New Debt Facility

09 March 2022

Harland & Wolff Group Holdings plc

("Harland & Wolff" or the "Company")

Announcement of $70 million Green Corporate Debt Facility

Harland & Wolff Group Holdings plc (AIM: HARL), the UK-quoted company focused on strategic infrastructure projects and physical asset lifecycle management, is pleased to announce that it has entered into a group-wide $70 million Green Term Loan Facility (the "Facility") with affiliates of Riverstone Credit Partners, LLC ("RCP") , a dedicated credit investment platform managed by Riverstone Holdings LLC ("Riverstone") and focused on entities engaged in building infrastructure and providing infrastructure services to generate, transport, store and distribute both renewable and conventional sources of energy, as well as entities focused on or otherwise engaged in the energy transition from fossil-based, to a zero-carbon economy. The Facility will be used to support growth in the business and supplement the Company's working capital requirements.

The Facility will be split into two tranches:

·      A committed facility of $35 million

·      An uncommitted accordion facility of up to $35 million

The Facility matures on 09 September 2023 and will attract an interest rate of the published 90 day Secured Overnight Financing Rate (the "SOFR") plus 9% per annum, with the floor of the SOFR set at 1%. The Company may elect to extend the maturity date by six months at a time up to three times for a final maturity date no later than 09 March 2025. These extensions are subject to an extension fee of 0.50% for the first extension option and 1% for each of the second and third extension options, in addition to pro forma covenant compliance and certain other usual and customary conditions.

The Facility has been structured as a Green Loan following the Green Loan Principles published by the LMA, APLMA, and LSTA and a Sustainability-Linked Loan with performance indicators focused on social responsibility. The Company is incentivised to upscale its group-wide apprenticeship programme aimed at the local communities in which Harland & Wolff operates. Harland & Wolff plans to build on its success to-date and seeks further contracts within the renewables and "green maritime" sectors, such as fabrication contracts for offshore wind and hydrogen projects, new vessel builds, retrofits with sustainability credentials and other such contracts that would promote the UK Government's agenda to achieving Net Zero by 2050.

Proceeds from the Facility will be utilised to fund working capital and CAPEX associated with the fabrication of wind turbine generator jackets for the NnG offshore wind project, to fully repay the existing £2 million Asset Backed Loan ("ABL") at Harland & Wolff (Belfast) Limited, to fund an interest reserve account, and to pay transaction fees & expenses. The Facility also includes an uncommitted accordion feature of $35 million, for a total borrowing capacity of up to $70 million, and may be utilised to fund the Company's incremental working capital and CAPEX requirements associated with new contracts.

The Company will also grant Riverstone detachable warrants over new ordinary shares in the Company ("Warrants") as part of this transaction. A total of 10,419,766 Warrants will be issued as part of this transaction. Each warrant will carry an exercise price of 14.25 pence per share, which is the closing price of the Company's shares on 08 March 2022, being the latest practicable date prior to this announcement. The Warrants are exercisable at any time after the Facility has been put in place but must be exercised before 36 months from today's date.

The Facility will be securitised against substantially all the assets of the Company, including land, property, plant and machinery and receivables.

In addition, an agreement has been reached with the vendors of Harland & Wolff (Appledore) Limited in relation to the outstanding deferred consideration payable by the Company. Under the terms of the revised payment schedule, the Company will pay the vendors instalments as follows:

·      31 March 2022: £500,000

·      30 June 2022: £500,000

·      25 August 2022: £2.50 million (£2.10 million in cash and £0.40 million in the Company's shares)

·      25 February 2023: £2 million (£1.60 million in cash and £0.40 million in the Company's shares)

Until the deferred consideration has been paid in full, Riverstone will take second charge on the assets of Harland & Wolff (Appledore) Limited with the current vendors retaining a first charge on the assets.

John Wood, Group CEO of Harland & Wolff, comments: "I am delighted to have entered into this Facility with Riverstone, a significant and much respected global asset management firm and specialist in our key sectors. The shared interests of the two groups now present a very real increased growth opportunity for Harland & Wolff and we are poised for the financial year 2022 to be a transformational one for the Group. Critically, this Facility now provides Harland & Wolff with the financial resources and flexibility to not only fast track its existing order book but also prepare itself for upcoming key contract wins. This is a major milestone for the Group. I look forward to working very closely with Riverstone in the months ahead and use this partnership to grow our business across all our sites."

Jamie Brodsky, Partner at Riverstone and Co-Head of RCP, said, "we are pleased to partner with Harland & Wolff on this financing and to support the Company's continued development. Our capital is best suited backing dynamic companies pursuing transformational opportunities. Harland & Wolff combines a mix of highly strategic infrastructure and operational expertise; and with a strong macro backdrop, the Company is ideally positioned to grow its core business lines. We are equally as excited about being able to provide a financing classified as both a Green and Sustainability Linked Loan, with proceeds primarily used to facilitate the fabrication of offshore wind development, while simultaneously having a positive impact on the local labour force and communities involved."

This announcement contains inside information.

For further information, please visit www.harland-wolff.com or contact:

About Harland & Wolff

Harland & Wolff is a multisite fabrication company, operating in the maritime and offshore industry through five markets: commercial, cruise and ferry, defence, energy and renewables and six services: technical services, fabrication and construction, decommissioning, repair and maintenance, in-service support and conversion.

Its Belfast yard is one of Europe's largest heavy engineering facilities, with deep water access, two of Europe's largest drydocks, ample quayside and vast fabrication halls. As a result of the acquisition of Harland & Wolff (Appledore) in August 2020, the company has been able to capitalise on opportunities at both ends of the ship-repair and shipbuilding markets where there will be significant demand.

In February 2021, the company acquired the assets of two Scottish-based yards along the east and west coasts. Now known as Harland & Wolff (Methil) and Harland & Wolff (Arnish), these facilities will focus on fabrication work within the renewables, energy and defence sectors.

In addition to Harland & Wolff, it owns the Islandmagee gas storage project, which is capable of providing 25% of the UK's natural gas storage capacity and which would benefit the Northern Irish economy as a whole when completed.

About Riverstone

Founded in 2000, Riverstone is an investment firm focused on executing private equity and credit investments in energy, power, decarbonization and infrastructure. To date, the Firm has raised approximately $43 billion of capital, which it has deployed across its platform to over 200 portfolio companies since inception.

RCP is the dedicated credit investment platform of Riverstone. Since inception, RCP has committed approximately $4.6 billion of capital to over 60 portfolio companies. In addition to its two institutional credit funds, RCP manages Riverstone Credit Opportunities Income Plc, a closed-ended investment company listed on the London Stock Exchange under the symbol RCOI.

For more information about Riverstone and RCP, please visit www.riverstonellc.com. For more information on RCOI, please visit www.riverstonecoi.com.