Corral Petroleum Holdings AB (publ): US Press Release
NOT FOR DISTRIBUTION IN
This press release is for informational purposes only and does not constitute an offer of securities for sale or an offer to purchase securities or a solicitation to buy or a solicitation of an offer to purchase any securities in any jurisdiction. There will be no public offering of any securities mentioned in this press release in
Corral Petroleum Holdings AB (publ) announces a proposed refinancing including the launch of an exchange offer and consent solicitation for its €220,947,825 Varying Rate Senior Secured Notes due 2011 and
Corral Petroleum Holdings AB (publ) ("we", "us", the "Company", and together with its subsidiaries, the "Group") announced the terms of a proposed refinancing (the "Refinancing") including: (i) an exchange offer for its (as initially issued) €220,947,825 (the "Existing € Notes") and (as initially issued)
- Each Holder will be offered the opportunity to receive: (i) an early lock-up fee payable in cash equal to 1.0% of the principal amount of its Existing Notes (including accrued and unpaid interest up to but not including the closing date of the Exchange Offer and Consent Solicitation (the "Closing Date")); (ii) cash pursuant to a Cash Election (as defined below) from a cash pool of
$300 million (the "Cash Consideration"); (iii) 15% New Senior Notes due 2017 (the "New Notes") in a principal amount equal to the principal amount of such Holder's Existing Notes (including accrued and unpaid interest up to but not including the Closing Date) which shall be reduced by the amount of cash received by such Holder pursuant to the Cash Election; and (iv) a consent premium to be issued in New Notes equal to 3.5% of the principal amount of Existing Notes tendered (including interest accrued up to but not including the Closing Date) but not exchanged for cash. - The appendix hereto set out examples illustrating what a holder of
$1,000,000 of Existing Notes as ofJune 30, 2011 would receive under the terms of the proposed Exchange Offer and Consent Solicitation. On the basis of the assumptions set out in the appendices, such Holder would exchange approximately$1,030,417 of Existing Notes (which includes accrued interest at the applicable rate of the Existing Notes up to but not including the Closing Date of approximately$30,417 ) for: (i) if the$300 million Cash Amount is allocated pro-rata to all holders of Existing Notes, Total Consideration of approximately$1,060,446 (comprising approximately$477,116 in cash and approximately$583,330 nominal value of New Notes); (ii) if a Holder elects to exchange all of its Existing Notes for cash and such election is satisfied in full, Total Consideration of approximately$1,040,721 in cash; and (iii) if a Holder elects to exchange all of its Existing Notes for New Notes and such election is satisfied in full, Total Consideration of approximately$1,076,785 (comprising approximately$10,304 in cash and approximately$1,066,481 nominal value of New Notes). - The Refinancing provides for a contribution by the Moroncha Affiliates of
$600 million of cash to the Group in the form of equity or subordinated debt,$300 million of which will be used to fund the Cash Election, with the remaining$300 million to be contributed toPreem in accordance with the refinancing of the New Credit Facility and to pay fees and expenses associated with the Refinancing. - The completion of the Refinancing is subject to a number of important conditions being satisfied, including but not limited to:
- the requirement that 99% of the outstanding principal amount of the Existing Notes are validly tendered and Consents validly delivered in the Exchange Offer and Consent Solicitation;
- the availability of sufficient funds to pay the Cash Consideration and the Early Lock-Up Fee by the Early Consent Deadline (or such later date as the Ad Hoc Committee agrees) and evidence of contribution of cash to, or payment in cash on behalf of, the Company on or before the Closing Date of such amounts;
- the requirement that the Lock-up Agreements remain effective and have not been terminated;
- the Subordinated Noteholder agreeing to the Subordinated Notes Amendment;
- the New Credit Facility becoming effective;
- the provision of the Moroncha Undertaking (as defined below); and
- the contribution of
$600 million in cash to the Group by the Moroncha Affiliates.
Exchange Offer and Consent Solicitation
The terms of the exchange offer and consent solicitation (the "Exchange Offer and Consent Solicitation"), which was launched yesterday, provide that:
- any Holder who validly tenders its Existing Notes and validly delivers a Consent (as defined below) prior to
5:00 p.m. ,London (UK ) local time onAugust 24, 2011 (the "Early Consent Deadline") and does not withdraw its tender and Consent in accordance with the terms of the Exchange Offer and Consent Solicitation will receive total consideration equal to (i) New Notes in a principal amount and denomination equal to the principal amount and denomination of such Holder's validly tendered Existing Notes (including accrued and unpaid interest up to but not including the Closing Date); provided that such Holder will be eligible to receive cash pursuant to the Cash Election, in which case, the principal amount of the New Notes such Holder will receive will be reduced accordingly; (ii) an amount of cash (if any) owing to such Holder pursuant to the terms of the Cash Election; (iii) a consent premium to be issued in New Notes equal to 3.5% of the principal amount of Existing Notes exchanged for New Notes (including interest accrued up to but not including the Closing Date) but not exchanged for cash pursuant to Cash Election and (iv) an early lock-up fee payable in cash of 1.0% of the outstanding principal amount of the Existing Notes (including accrued and unpaid interest up to but not including the Closing Date) tendered by such Holder (the "Total Consideration"), provided, however, that such Holder delivers a duly executed Lock-up Agreement (as defined herein) to the Company's transaction agent,Lucid Issuer Services Limited ("Lucid" or the "Information, Exchange and Tabulation Agent"); - any Holder who validly tenders its Existing Notes after the Early Consent Deadline but on or prior to
10:00 p.m. ,London (UK ) local time,5:00 p.m. ,New York City (USA ) local time onSeptember 9, 2011 , unless extended or terminated earlier (the "Expiration Time") will receive consideration equal to: (i) New Notes in a principal amount and denomination equal to the principal amount and denomination of such Holder's validly tendered Existing Notes (including accrued and unpaid interest up to but not including the Closing Date); provided that such Holder will be eligible to receive cash pursuant to the Cash Election, in which case, the principal amount of New Notes such Holder will receive will be reduced accordingly; and (ii) an amount in cash, if any, owing to such Holder pursuant to the terms of the Cash Election (the "Consideration").
Holders may elect to receive cash (the "Cash Election") in lieu of all or a portion of the New Notes that they would have otherwise received in the Exchange Offer and Consent Solicitation. A Holder wishing to participate in the Exchange Offer must submit one of the following three electronic exchange instructions, depending on the consideration it wishes to receive in exchange for its Existing Notes and delivery of Consents:
- Holders tendering their Existing Notes in exchange for New Notes only must submit an electronic instruction specifying the principal amount of Existing Notes that they wish to exchange for New Notes in minimum denominations described below;
- Holders tendering their Existing Notes in exchange for Cash Consideration only must submit an electronic instruction indicating the principal amount of Existing Notes requested to be exchanged for cash at 100% of the principal amount (the "Cash Submission Instruction") in minimum Cash Election denominations described below; and
- Holders tendering their Existing Notes in exchange for a combination of New Notes and Cash Consideration must, as part of their exchange instruction, make both of the following submissions: (i) a submission specifying the principal amount of Existing Notes that they wish to exchange for New Notes in minimum denominations described below and (ii) a Cash Submission Instruction in minimum Cash Election denominations described below.
Tenders of Existing Notes will be accepted only in minimum denominations of €50,000 and integral multiples of €1 in excess thereof (in the case of Existing € Notes) and
If the total amount of Existing Notes (including accrued and unpaid interest up to but not including the Closing Date) elected to be repaid in cash pursuant to the Cash Election is equal to the Cash Consideration, the Issuer will accept all submissions of Existing Notes in the Cash Election. In such case, all Holders who have validly tendered their Existing Notes through a Cash Submission Instruction prior to the Expiration Time will receive cash in an amount equal to the principal amount (including accrued and unpaid interest up to but not including the Closing Date) of Existing Dollar Notes and Existing Euro Notes tendered as part of the Cash Election, respectively. If the total amount of Existing Notes (including accrued and unpaid interest up to but not including the Closing Date) elected to be repaid in cash pursuant to the Cash Election is greater than the Cash Consideration, all Holders who have validly tendered their Existing Notes through a Cash Submission Instruction will receive a pro rata portion of the Cash Consideration in lieu of their Existing Notes (calculated by reference to elections made in the Cash Submission Instructions), with the remaining outstanding consideration to be paid to each such Holder in New Notes. To determine the proration, the principal amount of Existing Notes (including accrued and unpaid interest up to but not including the Closing Date) tendered by all Holders who have submitted a Cash Submission Instruction will be multiplied by a proration factor (equal to the Cash Consideration divided by the total principal amount of Existing Notes (including accrued and unpaid interest up to but not including the Closing Date) for which a Cash Election has been received) and rounded up to the nearest multiple of
If the total amount of Existing Notes (including accrued and unpaid interest up to but not including the Closing Date) elected to be repaid in cash pursuant to the Cash Election is less than the Cash Consideration, all Cash Elections will be satisfied in full, and all Holders who have validly tendered their Existing Notes through a Cash Submission Instruction will receive cash in lieu of the principal amount (including accrued and unpaid interest up to but not including the Closing Date) of Existing Dollar Notes and Existing Euro Notes tendered as part of the Cash Election, respectively. Any remaining Cash Consideration will be paid to Holders who have tendered their Existing Notes for New Notes and such Holders will receive a pro rata portion of any remaining Cash Consideration in lieu of their Existing Notes with the remaining outstanding consideration to be paid to each such Holder in New Notes. To determine the proration, the principal amount of Existing Notes (including accrued and unpaid interest up to but not including the Closing Date) tendered by all Holders for New Notes will be multiplied by a proration factor (equal to the remaining Cash Consideration divided by the total principal amount of Existing Notes (including accrued and unpaid interest up to but not including the Closing Date) tendered for New Notes) and rounded up to the nearest multiple of
Concurrently with the Exchange Offer, we are soliciting consents (the "Consents" and the "Consent Solicitation") from all Holders of the Existing Notes (i) to certain amendments (the "Proposed Amendments") to the indenture governing the Existing Notes (the "Existing Indenture"), and (ii) if the Exchange Offer and Consent Solicitation is not successful, to co-operate fully with the Company and its legal and financial advisers in all matters relating to the implementation of the economic terms of the Exchange Offer and Consent Solicitation on terms which have been agreed in a lock-up agreement including through the means of an alternative refinancing plan. A Holder may not tender Existing Notes without delivering a Consent, and a Holder may not deliver a Consent without tendering its Existing Notes.
The completion of the Exchange Offer is conditioned on, among other things, at least 99% of the outstanding Existing Notes being validly tendered and Consents validly delivered prior to the Expiration Time. If this condition is not satisfied or waived by the Issuer, then the Exchange Offer will not be completed. In addition, if Holders of at least 75% of the outstanding principal amount of the Existing Notes validly tender Existing Notes and validly deliver Consents prior to the Early Consent Deadline and have delivered to the Information, Exchange and Tabulation Agent a duly executed lock-up agreement, then the Company may choose to accept and pay for such Consents as binding obligations of such Holder even if the Exchange Offer is not completed. If the Consents become binding obligations on the Holders, then the Company will pay the Early Lock-up Fee on the Closing Date.
Information
Holders eligible to participate in the Exchange Offer and Consent Solicitation ("Eligible Investors") may obtain a free copy of the Exchange Offer Memorandum and Consent Solicitation Statement by directing a request to Lucid, which is acting as the information, exchange and tabulation agent, at Leroy House,
Terms of the New Notes
The Company will pay interest on the New Notes at the following rates:
- From the Closing Date through and including
December 31, 2012 , at 15.0% per annum, payable through the issuance of Additional Notes, which for the avoidance of doubt, upon issue will comprise part of the New Notes ("PIK Interest"); - From
January 1, 2013 through and includingDecember 31, 2013 , at 2.0% per annum, payable in cash ("Cash Interest") plus 13.0% PIK Interest per annum; and - From
January 1, 2014 to the Maturity Date of the New Notes, at 4.0% Cash Interest per annum plus 11.0% PIK Interest per annum.
The Company will make all or such portion of any Cash Interest payment in cash unless:
(i) such cash payment would cause a default under the New Credit Facility; or
- (ii)
Preem is not permitted to make dividends, other distributions or payments (including, without limitation, by way of subordinated loans) to the Company under (x) the New Credit Facility and (y) Swedish law, in each case, for the Company to be able to make such cash payment at the relevant interest payment date.
If the Issuer cannot make a Cash Interest payment in cash pursuant to the provisions above, any portion of a Cash Interest payment not paid in cash will be paid in the form of PIK Interest. Interest on the Notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. The Additional Notes will be identical to the originally issued New Notes, except that interest will begin to accrue from the date they are issued rather than the Closing Date.
From the Closing Date until
The New Notes will be secured by a pledge of all outstanding shares of capital stock of the Company (the "Share Pledge" or the "Collateral"). The New Notes will be senior debt of the Company, will rank equally in right of payment with all future senior debt of the Company, will be effectively senior to unsecured debt of the Company to the extent of the value of the Collateral and will be senior in right of payment to all existing and future subordinated obligations of the Company. The New Notes will be structurally subordinated in right of payment to the existing and future debt and other liabilities of
Application will be made to the
Foreign Exchange Rates
For the purposes of determining the principal amount of Existing Notes tendered and Consents delivered, the Existing Indenture requires that we convert the outstanding principal amount of Existing Notes denominated in dollars into euros at the spot rate (of €1.00=
We publish our financial statements in kronor. For your convenience, in this announcement and in the Exchange Offer Memorandum and Consent Solicitation Statement we have presented translations into euro of certain krona amounts at the
Source: Corral Petroleum Holdings AB (publ)
Appendix
Illustrative Examples
The following examples illustrate what a holder of
Example A - the US
In exchange for its Existing Notes (including accrued interest) validly tendered prior to the Early Consent Deadline and not withdrawn prior to the Withdrawal Deadline the following such holder would receive Total Consideration with an aggregate nominal value of approximately
1) An Early Lock-Up Fee of
2) A cash paydown of approximately
3) A total amount of New Notes of approximately
Example B - if a holder elects to exchange all of its Existing Notes for cash and such election is satisfied in full
In exchange for its Existing Notes (including accrued interest) validly tendered prior to the Early Consent Deadline and not withdrawn prior to the Withdrawal Deadline the following such holder would receive Total Consideration with an aggregate nominal value of approximately
1) An Early Lock-Up Fee of
2) A cash paydown of approximately
Example C - if a holder elects to exchange all of its Existing Notes for New Notes and such election is satisfied in full
In exchange for its Existing Notes (including accrued interest) validly tendered prior to the Early Consent Deadline and not withdrawn prior to the Withdrawal Deadline the following such holder would receive Total Consideration with an aggregate nominal value of approximately
1) An Early Lock-Up Fee of
2) A total amount of New Notes of approximately
The illustrative examples assume that:
1. The closing of the Exchange Offer takes place on
2. 100% of the Existing Notes are validly tendered prior to the Early Consent Date and not withdrawn prior to the Withdrawal Date
3. Exchange rate for the euro against the dollar is €1.00=
As described more fully in the Exchange Offer and Consent Solicitation Memorandum, elections by holders of Existing Notes will be adjusted up or down such that the Cash Consideration will always be equal to
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, our financial condition and liquidity, and the development of the industry in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results of operations, our financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results, conditions or developments in subsequent periods. Important factors that could cause those differences include, but are not limited to: (i) our substantial indebtedness and limitations on our operational flexibility arising under agreements governing our debt; (ii) volatility in refining margins and in market prices for crude oil and refined products; (iii) changes in global economic conditions and capital markets; (iv) our ability to obtain sufficient short-term credit to finance our spot market crude oil purchases and long-term credit to finance our future capital expenditures; (v) the competitive nature of our industry; (vi) operational hazards and our dependence on key refinery assets; (vii) our ability to comply with existing or newly implemented environmental regimes in the countries in which we operate; (viii) our liability for violations, known and unknown, under environmental, occupational health and safety, and other laws; (ix) our ability to remediate contaminated sites within budgeted amounts; (x) our ability to hedge against currency, commodity and interest rate risks; (xi) loss of key management; (xii) labour disruptions; and (xiii) economic disruptions in the countries in which we, our suppliers and our customers operate.
In light of these risks, uncertainties and assumptions, the forward-looking events described in this press release may not occur.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or publicly revise any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this press release.
The New Notes have not been registered under the U.S. Securities Act of 1933, as amended, (the "Securities Act") and unless so registered, may not be offered or sold in
In order to be eligible to view the Exchange Offer Memorandum and Consent Solicitation Statement or make an investment decision with respect to the New Notes (as defined herein), you must be a holder or a beneficial owner of the Existing Notes and be either (i) a "qualified institutional buyer", as that term is defined in Rule 144A under the Securities Act transacting in a private transaction in reliance upon an exemption from the registration requirements of the Securities Act or (ii) a non "U.S. person", as that term is defined in Rule 902 under the Securities Act that is outside
In addition, this press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the New Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
European Economic Area
The Exchange Offer Memorandum and Consent Solicitation Statement has been prepared on the basis that all offers of the New Notes will be made pursuant to an exemption under the Prospectus Directive and the amendments thereto, including the 2010 PD Amending Directive, as and to the extent implemented in member states of the European Economic Area ("EEA"), from the requirement to produce a prospectus for offers of the New Notes. Accordingly, any person making or intending to make any offer within the EEA of the New Notes which are the subject of the Exchange Offer contemplated in the Exchange Offer Memorandum and Consent Solicitation Statement must only do so in circumstances in which no obligation arises for the Issuer or the Dealer Managers to produce a prospectus for such offer. Neither the Issuer nor any Dealer Manager has authorized, nor do they authorize, the making of any offer of the New Notes through any financial intermediary, other than offers made by the Dealer Manager, which constitute the final placement of the New Notes contemplated in the Exchange Offer Memorandum and Consent Solicitation Statement.
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date") the Dealer Manager has not made and will not make an offer of the New Notes which are the subject of the offering contemplated by the Exchange Offer Memorandum and Consent Solicitation Statement to the public in that Relevant Member State other than:
to any legal entity which is a qualified investor as defined in the Prospectus Directive;
to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer Manager nominated by the Issuer for any such offer; or
in all other circumstances falling within Article 3(2) of the Prospectus Directive.
The foregoing exceptions apply only on the condition that such offer for the sale of securities does not require the publication of a prospectus by the Issuer pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an "offer of notes to the public" in relation to any New Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the New Notes to be offered so as to enable an investor to decide to purchase the New Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.
The communication of the Exchange Offer Memorandum and Consent Solicitation Statement is not being made, and the Exchange Offer Memorandum and Consent Solicitation Statement has not been approved, by an authorized person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, the Exchange Offer Memorandum and Consent Solicitation Statement is not being distributed to, and must not be passed on to, persons in the
Insofar as the communication in the Exchange Offer Memorandum and Consent Solicitation Statement is made to or directed at investment professionals in terms of Article 19 of the Order, it is made to or directed at persons having professional experience in matters relating to investments, and any investment or investment activity to which it relates is available only to such persons or will be engaged in only with such persons, and persons who do not have professional experience in matters relating to investments should not rely upon it.
The New Notes will not directly or indirectly be offered for subscription or purchase or be the subject of invitations to subscribe for or buy or sell any New Notes and the Exchange Offer Memorandum and Consent Solicitation Statement will not be distributed in
The Exchange Offer and the Exchange Offer Memorandum and Consent Solicitation Statement have not been submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa ("CONSOB") pursuant to Italian laws and regulations. In the Republic of
Holders of Existing Notes other than
No offering material has been or will be submitted to the approval of the
The New Notes may be offered, marketed or sold in
Neither this press release nor the Exchange Offer Memorandum and Consent Solicitation Statement constitutes investment advice or a recommendation under
The material and disclosure statements may not be used for solicitation purposes for or in connection with the acquisition of the New Notes in circumstances under which is unlawful under
The Exchange Offer is not being made, directly or indirectly, to the public in
The Exchange Offer is not being made, directly or indirectly, to the public in the Republic of
For further information, please contact:
Media enquiries - M: Communications
Louise Tingström
Office: +44(0)20-7923-2337
Mobile: +44(0)7899-066-995
Email: [email protected]
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