Settlement for Daxin Proceedings

Singapore, 9 November 2011 – FSL Trust Management Pte. Ltd. (“FSLTM”), the trustee-manager of First Ship Lease Trust (“FSL Trust”), refers to the previous announcement titled “Appeals in Proceedings in Japan and PRC” dated 12 August 2011 as well as the update set out in the unaudited financial statements announced on 20 October 2011 on the legal proceedings between FSL Trust and Daxin Petroleum Pte. Ltd. (“Daxin”) and its affiliated parties. FSLTM is pleased to announce that parties have reached an amicable out-of-court settlement on a without-admission-of-liability basis.

Daxin and its affiliated parties have agreed to :

a. cease all legal proceedings in Japan and PRC against the vessels ‘Verona I’ (now renamed ‘FSL Singapore’) and ‘Nika I’ (now renamed ‘FSL Hamburg’) respectively;

b. secure the release of the US$1.6 million cash deposit currently placed by FSL Trust with the Japanese court for proceedings in Japan as well as the US$2.8 million bank guarantee currently issued to Daxin for proceedings in the PRC; and

c. pay to FSL Trust a settlement sum of US$5 million by 14 November 2011.

In view of the settlement agreement, FSLTM will write-back the financial provision made earlier for US$2.5 million in the financial statements of FSL Trust for the financial quarter ending 31 December 2011. In addition, US$5 million will be recognised in the income statement for the same quarter. FSL Trust’s cash balance will be increased by US$5 million and the return of the US$1.6 million from the deposit placed with the Japanese court, less payments of any outstanding legal fees.

First Ship Lease Trust press release