April 7, 2014

MODEC, INC.
Toshiro Miyazaki, President & CEO
Code: TSE 6269
Contact: Yasuhiro Takano, Executive OfficerGeneral Manager, Corporate Planning& Strategies Dept.
TEL: +81-3-5290-1200

Issuance of New Shares through Public Offering and Third-Party Allotment,
and Sales of Shares
MODEC, INC. (MODEC) hereby announces, as set forth below, that it resolved, at its Board of Directors’Meeting held on April 7, 2014, to issue new shares through public offering and third-party allotment, andsales of shares.
Purpose of the Offering
MODEC provides complete engineering, construction, installation, leasing and operations services forfloating offshore oil and gas production facilities, referred to as Floating Production, Storage and Offloading
Systems (FPSOs), Floating Storage and Offloading Systems (FSOs) and Tension Leg Platforms (TLPs), tooil companies around the world.
With the crude oil price high, in the range of $90 per barrel, oil companies continue to show a strong
investment appetite. In Brazil, Petrobras, the state owned company to which MODEC has delivered six
FPSOs and FSOs, announced plans for aggressive investment in the development of offshore oil fields, while
there are also a number of plans for offshore oil development projects in West Africa. In such environment,
MODEC intends to strive for the expansion of this business, especially in Brazil and West Africa
This financing arrangement is intended to meet the funding requirements for the charter business, including
the operation of FPSOs of which MODEC has received orders in Brazil and West Africa. Specifically,
MODEC plans to use the funds for investments and loans to Cernambi Sul MV24 B.V. and Cernambi Norte
MV26 B.V., which are special purpose companies for the charter business of FPSOs offshore Brazil and toT.E.N. Ghana MV25 B.V., a special purpose company for the charter business of FPSO offshore Ghana.
Through this financing arrangement, MODEC will maintain and enhance its financial position toestablish foundations for stable growth.
As a result of the issuance of new shares through a public offering and third-party allotment to Mitsui
Engineering & Shipbuilding Co., Ltd.(MES) and Mitsui & Co., Ltd.(MITSUI) and sale of shares, MODEC
plans to boost the liquidity of its shares and to increase the number of shareholders. MODEC will also
maintain its cooperative relations with MES, the parent company of MODEC, and MITSUI, a major
shareholder, which has a business alliance agreement with MODEC, and will contribute to the enhancementof the corporate value.

-1-1. Issuance of New Shares Through Public Offering (Open to All Parties)
1)
Type and number of
3,096,000 shares of the common stock
shares offered2)
Amount paid
The amount paid shall be decided on a date from Tuesday, April 15, 2014
to Thursday, April 17, 2014 (hereinafter referred to as the “issuance pricedetermination date”) using the method stipulated in Article 25 of Rules
Concerning Underwriting, etc. of Securities set by the Japan Securities
Dealers Association (JSDA).
3)
Amounts of capital
The amount of capital increase shall be one (1) half of the ceiling amountincrease and capitalof increase in capital stock and the like calculated in accordance with thereserve increaseprovisions of Paragraph 1, Article 14 of Corporate Calculation Rules.
Fractions of less than 1 yen shall be rounded upwards when they result
from the calculation. The amount of capital reserve increase shall be an
amount calculated by deducting the amount of capital increase statedabove from the concerned ceiling amount of increase in capital stock andthe like.
4)
Subscription method
Subscription shall be open to the public. Nomura Securities Co., Ltd.,SMBC Nikko Securities Inc., Daiwa Securities Co., Ltd. and Mizuho
Securities Co., Ltd. (hereinafter referred to as the “underwriters”) shallpurchase all shares from MODEC, Inc. and offer them to investors.
Nomura Securities Co., Ltd. and SMBC Nikko Securities Inc. (acting as asole book runner) shall be lead underwriters for the public offering. The
issuance price for the public offering (the offering price) shall be decided
on the issuance price determination date, using the method stipulated in
Article 25 of Rules Concerning Underwriting, etc. of Securities set by theJSDA, in consideration of demand and other factors, with an amount(fractions of less than 1 yen of which shall be disregarded) calculated bymultiplying the closing price of MODEC, Inc.’s common shares on theTokyo Stock Exchange on the issuance price determination date (theclosing price on the closest prior date when no closing price exists for theconcerned date) by a figure between 0.90 and 1.00 as a tentative price.
5)
Compensation for theAn underwriting fee shall not be paid. In place of the fee, an amountunderwriters
calculated by deducting the amount paid (the amount the underwriters
paid to MODEC, Inc.) from the issuance price for the public offering (theoffering price) shall be paid to the underwriters.
6)
Subscription period
From the business day after the issuance price determination date to theday that corresponds to two (2) business days after the issuance pricedetermination date7)
Due payment date
A day that falls between Tuesday, April 22, 2014 and Thursday, April 24,2014, and that is at least five (5) business days after the issuance pricedetermination date8)
Due delivery date
The business day after the due payment date stated above
9)
Advance on subscription
An amount equal to the issuance price per share10) Subscription unit
100 shares
11) Determination of the amount paid, amounts of capital increase and capital reserve increase, theissuance price (offering price), and all other matters required for the issuance of new shares through-2-12)

the public offering shall be left entirely up to Toshiro Miyazaki, President and CEO of MODEC, Inc.
Each of the items stated above shall be subject to the effectuation of notifications in accordance withthe provisions of the Financial Instruments and Exchange Act.

2.

Issuance of New Shares Through Third-Party Allotment with Mitsui Engineering & Shipbuilding Co.,
Ltd. and Mitsui & Co., Ltd. as Allottees (Capital Increase Through Parallel Third-Party Allotment)
1)
Type and number of
6,439,800 shares of the common stock
shares offered
2)
Amount paid
The amount paid shall be decided on the issuance price determination
date. The amount paid shall be the same as the issuance price for thepublic offering (the offering price).
3)
Amounts of capital
The amount of capital increase shall be one (1) half of the ceiling amountincrease and capitalof increase in capital stock and the like calculated in accordance with thereserve increaseprovisions of Paragraph 1, Article 14 of Corporate Calculation Rules.
Fractions of less than 1 yen shall be rounded upwards when they result
from the calculation. The amount of capital reserve increase shall be an
amount calculated by deducting the amount of capital increase statedabove from the concerned ceiling amount of increase in capital stock andthe like.
4)
Allottees and number of Mitsui Engineering & Shipbuilding Co., Ltd.: 5,010,000 sharesshares allotted
Mitsui & Co., Ltd.: 1,429,800 shares
5)
Subscription period
From the business day after the issuance price determination date to theday that corresponds to two (2) business days after the issuance pricedetermination date. The subscription period shall be the same as thesubscription period for the public offering.
6)
Due payment date
The business day after the due payment date stated above7)
Subscription unit
100 shares8)
Determination of the amount paid, amounts of capital increase and capital reserve increase and allother matters required for the issuance of new shares through Third-party allotment with Mitsui
Engineering & Shipbuilding Co., Ltd. and Mitsui & Co., Ltd. as allottees shall be left entirely up toToshiro Miyazaki, President and CEO of MODEC, Inc.
9)
Each of the items stated above shall be subject to the effectuation of notifications in accordance withthe provisions of the Financial Instruments and Exchange Act.
10) The issuance of new shares through third-party allotment with Mitsui Engineering & Shipbuilding Co.,
Ltd. and Mitsui & Co., Ltd. as allottees shall be cancelled in cases where the public offering iscancelled.
3. Sales of Shares (Sales Through Over-Allotment)
1)
Type and number of464,200 shares of the common stock.
shares for sale
The number of shares for sale stated above shall be the maximum numberof such shares. Their number may decrease or their sale may not takeplace at all, depending on the state of demand and other factors. The
number of shares for sale shall be decided on the issuance pricedetermination date in consideration of the state of demand and otherfactors.

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3)

4)

5)
6)
7)
8)
9)
10)

4.
1)
2)
3)

4)
5)

6)

SellerSales price

SMBC Nikko Securities Inc.
Undecided（The sales price shall be decided on the issuance pricedetermination date. The sales price shall be the same as the issuance pricefor the public offering (the offering price)）.
Sales method
SMBC Nikko Securities Inc., an underwriter for the public offering, shallperform the additional sale of the common shares of MODEC, Inc.
borrowed from Mitsui & Co., Ltd., one of MODEC, Inc.’s shareholders,in consideration of the state of demand for the public offering and otherfactors.
Subscription period
The subscription period shall be the same as the subscription period forthe public offering.
Due payment date
The due payment date shall be the same as the due payment date for thepublic offering.
Advance on subscription
The advance on subscription shall be the same as the advance on
subscription for the public offering.
Subscription unit
100 shares
Determination of the sales price and all other matters required for the sales of shares through the over-allotment shall be left entirely up to Toshiro Miyazaki, President and CEO of MODEC, Inc.
Each of the items stated above shall be subject to the effectuation of notifications in accordance withthe provisions of the Financial Instruments and Exchange Act.

Issuance of New Shares Through Third-party allotment with SMBC Nikko Securities Inc. as Allottee(Capital Increase Through Third-Party Allotment)
Type and number of464,200 shares of the common stock
shares for saleAmount paid
The amount paid shall be the same as the issuance price for the public
offering (the offering price).
Amounts of capital
The amount of capital increase shall be one (1) half of the ceiling amountincrease and capitalof increase in capital stock and the like calculated in accordance with thereserve increaseprovisions of Paragraph 1, Article 14 of Corporate Calculation Rules.
Fractions of less than 1 yen shall be rounded upwards when they result
from the calculation. The amount of capital reserve increase shall be an
amount calculated by deducting the amount of capital increase statedabove from the concerned ceiling amount of increase in capital stock andthe like.
Allottee and number ofSMBC Nikko Securities Inc.: 464,200 sharesshares allotted
Due subscription date
A day that falls between Tuesday, May 20, 2014 and Friday, May 23,
2014. However, the due subscription date shall be two (2) business days
after the thirtieth (30th) day of the day after the termination of theapplication period for the public offering and share sales throughover-allotment (after the closest prior business day in cases where thethirtieth (30th) day is a business holiday.)Due payment date
A day that falls between Wednesday, May 21, 2014 and Monday, May26, 2014. However, the due subscription date shall be three (3) business-4-7)
8)

9)
10)

days after the thirtieth (30th) day of the day after the termination of theapplication period for the public offering and share sales throughover-allotment (after the closest prior business day in cases where thethirtieth (30th) day is a business holiday.)Subscription unit
100 shares
Determination of the amount paid, amounts of capital increase and capital reserve increase and allother matters required for the issuance of new shares through third-party allotment with SMBC Nikko
Securities Inc. as allottee shall be left entirely up to Toshiro Miyazaki, President and CEO of MODEC,Inc.
The issuance of shares left unsubscribed until the due subscription date stated in item 5 above shall beterminated.
Each of the items stated above shall be subject to the effectuation of notifications in accordance withthe provisions of the Financial Instruments and Exchange Act.

Reference
Reason of the capital increase (use of funds to be raised)
All funds estimated to be raised through the public offering and third-party allotment, 23,017,356,232 yen
maximum, are planned to use for investments in and loans to special purpose companies established for theFPSO charter business. Specifically, in January 2015, 11,152,000,000 yen (an investment of 5,576,000,000yen and a loan of 5,576,000,000 yen) will be given to Cernambi Sul MV24 B.V., and in January 2016,
11,700,000,000 yen (an investment of 5,850,000,000 yen and a loan of 5,850,000,000 yen) will be given toCernambi Norte MV26 B.V. In May 2016, the remaining funds, if any, will be invested in T.E.N. Ghana
MV25 B.V.
The special purpose companies plan to use the investments and loans for the FPSO charter business.
Before the funds are allocated to the special purpose companies, they will be used for a short-term loan,
which will be repaid by the end of December 2014, to Cernambi Sul MV24 B.V., which will use the loan forthe construction of an FPSO. From the payoff date to the date of appropriation to the special purpose
companies, MODEC will invest the funds in safe financial instruments.

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