As it was notified already before, on August 16^th, 2019 Riga City Vidzeme Urban Court resolved (a) to satisfy the application of legal protection proceedings of AS „Rīgas kuģu būvētava” (Company); (b) to implement the legal protection proceedings (Proceedings) of the Company; (c) to approve the plan of measures of the legal protection proceedings (Plan) of the Company; and (d) to set the period of 2 (two) years for implementation of the legal protection proceedings of the Company, effective from August 16^th, 2019.

According to the judgement of Riga City Vidzeme District Court of May 15^th, 2020 in civil case No.C30516819, amendments to the Plan were approved (the version of April 06^th, 2020), hereinafter referred to as the Amendments, by setting the term of the implementation of the Proceedings to 4 (four) years by accounting of the term as from August 16^th, 2019.

In turn, according to the judgement of Riga City Vidzeme District Court of January 25^th, 2021 in civil case No.C30516819, amendments to the Plan were approved (the version of December 23^rd, 2020), hereinafter referred to as the Amendments, by setting the term of the implementation of the Proceedings to 5 (five) years by accounting of the term as from August 16^th, 2019.

The Company thanks most creditors for the understanding of the financial position of the Company and for the provided support by approving implementation of the Plan and the Amendments.

However, despite the fact that Company was successfully implementing the Plan and the Amendments, by performing its core operations and implementing the measures provided by the Plan and the Amendments, in the result of which the Company has been able to cover more than 53% (EUR 7,335,609.61) of the amount of the creditors’ claims to be covered within the scope of the Proceedings, as long as the prohibitions and restrictions established in connection with the restriction of the spread of Covid-19 have not been completely cancelled in Latvia and elsewhere in the world, the Company is unable to resume its economic activity to the extent provided by the Plan and the Amendments.

In view of the above, the Company has still not been able to implement one of the major measures provided by the Plan and the Amendments – sale of the floating docks, because in Latvia and elsewhere in the world there is still economic uncertainty and caution caused by Covid-19, and for that reason potential byers, unable to predict economic trends even in the short term, still wants to wait instead of making a deal.

Consequently, the Company unplanned must make additional investments in the floating docks to keep them in working order. Additional expenses and unearned income from the sale of floating docks prevent the Company from achieving the planned amount of monthly coverage of creditors’ claims, and under the present circumstances, further implementation of the Proceedings in compliance with the Plan and the Amendments is not possible, therefore the Company has repeatedly developed amendments to the Plan by providing for the following changes:

1. to sell the floating docks at a reduced price, however, not below EUR 2,800,000.– EUR, latest during the 4^th quarter of the 3^rd year of the Proceedings according to the following core conditions:
   1. the buyer pays the purchase price in instalments according to the schedule provided by the amendments to the Plan, latest until the 3^rd quarter of the 5^th year of the Proceedings;
   2. until payment of the full purchase price, the buyer obtains the right of pledge to the floating docks equal to the paid portion of the purchase price or the Company obtains the right of pledge to the floating docks equal to the outstanding portion of the purchase price;
   3. until the completion of the Proceedings the buyer does not sell the floating docks and continues to store and use them in Riga port aquatorium at the real estate/berths owned/leased by the Company;
   4. until the completion of the Proceedings the buyer, by storing and using the floating docks, receives the ship repair support services from the Company.
2. to update the envisaged revenue and expenses of the Company, as well as the schedule of satisfying the creditors’ claims by providing the following:
   1. The remaining liabilities provided by the Plan (not amending the total amount of the liabilities to be covered) to the secured creditors will be satisfied within 60 months as from the date when the Proceedings has entered into force i.e., within the next 37 months;
   2. The remaining liabilities provided for by the Plan (reducing the total amount of liabilities to be covered by 10%) to the unsecured creditors will be satisfied within 60 months as from the date when the Proceedings has entered into force i.e., within the next 37 months, maintaining significantly reduced monthly payments to unsecured creditors until the 32^nd month of the Process, taking into account the expected duration of the economic uncertainty and prudence caused by the containment and mitigation of Covid-19.

In compliance with the provisions of the Insolvency Law on August 16^th, 2021 the Company has sent the amendments to the plan of measures of the legal protection proceedings developed by it to Company’s creditors for the provision of written consent.

The Company is thankful to its creditors for the understanding and support during the implementation of the plan of measures of the legal protection proceedings.

The Company expects the amendments to the plan of measures of the legal protection proceedings submit to the court for approval by September 03^rd, 2021.

The Board of Directors of AS „Rīgas kuģu būvētava”