Alliance Oil begins tender offer, consent bid for 7.25% convertibles

By Angela McDaniels

Tacoma, Wash., Nov. 4 - Alliance Oil Co. Ltd. began a tender offer and consent solicitation for its $265 million 7.25% convertible bonds due 2014, according to a company news release.

Holders who tender by the early tender deadline will receive 105% of par. Holders who tender after the early tender deadline but before the offer expiration will receive par. The company will also pay accrued interest.

The early tender deadline is 11 a.m. ET on Nov. 13. The offer expiration is 11 a.m. ET on Nov. 22.

The company wants to modify the terms and conditions of the bonds to give it the option to redeem all, but not just a portion, of any bonds that remain outstanding after the completion of the tender offer at par plus accrued interest.

By tendering bonds in the offer, bondholders will automatically arrange for a proxy to vote in favor of the proposed modification at the bondholder meeting to be held at 11 a.m. ET on Nov. 26 in London.

To be eligible for the tender offer, bondholders must not attend the meeting in person or separately seek to appoint a proxy to vote at the meeting on their behalf.

Holders have the option to vote in favor of the proposed modification without tendering their bonds. Holders who deliver a valid voting-only instruction in favor of the proposal by the early tender deadline will be eligible to receive a 5% consent fee. Payment of the fee is subject to the proposal passing.

The company said it began the tender offer in connection with its agreement to be acquired by Lambros Overseas SA and OJSC Alliance Group. The acquisition will result in the cancellation of Alliance Oil's shares. It is subject to shareholder approval.

The tender offer is subject to financing and the successful completion of the acquisition.

The dealer manager is BofA Merrill Lynch (contact John Cavanagh/Karl Bystedt Wikblom at 44 20 7995 3715/44 20 7996 0867 or john.m.cavanagh@baml.com/karl.bystedtwikblom@baml.com). The tender and tabulation agent is Bank of New York Mellon, London Branch (44 1202 689644 or debtrestructuring@bnymellon.com).

Alliance Oil is an oil company based in London.

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