was made on the basis that there is no variability in the number of equity instruments delivered upon conversion (i.e. the exchange meets the “fixed for fixed” requirements set forth under IAS 32). In making the determination, the Company considered that the Notes contain a mechanism whereby the conversion rate of the Notes is adjusted for cash dividends paid by the Company. Although this adjustment results in variability in the number of common shares delivered, the fact that this variability serves to maintain the relative economic rights of the holders of the Notes results in no violation of the “fixed for fixed” requirement.


 
 
19

 
Note 7 – Stockholders equity and dividend payment

   
Common stock
   
Preferred stock
Issued at March 31, 2018
 
143,572,543
   
                                   -
Shares to be issued assuming conversion of
         
   convertible notes*
 
20,904,879
     
Numbers of shares authorized for issue
         
   at March 31, 2018
 
      250,000,000
   
                    1,000,000
Par value
 
$ 0.01
   
$ 0.01
*assuming the maximum Fundamental Change conversion rate.
 
Common stock:
Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders.

Preferred stock:
In the first quarter 2017, the board established two series of preferred stock: Series C Preferred Stock and Series D Preferred Stock, the terms of which are detailed in Current Reports on Form 6-K dated January 30, 2017 and March 24, 2017, respectively.  As of March 31, 2018, no shares of Series C Preferred Stock or Series D Preferred Stock were outstanding.   Terms and rights of any other preferred shares will be established by the board when or if such shares would be issued.  


Dividend payment

Dividend payment as of March 31, 2018:

Payment date
Total Payment
Per common share
February 28, 2018
$2.9 million
$0.02
Total payment as per March 31, 2018
$2.9 million
$0.02
 
Dividend payment as of December 31, 2017:
 
Payment date
Total Payment
Per common share
December 6, 2017
$2.8 million
$0.02
August 31, 2017
$2.8 million
$0.02
May 31, 2017
$10.1 million
$0.08
February 22, 2017 $7.6 million $0.08
  Total payment as per December 31, 2017 $23.3 million $0.20
 
 
 
20

 
Note 8 – Accounts receivable and accrued revenues
Accounts receivable and accrued revenues totaling $35.3 million as of March 31, 2018 consists mainly of accounts receivable with no material amounts overdue.

 
Note 9 - Financial risk management, objectives and policies
Note 9 in the 2017 annual report on Form 20-F provides for details of financial risk management objectives and policies.

The Company’s principal financial liability consists of long-term debt with the main purpose being to partly finance the Company’s assets and operations. The Company’s financial assets mainly comprise cash. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks.

 
Note 10 – Subsequent Events
On May 4, 2018 the Board approved a dividend of $0.02 per common share related to the first quarter 2018 to be paid on May 30, 2018 for shareholders of record as of May 21, 2018.

On April 27, 2018 the Company took delivery of the first of its two VLCC newbuildings from DSME.  The vessel is named the DHT Stallion.  A total of $48 million of debt was drawn in connection with the delivery.

On April 24, 2018 the Company entered into a $485 million secured credit facility agreement with a six year tenor for the refinancing of 13 of the Company’s VLCCs. The new credit facility will bear interest at a rate equal to Libor + 2.40% and will have a 20-year repayment profile.

On April 24, 2018, the Company entered into an agreement with ABN Amro to increase the Company’s revolving credit facility to $57.0 million from the current availability of $43.4 million.

 
 
 
 
 
 
 
 
 
 
21
Exhibit 10.1
 
 
 
 
 
DATED 24 April 2018



 
Up to USD 485,000,000
SENIOR SECURED TERM LOAN FACILITIES AND REVOLVING CREDIT

for

the companies
listed in Schedule 1B hereto as joint and several borrowers

with

DHT Holdings, Inc.
as Guarantor
 
arranged by

ABN AMRO Bank N.V. Oslo Branch,
Nordea Bank AB (Publ), filial i Norge
ING Bank, a branch of ING–DiBa AG
DNB Bank ASA,
Credit Agricole Corporate and Investment Bank,
as Bookrunners

ABN AMRO Bank N.V. Oslo Branch,
Nordea Bank AB (Publ), filial i Norge
ING Bank, a branch of ING–DiBa AG
DNB Bank ASA,
Credit Agricole Corporate and Investment Bank,
Danish Ship Finance A/S,
Skandinaviska Enskilda Banken AB
as Mandated Lead Arrangers

with
ABN AMRO Bank N.V.
as Agent and Security Agent

 
 

Page 2 of 126
 
TABLE OF CONTENTS

Clause
 
  Page
     
1.
DEFINITIONS AND INTERPRETATION
9
1.1
Definitions
9
1.2
Construction
25
     
2.
THE FACILITIES
26
2.1
The Facilities
26
2.2
Finance Parties’ rights and obligations
26
2.3
Borrowers’ liabilities and obligations
27
2.4
Financial Agreements Act
27
     
3.
PURPOSE
28
3.1
Purpose
28
3.2
Monitoring
29
     
4.
CONDITIONS OF UTILISATION
29
4.1
Initial conditions precedent
29
4.2
Further conditions precedent
29
4.3
Maximum number of Loans
29
4.4
Form and content
30
4.5
Waiver of conditions precedent
30
     
5.
UTILISATION
31
5.1
Delivery of a Utilisation Request
31
5.2
Completion of a Utilisation Request
31
5.3
Currency and amount
31
5.4
Lenders’ participation
31
5.5
Cancellation of Commitments
31
     
6.
REPAYMENT
33
6.1
Repayment of Loans
33
6.2
Re-borrowing
33
     
7.
PREPAYMENT AND CANCELLATION
34
7.1
Voluntary cancellation
34
7.2
Voluntary prepayment of Loans
34
7.3
Illegality
34
7.4
Total Loss or sale of a Vessel
34
7.5
Market Value
35
7.6
Change of Control
35
7.7
Right of replacement or repayment and cancellation in relation to a single Lender
35
7.8
Restrictions
36
     
8.
INTEREST
37
8.1
Calculation of interest
37
8.2
Payment of interest
37
8.3
Default interest
37
8.4
Notification of rates of interest
38
     
9.
INTEREST PERIODS
38
9.1
Selection of Interest Periods
38
9.2
Non-Business Days
38
     
10.
CHANGES TO THE CALCULATION OF INTEREST
38
10.1
Obligation of Reference Banks to quote
38
10.2
Quotations by Reference Bank
38
10.3
Market disruption
39
10.4
Notification of market disruption
39
 

Page 3 of 126
10.5
Suspension of Utilisation
39
10.6
Negotiation of alternative rate of interest
39
10.7
Application of agreed alternative rate of interest
39
10.8
Alternative rate of interest in absence of agreement
39
10.9
Notice of prepayment
40
10.10
Prepayment
40
10.11
Break Costs
40
     
11.
FEES
40
11.1
Commitment fee
40
11.2
Arrangement Fee
40
11.3
Agency Fee
40
     
12.
TAX GROSS UP AND INDEMNITIES
41
12.1
Definitions
41
12.2
Tax gross-up
41
12.3
Tax indemnity
41
12.4
Tax Credit
42
12.5
Stamp taxes
42
12.6
VAT
42
12.7
FATCA Information
43
12.8
FATCA Deduction
44
12.9
Secured Hedging Agreements
44
     
13.
INCREASED COSTS
44
13.1
Increased costs
44
13.2
Increased cost claims
45
13.3
Exceptions
45
     
14.
OTHER INDEMNITIES
45
14.1
Currency indemnity
45
14.2
Other indemnities
46
14.3
Indemnity to the Agent and Security Agent
46
     
15.
MITIGATION BY THE LENDERS
47
15.1
Mitigation
47
15.2
Limitation of liability
47
     
16.
COSTS AND EXPENSES
47
16.1
Transaction expenses
47
16.2
Amendment and enforcement costs
47
     
17.
SECURITY
49
17.1
Security
49
17.2
Perfection etc.
49
17.3
Further assignment of Earnings, Charterparty and Intra Group Loans
49
17.4
Security – Secured Hedging Agreement
50
17.5
Parallel Debt
50
     
18.
GUARANTEE AND INDEMNITY
51
18.1
Guarantee and indemnity
51
18.2
Continuing guarantee
51
18.3
Reinstatement
51
18.4
Waiver of defences
52
18.5
Immediate recourse
52
18.6
Appropriations
52
18.7
Deferral of the Guarantor’s rights
53
18.8
Additional security
53
18.9
Norwegian Financial Agreements Act
53
18.10
Guarantee Limitations
54
     
19.
REPRESENTATIONS
56
19.1
Status
56
19.2
Binding obligations
56
19.3
Non-conflict with other obligations
56
19.4
Power and authority
56
 

Page 4 of 126
19.5
Validity and admissibility in evidence
57
19.6
Governing law and enforcement
57
19.7
Insolvency
57
19.8
Deduction of Tax
57
19.9
No filing or stamp taxes
57
19.10
No default
58
19.11
No misleading information
58
19.12
Financial statements
58
19.13
Pari passu ranking
58
19.14
No proceedings pending or threatened
58
19.15
Title
58
19.16
No security
58
19.17
No immunity
59
19.18
Ranking of Security Documents
59
19.19
Taxation
59
19.20
Environmental compliance
59
19.21
Environmental Claims
59
19.22
ISM Code and ISPS Code compliance
59
19.23
The Vessels
60
19.24
Financial Indebtedness
60
19.25
Sanctions
60
19.26
Shares
60
19.27
Repetition
61
     
20.
INFORMATION UNDERTAKINGS
61
20.1
Financial statements
61
20.2
Compliance Certificate
61
20.3
Requirements as to financial statements
61
20.4
Information: miscellaneous
62
20.5
Notification of default
62
20.6
Notification of Environmental Claims
63
20.7
Market Value
63
20.8
“Know your customer” checks
63
20.9
Disclosure of information
64
     
21.
FINANCIAL COVENANTS
64
21.1
Financial covenants - the Guarantor
64
21.2
Amended financial covenants – Obligors
65
     
22.
GENERAL UNDERTAKINGS
65
22.1
Authorisations
65
22.2
Compliance with laws
65
22.3
Negative pledge
65
22.4
Disposals, loans and acquisitions
66
22.5
Merger
67
22.6
Shareholding
67
22.7
Change of business
67
22.8
Title
67
22.9
Insurances – general
67
22.10
Earnings Accounts
68
22.11
Derivative transactions
68
22.12
Distribution restrictions and subordination of inter-company debt
68
22.13
Transaction Documents
68
22.14
Taxation
69
22.15
No change of name etc.
69
22.16
Sanctions
69
22.17
US Tax Obligor
69
22.18
Use of Proceeds and repayments
69
22.19
Listing
70
     
23.
VESSEL UNDERTAKINGS
70
23.1
General
70
23.2
Insurance – Vessels
70
23.3
Flag, name and registry
71
23.4
Classification and repairs
72
23.5
Inspections and class records
72
23.6
Surveys
72
 

Page 5 of 126
23.7
Notification of certain events
73
23.8
Operation of the Vessels
73
23.9
ISM Code compliance
74
23.10
Environmental compliance
74
23.11
Arrest
74
23.12
Chartering
75
     
24.
EVENTS OF DEFAULT
75
24.1
Non-payment
75
24.2
Financial covenants
75
24.3
Other obligations
75
24.4
Misrepresentation
76
24.5
Cross default
76
24.6
Insolvency
76
24.7
Insolvency proceedings
76
24.8
Creditors’ process
77
24.9
Unlawfulness
77
24.10
Repudiation
77
24.11
Material adverse change
77
24.12
Cessation of business
77
24.13
Insurances
77
24.14
Failure of security
77
24.15
Litigation
77
24.16
Breach of the terms of a Secured Hedging Agreement
77
24.17
Sanctions
78
24.18
Acceleration
78
     
25.
CHANGES TO THE LENDERS
79
25.1
Assignments and transfers by the Lenders
79
25.2
Conditions of assignment or transfer
79
25.3
Limitation of responsibility of Existing Lenders
80
25.4
Procedure for transfer
81
25.5
Copy of Transfer Certificate to the Borrowers
81
25.6
Pro rata interest settlement
81
25.7
Securitisation
82
25.8
Security over Lenders’ rights
82
     
26.
CHANGES TO THE OBLIGORS
83
26.1
Assignments and transfer by Obligors
83
     
27.
ROLE OF THE AGENT, THE SECURITY AGENT AND THE MANDATED LEAD ARRANGERS
  84
27.1
Appointment of the Agent
84
27.2
Instructions
84
27.3
Duties of the Agent
85
27.4
Role of the Mandated Lead Arrangers
85
27.5
No fiduciary duties
85
27.6
Business with any Obligor
86
27.7
Rights and discretions
86
27.8
Responsibility for documentation
87
27.9
No duty to monitor
87
27.10
Exclusion of liability
88
27.11
Lenders’ indemnity to the Agent
89
27.12
Resignation of the Agent
89
27.13
Confidentiality
90
27.14
Relationship with the Lenders
90
27.15
Credit appraisal by the Lenders and the Hedging Banks
91
27.16
Reference Banks
91
27.17
Deduction from amounts payable by the Agent
92
     
28. 
CONDUCT OF BUSINESS BY THE FINANCE PARTIES OR THE HEDGING BANKS 
 
      92
29.
SHARING AMONG THE FINANCE PARTIES
 
29.1
Payments to Finance Parties
92
29.2
Redistribution of payments
92
29.3
Recovering Finance Party’s rights
92
29.4
Reversal of redistribution
93
 

Page 6 of 126
29.5
Exceptions
93
     
30.
PAYMENT MECHANICS
94
30.1
Payments to the Agent
94
30.2
Distributions by the Agent
94
30.3
Distributions to an Obligor
94
30.4
Clawback
94
30.5
Partial payments
94
30.6
No set-off by the Obligors
95
30.7
Business Days
95
30.8
Currency of account
95
30.9
Change of currency
95
30.10
Disruption to payment systems etc.
96
     
31.
SET-OFF
96
     
32.
NOTICES
97
32.1
Communications in writing
97
32.2
Addresses
97
32.3
Delivery
97
32.4
Notification of address, e-mail and fax number
98
32.5
Electronic communication
98
32.6
English language
98
     
33.
CALCULATIONS AND CERTIFICATES
99
33.1
Accounts
99
33.2
Certificates and Determinations
99
33.3
Day count convention
99
     
34.
PARTIAL INVALIDITY
99
     
35.
REMEDIES AND WAIVERS
99
     
36.
AMENDMENTS AND WAIVERS
99
36.1
Required consents
99
36.2
Exceptions
99
     
37.
CONFIDENTIALITY
100
37.1
Confidential information
100
37.2
Disclosure of Confidential Information
100
37.3
Disclosure to numbering service providers
102
37.4
Entire agreement
103
37.5
Inside information
103
37.6
Notification of disclosure
103
37.7
Continuing obligations
103
     
38.
CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS
104
38.1
Confidentiality and disclosure
104
38.2
Related obligations
105
38.3
No Event of Default
105
     
39.
COUNTERPARTS
105
     
40.
CONFLICT
105
40.1
Conflict
105
40.2
Contractual recognition of bail-in
105
     
41.
GOVERNING LAW
107
     
42.
ENFORCEMENT
107
42.1
Jurisdiction
107
42.2
Service of process
107
     
Schedule 1A: The Original lenders
Schedule 1B: Borrowers, Vessels and Tranches
Schedule 1C: Repayment Schedule
Schedule 2: Conditions Precedent

Page 7 of 126

Schedule 3: Requests
Schedule 4: Form of transfer certificate
Schedule 5: Form of Compliance Certificate
Schedule 6: Form of Valuation Certificate

Page 8 of 126
THIS AGREEMENT is dated 24 April 2018 and made between:

(1)
THE COMPANIES, each incorporated with limited liability , all with the registered address of either The Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 , Marshall Islands (if incorporated in the Marshall Islands) or Estera Trust (Cayman) Limited, Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands (if incorporated in the Cayman Islands), as set out in Schedule 1B ( Borrowers, Vessels and Tranches ), as joint and several borrowers   (each a “ Borrower ” and together the “ Borrowers ”) ;

(2)
DHT HOLDINGS, INC., The Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 , Marshall Islands   as guarantor (the “ Guarantor ”);

(3)
ABN AMRO BANK N.V., OSLO BRANCH , acting through its offices at Olav V’s gate 5, 0161 Oslo, Norway, NORDEA BANK AB (PUBL), FILIAL I NORGE acting through its offices at Essendrops gate 7,0368 Oslo, Norway, ING BANK,   a branch of ING–DiBa AG acting through its offices at Hamburger Allee 1, 60486 Frankfurt am Main, Germany, DNB BANK ASA acting through its offices at Dronning Eufemias gate 30, 0191 Oslo, Norway and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK acting through its offices at 12 place des Etats-Unis, CS 70052, 92547 Montrouge Cedex, France as bookrunners and mandated lead arrangers DANISH SHIP FINANCE A/S acting through its offices at Sankt Annae Plads 3, 1250 Copenhagen, Denmark and SKANDINAVISKA ENSKILDA BANKEN AB acting through its offices at Filipstad brygge 1, 0250 Oslo, Norway as mandated lead arrangers (the “ Mandated Lead Arrangers ”);

(4)
DVB BANK SE acting through its offices at Haakon VIIs gt. 1, 0125 Oslo, Norway and SWEDBANK AB acting through its offices at Filipstad brygge 1, 0250 Oslo, Norway as lead arrangers (the “ Lead Arrangers ”);

(5)
THE FINANCIAL INSTITUTIONS listed in Schedule 1A as lenders (the “ Original Lenders ”);

(6)
One or more of the Lenders and any of their affiliates as hedging banks   (the “ Hedging Banks ”);

(7)
ABN AMRO BANK N.V., acting through its offices at   Daalesingel 71 ,3511 SW Utrecht, The Netherlands as agent of the other Finance Parties (the “ Agent ”); and

(8)
ABN AMRO BANK N.V., as security agent of the other Finance Parties and the Hedging Banks (the “ Security Agent ”).


IT IS AGREED as follows:



Page 9 of 126


SECTION 1
INTERPRETATION

1.
DEFINITIONS AND INTERPRETATION

1.1
Definitions

In this Agreement:

Account Banks ” means Nordea Bank AB (publ.) filial i Norge, DNB Bank ASA and ABN AMRO Bank N.V.

Affiliate ” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

Agreement ” means this facilities agreement, as it may be amended, supplemented and varied in writing from time to time, including its schedules.

Approved Brokers ” means Nordic Shipping, Clarksons Platou Limited, Simpson, Spence and Young (SSY), Poten & Partners, Arrow Valuations and Fearnleys.

Approved Ship Registry ” means the Marshall Islands Ship Registry, the Hong Kong Ship Registry, the Isle of Man Ship Registry, France and any ship registry as approved in writing by the Agent (on behalf of the Finance Parties and the Hedging Banks).

Assignment Agreement ” means a general assignment agreement for an assignment on first priority of the Earnings, the insurance proceeds in respect of all Insurances, the Earnings Accounts, any rights under any Intra Group Loans, and any rights under any Secured Hedging Agreement to be executed by the relevant Borrower in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) as security for the Obligors’ obligations under the Finance Documents and any Secured Hedging Agreements in form and substance acceptable to all Lenders.

Authorisation ” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

Availability Period ” means (1) for the Term Loan  Facility the period from and including the date of this Agreement and (x), in respect of the Existing Vessels up to and including the earlier of (i) 31 August 2018, and (ii) the date when the Term Loan Facility is fully drawn or cancelled or (iii) such later date as the Agent (on behalf of the Finance Parties) may agree, and (y) in respect of the Newbuilding Vessels, up to and including the earlier of (i) 180 days after the Contractual Delivery Date of the relevant Vessel as specified in Schedule 1B ( Borrowers, Vessels, Tranches ) hereto (ii) the date the relevant Shipbuilding Contract has been terminated and (iii) the date when the Term Loan Facility is fully drawn or cancelled or (iv) such later date as the Agent (on behalf of the Finance Parties) may agree, and (2) for the Revolving Credit Facility, the period from and including the date of this Agreement up to and including the date 3 months prior to the Maturity Date.

Available Revolving Credit Facility Commitment ” means the aggregate of the Revolving Credit Facility Commitments available under the Revolving Credit Facility Tranches in respect of each Vessel delivered to and owned by the relevant Borrower, less any Loans outstanding under the Revolving Credit Facility.

Bail-In Action ” means the exercise of any Write-down and Conversion Powers.

Bail-In Legislation ” means:



Page 10 of 126


(a)
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

(b)
in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.

Bareboat Charter ” means in relation to DHT China, the bareboat charter dated 8 October 2012 (as amended from time to time) entered into between Samco Epsilon Ltd as owner and the Bareboat Charterer as Charterer.

Bareboat Charterer ” means V Ships France SAS.

Bareboat Registry ” means the French International Ship Registry.

Break Costs ” means the amount (if any) by which:

(a)
the interest (excluding margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of a Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(b)
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the London interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for general business in Oslo, Amsterdam, London, Frankfurt, Paris, Copenhagen and New York City. For the purpose of a Utilisation, Isle of Man, Seoul (in relation to a Newbuilding Vessel only), Hong Kong, Paris and Singapore (or any other relevant place of payment of the proceeds) shall be included.

Cash ” means the aggregate amount of cash, bank deposits and fully marketable securities (issued by an A rated or better financial institution), excluding restricted cash which is not at the disposal of the relevant company.

Change of Control ” means (i) in respect of a Borrower, if the Guarantor ceases to be the owner of 100% of the shares in that Borrower, and (ii) in respect of the Guarantor, if any person or a group of persons acting in concert, other than BW Group Limited, gain ownership or control of 33 1/3 % or more of the voting rights of the Guarantor or there is a change of ownership in any of the Borrowers (direct or indirect) or a person other than the Guarantor controls the appointment of the board of directors for any Borrower. For the purposes of this definition, “ control ” of the Guarantor means (i) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, more than 33 1/3% of the maximum number of votes that might be cast at a general meeting of the Guarantor, and/or (ii) the holding beneficially of more than 33 1/3 % of the issued share capital of the Guarantor (excluding any part of that issued share capital that carries no



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right to participate beyond a specified amount in a distribution of either profits or capital), and “ acting in concert ” means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Guarantor by any of them, either directly or indirectly, to obtain or consolidate control of 33 1/3 % of the Guarantor.

Charterer ” means any charterer approved by the Agent (on behalf of the Finance Parties) under a Charterparty, hereunder the Bareboat Charterer.

Charterparty ” means any time or bareboat charter or any pool agreement or any other agreements of employment (including for the avoidance of doubt the Bareboat Charter and the Sub-Bareboat Charter) entered or to be entered into between a Borrower and the relevant Charterer for the chartering of a Vessel for a period exceeding 24 Months, in form and substance acceptable to the Agent (on behalf of the Finance Parties) subject to the provisions of Clause 23.12 ( Chartering ).

Closing Date ” means the date of this Agreement, however not later than 30 June 2018.

Code ” means the US Internal Revenue Code of 1986 as amended.

Commercial Management Agreement ” means any agreement made or to be made between a Borrower and the Commercial Manager for the commercial management of a Vessel.

Commercial Manager ” means DHT Management AS or any other commercial manager acceptable to the Agent.

Commitment ” means a Term Loan Facility Commitment and/or a Revolving Credit Facility Commitment.

Compliance Certificate ” means a certificate substantially in the form set out in Schedule 5 ( Form of Compliance Certificate ).

Confidential Information ” means all information relating to any Obligor, the Finance Documents or the Facilities of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

(a)
any Obligor or any of its advisers; or

(b)
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Obligor or any of its advisers,

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

(i)
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 37 ( Confidentiality ); or

(ii)
is identified in writing at the time of delivery as non-confidential by any Obligor or any of its advisers; or

(iii)
is known by that Finance Party before the date the information is disclosed to it in accordance with (a) or (b) or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with



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any Obligor and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

Contractual   Delivery Date ” means in respect of a Newbuilding Vessel, the originally scheduled date of delivery under a Shipbuilding Contract and defined as Delivery Date in the Shipbuilding Contracts.

Current Assets ” means the aggregate of the current assets of a company as determined in accordance with GAAP.

Current Liabilities ” means the aggregate of the current liabilities of a company, however excluding the current portion of long term debt maturing six (6) Months or more after the date of computation as well as excluding any balloon instalments under any financing arrangement.

Deed of   Assignment ” means one or more general deed of assignment in respect of any Charterparty including the Bareboat Charter and Sub-Bareboat Charter (including any guarantees or other security for the Charterer’s obligations thereunder), to be executed by the relevant Borrower in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks), in form and substance acceptable to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

Default ” means an Event of Default or any event or circumstance specified in Clause 24 ( Events of Default ) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any Secured Hedging Agreements or any combination of any of the foregoing) be an Event of Default.

Delivery Date ” means in respect of a Newbuilding Vessel, the date of actual delivery of the relevant Newbuilding Vessel to the relevant Borrower under a Shipbuilding Contract.

Disruption Event ” means either or both of:

(a)
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facilities (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b)
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

(i)
from performing its payment obligations under the Finance Documents; or

(ii)
from communicating with other Parties in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.



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DOC ” means in relation to the Technical Manager a valid document of compliance relevant to the Vessels issued to such company pursuant to paragraph 13.2 of the ISM Code.

Earnings ” means all moneys whatsoever which are now or later become payable (actually or contingently) to a Borrower in respect of and/or arising out of the use of or operation of a Vessel, including (but not limited to):

(a)
all freight, hire and passage moneys payable to a Borrower, including (without limitation) payments of any nature under any contract or any other agreement for the employment, use, possession, management and/or operation of a Vessel;

(b)
any claim under any guarantees related to hire payable to a Vessel as a consequence of the operation of such Vessel;

(c)
any compensation payable to a Borrower in the event of any requisition of a Vessel or for the use of such Vessel by any government authority or other competent authority;

(d)
remuneration for salvage, towage and other services performed by a Vessel payable to a Borrower;

(e)
demurrage and retention money receivable by a Borrower in relation to a Vessel;

(f)
all moneys which are at any time payable under the Insurances in respect of loss of earnings from a Vessel;

(g)
if and whenever a Vessel is employed on terms whereby any moneys falling within paragraphs (a) to (f) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to such Vessel; and

(h)
any other money which arise out of the use of or operation of a Vessel and moneys whatsoever due or to become due to a Borrower from third parties in relation to a Vessel.

Earnings Accounts ” means the bank accounts in the names of each Borrower opened and maintained with the Account Banks , or one of the Account Banks or such other accounts designated as “Earnings Accounts” by the Guarantor and the Agent.

EEA Member Country ” means any member state of the European Union, Iceland, Liechtenstein and Norway.

Environmental Claim ” means any claim, proceeding, formal notice or investigation by any person or company in respect of any Environmental Law or Environmental Permits.

Environmental Law ” means any applicable law or regulation which relates to:

(a)
the pollution or protection of the environment or to the carriage of material which is capable of polluting the environment;

(b)
harm to or the protection of human health;

(c)
the conditions of the workplace; or

(d)
any emission or substance capable of causing harm to any living organism or the environment.



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Environmental Permits ” means any permit, licence, consent, approval and other authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of business conducted on or from the properties owned or used by the relevant company.

EU Bail-In Legislation Schedule ” means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

Event of Default ” means any event or circumstance specified as such in Clause 24 ( Events of Default ).

Excess Values ” means the positive or negative (as the case may be) difference between (i) the Market Value (in respect of the Vessels) or the market value as established in accordance with the procedure described in the definition of “Market Value”, and (ii) the book value of the relevant Vessel.

Existing Vessels ” means the 11 vessels listed as such in Schedule 1B ( Borrowers, Vessels, Tranches ) hereto and “ Existing Vessel ” means any of them.

FA Act ” means the Norwegian Financial Agreements Act of 25 June 1999 No. 46 (in No. finansavtaleloven ).

Facilities ” means together the Term Loan Facility and the Revolving Credit Facility made available under this Agreement as described in Clause 2 ( The Facilities ) and “Facility” means any of them.

Facility Office ” means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

FATCA ” means:

(a)
sections 1471 to 1474 of the Code or any associated regulations;

(b)
any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

(c)
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

FATCA Application Date ” means:

(a)
in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

(b)
in relation to a “withholdable payment” described in section 1473(1)(A)(ii) of the Code (which relates to “gross proceeds” from the disposition of property of a type that can produce interest from sources within the US), 1 January 2019; or



Page 15 of 126


(c)
in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2019, or

in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

FATCA Deduction ” means a deduction or withholding from a payment under a Finance Document required by FATCA.

FATCA Exempt Party ” means a Party that is entitled to receive payments free from any FATCA Deduction.

Fee Letter ” means any letter or letters between the Agent and the Borrowers setting out any of the fees referred to in Clause 11 ( Fees ).

Finance Document ” means this Agreement, any Security Document, any Fee Letter and any other document designated as such by the Agent and the Borrowers.

Finance Party ” means each of the Agent, the Security Agent, a Mandated Lead Arranger and any Lender.

Financial Indebtedness ” means any indebtedness for or in respect of:

(a)
moneys borrowed;

(b)
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

(c)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;

(e)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f)
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

(g)
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

(h)
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

(i)
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.

Funding Rate ” means any individual rate notified by a Lender to the Agent pursuant to Clause 10 ( Changes to the calculation of interest ).



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GAAP ” means generally accepted accounting principles such as IFRS.

“Green Passport” means a document listing all potential hazardous materials on board the relevant Vessel as further described by the relevant Vessel’s classification society and/or the International Maritime Organisation (IMO).

Group ” means the Guarantor and its direct and indirect Subsidiaries from time to time.

Guarantee ” means the irrevocable, unconditional and on-first-demand guarantee given by the Guarantor under Clause 18 ( Guarantee and Indemnity ) of this Agreement.

Holding Company ” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

IAPPC ” means the International Air Pollution Prevention Certificate required under Regulation 6 of the International Convention for the Prevention of Pollution From Ships 1973/1978 (MARPOL).

IFRS ” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

Insurances ” means, in relation to the Vessels, all policies and contracts of insurance (which expression includes all entries of the Vessels in a protection and indemnity or war risk association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Borrowers (whether in the sole name of such Borrower or in the joint names of the Borrowers and any other person) in respect of a Vessel or otherwise in connection with the Vessel and all benefits thereunder (including claims of whatsoever nature and return of premiums).

Interest Payment Date ” means the last day of each Interest Period, and in respect of Interest Periods exceeding three (3) months, the date falling three (3) months after the first day of such Interest Period, and each date falling at three-monthly intervals thereafter.

Interest Period ” means, in relation to a Loan, each period determined in accordance with Clause 9 ( Interest Periods ) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).

Intra Group Loans   means any loans granted by (i) a Borrower to any of its Affiliates or (ii) the Guarantor to a Borrower.

Intra Group Loans Assignment Agreement ” means one or more general assignment agreements on first priority of any claims the Guarantor may have in respect of any Intra Group Loans, to be executed by the Guarantor in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) as security for the Guarantor’s obligations under the Finance Documents and any Secured Hedging Agreement in form and substance acceptable to all Lenders.

ISM Code ” means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevent.

ISPS Code ” means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization’s (IMO) Diplomatic Conference of December 2002.

ISSC ” means an International Ship Security Certificate issued by the Classification Society confirming that a Vessel is in compliance with the ISPS Code.



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Lender ” means:

(a)
any Original Lender; and

(b)
any New Lender which has become a Party in accordance with Clause 25 ( Changes to the Lenders ),

which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

Letter of Undertaking ” means an irrevocable and unconditional written undertaking from the Bareboat Charterer to the Security Agent (on behalf of the Finance Parties and the Hedging Banks) containing inter alia (i) a right for the Security Agent (on behalf of the Finance Parties and the Hedging Banks) upon an Event of Default which is continuing   to terminate the Bareboat Charter and the Sub-Bareboat Charter, deregister the relevant Vessel from its Approved Ship Registry and enforce their rights under the Mortgages and (ii) a confirmation that any claims the Bareboat Charterer may have against a Borrower shall rank after and be fully subordinated to the rights and claims of the Security Agent (on behalf of the Finance Parties and the Hedging Banks), including an undated termination letter and an irrevocable and unconditional power of attorney in respect of the deregistration of the relevant Vessel from the Approved Ship Registry in form and substance satisfactory to the Security Agent (on behalf of the Finance Parties and the Hedging Banks).

LIBOR ” (London Interbank Offered Rate) means, in relation to a Loan:

(a)
the applicable Screen Rate at 11:00 GMT hours on the Quotation Day for the offering of deposits in USD and for a period equal in length to the Interest Period of that Loan; or

(b)
as otherwise determined pursuant to Clause 10 (Changes to the calculation of interest) ,

and, if such rate is below zero, LIBOR will be deemed to be zero.

Loan ” means a loan made or to be made pursuant to this Agreement or any of the principal amount outstanding from time to time of that loan, or, if the context otherwise requires, the total principal amount outstanding for the time being under the Facilities.

Majority Lenders ” means:

(a)
if there are no amounts then outstanding, a Lender or Lenders whose Commitments aggregate more than 66 2 / 3 % of the Total Commitments; or

(b)
at any other time, a Lender or Lenders whose participations in the Loans and any Available Revolving Facility Credit Commitment aggregate more than 66 2 / 3 % of the Loans.

Margin ” means 2.40 % (two point forty per cent) per annum.

Market Value ” means the fair market value of a Vessel as (i) determined by one (1) independent Approved Broker appointed by the Borrower, being the owner of the relevant Vessels, or (ii) at the request of the Agent (on behalf of any Lender), calculated as the average of valuations of a Vessel obtained from two (2) Approved Brokers (of which one is appointed by the Borrower, being the owner of the relevant Vessels and one is appointed by the Agent), in each case, on the basis of a sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing buyer and a willing seller, on an “as is, where is” basis, free of any existing charter or other contract of employment and/or pool arrangement, provided however that if the higher of the two valuations is



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more than one hundred and ten per cent (110%) of the lower, a third valuation shall be obtained from another Approved Broker and the fair market value shall be the arithmetic average of the three (3) valuations, in form and substance acceptable to the Facility Agent. Any valuations are valid for thirty (30) days from the date of issue.

Material Adverse Effect ” means a materially adversely effect on:

(a)
the business, condition (financial or otherwise), operations or prospects of the Guarantor since the date at which its latest audited financial statements were prepared; or

(b)
the ability of an Obligor to perform its obligations under the Finance Documents or any Secured Hedging Agreement; or

(c)
the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to, any Finance Document or any Secured Hedging Agreement; or

(d)
the right or remedy of a Finance Party or a Hedging Bank in respect of a Finance Document or any Secured Hedging Agreement.

Maturity Date ” means the sixth (6 th ) anniversary of the date of the Closing Date, however not later than 30 June 2024.

Month ” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

(a)
if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

(b)
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month.

The above rules will only apply to the last Month of any period.

Mortgages ” means the first priority or preferred mortgages (and deeds of covenants collateral thereto (if applicable), to be executed and recorded by the Borrowers against the Vessels in favour of the Security Agent or security trustee, as applicable, (on behalf of the Finance Parties and the Hedging Banks) in (i) the relevant Approved Ship Registry and (ii) entered in the Bareboat Registry by a notation (applicable while a Vessel is registered in the Bareboat Registry), in form and substance satisfactory to all Lenders.

Newbuilding Vessels ” means the two (2) vessels listed as such in Schedule 1B ( Borrowers, Vessels, Tranches ) hereto and “ Newbuilding Vessel ” means any of them. The delivery of the Newbuilding Vessels is scheduled to take place in the second half of 2018.

Obligor ” means any of the Borrowers or the Guarantor and “Obligors” means all of them.

Original Financial Statements ” means the audited financial statements of the Guarantor for the financial year ended 31 December 2017.

Outstanding Indebtedness ” means the aggregate of all sums of money at any time and from time to time owing to the Finance Parties under or pursuant to the Finance Documents.



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Party ” means a party to this Agreement.

Pledge of Account ” means a pledge of the Earnings Accounts, not pledged under an Assignment Agreement, to be executed by the Borrowers in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to all Lenders.

Pledge of Shares ” means a pledge of all the Shares in a Borrower to be executed by the Guarantor in favour of the Security Agent (on behalf of the Finance Parties and the Hedging Banks) in form and substance satisfactory to all Lenders.

Quotation Day ” means, in relation to any period for which an interest rate is to be determined, two (2) Business Days before the first day of that period.

Reference Banks ” means the Mandated Lead Arrangers, excluding ING Bank, a branch of ING-DiBa AG and such other bank or financial institution as may be appointed by the Agent in consultation with the Borrowers.

Reference Bank Quotation ” means any quotation supplied to the Agent by a Reference Bank.

Reference Bank Rate ” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks:

(a)
(other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in USD for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or

(b)
if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the Screen Rate are asked to submit to the relevant administrator, and, if such rate is below zero, Reference Bank Rate will be deemed to be zero.

Repayment Date ” means a date on which a repayment instalment is required to be made pursuant to Clause 6 ( Repayment ).

Repeating Representations ” means each of the representations set out in Clause 19 ( Representations ), to the extent they are repeating pursuant to Clause 19.27 ( Repetition ).

Representative ” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

Resolution Authority ” means any body which has authority to exercise any Write-down and Conversion Powers.

Restricted Party ” means a person:

(a)
that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person);

(b)
that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions Laws which attach legal effect to being domiciled, registered as located in, having its main place of business in and/or being incorporated under the laws of such country;



Page 20 of 126


(c)
that is directly or indirectly owned or controlled (by 50% or more) by or acting on behalf at the direction or for the benefit of a person referred to in paragraphs (a) and/or (b) above; or

(d)
with which any Lender is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws.

Revolving Credit   Facility ” means the secured revolving credit facility made available under this Agreement as described in Clause 2 ( The Facilities ).

Revolving Credit Facility Commitment ” means

(a)
in relation to an Original Lender, the amount set opposite its name under the heading “Revolving Credit Facility Commitment” in Schedule 1A ( The Original Lenders ) and the amount of any other Revolving Credit Facility Commitment transferred to it under this Agreement;

(b)
in relation to any other Lender, the amount of any Revolving Credit Facility Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement and always subject to the limitations in Clause 2.1 ( The Facilities ) and Clause 7.5 ( Market Value ).

Revolving Credit Facility Tranche ” means one tranche per Existing Vessel pursuant to the Revolving Credit Facility as described in Clause 2 ( The Facilities ), and “ Revolving Credit Facility   Tranches ” means some or all of them (as the context requires).

Sanctions Authority ” means any country to which any Obligor is bound, the Norwegian State, the United Nations, the European Union or any of its member states the United Kingdom and the United States of America, and any authority, governmental institution and agency acting on behalf of any of them in connection with Sanctions Laws including without limitation, the Office of Foreign Assets Control of the US Department of Treasury, the United States Department of State, and Her Majesty’s Treasury.

Sanctions Laws ” means any trade, economic or financial sanctions laws and/or regulations, trade embargoes, prohibitions, restrictive measures, decisions, executive orders or notices from regulators implemented, adapted, imposed, administered, enacted and/or enforced by any Sanctions Authority and any law or regulation enacted, promulgated or issued by any Sanctions Authority after the date of this Agreement.

Sanctions List ” means any list of persons, entities or vessels published in connection with Sanctions Laws by or on behalf of any Sanctions Authority including but not limited to the “Specially Designated Nationals and Blocked Persons” list maintained by OFAC, the “Consolidated List of Financial Sanctions Targets”, maintained by HMT each as amended from time to time.

Screen   Rate ” means the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for USD for the relevant period, displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate), or such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers.



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Secured Assets ” means:

(a)
the Vessels;

(b)
the Earnings;

(c)
the Shares;

(d)
any Secured Hedging Agreement;

(e)
any Intra Group Loans;

(f)
the Insurances;

(g)
the Earnings Accounts; and

(h)
any Charterparty.

Secured   Hedging Agreement ” means any master agreement on the form of ISDA 2002 (as amended at any time) and any swap transaction, confirmation, schedule or hedging agreement pursuant to such master agreement entered or to be into between any Borrower and a Hedging Bank for the purpose of hedging the interest rate risk in relation to the Facility.

Security ” means a mortgage, charge, pledge, lien, assignment, subordination or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

Security Document ” means each document listed in Clause 17 ( Security ) and any other document agreement agreed between the Parties to be a Security Document and any other document entered into by any Obligor creating or expressed to create any Security over all or any part of its assets in respect of the obligations of any of the Obligors under any of the Finance Documents.

Security Period ” means the period commencing on the date of this Agreement and ending the date on which the Agent notifies the Borrowers and the other Finance Parties and the Hedging Banks that:

(a)
all amounts which have become due for payment by the Borrowers under the Finance Documents and any Secured Hedging Agreement have been paid;

(b)
no amount is owing or has accrued (without yet having become due for payment) under any of the Finance Documents or any Secured Hedging Agreement;

(c)
none of the Obligors have any future or contingent liability under any provision of this Agreement, the other Finance Documents or any Secured Hedging Agreement; and

(d)
the Agent, the other Finance Parties or any Hedging Bank do not consider that there is a significant risk that any payment or transaction under a Finance Document or any Secured Hedging Agreement would be set aside, or would have to be reversed or adjusted, in any present or possible future proceeding relating to a Finance Document or any Secured Hedging Agreement or any asset covered (or previously covered) by a Security created by a Finance Document.

Selection Notice ” means a notice substantially in the form set out in Part II of Schedule 3 ( Requests ) given in accordance with Clause 9 ( Interest Periods ).



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Shares ” means all current and future shares in each Borrower.

Shipbuilding Contract ” means (i) the shipbuilding contract dated 20 January 2017 entered into between the Guarantor and the Yard as builder for the construction of Hull No. 2957 to be named “DHT Bronco” or (ii) the shipbuilding contract dated 20 January 2017 entered into between the Guarantor and the Yard as builder for the construction of Hull No. 2958 to be named “DHT Mustang”.

SMC ” means a valid safety management certificate issued for a Vessel issued by the Classification Society pursuant to paragraph 13.7 of the ISM Code.

SMS ” means a safety management system for a Vessel developed and implemented in accordance with the ISM Code and including the functional requirements duties and obligations that follow from the ISM Code.

Sub-Bareboat Charters ” means in relation to DHT China, the bareboat charter dated 8 October 2012 (as amended from time to time) entered into between the Bareboat Charterer as owner and Samco Epsilon Ltd. as charterer.

Subsidiary ” means an entity of which a person has direct or indirect control (whether through the ownership of voting capital, by contract or otherwise) or owns directly or indirectly more than 50 % of the shares and for this purpose an entity shall be treated as controlled by another if that entity is able to direct its affairs and/or to control the composition of the board of directors or equivalent body.

Tax ” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

Technical Management Agreement ” means any technical management agreement made between the Technical Manager and a Borrower for the technical management of a Vessel.

Technical Manager ” means Goodwood Ship Management Pte Ltd. and any technical manager acceptable to the Agent.

Term   Loan   Facility ” means the term loan facility made available under this Agreement as described in Clause 2 ( The Facilities ).

Term Loan Facility Commitment ” means

(a)
in relation to an Original Lender, the amount set opposite its name under the heading “Term Loan Facility Commitment” in Schedule 1A ( The Original Lenders ) and the amount of any other Term Loan Facility Commitment transferred to it under this Agreement;

(b)
in relation to any other Lender, the amount of any Term Loan Facility Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

Term Loan Tranche ” means one tranche per Vessel pursuant to the Term Loan Facility as described in Clause 2 ( The Facilities ), and “ Term Loan   Tranches ” means all of them.

Total Commitments ” means the aggregate of the Commitments specified as such in Schedule 1A ( Original Lenders ) at the date of this Agreement.



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Total Interest Bearing Debt ” means all debt and financial instruments (including financial leases) which bear interests.

Total Loss ” means, in relation to a Vessel:

(a)
the actual, constructive, compromised, agreed, arranged or other total loss of such Vessel; and

(b)
any expropriation, confiscation, requisition or acquisition of a Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a governmental or official authority (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to extension) unless it is within one (1) month from the Total Loss Date redelivered to the full control of the relevant Borrower.

Total Loss Date ” means:

(a)
in the case of an actual total loss of a Vessel, the date on which it occurred or, if that is unknown, the date when such Vessel was last heard of;

(b)
in the case of a constructive, compromised, agreed or arranged total loss of a Vessel, the earlier of: (i) the date on which a notice of abandonment is given to the insurers (provided a claim for total loss is admitted by such insurers) or, if such insurers do not forthwith admit such a claim, at the date at which either a total loss is subsequently admitted by the insurers or a total loss is subsequently adjudged by a competent court of law or arbitration panel to have occurred or, if earlier, the date falling three (3) months after notice of abandonment of such Vessel was given to the insurers; and (ii) the date of compromise, arrangement or agreement made by or on behalf of the relevant Borrower with such Vessel’s insurers in which the insurers agree to treat such Vessel as a total loss; or

(c)
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred.

Tranche ” means any Term Loan Tranche or Revolving Credit Facility Tranche, and “ Tranches ” means all of them.

Transaction Documents ” means the Finance Documents, any Shipbuilding Contract, any Secured Hedging Agreement, any Technical Management Agreement, any Commercial Management Agreement and any Charterparty, the Letter of Undertaking, together with the other documents contemplated herein or therein.

Transfer Certificate ” means a certificate substantially in the form set out in Schedule 4 ( Form of Transfer Certificate ) or any other form agreed between the Agent and the Borrowers.

Transfer Date ” means, in relation to an assignment or a transfer, the later of:

(a)
the proposed Transfer Date specified in the relevant Transfer Certificate; and

(b)
the date on which the Agent executes the relevant Transfer Certificate.

Unpaid Sum ” means any sum due and payable but unpaid by the Borrowers and/or the Guarantor under the Finance Documents.



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US Tax Obligor ” means:

(a)
an Obligor which is resident for tax purposes in the US; or

(b)
an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

USD ” means the lawful currency of the United States of America.

Utilisation ” means the utilisation of a Loan.

Utilisation Date ” means the date of a Utilisation, being the date on which a Loan is to be made.

Utilisation Request ” means a notice substantially in the form set out in Schedule 3 ( Requests ).

Valuation Certificate ” means a certificate substantially in the form set out in Schedule 6 ( Form of Valuation Certificate ).

Value Adjusted Tangible Net Worth ” means Value Adjusted Total Assets, less the value of all liabilities and intangible assets, as determined by GAAP.

Value Adjusted Total Assets ” means on consolidated basis, the book value of all assets (both tangible and intangible) at the relevant time, as determined by GAAP, adjusted for Excess Values.

VAT ” means value added tax and any other tax of a similar nature in the relevant jurisdiction.

Vessels ” means the Existing Vessels and the Newbuilding Vessels and “ Vessel ” means any of them.

Working Capital ” means Current Assets less Current Liabilities.

Write-down and Conversion Powers ” means:

(a)
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

(b)
in relation to any other applicable Bail-In Legislation:

(i)
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

(ii)
any similar or analogous powers under that Bail-In Legislation.

Yard ” means Hyundai Heavy Industries Co., Ltd., 1000 Bangeojinsunhwan-Doro, Dong-Gu, Ulsan, Korea.



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1.2
Construction

(a)
Unless a contrary indication appears, any reference in this Agreement to:

(i)
the “ Agent ”, the “ Security Agent ”, any “ Mandated Lead Arranger ”, any “ Finance Party ”, any “ Lender ”, the “ Hedging Banks ”, or any “ Party ” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

(ii)
assets ” includes present and future properties, revenues and rights of every description;

(iii)
a “ Finance Document ”, “ Secured Hedging Agreement ” or any other agreement or instrument is a reference to that Finance Document, that Secured Hedging Agreement or other agreement or instrument as amended, novated, supplemented, extended or restated;

(iv)
indebtedness ” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

(v)
a “ person ” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

(vi)
a “ regulation ” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

(vii)
a provision of law is a reference to that provision as amended or re-enacted;

(viii)
words importing the singular shall include the plural and vice versa; and

(ix)
a time of day is a reference to Oslo time unless specified otherwise.

(b)
Section, Clause and Schedule headings are for ease of reference only.

(c)
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

(d)
A Default (other than an Event of Default) is “ continuing ” if it has not been remedied or waived and an Event of Default is “ continuing ” if it has not been waived.

(e)
In case of conflict between this Agreement and any of the Security Documents, the provisions of this Agreement shall prevail.



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SECTION 2
THE FACILITIES

2.
THE FACILITIES

2.1
The Facilities

Subject to the terms of this Agreement, the Lenders make available to the Borrowers the following facilities:

(a)
the Term Loan Facility consisting of up to thirteen (13) cross-collateralised Term Loan Tranches (one per Existing Vessel and Newbuilding Vessel) up to the amount set out opposite each Vessel under the heading “Maximum Available Term Loan” in Schedule 1B ( Borrowers, Vessels, Tranches ), but always subject to Clause 2.1 (c) below; 

(b)
the Revolving Credit Facility in the amount of USD 100,000,000, which may be incurred on a revolving basis at any time within the Availability Period in the amount set out opposite each Vessel under the heading “Maximum Available RCF” in Schedule 1B ( Borrowers, Vessels, Tranches ) provided that the amount drawn shall never exceed the Available Revolving Credit Facility Commitment, and always subject to Clause 2.1 (c) below. 

(c)
Provided, however, that the maximum aggregate available amount under the Tranches shall never exceed:

(i)
in respect of the Existing Vessels the lesser of (A) USD 304,197,158 of Term Loan Tranches and USD 78,002,842 of  Revolving Credit Facility Tranches, and (B) sixty per cent (60 %) of the aggregate Market Value of the Existing Vessels, and

(ii)
in respect of the Newbuilding Vessels the lesser of (A) USD 80,802,842 of Term Loan Tranches and USD 21,997,158 of  Revolving Credit Facility Tranches, and (B) sixty five per cent (65 %) of the aggregate Fair Market Value of the Newbuilding Vessels.

2.2
Finance Parties’ rights and obligations

(a)
The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

(b)
The rights of each Finance Party or the Hedging Banks under or in connection with the Finance Documents and any Secured Hedging Agreement are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from the Borrowers and/or the Guarantor shall be a separate and independent debt.

(c)
A Finance Party or the Hedging Banks may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents and any Secured Hedging Agreement. The rights of the Hedging Banks under any Secured Hedging



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Agreement shall be subordinated to the rights of the Finance Parties under the other Finance Documents.

2.3
Borrowers’ liabilities and obligations

(a)
The liabilities and obligations of the Borrowers under this Agreement shall be joint and several and shall not be affected by:

(i)
any Finance Document being or later becoming void, unenforceable or illegal as regards any other Borrower; or

(ii)
any Finance Party entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower; or

(iii)
any Finance Party releasing any other Borrower.

(b)
For so long as any Commitment is in force or any amount is outstanding under the Finance Documents, each Borrower shall remain a principal debtor for all amounts owing under any Finance Document to which it is party and no Borrower shall be construed to be a surety for the obligations of any other Borrower under this Agreement.

(c)
For so long as any Commitment is in force or any amount is outstanding under the Finance Documents, no Borrower shall:

(i)
claim any amount which may be due to it from any other Borrower whether in respect of a payment made, or matter arising out of, any Finance Document; or

(ii)
take or enforce any form of security from any other Borrower for such an amount; or

(iii)
set off such an amount against any sum due from it to any other Borrower; or

prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower.

2.4
Financial Agreements Act

For the purposes of the Financial Agreements Act (“ FA Act ”) and the Security Documents, each Borrower (to the extent it is to be considered a guarantor for the other Borrowers pursuant to the FA Act) (i) confirms and agrees that its liability under each Finance Document and any Secured Hedging Agreement shall be limited to USD 550,000,000 (plus any interest, default interest, Break Cost or other costs, fees and expenses related to such Borrower’s obligations under the Finance Documents and any default interest or other costs, fees and expenses related to the liability of the Borrower under such Finance Document) and (ii)  specifically waives all rights under the provisions of the Financial Agreements Act not being mandatory provisions, including (but not limited to) the following provisions (the main contents of the relevant provisions being as indicated in the brackets):

(a)
§ 29 (as the Agent and/or any Finance Party and/or the Hedging Banks shall be entitled to exercise all its rights under the relevant Finance Document and applicable law in order to secure payment. Such rights shall include the right to set-off any credit balance in any currency, on any bank account the Borrower might have with each of the Finance Parties or the Hedging Banks individually against the amount due);

(b)
§ 63 (1) – (2) (to be notified of an Event of Default hereunder and to be kept informed thereof);



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(c)
§ 63 (3) (to be notified of any extension granted to a Borrower in payment of principal and/or interest);

(d)
§ 63 (4) (to be notified of a Borrower’s bankruptcy proceedings or debt reorganisation proceedings and/or any application for the latter);

(e)
§ 65 (3) (that its consent is required for it to be bound by amendments to the Finance Documents or any Secured Hedging Agreement that may be detrimental to its interest);

(f)
§ 67 (2) (about any reduction of its liabilities hereunder, since no such reduction shall apply as long as any amount is outstanding under the Finance Documents and any Secured Hedging Agreement);

(g)
§ 67 (4) (that its liabilities under a Finance Documents shall lapse after ten (10) years, as it shall remain liable hereunder as long as any amount is outstanding under any of the Finance Documents and any Secured Hedging Agreement);

(h)
§ 70 (as it shall not have any right of subrogation into the rights of the Finance Parties and the Hedging Banks under the Finance Documents and any Secured Hedging Agreement until and unless the Finance Parties and the Hedging Banks shall have received all amounts due or to become due to them under the Finance Documents and any Secured Hedging Agreement);

(i)
§ 71 (as the Finance Parties and the Hedging Banks shall have no liability first to make demand upon or seek to enforce remedies against a specific Borrower or any other security interest provided in respect of a specific Borrower’s liabilities under the Finance Documents and any Secured Hedging Agreement before demanding payment under or seeking to enforce its guarantee obligations in the relevant Finance Document);

(j)
§ 72 (as all interest and default interest due under any of the Finance Documents and any Secured Hedging Agreement shall be secured by its obligations hereunder);

(k)
§ 73 (1) – (2) (as all costs and expenses related to a termination event or an Event of Default under this Agreement shall be secured by its guarantee obligations hereunder); and

(l)
§ 74 (1) – (2) (as it shall not make any claim against any other Borrower for payment by reason of performance by it of its obligations under the Finance Documents and any Secured Hedging Agreement until and unless the Finance Parties and the Hedging Banks first shall have received all amounts due or to become due to them under the Finance Documents and any Secured Hedging Agreement).

3.
PURPOSE

3.1
Purpose

The Borrowers shall apply all amounts borrowed by them:

(a)
under the Term Loan Facility (i) towards the part financing of the refinancing costs of the Existing Vessels and (ii) towards the part financing of the delivery costs with respect to the Newbuilding Vessels (it being understood that proceeds of the Term Loan Facility related to the Newbuilding Vessels may be used to cover any amount already paid by the Guarantor in connection therewith); and



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(b)
under the Revolving Credit Facility (i) towards the part financing of the refinancing costs of the Existing Vessels (ii) and towards the part financing of the delivery costs with respect to the Newbuilding Vessels (it being understood that proceeds of the Revolving Credit Facility related to the Newbuilding Vessels may be used to cover any amount already paid by the Guarantor in connection therewith) and (iii) for general corporate purposes.

3.2
Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

4.
CONDITIONS OF UTILISATION

4.1
Initial conditions precedent

(a)
The Finance Parties’ obligations hereunder are subject to the Agent’s receipt of all of the documents and other evidence listed in Schedule 2 ( Conditions precedent ) Part I. The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied.

(b)
The Borrowers may not deliver a Utilisation Request unless the Agent has received all of the documents and other evidence listed in Schedule 2 ( Conditions precedent ) Part II, except those documents which specifically will only be available on the relevant Utilisation Date or within another specified date, in a form and substance satisfactory to the Agent. The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied.

(c)
Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in paragraph (a) and paragraph (b) above, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

4.2
Further conditions precedent

The Lenders will only be obliged to comply with Clause 5.4 ( Lenders’ participation ) if on the date of the relevant Utilisation Request and on the proposed Utilisation Date:

(a)
no Default is continuing or would result from the proposed Loan; and

(b)
the Repeating Representations to be made by each Obligor are true in all material respects.

4.3
Maximum number of Loans

(a)
The Term Loan Facility may be drawn in thirteen (13) Loans, one per Term Loan Tranche.

(b)
Only five (5) Loans may be outstanding at any time under the Revolving Credit Facility.

(c)
Any new Loan to be drawn under the Revolving Credit Facility shall never exceed the Available Revolving Credit Facility Commitment prior to the delivery of a Utilisation Request in respect of such Loan.



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4.4
Form and content

All documents and evidence delivered to the Agent pursuant to this Clause 4 ( Conditions of Utilisation ) shall:

(a)
be in form and substance satisfactory to the Agent;

(b)
if required by the Agent, be in original; and

(c)
if required by the Agent, be certified, notarized, legalized or attested in a manner acceptable to the Agent.

4.5
Waiver of conditions precedent

The conditions specified in this Clause 4 ( Conditions of Utilisation ) are solely for the benefit of the Lenders and may be waived on their behalf in whole or in part and with or without conditions by the Agent (acting on the instructions of the Majority Lenders), save for conditions which are comprised by Clause 36.2 ( Exceptions ), which will be subject to consent from all the Lenders).



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SECTION 3
UTILISATION

5.
UTILISATION

5.1
Delivery of a Utilisation Request

The Borrowers may utilise a Facility by delivery to the Agent of a duly completed Utilisation Request not later than 12:00 noon Oslo time on the date falling  three (3) Business Days prior to any Utilisation Date.

5.2
Completion of a Utilisation Request

A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(a)
the proposed Utilisation Date is a Business Day within the relevant Availability Period;

(b)
the currency and amount of the Utilisation comply with Clause 5.3 ( Currency and amount ); and

(c)
the proposed Interest Period complies with Clause 9 ( Interest Periods ).

5.3
Currency and amount

(a)
The currency specified in a Utilisation Request must be USD.

(b)
The amount of a proposed Loan under the Term Loan Facility must be an amount which does not exceed the lesser of (x) the Term Loan Facility Commitment and (y) the relevant Tranche.

(c)
The amount of a proposed Loan under the Revolving Credit Facility must be in the minimum amount of USD 5,000,000 (or integral multiples thereof) and shall not exceed the Available Revolving Credit Facility Commitment.

5.4
Lenders’ participation

(a)
If the conditions set out in this Agreement have been met, each Lender shall make its participation in a Loan available by the Utilisation Date through its Facility Office.

(b)
The amount of each Lender’s participation in such Loan will be equal to the proportion that its Commitment bears to the Total Commitments immediately prior to making a Loan.

(c)
The Agent shall notify each Lender of the amount of a Loan and the amount of its participation in such Loan upon receipt of the relevant Utilisation Notice from the Borrowers.

5.5
Cancellation of Commitments

(a)
The Term Loan Facility Commitment shall be cancelled as follows:

(i)
any Term Loan Facility Commitment which are un-utilised at the end of the applicable Availability Period shall be immediately cancelled;

(ii)
any part of a Term Loan Tranche un-utilised after the Utilisation of a Loan pursuant to such Tranche shall be immediately cancelled; and

(iii)
in accordance with Clause 7 ( Prepayment and cancellation ).



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(b)
Cancellations of the Revolving Credit Facility Commitment shall be made as described in Clause 7 ( Prepayment and cancellation ).

 

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SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION

6.
REPAYMENT

6.1
Repayment of Loans

(a)
The Borrowers shall repay each Loan outstanding under the Term Loan Tranche by consecutive quarterly repayment instalments commencing (i) in respect of the Existing Vessels on 30 September 2018 and (ii) in respect of the Newbuilding Vessels 3 months after the relevant Utilisation Date, each in an amount as set out in Schedule 1C ( Repayment Schedule ) hereto. Should a Tranche be reduced as per Clause 2.1 ( The Facilities )  not to exceed 60% or 65% (as the case may be) of the Market Value of the relevant Vessel at the relevant Delivery Date, the repayment instalments set out in Schedule 1C ( Repayment Schedule ) shall be reduced accordingly and the Agent shall provide an updated Schedule 1C ( Repayment Schedule ) to the Finance Parties and the Obligors.

(b)
Following the Utilisation or cancellation of the last Tranche, the instalments of all Tranches shall, if requested by the Borrower, be consolidated by the due date of the next instalments of any previous drawn Tranche to fall due on the next Repayment Date of the last drawn Tranche, and thereafter be repaid as one Loan in the aggregate amounts of the instalments and balloon payments of the Tranches (it being understood that a reference to “Tranche” in this sub-clause shall not be a reference to a Tranche under the Revolving Credit Facility).

(c)
Always subject to Clause 4 ( Conditions of utilisation ), each Loan under the Revolving Credit Facility will on the last day of its Interest Period automatically be renewed with a new Interest Period of three (3) Months without the need for any Utilisation Request, unless the Borrowers instruct otherwise in writing to the Agent

(d)
If the Borrowers in accordance with sub-clause (c) above give instructions that a Loan under the Revolving Credit Facility shall not automatically be renewed, and the date for payment of such existing Loan falls on the same date as the Utilisation Date of a new Loan, the Agent shall set off the amounts against each other, and only the net amount (if any) shall be payable by the Borrowers. Such instructions shall be given by the Borrowers at the latest three (3) Business Days prior to the renewal date.

(e)
Any Outstanding Indebtedness is due and payable to the Agent for the account of the Finance Parties on the Maturity Date.

6.2
Re-borrowing

(a)
The Borrowers may not re-borrow any part of the Term Loan Facility which is repaid or prepaid.

(b)
Any repayments or prepayments of the Loans outstanding under the Revolving Credit Facility Tranches may be re-borrowed in accordance with the terms of this Agreement as long as the outstanding Loans under the Revolving Credit Facility Tranches do not exceed the Available Revolving Credit Facility Commitment.



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7.
PREPAYMENT AND CANCELLATION

7.1
Voluntary cancellation

The Borrowers may, if they give the Agent not less than five (5) days’ (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part of any Facility or Tranche. Any cancellation under this Clause 7.1 ( Voluntary cancellation) shall be in the minimum amount of USD 1,000,000 or multiples thereof and reduce the relevant Commitments of the Lenders proportionately, and may not be reinstated.

Any amount outstanding after a cancellation under the Revolving Credit Facility that exceeds the Available Revolving Credit Facility Commitment (as reduced) must immediately be repaid in connection with the cancellation.

7.2
Voluntary prepayment of Loans

(a)
The Borrowers may, if they give the Agent not less than five (5) Business Days (or such shorter period as the Majority Lenders may agree) prior written notice, prepay the whole or any part of a Loan (but, if in part, being an amount that reduces the amount of the Loans by a minimum amount of USD 1,000,000 or multiples thereof).

(b)
Any prepayment under this Clause 7.2 ( Voluntary prepayment of Loans ) shall be applied pro-rata against each Loan outstanding under the Term Loan Tranches and reduce the remaining instalments (excluding the balloon) on a pro-rata basis.

(c)
The Borrowers have the option to apply the voluntary prepayment against any scheduled instalments of any Term Loan Tranche, provided that the Borrowers have given ten (10) Business Days’ prior notice to the Agent and subject to the Majority Lenders consent (not to be unreasonable withheld).

7.3
Illegality

If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in a Loan:

(a)
that Lender shall promptly notify the Agent upon becoming aware of that event;

(b)
upon the Agent notifying the Borrowers, the Commitment, or the relevant part of the Commitment, of that Lender will be immediately cancelled; and

(c)
the Borrowers shall repay that Lender’s participation in the relevant Loan on the last day of the Interest Period for that Loan occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the relevant Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).

7.4
Total Loss or sale of a Vessel

(a)
If a Vessel is sold or suffers a Total Loss:

(i)
the Term Loan Facility shall be prepaid in the amount outstanding pursuant to the respective Vessel’s Term Loan Tranche as set out in Schedule 1C ( Repayment Schedule ) hereto; and

(ii)
the Revolving Credit Facility shall be reduced and/or cancelled with the amount of the Revolving Credit Facility Tranche in respect of the Vessel sold or lost, and any



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Loan outstanding under the Revolving Credit Facility exceeding the Available Revolving Credit Facility Commitment (as reduced) shall be repaid.

Any prepayment and reduction under this Clause 7.4 ( Total Loss or sale of a Vessel ) shall (i) in case of a sale be made on or before the date on which the sale is completed by delivery of a Vessel to the buyer, or (ii) in the case of a Total Loss, on the earlier of the date falling one hundred and eighty (180) days after the Total Loss Date and the receipt by the Agent of the proceeds of Insurance relating to such Total Loss (or in the event of a requisition for title of a Vessel, immediately after the occurrence of such requisition of title), and be applied in accordance with 7.4 ( Total Loss or sale of the Vessel ) sub-paragraphs (i) and/or (ii) (as applicable).

7.5
Market Value

(a)
If the aggregate Market Value of the Vessels (then serving as collateral hereunder) is less than 135% of the Loans the Borrowers shall, unless otherwise agreed with the Agent (on behalf of the Lenders) within fifteen (15) Business Days, either

(i)
prepay the Loans or a part of the Loans (as the case may be) required to restore the aforesaid ratio; or

(ii)
provide the Lenders with such additional security, in form and substance satisfactory to all Lenders (it being understood that cash collateral in USD shall be deemed acceptable and be valued at par).

(b)
Any prepayment under this Clause 7.5 ( Market Value ) shall first be applied against the Facilities pro rata based on the total amounts of the Loan outstanding under each Facility. The amounts prepaid in respect of  the Term Loan Facility, shall be  applied against the remaining instalments and balloon under each such Facility in inverse order of maturity.

7.6
Change of Control

If a Change of Control occurs,

(a)
the Borrowers shall promptly notify the Agent upon becoming aware of that event;

(b)
a Lender shall not be obliged to fund any Utilisation;

(c)
the Agent shall, with thirty (30) Business Days prior written notice to the Borrowers (unless another notice period is set by the Majority Lenders) (x) cancel the Total Commitments, and (y) require the Borrowers to prepay all or parts of the Outstanding Indebtedness in full..

7.7
Right of replacement or repayment and cancellation in relation to a single Lender

(a)
If:

(i)
any sum payable to any Lender by the Borrowers and/or the Guarantor is required to be increased under paragraph (c) of Clause 12.2 ( Tax gross-up ); or

(ii)
any Lender claims indemnification from the Borrowers under Clause 12.3 ( Tax indemnity ) or Clause 13.1 ( Increased costs ),

the Borrowers may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender’s participation in the



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Loans or give the Agent notice of its intention to replace that Lender in accordance with paragraph (d) below.

(b)
On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.

(c)
On the last day of each Interest Period which ends after the Borrowers have given notice of cancellation under paragraph (a) above (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Lender’s participation in the Loans.

(d)
The replacement of a Lender pursuant to paragraph (a) above shall be subject to the following conditions:

(i)
the Borrowers shall have no right to replace the Agent;

(ii)
neither the Agent nor any Lender shall have any obligation to find a replacement Lender; and

(iii)
in no event shall the Lender replaced under paragraph (a) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents.

7.8
Restrictions

(a)
Any notice of cancellation or prepayment given by any Party under this Clause 7 ( Prepayment and cancellation ) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

(b)
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

(c)
The Borrowers may not re-borrow any part of the Term Loan Facility which is prepaid.

(d)
The Borrowers shall not repay or prepay all or any part of a Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

(e)
No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

(f)
If the Agent receives a notice under this Clause 7 ( Prepayment and cancellation ) it shall promptly forward a copy of that notice to either the Borrowers or the affected Lender, as appropriate.



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SECTION 5
COSTS OF UTILISATION

8.
INTEREST

8.1
Calculation of interest

(a)
The rate of interest on a Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

(i)
Margin; and

(ii)
LIBOR.

(b)
It is not possible to calculate the effective interest rate on a Loan in advance. The Lenders are nevertheless, according to the FA Act obliged to give a representative example. LIBOR for 3 (three) months was at 17 April 2018 2.35509 % p.a. and provided unaltered LIBOR and Margin of 240 basis points per annum for the duration of the Facilities, fees agreed hereunder and Utilisation of the Total Commitment on 18 April 2018, the effective interest rate will be 5.19% p.a.

(c)
Interest shall be calculated on the actual number of days elapsed on the basis of a three hundred and sixty (360) day year.

8.2
Payment of interest

The Borrowers shall pay accrued interest on the relevant Loan on each Interest Payment Date.

8.3
Default interest

(a)
If the Borrower or Guarantor  fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of the actual payment (both before and after judgment), , at a rate which, subject to paragraph (b) below, is two hundred basis points higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a part of the Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably) above the Margin. Any interest accruing under this Clause 8.3 ( Default interest ) shall be immediately payable by the Borrowers and/or the Guarantor on demand by the Agent.

(b)
If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to such Loan:

(i)
the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and

(ii)
the rate of interest applying to the overdue amount during that first Interest Period shall be two (2) per cent higher than the rate which would have applied if the overdue amount had not become due.

(c)
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.



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8.4
Notification of rates of interest

The Agent shall promptly notify the Lenders and the Borrowers of (i) the determination of a rate of interest under this Agreement and (ii) the Funding Rate relating to a Loan.

9.
INTEREST PERIODS

9.1
Selection of Interest Periods

(a)
The Borrowers may select an Interest Period for a Loan in the relevant Utilisation Request (however for the Revolving Credit Facility always taking into consideration Clause 6.1 ( Repayment of Loans ) (b)).

(b)
In respect of any Loan already utilised under the Term Loan Facility, the Borrowers may select an Interest Period for such Loan in a Selection Notice on the following terms:

(i)
each Selection Notice for a Loan is irrevocable and must be delivered to the Agent by the Borrowers not later than 12:00 noon Oslo time on the date falling three (3) Business Days prior to the last day of the current Interest Period; and

(ii)
if the Borrowers fail to deliver a Selection Notice to the Agent in accordance with paragraph (b) above, the relevant Interest Period will be three (3) Months.

(c)
The Borrowers may select an Interest Period of three (3) Months or any such other periods as all Lenders may agree.

(d)
An Interest Period for a Loan shall not extend beyond the Maturity Date.

(e)
The first Interest Period for a Loan shall start on the relevant Utilisation Date and each subsequent Interest Period shall start on the last day of its preceding Interest Period.

9.2
Non-Business Days

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Busines