ESTABLISH A SIGNIFICANT FLEET

OF OFFSHORE SUPPLY SHIPS

FIRST-RATE MANAGEMENT TEAM WITH CONSIDERABLE EXPERTISE IN THE SECTOR AND ASSET

BACKED FINANCING

HMRC ADVANCE ASSURANCE GRANTED FOR INVESTEE COMPANY

The global support vessels industry is estimated to grow from $39.4 billion in 2014 to $69.34 billion by the end of 2020 at a CAGR of 9.88%. Source: Mordor Intelligence

OFFSHORE SUPPLY VESSELS (OSV) INVESTEE COMPANY

Asia Pacific region is one of the fastest growing markets with the market estimated to be $9.7 billion by 2020. Source: Mordor Intelligence

Our new investee company aims to build a sizeable fleet of ships and become a market leader in its field. I am confident the highly experienced management team has the potential to develop a strong trading record with excellent possibilities for growth.”

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EVOLVE

ASSET FOCUSED EIS PORTFOLIOS

RICHARD COOK CHIEF EXECUTIVE

Blackfinch Investments intends to acquire and develop a fleet of Offshore Supply Vessels (OSV) to exploit the demand for services to international sea-based projects, through the trading company Agility Shipping Investments Limited. The investee company has an experienced management team who aim to build a fleet of OSV that will drive strong cash flows and create a solid return. This should enable the company to mature and develop a strong trading record, with a competitive investment return being provided to the early stage investors.

The company wishes to access the offshore support market through the initial acquisition of two OSV’s which can participate in the support of offshore projects. The company has identified the OSV supply market to the offshore oil industry as an attractive opportunity, as vessels of this type provide specialist services and have long construction lead times, meaning good charter rates and attractive residual values are available.

The management team consider the company to have significant potential for growth and development; they will generate a successful trading record by building the fleet through the acquisition of additional OSV’s. Currently the sector is fragmented with many small support vessel companies, and the team will develop the company with the intention of becoming a market leader in its field.

The key factors which are driving growth of the market are the recovery in oil and gas demand, resulting in, growing exploration and production activities and an increase in the number of offshore platforms. No other vessel substitutes are currently available which makes OSV the backbone of the offshore industry. Consequently, the market is expected to continue its steady growth in the future.

Offshore support vessel manufacturers are focusing on new developments and add-ons for offshore services, offering new features such as dynamic positioning with better efficiency and navigational ability.

Expansion, mergers and acquisitions into new and emerging markets such as APAC, North-West Europe and South America will continue to be the key to success for offshore support vessel manufacturers and managers, increasing their overall sales and revenue.

OPPORTUNITY SUMMARY

Blackfinch is delighted to announce the launch of a new investee company as part of our Asset Focused EIS Portfolios.

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THE STRATEGY

The company will be responsible for sourcing clients who will charter the OSV and marketing to these potential clients. The Operations Director has substantial experience of the market and extensive contacts with both potential charter parties and brokers acting on their behalf. The company’s initial market research indicates demand will be strong for OSV for charter clients to contract the boats on a ‘bareboat charter’ basis.

A bareboat charter or demise charter is an arrangement for the chartering or hiring of a ship or boat, whereby no crew, provisions, administration or technical maintenance is included as part of the agreement; instead, the client who charters the vessel from the owner is responsible for all these aspects.

In a bareboat or demise charter the owner gives possession of the ship to the charterer and the charterer hires its own master and crew. The bareboat charterer is sometimes called a “disponent owner”. The giving up of possession of the ship by the owner is the defining characteristic of a bareboat or demise charter.

The charterer obtains possession and full control of the vessel along with the legal and financial responsibility for it. The charterer pays for all operating expenses, including fuel, crew, port expenses, protection and indemnity insurance and hull insurance.

The company will focus on the agile OSV market, a market in which the management team have significant experience and one which they feel offers a strong opportunity for growth for the company. Two fundamental reasons for the growth opportunity lie within:

— The requirement for these specialist vessels; they are constantly in demand where there are active sea-based projects; and

— The acquisition price means that further ships can be added to the company’s inventory as cashflows continue to develop; with a relatively low price point, they are relatively simple to purchase.

The first priority will be to secure the relevant funding in order to facilitate the acquisition process for the company’s fleet of ships. Once funding has been secured, the company can begin the ship acquisition process and simultaneously begin discussions with potential charter parties to create client demand.

THE CHARTER CONTRACT

THE SHIPS

CORPORATE STRATEGY

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The company is seeking to initially raise £5 million through equity. The investee company has been granted HMRC advance assurance which will provide our investors with confidence that their investment will give them the available tax reliefs. The following points are pertinent to the trading activity of the company

— The OSV are not offshore installations— The company will beneficially own the OSV’s which are let on charter.

There may be some borrowing against the ships, but the company will always be the beneficial owner

— The company will be responsible in the diligent acquisition of the OSV— The company will be solely responsible for all marketing activities.

The initial ‘target panel’ is listed below and the company will prioritise marketing to this client bank initially. The company will always be responsible for arranging charters on behalf of its OSV

— All charters / lettings will be for periods of 1 – 12 months. The company will always analyse the best risk adjusted return, when considering contract lengths (certainty) vs the level of chargeable day rate

— The company will carry responsibility for all management decisions relating to the OSV, aside from any decisions relating to husbandry, which will probably be made by the client who charters the OSV. The company will also be responsible for defraying all expenses in relation to the OSV, aside from those which are incidental to voyages or employment of the ship. Again, this will be the responsibility of the management team. The bareboat charter company will carry responsibility for expenses which relate to a particular voyage or to the employment of the ship.

The company will advertise its services to the whole of the market but the management team has built up a network of potential clients or the ‘target panel’. Key operators in this sector are companies such as: Stanford Marine, Midgulf Offshore, Dynamic Marine Services and White Sea Shipping.

The bareboat charter party typically will provide the vessel on a fully serviced basis (Time Charter) to either an oil producer directly or to a major offshore service provider.

SECURING FUNDING

CLIENT DEMAND

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THE MANAGEMENT TEAM

Admiral Rix is a former Royal Navy officer of the Warfare (Operations) Branch who since retiring in 2009 has acquired 6 years of commercial experience in Risk Management and Maritime Consultancy. A senior executive with extensive leadership, management, operational and commercial experience, in national and multi-national environments.Admiral Rix will act as Chairman of the company and will use his knowledge and experience to assist in developing the company’s operations, ensuring risks are managed and that commercial arrangements are in line with the overall strategy.

Rory has spent 40 years in the offshore oil and gas industry around the world as a consultant and manager. He has specialist knowledge of OSV and extensive experience of providing vessel charters to major oil companies, regional oil companies and international oil industry contractors along with experience in the marketing, sale and purchase of offshore support vessels.

Paul has over 25 years in senior finance roles within the global banking sector. He brings extensive international experience in asset backed financing specifically related to evaluating, structuring and financing such opportunities.

Andrew brings extensive experience in negotiating commercial contracts, managing relationships and arranging deals. This experience will be vital when the company secures contracts for purchase, as well as negotiation of ongoing charter arrangements.

REAR ADMIRAL ANTHONY RIX CBCHAIRMAN

RORY JONZENOPERATIONS DIRECTOR

PAUL CHIVERSDIRECTOR

ANDREW DUCKWORTHCOMMERCIAL DIRECTOR

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RETURNS

The company will target returns of £1.10p – £1.25p.

This will mean that these returns are in line with our overall target returns for the Asset Focused EIS Portfolio of £1.20p.

COSTS AND CHARGES

Typically, a fee of 5% is charged to each underlying company, on a pro rata basis, when it is initially funded. Please note that this fee is charged to the qualifying investee companies, so investors should receive tax relief on the entire amount invested and the fees charged to the companies. The fee is payable by the investee company to cover fundraising expenses, the dealing of shares, the drafting of the company business plans and confirmation of advance assurance from HMRC.

Blackfinch will charge an annual management fee equivalent to the 2% of capital invested. The Blackfinch ongoing fees are charged to the investee companies so investors should receive tax relief on the entire amount invested into the companies and the fees charged to the companies. All fees and costs are exclusive of VAT, which will be charged where applicable.

Blackfinch will be entitled to a 25% share of returns from the investment, subject to the investors receiving £1.05 for every £1.00 invested (ignoring tax reliefs).

Blackfinch and its affiliates retain the right to recover reasonable expenses (e.g. legal, director, accounting, arrangement, company secretarial, audit) incurred in administering and managing the service together with the investee companies which Blackfinch Asset Focused EIS Portfolios invest. Blackfinch also retain the right to charge monitoring and exit fees to the investee company.

On agreement with your Financial Intermediary, intermediary fees will be paid through the investee companies. Typically, up to 3% for the initial charge and 0.5% annually. As the financial intermediary fee comes directly from the investee company, you will benefit from more of your capital being eligible for tax relief.

PERFORMANCE

INVESTEE COMPANY

ARRANGEMENT FEE

ANNUAL

MANAGEMENT FEE

PERFORMANCE FEES

FINANCIAL

INTERMEDIARY FEES

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EIS EXIT

It is possible that an exit could be facilitated in year 4 for investors. One possible exit route would be for the company to be sold at a market trading multiple of EBITDA to one of the other operators in this market. We believe that by then we will have created a compelling proposition for a trade buyer; strong and profitable operating track record, supported with a robust balance sheet which is supported by a range of vessels.

SUMMARY

Blackfinch Investments believe the demand for a market leading OSV fleet is a compelling business proposition, with the market consensus that there is expected to be significant growth in the sector.

The Directors have strong experience in this specialist market and will add value with broad-ranging commercial and operation expertise, in addition to a strong financial infrastructure, ensuring sufficient working capital is available for development of the business to create healthy returns to investors.

IMPORTANT INFORMATION: THIS DOCUMENT IS ISSUED BY BLACKFINCH INVESTMENTS LIMITED (BLACKFINCH), WHICH IS AUTHORISED

AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY (FCA NUMBER 153860). REGISTERED ADDRESS: 1350-1360 MONTPELLIER

COURT, GLOUCESTER BUSINESS PARK, GLOUCESTER, GL3 4AH. REGISTERED IN ENGLAND AND WALES COMPANY NUMBER 02705948.

THIS DOCUMENT IS FOR INTERMEDIARY INFORMATION ONLY AND DOES NOT FORM ANY OFFER OR INVITATION TO INVEST. ALL

INFORMATION CORRECT AS AT JANUARY 2018. ANY DECISION TO INVEST IN THIS SERVICE SHOULD NOT BE BASED ON THIS

DOCUMENT BUT RATHER MADE BASED ON THE INFORMATION CONTAINED IN THE BROCHURES AND TERMS AND CONDITIONS. WHILST

BLACKFINCH HAS TAKEN ALL REASONABLE CARE TO ENSURE THAT ALL THE FACTS STATED IN THIS DOCUMENT ARE CORRECT, NO

REPRESENTATION OR WARRANTY, EXPRESSLY OR IMPLIED, IS GIVEN AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION OR

OPINIONS CONTAINED IN THIS DOCUMENT AND NO LIABILITY IS ACCEPTED BY BLACKFINCH INVESTMENTS LIMITED, OR ANY OF THEIR

DIRECTORS, MEMBERS, OFFICERS, EMPLOYERS, AGENTS OR ADVISERS, FOR ANY SUCH INFORMATION OR OPINION.

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BLACKFINCH INVESTMENTS LIMITED

1350-1360 MONTPELLIER COURT, GLOUCESTER BUSINESS PARK, GLOUCESTER, GL3 4AH

01684 571 255 ENQUIRIES@BLACKFINCH.COM WWW.BLACKFINCH.COM