Corral waives minimum for exchange, holders tender 98.7% of notes

New York, Sept. 6 - Corral Petroleum Holdings AB said that holders delivered tenders and consents for 98.7% of its euro- and dollar-denominated senior secured notes due Sept. 18 as part of the company's offer to exchange the notes for new debt securities or cash.

Corral said it has waived the requirement that 99% of the existing notes be tendered.

As of the early consent deadline of 12 p.m. ET on Sept. 2, holders had tendered $53,420,433 and €26,674,788 of the existing varying rate senior secured notes for new notes and $230,148,000 and €220,428,000 of the existing notes for cash.

Holders who tender after the consent deadline but before 5 p.m. ET on Sept. 9, the offer expiration, will receive an equal amount of Corral's 15% senior notes due 2017 for their existing notes, including accrued interest, less the amount tendered and accepted for cash. A total of $300 million is available to fund the cash option. Those who participated before the consent deadline will receive the same payment plus a consent premium equal to 3.5% of the amount of existing notes tendered for exchange into new notes, with the amount payable in new notes, and an early lock-up fee equal to 1% of the amount of existing notes tendered.

The offer was launched on Aug. 11 as part of a "comprehensive and long-term refinancing" plan.

Included in the transactions is the injection of $600 million of cash by Corral's owner, Moroncha Holdings Co. Ltd.

Ahead of the announcement, the company had obtained support for the refinancing from a syndicate of six Nordic banks, who will provide a new facility to subsidiary Preem AB to replace the existing bank debt maturing on Sept. 17, and holders of 63% of the notes, including an ad hoc committee plus other holders.

In addition to the exchange for the senior secured notes, Corral's varying rate subordinated notes due 2015 will be extended to Dec. 31, 2019 as part of the refinancing.

On Aug. 25, Corral extended the consent deadline from 12 p.m. ET on Aug. 24. As of the old deadline, holders had tendered $53,082,295 and €25,312,859 of the existing notes for new notes and $229,484,000 and €209,793,000 for cash.

Corral had previously noted that it needed consents from holders of 75% of its senior secured notes. Had the company only reached this threshold and not decided to waive the requirement that 99% of the notes be tendered, it would have implemented the refinancing through a scheme of arrangement under English Law. It had warned this could take "substantially more time" than the exchange.

Lucid Issuer Services Ltd. is the information, exchange and tabulation agent (contact: Sunjeeve Patel or Thomas Choquet at +44 20 7704-0880, email: corral@lucid-is.com). The offer is being made under Rule 144A and Regulation S.

Corral is the London-based holding company for Preem, an oil refiner based in Stockholm.

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