Alliance Oil Company Ltd / Miscellaneous 31.10.2013 09:45 Dissemination of a UK Regulatory Announcement, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement.
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Lambros Overseas S.A., OJSC Alliance Group and Alliance Oil Company Ltd., 31 October 2013, at 09.45 CET For immediate publication THIS PRESS RELEASE IS NOT AND MUST NOT, DIRECTLY OR INDIRECTLY, BE DISTRIBUTED OR MADE PUBLIC IN AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA. THE TRANSACTION IS NOT BEING MADE TO PERSONS IN THOSE JURISDICTIONS OR ELSEWHERE WHERE THEIR PARTICIPATION REQUIRES FURTHER OFFER DOCUMENTS, FILINGS OR OTHER MEASURES. Alliance Group launches recommended Cash Offer for Alliance Oil Company The Boards of Directors of Lambros Overseas S.A. and OJSC Alliance Group (together 'Alliance Group') and Alliance Oil Company Ltd. ('AOC', the 'Company') today announce a recommended cash offer, pursuant to which Alliance Group, through its jointly owned subsidiary Alford Financial Ltd ('Alford'), would acquire all of the ordinary shares in AOC (the 'Ordinary Shares'), represented by Swedish Depositary Receipts ('SDRs'), and all the preference shares in AOC (the 'Preference Shares'), represented by SDRs, which are held by parties other than Alliance Group and its affiliates (the 'Transaction'). Prior to the Transaction, Alliance Group and its affiliated companies control 45 per cent. of the SDRs over Ordinary Shares in AOC, and 7 per cent. of the SDRs over Preference Shares in AOC. SDRs representing the Ordinary Shares and the Preference Shares are listed on NASDAQ OMX Stockholm Large Cap under the ticker symbols AOIL SDB and AOIL SDB PREF, respectively. Upon successful completion of the Transaction, all of the SDRs will be delisted and cancelled in exchange for cash payment. Summary of the Transaction: -- Under the terms of the Transaction, holders of Ordinary Shares and Preference Shares (together referred to herein as the 'Shares') in AOC (the 'Shareholders'), except for the holder(s) of Shares held by or on behalf of Alliance Group and its affiliated companies, are offered a cash consideration consisting of: -- SEK 60 in cash for each Ordinary Share; and -- SEK 313 in cash for each Preference Share, plus SEK 7.5 for each Preference Share multiplied by the percentage of the period between the most recent dividend record date and the subsequent dividend record date, which has elapsed at the registration of the Amalgamation [1] (the cash consideration for all Shares together referred to as the 'Cash Consideration'); -- The Independent Directors (as defined below) unanimously recommend the Transaction. Merrill Lynch International ('BofA Merrill Lynch') and Carnegie Investment Bank ('Carnegie') have acted as financial advisors to the Company in connection with the Transaction, and BofA Merrill Lynch has provided the Independent Directors with an opinion in relation to the fairness of the value, from a financial point of view, of the Cash Consideration to be received by the holders of Ordinary Shares and Preference Shares. For more details, see Recommendation by the Independent Directors of AOC, page 4. -- The Independent Directors have confirmed that they intend to undertake irrevocably to vote in favour of the Transaction at the SGM in respect of their own beneficial holdings of 264,718 of AOC's Ordinary Shares (representing approximately 0.2 per cent. of the total number of votes in AOC as of 30 September 2013). -- Two of the directors of AOC, Arsen Idrisov (a beneficiary of Alliance Group) and Isa Bazhaev (Managing Director of one of Alliance Group's subsidiaries), have absented themselves from all deliberations of the board in connection with the Transaction. -- The cash offer represents a premium for each Ordinary Share of approximately: -- 4 per cent. to the closing price of the relevant SDRs on 30 October 2013 (being the last trading day before this announcement); -- 17 per cent. to the volume weighted average closing price of the relevant SDRs over the 3 month period prior to 31 October 2013; -- 25 per cent. to the volume weighted average closing price of the relevant SDRs over the 6 month period prior to 31 October 2013; and -- 48 per cent. to the closing price on 24 July 2013, which is the last date prior to press speculation about a potential third party acquisition of a significant stake in the Company or its assets. -- The cash offer represents a premium for each Preference Share of approximately: -- 4 per cent. to the closing price, net of accrued dividend, of the relevant SDRs on 30 October 2013; -- 6 per cent. to the volume weighted average closing price, net of accrued dividend, of the relevant SDRs over the 3 month period prior to 31 October 2013; and -- 6 per cent. to the volume weighted average closing price, net of accrued dividend, of the relevant SDRs over the 6 month period prior to 31 October 2013. -- The Transaction is proposed to be made by way of amalgamation between AOC and Alford under Bermuda law (the 'Amalgamation'), which requires the approval of Shareholders at a Special General Meeting of AOC (the 'SGM'). The threshold for approval at the SGM is at least 75 per cent. of the votes cast at the SGM for which the required quorum is two persons at least holding or representing by proxy more than one third of the issued Shares. -- Upon approval of the Amalgamation at the SGM, AOC and Alford will be permitted to amalgamate under Bermuda law and continue as one company (the 'Amalco'). -- Alliance Group and its affiliated companies controlling 45 per cent. of the total votes in AOC will utilize their right to vote in favour of the Amalgamation at the SGM. -- An SGM has been scheduled for and is expected to take place on or around 2 December 2013. -- The Transaction will be funded by a committed debt facility, as described in more detail below, which will be provided by Gazprombank (Open Joint-Stock Company) as lender (the 'Lender'). -- The Transaction is conditional on, inter alia, approval at the SGM, receipt of relevant antitrust clearances in Russia, Germany and Cyprus, and that no bona fide third party offer is made for all the Shares that is deemed more attractive in the view of the Independent Directors. -- The board of directors of Repsol Exploration S.A., one of the largest holders of SDRs, representing 3 per cent. of the total number of SDRs representing the Shares, corresponding to 3 per cent. of the total number of votes in AOC as of 30 September 2013, has approved to vote in favour of the Transaction at the SGM. -- An information memorandum detailing the Transaction (the 'Information Memorandum') will be made available on AOC's website at the latest around 4 November 2013. -- As part of the Transaction, a tender offer of a total of US$ 278,250,000 in cash and a related consent solicitation (the 'Convertible Bond Tender Offer and Consent Solicitation') is intended to be launched on 4 November 2013 by AOC for its outstanding US$ 265,000,000 convertible bonds due 2014 (the 'Convertible Bonds'). -- 'The Independent Directors of AOC have carefully considered the offer from Alliance Group. We believe the offer provides all AOC's independent shareholders with an opportunity to realise cash value of their investment at a fair price that reflects the future prospects for the Company', says Eric Forss, Chairman of AOC. Background to and reasons for Alliance Group making an offer Alliance Group has been a supportive and committed long-term shareholder of AOC as a public company since the creation of AOC through the merger of Alliance Oil and West Siberian Resources in 2008. Alliance Group began work on a potential take-private transaction as it became clearer that the strategy being pursued by the Company was not being appropriately rewarded by the public equity market. Alliance Group believes that AOC management's time would be best spent on the fundamental strategy and challenges of the Company, including on-going operational challenges in Timan-Pechora and the impact of fiscal changes on the downstream business, without the additional and simultaneous pressure of addressing the market volatility these challenges can bring. In the current environment, Alliance Group believes public equity markets do not represent the optimal ownership structure for AOC. As a private company: -- It will be easier to take a strategic approach to operational challenges and opportunities facing AOC today; -- Earnings will be improved through the increased leverage afforded by the high liquidity and low interest rates the debt markets offer, which will be more easily accessed under private ownership; and -- AOC's corporate structure, administration and corporate governance will be simplified, enabling more efficient operations and cost reductions. Finally, Alliance Group believes that while in the past access to the public equity capital markets has been a significant benefit, the relative value of the optionality of this access is now significantly reduced as funds would only be available at a cost of unacceptable dilution to current shareholders. Alliance Group would enter into the Transaction as a strategic investor, with the aim of developing AOC as an independent oil company under its ownership. Alliance Group is acting as principal and not as agent in the Transaction, and is not in discussion with any third parties about the on-sale of AOC or all or significant parts of AOC's business. Recommendation by the Independent Directors of AOC Two of the directors of AOC, Arsen Idrisov (a beneficiary of Alliance Group) and Isa Bazhaev (Managing Director of one of Alliance Group's subsidiaries), have absented themselves from all deliberations of the board in connection with the Transaction. Accordingly, the Transaction has been considered only by the Independent Directors: Eric Forss, Raymond Liefooghe, Fred Boling, Claes Levin and Fernando Martinez-Fresneda (the 'Independent Directors'). The Independent Directors have, together with their financial and legal advisors, evaluated the Transaction, and the Independent Directors have determined that it is in the interest of the Shareholders that the cash offer is presented to them for resolution at an SGM. The Independent Directors unanimously recommend that the Shareholders vote in favour of the Transaction. In making their recommendation, the Independent Directors have considered a number of factors, including the considerations described in the section 'Background to and reasons for the recommendation by the Independent Directors.' BofA Merrill Lynch and Carnegie have acted as financial advisors to the Company in connection with the Transaction, and BofA Merrill Lynch has provided the Independent Directors with an opinion in relation to the fairness of the value, from a financial point of view, of the Cash Consideration to be received by the holders of Ordinary Shares and Preference Shares. In providing their advice, BofA Merrill Lynch has taken into account the commercial assessments of the Independent Directors as well as their consideration of the Company's bye-laws with respect to the provisions relating to the Preference Shares. The Independent Directors have confirmed that they intend to undertake irrevocably to vote in favour of the Transaction at the SGM in respect of their own beneficial holdings of 264,718 of AOC's Ordinary Shares (representing approximately 0.2 per cent. of the total number of votes in AOC as of 30 September 2013). Background to and reasons for the recommendation by the Independent Directors Offer for Ordinary Shares In evaluating the Transaction, the Independent Directors have considered several factors deemed to be relevant. These factors include AOC's current position, its future potential to realise value as well as the evolving risks to that value. The Independent Directors are pleased with the historic track-record of the Company's upstream and downstream volume growth, as well as EBITDA and earnings growth, achieved since the merger of AOC with West Siberian Resources in 2008. The Independent Directors also recognise the potential for future value creation from current upstream projects as well as from the Company's substantial refinery modernisation programme, due to be completed in 2014. The Independent Directors also believe, however, that there are a number of risks to realising additional value, including geological complexity in the Timan-Pechora region, changes in domestic gas tariffs and taxation for independent oil and gas producers, fiscal risks for Russian refiners and market risk in the Company's domestic market for refined products. The Independent Directors note that the offer price for the Ordinary Shares of SEK 60 represents a modest premium of 4 per cent. to the closing price of the relevant SDRs on 30 October 2013 (being the last trading day before this announcement) and believe that the premium level needs to be considered against the background of the SDR price increasing over 48 per cent. to the closing price on 24 July 2013, which is the last date prior to press speculation about a potential third party acquisition of a significant stake in the Company or its assets. The Independent Directors have based their assessment of the offer from Alliance Group on their views on the fundamental value of the Company, including the commercial prospects and risks facing AOC. In arriving at their decision to recommend the Transaction, the Independent Directors have also taken into account Alliance Group's significant shareholding in AOC and its limiting effect on the Company's ability to attract an alternative offer. In light of these considerations, the Independent Directors consider the terms of Alliance Group's offer to be fair and reasonable and believe that the Transaction represents an opportunity for all of AOC's independent Shareholders to realise cash value for their investment at a fair price that reflects the future prospects of the Company. Offer for Preference Shares The Independent Directors believe that the offer for the Preference Shares, including the payment of accrued dividend up to completion of the Transaction, is fair and reasonable, reflecting the fundamental debt-like characteristics of Preference Shares as well as the trading performance of the Preference Shares. In arriving at their recommendation to the holders of the Preference Shares, the Independent Directors have considered the Company's bye-laws with respect to the provisions relating to the Preference Shares. Alliance Group's ownership in AOC, support for the Transaction Alliance Group currently holds SDRs representing 76,700,878 Ordinary Shares and 494,700 Preference Shares, representing 43 per cent. of the total number of Shares and 45 per cent. of the total number of votes in AOC as of 30 September 2013. Under Bermuda law, Alliance Group is entitled to vote regarding the Amalgamation and intends to vote in favour of the Transaction. The board of directors of Repsol Exploration S.A., one of the largest holders of SDRs, representing 3 per cent. of the total number of SDRs representing the Shares, corresponding to 3 per cent. of the total number of votes in AOC as of 30 September 2013, has approved to vote in favour of the Transaction at the SGM The Transaction Alliance Group has decided to effect the Transaction through Alford. Affiliates of Alliance Group, including Alford, and AOC entered into a conditional implementation agreement on 30 October 2013 with respect to the proposed Amalgamation (the 'Implementation Agreement'). Pursuant to the Implementation Agreement, Alford and AOC also entered into an amalgamation agreement on 30 October 2013 (the 'Amalgamation Agreement'), in order to effect the Amalgamation if the conditions to the Implementation Agreement are satisfied. If the conditions to the Amalgamation are satisfied, the Independent Directors and executive management of AOC expect the Amalgamation to be completed on or about 11 December 2013. Two of the directors of AOC, Arsen Idrisov (a beneficiary of Alliance Group) and Isa Bazhaev (Managing Director of one of Alliance Group's subsidiaries), have absented themselves from all deliberations of the Board in connection with the Transaction. Accordingly, the Transaction has been considered only by the Independent Directors of AOC. Alliance Group offers: -- SEK 60 in cash for each Ordinary Share; and -- SEK 313 in cash for each Preference Share, plus SEK 7.5 for each Preference Share, multiplied by the percentage of the period between the most recent dividend record date and the subsequent dividend record date, which has elapsed at the registration of the Amalgamation. The Transaction represents a premium for each Ordinary Share of approximately: -- 4 per cent. to the closing price of the relevant SDRs on 30 October 2013 (being the last trading day before this announcement); -- 17 per cent. to the volume weighted average closing price of the relevant SDRs over the 3 month period prior to 31 October 2013; -- 25 per cent. to the volume weighted average closing price of the relevant SDRs over the 6 month period prior to 31 October 2013; and -- 48 per cent. to the closing price on 24 July 2013, which is the last date prior to press speculation about a potential third party acquisition of a significant stake in the Company or its assets. The Transaction represents a premium for each Preference Share of approximately: -- 4 per cent. to the closing price of the relevant SDRs on 30 October 2013; -- 6 per cent. to the volume weighted average closing price of the relevant SDRs over the 3 month period prior to 31 October 2013; and -- 6 per cent. to the volume weighted average closing price of the relevant SDRs over the 6 month period prior to 31 October 2013. The total value of the Transaction, excluding the value of the Shares beneficially held by Alliance Group and its affiliated companies, amounts to approximately SEK 7,813,451,060 (excluding the amount of accrued dividends relating to the Preference SDRs). No brokerage fee will be charged of those who tender Shares. Holders of SDRs will be responsible for paying customary fees to custodians or intermediaries through whom such SDR interests are held. The Swedish Securities Council (as defined below) concluded in AMN 2013:35 that, as AOC is a Bermuda company and the Transaction is made by way of amalgamation under Bermuda law, the Securities Council did not, from a sound stock market practice point of view, have any additional requirements other than those required under Bermuda law. The Securities Council, emphasized the importance of informing the Shareholders, including the holders of SDRs, of the planned actions in a manner as similar as possible to the information which would have be given had AOC been a Swedish listed company. Please refer to www.aktiemarknadsnamnden.se for the full statement. Financing The Transaction will be funded by a committed facility provided under a facility agreement between, among others, the Lender and Daumier Investments Limited as borrower (the 'Borrower') (the 'Facility Agreement'). Drawdown of the facility is conditional upon delivery of certain customary conditions precedent to funding, the majority of which are within the Borrower's control, such as corporate approvals, delivery of financial statements and execution of security documents (which are in an agreed form). Certain other conditions precedent to funding allow the Lender some discretion, for example, provision of satisfactory legal opinions of the Lender's counsel as well as evidence that all necessary and desirable authorisations and consents have been obtained in connection with the Transaction. The representations, covenants and events of default contained in the Facility Agreement are customary for a facility of this nature. The facility is provided on a committed basis and the Lender will therefore be obliged to fund a loan if requested to do so (subject to delivery of the conditions precedent referred to in the previous paragraph) provided that no misrepresentation, breach of covenant or other event of default (actual or potential) exists at the time of the request or when the funds are due to be advanced. If such an event has occurred then the Borrower is required to notify the Lender thereof and the Lender has discretion to refuse a funding request in such circumstances. Examples of representations contained in the Facility Agreement include those in relation to the status of the obligors under the Facility Agreement (the Borrower, Alford, Geltome Financial Ltd. and Betino Investments Ltd.) and AOC and its subsidiaries, absence of insolvency, absence of material litigation and material breach of laws. Examples of covenants contained in the Facility Agreement include those which restrict the creation of security, disposals, the incurrence of financial indebtedness, a change of business and acquisitions. Examples of events of default contained in the Facility Agreement include cross-default over certain thresholds, insolvency, misrepresentation, expropriation, litigation and moratorium. Management and Employees Alliance Group values the skills, experience and industry knowledge of the existing management and employees of AOC. Alliance Group confirms that, upon completion of the Amalgamation, the existing contractual and statutory employment rights, including in relation to bonuses and pensions, of all AOC employees will continue to be fully safeguarded. AOC's Global Share Option Plan Participants in AOC's Global Share Option Plan will be contacted regarding the effect of the Amalgamation on their rights under AOC's Global Share Option Plan. Pre-Amalgamation undertakings The Implementation Agreement includes undertakings from AOC that it will, during the period from the date of this announcement until the date of registration of the Amalgamation with the Registrar of Companies in Bermuda, carry on its business in the ordinary course of business and will not, other than as publicly announced at the date hereof, without the prior written consent of Alliance Group, take any of the following actions: 1. subject to dividends previously resolved at the AOC AGM 2013 to holders of Preference Shares, make any distributions or resolve to make any distributions to Shareholders or to issue, sell, purchase or redeem any financial instruments; 2. commit to merge, de-merge, amalgamate or enter into any corporate restructuring, liquidation, dissolution or any business combination transaction, or make any corporate acquisition or disposals or discontinue from Bermuda; 3. enter into, or announce an intention to enter into, any transaction which is material and outside the ordinary business of AOC; or 4. fail to comply in any material respect with any law or any of its regulatory obligations, including all filings in connection therewith, or include any information in such filings that is untrue, inaccurate or misleading in any material respect. Conditions to the Transaction The Transaction is subject to the following conditions: 1. that the Amalgamation is approved at the SGM, as required under Bermuda law (namely, approval at the SGM by 75 per cent. of the votes cast at the SGM for which the required quorum is two persons at least holding or representing by proxy more than one third of the issued Shares) (the 'Approval' ); 2. that all permits and approvals of the authorities that are necessary for the Amalgamation have been obtained on terms that are acceptable for AOC, Alford and Alliance Group, in the opinion of each respective Board of Directors; 3. that the pre-amalgamation undertakings made by AOC as set out under the 'Pre-amalgamation undertakings' section are not breached before the day of the registration of the Amalgamation; 4. Subject to what Alford and/or Alliance Group could reasonably have foreseen or had knowledge of, that no event occurs which is outside the control of Alliance Group and Alford, which will materially adversely affect the results, liquidity or profit of AOC; and 5. Subject to what Alford and/or Alliance Group could reasonably have foreseen or had knowledge of, that the Amalgamation is not, in whole or in part, made impossible, made materially more difficult or negatively affected to a considerable extent by legislation, decisions of the courts, decisions by public authorities or other circumstances outside the control of AOC, Alford and Alliance Group in Sweden, Bermuda or Russia. Alliance Group and Alford reserve the right to waive, in whole or in part, the conditions to the Transaction other than the requirement for Shareholder approval of the Amalgamation under Bermuda law. The Transaction may, however, only be withdrawn with reference to condition 3 to 5 if the non-satisfaction of such conditions is of material importance to Alford's acquisition of the Shares. Information regarding the SGM, implementation of the Amalgamation and Alliance Group's voting at the SGM Notice convening the SGM, which will be held on 2 December 2013 at 3.00 p.m. CET at Nalen, Regeringsgatan 74, Stockholm, Sweden, will be available on 4 November 2013 (the 'Notice'). Holders of SDRs in Sweden will be sent an information brochure summarizing the Amalgamation and a form of instruction to enable them to cast their votes at the SGM. In addition, an information memorandum will be made available on AOC's webpage around the time of the Notice. SDR holders who hold their interest in Shares through SDRs will require authorisation from Skandinaviska Enskilda Banken AB (publ) ('SEB') in order to attend the SGM. The manner in which this authorisation may be requested will be set out in the Notice. Alliance Group and its affiliated companies will be permitted to vote in favour of the Transaction at the SGM in respect of all of the Shares beneficially held through SDRs on their behalf. Upon Approval of the Amalgamation at the SGM, the record date for settlement of the Cash Consideration (the 'Cash Consideration Record Date') will be confirmed and notified to the market in due course and in well in advance of settlement. Within approximately 10 days following Approval, provided that all other conditions to the Transaction have been satisfied or waived, as appropriate, the Amalgamation will be registered with the Bermuda Registrar of Companies, which will issue a certificate of amalgamation confirming implementation of the Amalgamation. As a result of the Amalgamation, Alford and AOC will be amalgamated into Amalco and continue as one company. Following registration of the Amalgamation, all of the Shares will be cancelled and the SDRs will be delisted from NASDAQ OMX Stockholm. Shareholders who are entered in AOC's register of members kept at AOC's registered office in Bermuda on the Cash Consideration Record Date are entitled to receive the Cash Consideration. SEB will be responsible for on-payment of the Cash Consideration to holders of SDRs who are entered in the register of SDR holders kept by Euroclear Sweden AB on the Cash Consideration Record Date. Any SDR holders who hold their interest in Shares through SDRs who do not vote in favour of the Amalgamation at the SGM are entitled, if they do not consider the Cash Consideration to represent a fair price for their Shares, to apply to the Court in Bermuda under Section 106 of the Companies Act 1981 of Bermuda (as amended) for an appraisal of the fair value of their Shares. Such dissenting shareholders are advised to obtain the advice of counsel before proceeding, and the following does not constitute legal advice. In brief, dissenting shareholders will likely be required to exchange their SDRs for registered Shares, vote against the Amalgamation at the SGM and apply to the court for appraisal within one month of the giving of the Notice of SGM. Right to postpone settlement of the Cash Consideration Subject to relevant antitrust clearances, Alliance Group and Alford reserve the right to defer the date for settlement of the Cash Consideration to a date not occurring later than two weeks following completion of the Amalgamation. Statement from the Swedish Securities Council On 1 September 2013, Alliance Group requested a statement from the Swedish Securities Council (Sw. Aktiemarknadsnamnden) (the 'Securities Council') in relation to interpretation of the NASDAQ OMX Stockholm Takeover Rules (Sw. NASDAQ OMX Stockholms regler rorande offentliga uppkopserbjudanden pa aktiemarknaden) (the 'Takeover Rules') and sound stock market practice in Sweden in the context of the Transaction. The Securities Council concluded in AMN 2013:35 that, as AOC is a Bermuda company and the Transaction is made by way of amalgamation under Bermuda law, the Securities Council did not, from a sound stock market practice point of view, have any additional requirements other than those required under Bermuda law. The Securities Council, however, emphasised the importance of informing the Shareholders of the planned actions in a manner as similar as possible to the information which would have been required had AOC been a Swedish listed company. Please refer to www.aktiemarknadsnamnden.se for the full statement. As the Stock Market (Takeover Bids) Act (Sw. lagen (2006:451) om offentliga uppkopserbjudanden pa aktiemarknaden) and the Takeover Rules will not apply to the Transaction, the Information Memorandum will not be registered with, or approved by, the Swedish Financial Supervisory Authority. Alliance Group has agreed to comply with AOC's bye-laws, mandatory Bermuda law, any special directions given in the SGM and the information requirements, as appropriate, set out in Chapter 2a, section 2 of the Financial Instruments Trading Act (Sw. lagen (1991:980) om handel med finansiella instrument) and rule II.3 of the Takeover Rules. Delisting of SDRs and cancellation of Shares and SDRs Following Approval of the Amalgamation by the Shareholders at the SGM and registration of the Amalgamation by the Bermuda Registrar of Companies, the SDRs will be cancelled, delisted from NASDAQ OMX Stockholm and deregistered from Euroclear Sweden AB. Convertible Bonds Tender Offer AOC is intending to launch a Convertible Bond Tender Offer and Consent Solicitation for its outstanding Convertible Bonds on 4 November 2013. The Convertible Bond Tender Offer and Consent Solicitation will be conditional upon Approval of the Amalgamation being obtained at the SGM. Holders of the Convertible Bonds who participate in the Convertible Bond Tender Offer and Consent Solicitation by a specified early participation date will be offered, by AOC, 105 of par, plus accrued but unpaid interest, which represents a 2.3 per cent. premium to the price of the Convertible Bonds as of 30 October 2013. Holders of the Convertible Bonds who participate in the Convertible Bond Tender Offer and Consent Solicitation after such early participation date will be offered, by AOC, 100 of par. The Convertible Bond Tender Offer and Consent Solicitation is subject amongst other things to completion of the Amalgamation, at the discretion of the Independent Directors, and sufficient financing. Commitment and disputes The Amalgamation (including the Implementation Agreement and the Amalgamation Agreement) is governed by Bermuda law. Any dispute arising out of the Transaction shall be subject to the jurisdiction of the Bermuda courts applying Bermuda law. Preliminary timetable 31 October 2013 Announcement of the Transaction by AOC 4 November 2013 Notice of SGM and Information Memorandum published 2 December 2013 SGM Announcement of SGM outcome, disclosure of last trading day, delisting, record date and settlement date 10 December 2013 Confirmation regarding all regulatory approvals expected to be received 11 December 2013 Delisting of the SDRs 11 December 2013 The Bermuda Registrar of Companies issues certificate of amalgamation for Amalco 13 December 2013 Cash Consideration Record Date 18 December 2013 Date for settlement of the Cash Consideration All the dates above are preliminary and, inter alia, subject to relevant regulatory clearances being obtained. A firm timetable will be announced by Alliance Group and AOC in due time if the above dates change. Other Information A conference call has been scheduled at 10.30 CET on Thursday October 31, 2013 to present the Transaction. The conference call will be hosted by Eric Forss, Chairman of the Board, Alliance Oil Company, and Magomed A. Galaev, advisor to the CEO of Alliance Group. Presentations slides will be available at www.allianceoilco.com. To participate in the conference call you may choose one of the following options: Web The conference will be webcasted live at Alliance Oil's website www.allianceoilco.com. Telephone Dial one of the following numbers a few minutes before the conference starts: Location Local Number Toll-Free
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Russia +7 (495) 580 9543
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Sweden + 46 8 505 202 78 0200 125 058
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United Kingdom +44 20 7190 1596 0800 358 5279
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Conference ID: 4648577 Advisors Morgan Stanley & Co. International plc ('Morgan Stanley') is acting as financial advisor and Linklaters (Swedish, English and Russian law) and Appleby (Bermuda) Limited (Bermuda law) are acting as legal advisors to Alliance Group and Alford in connection with the Transaction. Morgan Stanley is acting as financial advisor to Betino Investments Ltd. ('Betino'), a wholly-owned indirect subsidiary of OJSC Alliance Group in relation to the Transaction and is not acting for any other person and accordingly will not be responsible to any person other than Betino for providing the protections afforded to clients of Morgan Stanley or for providing advice in relation to the contents of this document or the Transaction or arrangements referred to herein. BofA Merrill Lynch and Carnegie are acting as financial advisors to the Independent Directors in relation to the Transaction and are not acting for any other person and accordingly will not be responsible to any person other than the Independent Directors for providing the protections afforded to clients of BofA Merrill Lynch and Carnegie or for providing advice in relation to the contents of this document or the Transaction or arrangements referred to herein. Baker & McKenzie (Swedish, English and Russian law) and Conyers Dill & Pearman (Bermuda law) are acting as legal advisors to AOC in connection with the Transaction. For additional information please contact: Alliance Group Magomed A. Galaev, Advisor to the CEO Phone: +7 495-212-2288 Andrei Roumyantsev, Chief of PR Department Phone. +7 495-745-5810 Morgan Stanley Gergely Voros, Managing Director Phone: +7 495 287-2280 E-mail: Gergely.Voros@morganstanley.com Adrian Doyle, Managing Director Phone: +44 20 7425-7491 E-mail: Adrian.Doyle@morganstanley.com AOC Eric Forss, Chairman of the Board Phone + 46 8 611 49 90 Pavel Kim, Head of Investor Relations Phone. +7 495 777 18 08, ext 1056 E-mail: pkim@aoil.ru Jakob Sintring, Investor Relations Phone. +46 8 611 49 95 E-mail: sintring@allianceoilco.com BofA Merrill Lynch Thomas Westin, Managing Director Phone: +46 8 459 12 80 E-mail: Thomas.Westin@baml.com Carnegie Lars-Erik Sjoberg, Head of Investment Banking Sweden Phone: +46 8 5886 85 00 E-mail: Lars-Erik.Sjoberg@carnegie.se Information about Alford, Alliance Group and AOC Alford Alford is a newly created subsidiary of Alliance Group, incorporated in Bermuda for the purpose of the Amalgamation as an exempted company limited by shares (registration number 48233). Alford has never conducted, and at present does not conduct, any business. Its registered office is at Canon's Court, 22 Victoria Street, PO Box HM 1179, Hamilton HM EX, Bermuda. Alliance Group OJSC Alliance Group is incorporated and existing under the laws of Russia as an open joint stock company, with its registered offices at 39 Sivtsev Vrazhek, Moscow 119002, Russia, owning assets in a range of sectors. Lambros Overseas S.A. is incorporated and existing under the laws of the British Virgin Islands, with its first registered office at Shirley Trust Company Limited, P.O. Box 3099, Road Town, Tortola, British Virgin Islands. AOC Alliance Oil Company Ltd. is incorporated and existing under the laws of Bermuda as an exempted company limited by shares (registration number 25413) with its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. For further information, please see AOC's website at www.allianceoilco.com. - END - IMPORTANT INFORMATION Certain statements included in this press release constitute or are based on forward-looking statements. Examples of forward-looking statements include, among others, statements regarding the Alliance Group's future financial position, income growth, assets, business strategy, leverage, projected levels of growth, projected costs, plans and objectives for future operations, statements related to the planned amalgamation of Alford and AOC and anticipated benefits associated therewith, and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, domestic and global economic and business conditions, the effects of continued volatility in credit markets, market related risks such as changes in interest rates and exchange rates, effects of changes in valuation of credit market exposures, changes in valuation of issued notes, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards (IFRS) applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation, the success of future acquisitions and other strategic transactions and the impact of competition - a number of such factors being beyond the Alliance Group's control. These statements as they appear throughout this press release are not guarantees of future performance and are subject to inherent risks and uncertainties. Forward-looking statements may be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as 'may,' 'will,' 'expects,' 'believes,' 'anticipates,' 'plans,' 'intends,' 'estimates,' 'projects,' 'targets,' 'forecasts,' 'seeks,' 'could,' or the negative of such terms, and other variations on such terms or comparable terminology. Actual results could differ materially from those expressed or implied in such forward-looking statements. Any forward-looking statements made herein speak only as of the date they are made. Except as required by NASDAQ OMX Stockholm or applicable law, Alliance Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in Alliance Group expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that Alliance Group has made or may make in documents it has filed or may file with the Securities Exchange Commission. The Convertible Bonds Tender Offer and Solicitation is not being made, and will not be made, directly or indirectly in or into, or by use of the mail of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Convertible Bonds may not be tendered in the Convertible Bonds Tender Offer and Solicitation by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States as defined in Regulation S of the U.S. Securities Act of 1933 (the 'Securities Act') or to U.S. persons as defined in Regulation S of the Securities Act. [1] For example, if the registration of the Amalgamation takes place on 11 December 2013, each Preference Share holder will be entitled to receive from the Company SEK 313 of principal amount per one Preference Share plus an accrued dividend of SEK 7.5 multiplied by 12/91, which represents the proportion of the number of days between 30-Nov-2013 and 11-Dec-2013 (inclusive) to the number of days between 30-Nov-2013 and 28-Feb-2014 (inclusive) (29-Nov-2013 and 28-Feb-2014 being the upcoming quarterly dividend record dates). Click on, or paste the following link into your web browser, to view the associated documents https://newsclient.omxgroup.com/cds/DisclosureAttachmentServlet?messageAttachmentId=449140 News Source: NASDAQ OMX 31.10.2013 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English Company: Alliance Oil Company Ltd Sweden Phone: Fax: E-mail: Internet: ISIN: XS0493579238 Category Code: MSC LSE Ticker: 0QBX Sequence Number: 1736 Time of Receipt: Oct 31, 2013 09:45:02 End of Announcement DGAP News-Service
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Lambros Overseas S.A., OJSC Alliance Group and Alliance Oil Company Ltd., 31 October 2013, at 09.45 CET For immediate publication THIS PRESS RELEASE IS NOT AND MUST NOT, DIRECTLY OR INDIRECTLY, BE DISTRIBUTED OR MADE PUBLIC IN AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA. THE TRANSACTION IS NOT BEING MADE TO PERSONS IN THOSE JURISDICTIONS OR ELSEWHERE WHERE THEIR PARTICIPATION REQUIRES FURTHER OFFER DOCUMENTS, FILINGS OR OTHER MEASURES. Alliance Group launches recommended Cash Offer for Alliance Oil Company The Boards of Directors of Lambros Overseas S.A. and OJSC Alliance Group (together 'Alliance Group') and Alliance Oil Company Ltd. ('AOC', the 'Company') today announce a recommended cash offer, pursuant to which Alliance Group, through its jointly owned subsidiary Alford Financial Ltd ('Alford'), would acquire all of the ordinary shares in AOC (the 'Ordinary Shares'), represented by Swedish Depositary Receipts ('SDRs'), and all the preference shares in AOC (the 'Preference Shares'), represented by SDRs, which are held by parties other than Alliance Group and its affiliates (the 'Transaction'). Prior to the Transaction, Alliance Group and its affiliated companies control 45 per cent. of the SDRs over Ordinary Shares in AOC, and 7 per cent. of the SDRs over Preference Shares in AOC. SDRs representing the Ordinary Shares and the Preference Shares are listed on NASDAQ OMX Stockholm Large Cap under the ticker symbols AOIL SDB and AOIL SDB PREF, respectively. Upon successful completion of the Transaction, all of the SDRs will be delisted and cancelled in exchange for cash payment. Summary of the Transaction: -- Under the terms of the Transaction, holders of Ordinary Shares and Preference Shares (together referred to herein as the 'Shares') in AOC (the 'Shareholders'), except for the holder(s) of Shares held by or on behalf of Alliance Group and its affiliated companies, are offered a cash consideration consisting of: -- SEK 60 in cash for each Ordinary Share; and -- SEK 313 in cash for each Preference Share, plus SEK 7.5 for each Preference Share multiplied by the percentage of the period between the most recent dividend record date and the subsequent dividend record date, which has elapsed at the registration of the Amalgamation [1] (the cash consideration for all Shares together referred to as the 'Cash Consideration'); -- The Independent Directors (as defined below) unanimously recommend the Transaction. Merrill Lynch International ('BofA Merrill Lynch') and Carnegie Investment Bank ('Carnegie') have acted as financial advisors to the Company in connection with the Transaction, and BofA Merrill Lynch has provided the Independent Directors with an opinion in relation to the fairness of the value, from a financial point of view, of the Cash Consideration to be received by the holders of Ordinary Shares and Preference Shares. For more details, see Recommendation by the Independent Directors of AOC, page 4. -- The Independent Directors have confirmed that they intend to undertake irrevocably to vote in favour of the Transaction at the SGM in respect of their own beneficial holdings of 264,718 of AOC's Ordinary Shares (representing approximately 0.2 per cent. of the total number of votes in AOC as of 30 September 2013). -- Two of the directors of AOC, Arsen Idrisov (a beneficiary of Alliance Group) and Isa Bazhaev (Managing Director of one of Alliance Group's subsidiaries), have absented themselves from all deliberations of the board in connection with the Transaction. -- The cash offer represents a premium for each Ordinary Share of approximately: -- 4 per cent. to the closing price of the relevant SDRs on 30 October 2013 (being the last trading day before this announcement); -- 17 per cent. to the volume weighted average closing price of the relevant SDRs over the 3 month period prior to 31 October 2013; -- 25 per cent. to the volume weighted average closing price of the relevant SDRs over the 6 month period prior to 31 October 2013; and -- 48 per cent. to the closing price on 24 July 2013, which is the last date prior to press speculation about a potential third party acquisition of a significant stake in the Company or its assets. -- The cash offer represents a premium for each Preference Share of approximately: -- 4 per cent. to the closing price, net of accrued dividend, of the relevant SDRs on 30 October 2013; -- 6 per cent. to the volume weighted average closing price, net of accrued dividend, of the relevant SDRs over the 3 month period prior to 31 October 2013; and -- 6 per cent. to the volume weighted average closing price, net of accrued dividend, of the relevant SDRs over the 6 month period prior to 31 October 2013. -- The Transaction is proposed to be made by way of amalgamation between AOC and Alford under Bermuda law (the 'Amalgamation'), which requires the approval of Shareholders at a Special General Meeting of AOC (the 'SGM'). The threshold for approval at the SGM is at least 75 per cent. of the votes cast at the SGM for which the required quorum is two persons at least holding or representing by proxy more than one third of the issued Shares. -- Upon approval of the Amalgamation at the SGM, AOC and Alford will be permitted to amalgamate under Bermuda law and continue as one company (the 'Amalco'). -- Alliance Group and its affiliated companies controlling 45 per cent. of the total votes in AOC will utilize their right to vote in favour of the Amalgamation at the SGM. -- An SGM has been scheduled for and is expected to take place on or around 2 December 2013. -- The Transaction will be funded by a committed debt facility, as described in more detail below, which will be provided by Gazprombank (Open Joint-Stock Company) as lender (the 'Lender'). -- The Transaction is conditional on, inter alia, approval at the SGM, receipt of relevant antitrust clearances in Russia, Germany and Cyprus, and that no bona fide third party offer is made for all the Shares that is deemed more attractive in the view of the Independent Directors. -- The board of directors of Repsol Exploration S.A., one of the largest holders of SDRs, representing 3 per cent. of the total number of SDRs representing the Shares, corresponding to 3 per cent. of the total number of votes in AOC as of 30 September 2013, has approved to vote in favour of the Transaction at the SGM. -- An information memorandum detailing the Transaction (the 'Information Memorandum') will be made available on AOC's website at the latest around 4 November 2013. -- As part of the Transaction, a tender offer of a total of US$ 278,250,000 in cash and a related consent solicitation (the 'Convertible Bond Tender Offer and Consent Solicitation') is intended to be launched on 4 November 2013 by AOC for its outstanding US$ 265,000,000 convertible bonds due 2014 (the 'Convertible Bonds'). -- 'The Independent Directors of AOC have carefully considered the offer from Alliance Group. We believe the offer provides all AOC's independent shareholders with an opportunity to realise cash value of their investment at a fair price that reflects the future prospects for the Company', says Eric Forss, Chairman of AOC. Background to and reasons for Alliance Group making an offer Alliance Group has been a supportive and committed long-term shareholder of AOC as a public company since the creation of AOC through the merger of Alliance Oil and West Siberian Resources in 2008. Alliance Group began work on a potential take-private transaction as it became clearer that the strategy being pursued by the Company was not being appropriately rewarded by the public equity market. Alliance Group believes that AOC management's time would be best spent on the fundamental strategy and challenges of the Company, including on-going operational challenges in Timan-Pechora and the impact of fiscal changes on the downstream business, without the additional and simultaneous pressure of addressing the market volatility these challenges can bring. In the current environment, Alliance Group believes public equity markets do not represent the optimal ownership structure for AOC. As a private company: -- It will be easier to take a strategic approach to operational challenges and opportunities facing AOC today; -- Earnings will be improved through the increased leverage afforded by the high liquidity and low interest rates the debt markets offer, which will be more easily accessed under private ownership; and -- AOC's corporate structure, administration and corporate governance will be simplified, enabling more efficient operations and cost reductions. Finally, Alliance Group believes that while in the past access to the public equity capital markets has been a significant benefit, the relative value of the optionality of this access is now significantly reduced as funds would only be available at a cost of unacceptable dilution to current shareholders. Alliance Group would enter into the Transaction as a strategic investor, with the aim of developing AOC as an independent oil company under its ownership. Alliance Group is acting as principal and not as agent in the Transaction, and is not in discussion with any third parties about the on-sale of AOC or all or significant parts of AOC's business. Recommendation by the Independent Directors of AOC Two of the directors of AOC, Arsen Idrisov (a beneficiary of Alliance Group) and Isa Bazhaev (Managing Director of one of Alliance Group's subsidiaries), have absented themselves from all deliberations of the board in connection with the Transaction. Accordingly, the Transaction has been considered only by the Independent Directors: Eric Forss, Raymond Liefooghe, Fred Boling, Claes Levin and Fernando Martinez-Fresneda (the 'Independent Directors'). The Independent Directors have, together with their financial and legal advisors, evaluated the Transaction, and the Independent Directors have determined that it is in the interest of the Shareholders that the cash offer is presented to them for resolution at an SGM. The Independent Directors unanimously recommend that the Shareholders vote in favour of the Transaction. In making their recommendation, the Independent Directors have considered a number of factors, including the considerations described in the section 'Background to and reasons for the recommendation by the Independent Directors.' BofA Merrill Lynch and Carnegie have acted as financial advisors to the Company in connection with the Transaction, and BofA Merrill Lynch has provided the Independent Directors with an opinion in relation to the fairness of the value, from a financial point of view, of the Cash Consideration to be received by the holders of Ordinary Shares and Preference Shares. In providing their advice, BofA Merrill Lynch has taken into account the commercial assessments of the Independent Directors as well as their consideration of the Company's bye-laws with respect to the provisions relating to the Preference Shares. The Independent Directors have confirmed that they intend to undertake irrevocably to vote in favour of the Transaction at the SGM in respect of their own beneficial holdings of 264,718 of AOC's Ordinary Shares (representing approximately 0.2 per cent. of the total number of votes in AOC as of 30 September 2013). Background to and reasons for the recommendation by the Independent Directors Offer for Ordinary Shares In evaluating the Transaction, the Independent Directors have considered several factors deemed to be relevant. These factors include AOC's current position, its future potential to realise value as well as the evolving risks to that value. The Independent Directors are pleased with the historic track-record of the Company's upstream and downstream volume growth, as well as EBITDA and earnings growth, achieved since the merger of AOC with West Siberian Resources in 2008. The Independent Directors also recognise the potential for future value creation from current upstream projects as well as from the Company's substantial refinery modernisation programme, due to be completed in 2014. The Independent Directors also believe, however, that there are a number of risks to realising additional value, including geological complexity in the Timan-Pechora region, changes in domestic gas tariffs and taxation for independent oil and gas producers, fiscal risks for Russian refiners and market risk in the Company's domestic market for refined products. The Independent Directors note that the offer price for the Ordinary Shares of SEK 60 represents a modest premium of 4 per cent. to the closing price of the relevant SDRs on 30 October 2013 (being the last trading day before this announcement) and believe that the premium level needs to be considered against the background of the SDR price increasing over 48 per cent. to the closing price on 24 July 2013, which is the last date prior to press speculation about a potential third party acquisition of a significant stake in the Company or its assets. The Independent Directors have based their assessment of the offer from Alliance Group on their views on the fundamental value of the Company, including the commercial prospects and risks facing AOC. In arriving at their decision to recommend the Transaction, the Independent Directors have also taken into account Alliance Group's significant shareholding in AOC and its limiting effect on the Company's ability to attract an alternative offer. In light of these considerations, the Independent Directors consider the terms of Alliance Group's offer to be fair and reasonable and believe that the Transaction represents an opportunity for all of AOC's independent Shareholders to realise cash value for their investment at a fair price that reflects the future prospects of the Company. Offer for Preference Shares The Independent Directors believe that the offer for the Preference Shares, including the payment of accrued dividend up to completion of the Transaction, is fair and reasonable, reflecting the fundamental debt-like characteristics of Preference Shares as well as the trading performance of the Preference Shares. In arriving at their recommendation to the holders of the Preference Shares, the Independent Directors have considered the Company's bye-laws with respect to the provisions relating to the Preference Shares. Alliance Group's ownership in AOC, support for the Transaction Alliance Group currently holds SDRs representing 76,700,878 Ordinary Shares and 494,700 Preference Shares, representing 43 per cent. of the total number of Shares and 45 per cent. of the total number of votes in AOC as of 30 September 2013. Under Bermuda law, Alliance Group is entitled to vote regarding the Amalgamation and intends to vote in favour of the Transaction. The board of directors of Repsol Exploration S.A., one of the largest holders of SDRs, representing 3 per cent. of the total number of SDRs representing the Shares, corresponding to 3 per cent. of the total number of votes in AOC as of 30 September 2013, has approved to vote in favour of the Transaction at the SGM The Transaction Alliance Group has decided to effect the Transaction through Alford. Affiliates of Alliance Group, including Alford, and AOC entered into a conditional implementation agreement on 30 October 2013 with respect to the proposed Amalgamation (the 'Implementation Agreement'). Pursuant to the Implementation Agreement, Alford and AOC also entered into an amalgamation agreement on 30 October 2013 (the 'Amalgamation Agreement'), in order to effect the Amalgamation if the conditions to the Implementation Agreement are satisfied. If the conditions to the Amalgamation are satisfied, the Independent Directors and executive management of AOC expect the Amalgamation to be completed on or about 11 December 2013. Two of the directors of AOC, Arsen Idrisov (a beneficiary of Alliance Group) and Isa Bazhaev (Managing Director of one of Alliance Group's subsidiaries), have absented themselves from all deliberations of the Board in connection with the Transaction. Accordingly, the Transaction has been considered only by the Independent Directors of AOC. Alliance Group offers: -- SEK 60 in cash for each Ordinary Share; and -- SEK 313 in cash for each Preference Share, plus SEK 7.5 for each Preference Share, multiplied by the percentage of the period between the most recent dividend record date and the subsequent dividend record date, which has elapsed at the registration of the Amalgamation. The Transaction represents a premium for each Ordinary Share of approximately: -- 4 per cent. to the closing price of the relevant SDRs on 30 October 2013 (being the last trading day before this announcement); -- 17 per cent. to the volume weighted average closing price of the relevant SDRs over the 3 month period prior to 31 October 2013; -- 25 per cent. to the volume weighted average closing price of the relevant SDRs over the 6 month period prior to 31 October 2013; and -- 48 per cent. to the closing price on 24 July 2013, which is the last date prior to press speculation about a potential third party acquisition of a significant stake in the Company or its assets. The Transaction represents a premium for each Preference Share of approximately: -- 4 per cent. to the closing price of the relevant SDRs on 30 October 2013; -- 6 per cent. to the volume weighted average closing price of the relevant SDRs over the 3 month period prior to 31 October 2013; and -- 6 per cent. to the volume weighted average closing price of the relevant SDRs over the 6 month period prior to 31 October 2013. The total value of the Transaction, excluding the value of the Shares beneficially held by Alliance Group and its affiliated companies, amounts to approximately SEK 7,813,451,060 (excluding the amount of accrued dividends relating to the Preference SDRs). No brokerage fee will be charged of those who tender Shares. Holders of SDRs will be responsible for paying customary fees to custodians or intermediaries through whom such SDR interests are held. The Swedish Securities Council (as defined below) concluded in AMN 2013:35 that, as AOC is a Bermuda company and the Transaction is made by way of amalgamation under Bermuda law, the Securities Council did not, from a sound stock market practice point of view, have any additional requirements other than those required under Bermuda law. The Securities Council, emphasized the importance of informing the Shareholders, including the holders of SDRs, of the planned actions in a manner as similar as possible to the information which would have be given had AOC been a Swedish listed company. Please refer to www.aktiemarknadsnamnden.se for the full statement. Financing The Transaction will be funded by a committed facility provided under a facility agreement between, among others, the Lender and Daumier Investments Limited as borrower (the 'Borrower') (the 'Facility Agreement'). Drawdown of the facility is conditional upon delivery of certain customary conditions precedent to funding, the majority of which are within the Borrower's control, such as corporate approvals, delivery of financial statements and execution of security documents (which are in an agreed form). Certain other conditions precedent to funding allow the Lender some discretion, for example, provision of satisfactory legal opinions of the Lender's counsel as well as evidence that all necessary and desirable authorisations and consents have been obtained in connection with the Transaction. The representations, covenants and events of default contained in the Facility Agreement are customary for a facility of this nature. The facility is provided on a committed basis and the Lender will therefore be obliged to fund a loan if requested to do so (subject to delivery of the conditions precedent referred to in the previous paragraph) provided that no misrepresentation, breach of covenant or other event of default (actual or potential) exists at the time of the request or when the funds are due to be advanced. If such an event has occurred then the Borrower is required to notify the Lender thereof and the Lender has discretion to refuse a funding request in such circumstances. Examples of representations contained in the Facility Agreement include those in relation to the status of the obligors under the Facility Agreement (the Borrower, Alford, Geltome Financial Ltd. and Betino Investments Ltd.) and AOC and its subsidiaries, absence of insolvency, absence of material litigation and material breach of laws. Examples of covenants contained in the Facility Agreement include those which restrict the creation of security, disposals, the incurrence of financial indebtedness, a change of business and acquisitions. Examples of events of default contained in the Facility Agreement include cross-default over certain thresholds, insolvency, misrepresentation, expropriation, litigation and moratorium. Management and Employees Alliance Group values the skills, experience and industry knowledge of the existing management and employees of AOC. Alliance Group confirms that, upon completion of the Amalgamation, the existing contractual and statutory employment rights, including in relation to bonuses and pensions, of all AOC employees will continue to be fully safeguarded. AOC's Global Share Option Plan Participants in AOC's Global Share Option Plan will be contacted regarding the effect of the Amalgamation on their rights under AOC's Global Share Option Plan. Pre-Amalgamation undertakings The Implementation Agreement includes undertakings from AOC that it will, during the period from the date of this announcement until the date of registration of the Amalgamation with the Registrar of Companies in Bermuda, carry on its business in the ordinary course of business and will not, other than as publicly announced at the date hereof, without the prior written consent of Alliance Group, take any of the following actions: 1. subject to dividends previously resolved at the AOC AGM 2013 to holders of Preference Shares, make any distributions or resolve to make any distributions to Shareholders or to issue, sell, purchase or redeem any financial instruments; 2. commit to merge, de-merge, amalgamate or enter into any corporate restructuring, liquidation, dissolution or any business combination transaction, or make any corporate acquisition or disposals or discontinue from Bermuda; 3. enter into, or announce an intention to enter into, any transaction which is material and outside the ordinary business of AOC; or 4. fail to comply in any material respect with any law or any of its regulatory obligations, including all filings in connection therewith, or include any information in such filings that is untrue, inaccurate or misleading in any material respect. Conditions to the Transaction The Transaction is subject to the following conditions: 1. that the Amalgamation is approved at the SGM, as required under Bermuda law (namely, approval at the SGM by 75 per cent. of the votes cast at the SGM for which the required quorum is two persons at least holding or representing by proxy more than one third of the issued Shares) (the 'Approval' ); 2. that all permits and approvals of the authorities that are necessary for the Amalgamation have been obtained on terms that are acceptable for AOC, Alford and Alliance Group, in the opinion of each respective Board of Directors; 3. that the pre-amalgamation undertakings made by AOC as set out under the 'Pre-amalgamation undertakings' section are not breached before the day of the registration of the Amalgamation; 4. Subject to what Alford and/or Alliance Group could reasonably have foreseen or had knowledge of, that no event occurs which is outside the control of Alliance Group and Alford, which will materially adversely affect the results, liquidity or profit of AOC; and 5. Subject to what Alford and/or Alliance Group could reasonably have foreseen or had knowledge of, that the Amalgamation is not, in whole or in part, made impossible, made materially more difficult or negatively affected to a considerable extent by legislation, decisions of the courts, decisions by public authorities or other circumstances outside the control of AOC, Alford and Alliance Group in Sweden, Bermuda or Russia. Alliance Group and Alford reserve the right to waive, in whole or in part, the conditions to the Transaction other than the requirement for Shareholder approval of the Amalgamation under Bermuda law. The Transaction may, however, only be withdrawn with reference to condition 3 to 5 if the non-satisfaction of such conditions is of material importance to Alford's acquisition of the Shares. Information regarding the SGM, implementation of the Amalgamation and Alliance Group's voting at the SGM Notice convening the SGM, which will be held on 2 December 2013 at 3.00 p.m. CET at Nalen, Regeringsgatan 74, Stockholm, Sweden, will be available on 4 November 2013 (the 'Notice'). Holders of SDRs in Sweden will be sent an information brochure summarizing the Amalgamation and a form of instruction to enable them to cast their votes at the SGM. In addition, an information memorandum will be made available on AOC's webpage around the time of the Notice. SDR holders who hold their interest in Shares through SDRs will require authorisation from Skandinaviska Enskilda Banken AB (publ) ('SEB') in order to attend the SGM. The manner in which this authorisation may be requested will be set out in the Notice. Alliance Group and its affiliated companies will be permitted to vote in favour of the Transaction at the SGM in respect of all of the Shares beneficially held through SDRs on their behalf. Upon Approval of the Amalgamation at the SGM, the record date for settlement of the Cash Consideration (the 'Cash Consideration Record Date') will be confirmed and notified to the market in due course and in well in advance of settlement. Within approximately 10 days following Approval, provided that all other conditions to the Transaction have been satisfied or waived, as appropriate, the Amalgamation will be registered with the Bermuda Registrar of Companies, which will issue a certificate of amalgamation confirming implementation of the Amalgamation. As a result of the Amalgamation, Alford and AOC will be amalgamated into Amalco and continue as one company. Following registration of the Amalgamation, all of the Shares will be cancelled and the SDRs will be delisted from NASDAQ OMX Stockholm. Shareholders who are entered in AOC's register of members kept at AOC's registered office in Bermuda on the Cash Consideration Record Date are entitled to receive the Cash Consideration. SEB will be responsible for on-payment of the Cash Consideration to holders of SDRs who are entered in the register of SDR holders kept by Euroclear Sweden AB on the Cash Consideration Record Date. Any SDR holders who hold their interest in Shares through SDRs who do not vote in favour of the Amalgamation at the SGM are entitled, if they do not consider the Cash Consideration to represent a fair price for their Shares, to apply to the Court in Bermuda under Section 106 of the Companies Act 1981 of Bermuda (as amended) for an appraisal of the fair value of their Shares. Such dissenting shareholders are advised to obtain the advice of counsel before proceeding, and the following does not constitute legal advice. In brief, dissenting shareholders will likely be required to exchange their SDRs for registered Shares, vote against the Amalgamation at the SGM and apply to the court for appraisal within one month of the giving of the Notice of SGM. Right to postpone settlement of the Cash Consideration Subject to relevant antitrust clearances, Alliance Group and Alford reserve the right to defer the date for settlement of the Cash Consideration to a date not occurring later than two weeks following completion of the Amalgamation. Statement from the Swedish Securities Council On 1 September 2013, Alliance Group requested a statement from the Swedish Securities Council (Sw. Aktiemarknadsnamnden) (the 'Securities Council') in relation to interpretation of the NASDAQ OMX Stockholm Takeover Rules (Sw. NASDAQ OMX Stockholms regler rorande offentliga uppkopserbjudanden pa aktiemarknaden) (the 'Takeover Rules') and sound stock market practice in Sweden in the context of the Transaction. The Securities Council concluded in AMN 2013:35 that, as AOC is a Bermuda company and the Transaction is made by way of amalgamation under Bermuda law, the Securities Council did not, from a sound stock market practice point of view, have any additional requirements other than those required under Bermuda law. The Securities Council, however, emphasised the importance of informing the Shareholders of the planned actions in a manner as similar as possible to the information which would have been required had AOC been a Swedish listed company. Please refer to www.aktiemarknadsnamnden.se for the full statement. As the Stock Market (Takeover Bids) Act (Sw. lagen (2006:451) om offentliga uppkopserbjudanden pa aktiemarknaden) and the Takeover Rules will not apply to the Transaction, the Information Memorandum will not be registered with, or approved by, the Swedish Financial Supervisory Authority. Alliance Group has agreed to comply with AOC's bye-laws, mandatory Bermuda law, any special directions given in the SGM and the information requirements, as appropriate, set out in Chapter 2a, section 2 of the Financial Instruments Trading Act (Sw. lagen (1991:980) om handel med finansiella instrument) and rule II.3 of the Takeover Rules. Delisting of SDRs and cancellation of Shares and SDRs Following Approval of the Amalgamation by the Shareholders at the SGM and registration of the Amalgamation by the Bermuda Registrar of Companies, the SDRs will be cancelled, delisted from NASDAQ OMX Stockholm and deregistered from Euroclear Sweden AB. Convertible Bonds Tender Offer AOC is intending to launch a Convertible Bond Tender Offer and Consent Solicitation for its outstanding Convertible Bonds on 4 November 2013. The Convertible Bond Tender Offer and Consent Solicitation will be conditional upon Approval of the Amalgamation being obtained at the SGM. Holders of the Convertible Bonds who participate in the Convertible Bond Tender Offer and Consent Solicitation by a specified early participation date will be offered, by AOC, 105 of par, plus accrued but unpaid interest, which represents a 2.3 per cent. premium to the price of the Convertible Bonds as of 30 October 2013. Holders of the Convertible Bonds who participate in the Convertible Bond Tender Offer and Consent Solicitation after such early participation date will be offered, by AOC, 100 of par. The Convertible Bond Tender Offer and Consent Solicitation is subject amongst other things to completion of the Amalgamation, at the discretion of the Independent Directors, and sufficient financing. Commitment and disputes The Amalgamation (including the Implementation Agreement and the Amalgamation Agreement) is governed by Bermuda law. Any dispute arising out of the Transaction shall be subject to the jurisdiction of the Bermuda courts applying Bermuda law. Preliminary timetable 31 October 2013 Announcement of the Transaction by AOC 4 November 2013 Notice of SGM and Information Memorandum published 2 December 2013 SGM Announcement of SGM outcome, disclosure of last trading day, delisting, record date and settlement date 10 December 2013 Confirmation regarding all regulatory approvals expected to be received 11 December 2013 Delisting of the SDRs 11 December 2013 The Bermuda Registrar of Companies issues certificate of amalgamation for Amalco 13 December 2013 Cash Consideration Record Date 18 December 2013 Date for settlement of the Cash Consideration All the dates above are preliminary and, inter alia, subject to relevant regulatory clearances being obtained. A firm timetable will be announced by Alliance Group and AOC in due time if the above dates change. Other Information A conference call has been scheduled at 10.30 CET on Thursday October 31, 2013 to present the Transaction. The conference call will be hosted by Eric Forss, Chairman of the Board, Alliance Oil Company, and Magomed A. Galaev, advisor to the CEO of Alliance Group. Presentations slides will be available at www.allianceoilco.com. To participate in the conference call you may choose one of the following options: Web The conference will be webcasted live at Alliance Oil's website www.allianceoilco.com. Telephone Dial one of the following numbers a few minutes before the conference starts: Location Local Number Toll-Free
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Russia +7 (495) 580 9543
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Sweden + 46 8 505 202 78 0200 125 058
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United Kingdom +44 20 7190 1596 0800 358 5279
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Conference ID: 4648577 Advisors Morgan Stanley & Co. International plc ('Morgan Stanley') is acting as financial advisor and Linklaters (Swedish, English and Russian law) and Appleby (Bermuda) Limited (Bermuda law) are acting as legal advisors to Alliance Group and Alford in connection with the Transaction. Morgan Stanley is acting as financial advisor to Betino Investments Ltd. ('Betino'), a wholly-owned indirect subsidiary of OJSC Alliance Group in relation to the Transaction and is not acting for any other person and accordingly will not be responsible to any person other than Betino for providing the protections afforded to clients of Morgan Stanley or for providing advice in relation to the contents of this document or the Transaction or arrangements referred to herein. BofA Merrill Lynch and Carnegie are acting as financial advisors to the Independent Directors in relation to the Transaction and are not acting for any other person and accordingly will not be responsible to any person other than the Independent Directors for providing the protections afforded to clients of BofA Merrill Lynch and Carnegie or for providing advice in relation to the contents of this document or the Transaction or arrangements referred to herein. Baker & McKenzie (Swedish, English and Russian law) and Conyers Dill & Pearman (Bermuda law) are acting as legal advisors to AOC in connection with the Transaction. For additional information please contact: Alliance Group Magomed A. Galaev, Advisor to the CEO Phone: +7 495-212-2288 Andrei Roumyantsev, Chief of PR Department Phone. +7 495-745-5810 Morgan Stanley Gergely Voros, Managing Director Phone: +7 495 287-2280 E-mail: Gergely.Voros@morganstanley.com Adrian Doyle, Managing Director Phone: +44 20 7425-7491 E-mail: Adrian.Doyle@morganstanley.com AOC Eric Forss, Chairman of the Board Phone + 46 8 611 49 90 Pavel Kim, Head of Investor Relations Phone. +7 495 777 18 08, ext 1056 E-mail: pkim@aoil.ru Jakob Sintring, Investor Relations Phone. +46 8 611 49 95 E-mail: sintring@allianceoilco.com BofA Merrill Lynch Thomas Westin, Managing Director Phone: +46 8 459 12 80 E-mail: Thomas.Westin@baml.com Carnegie Lars-Erik Sjoberg, Head of Investment Banking Sweden Phone: +46 8 5886 85 00 E-mail: Lars-Erik.Sjoberg@carnegie.se Information about Alford, Alliance Group and AOC Alford Alford is a newly created subsidiary of Alliance Group, incorporated in Bermuda for the purpose of the Amalgamation as an exempted company limited by shares (registration number 48233). Alford has never conducted, and at present does not conduct, any business. Its registered office is at Canon's Court, 22 Victoria Street, PO Box HM 1179, Hamilton HM EX, Bermuda. Alliance Group OJSC Alliance Group is incorporated and existing under the laws of Russia as an open joint stock company, with its registered offices at 39 Sivtsev Vrazhek, Moscow 119002, Russia, owning assets in a range of sectors. Lambros Overseas S.A. is incorporated and existing under the laws of the British Virgin Islands, with its first registered office at Shirley Trust Company Limited, P.O. Box 3099, Road Town, Tortola, British Virgin Islands. AOC Alliance Oil Company Ltd. is incorporated and existing under the laws of Bermuda as an exempted company limited by shares (registration number 25413) with its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. For further information, please see AOC's website at www.allianceoilco.com. - END - IMPORTANT INFORMATION Certain statements included in this press release constitute or are based on forward-looking statements. Examples of forward-looking statements include, among others, statements regarding the Alliance Group's future financial position, income growth, assets, business strategy, leverage, projected levels of growth, projected costs, plans and objectives for future operations, statements related to the planned amalgamation of Alford and AOC and anticipated benefits associated therewith, and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, domestic and global economic and business conditions, the effects of continued volatility in credit markets, market related risks such as changes in interest rates and exchange rates, effects of changes in valuation of credit market exposures, changes in valuation of issued notes, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards (IFRS) applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation, the success of future acquisitions and other strategic transactions and the impact of competition - a number of such factors being beyond the Alliance Group's control. These statements as they appear throughout this press release are not guarantees of future performance and are subject to inherent risks and uncertainties. Forward-looking statements may be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as 'may,' 'will,' 'expects,' 'believes,' 'anticipates,' 'plans,' 'intends,' 'estimates,' 'projects,' 'targets,' 'forecasts,' 'seeks,' 'could,' or the negative of such terms, and other variations on such terms or comparable terminology. Actual results could differ materially from those expressed or implied in such forward-looking statements. Any forward-looking statements made herein speak only as of the date they are made. Except as required by NASDAQ OMX Stockholm or applicable law, Alliance Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in Alliance Group expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that Alliance Group has made or may make in documents it has filed or may file with the Securities Exchange Commission. The Convertible Bonds Tender Offer and Solicitation is not being made, and will not be made, directly or indirectly in or into, or by use of the mail of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Convertible Bonds may not be tendered in the Convertible Bonds Tender Offer and Solicitation by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States as defined in Regulation S of the U.S. Securities Act of 1933 (the 'Securities Act') or to U.S. persons as defined in Regulation S of the Securities Act. [1] For example, if the registration of the Amalgamation takes place on 11 December 2013, each Preference Share holder will be entitled to receive from the Company SEK 313 of principal amount per one Preference Share plus an accrued dividend of SEK 7.5 multiplied by 12/91, which represents the proportion of the number of days between 30-Nov-2013 and 11-Dec-2013 (inclusive) to the number of days between 30-Nov-2013 and 28-Feb-2014 (inclusive) (29-Nov-2013 and 28-Feb-2014 being the upcoming quarterly dividend record dates). Click on, or paste the following link into your web browser, to view the associated documents https://newsclient.omxgroup.com/cds/DisclosureAttachmentServlet?messageAttachmentId=449140 News Source: NASDAQ OMX 31.10.2013 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English Company: Alliance Oil Company Ltd Sweden Phone: Fax: E-mail: Internet: ISIN: XS0493579238 Category Code: MSC LSE Ticker: 0QBX Sequence Number: 1736 Time of Receipt: Oct 31, 2013 09:45:02 End of Announcement DGAP News-Service
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