Alliance Oil to price $225 million five-year convertibles to yield 6.75%-7.5%, up 25%-30%

By Rebecca Melvin

New York, June 11 - Alliance Oil Co. Ltd., formerly West Siberian Resources Ltd., plans to price $225 million of five-year convertible bonds at par to yield a coupon of 6.75% to 7.5% with an initial conversion premium of 25% to 30%, according to a news release.

There is a $25 million greenshoe.

Alliance also plans to price $100 million of common stock in the form of Swedish depository receipts to be listed on the Nasdaq OMX Nordic.

Merrill Lynch International and Morgan Stanley & Co. International plc are joint bookrunners and joint lead managers for the Regulation S convertibles offering, with Carnegie Investment Bank AB and VTB Capital plc acting as co-lead managers.

And Merrill Lynch International, Morgan Stanley & Co. International plc and Carnegie Investment Bank AB are joint bookrunners for the equity offering, with VTB Capital plc acting as senior co-lead manager.

The bonds, which are expected to be listed on the Luxembourg Stock Exchange, will be convertible into the SDRs.

They will be non-callable for three years and will be provisionally callable thereafter at a 130% price hurdle.

Proceeds from both offerings are intended to strengthen the company's balance sheet and liquidity position, reduce short-term debt and provide additional flexibility for both organic growth and potential acquisitions.

The Russian oil company has proven reserves of 487 million barrels

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