Corral Petroleum Holdings AB (publ): US Press Release

LONDON, August 12, 2011 /PRNewswire/ --

NOT FOR DISTRIBUTION IN CANADA, JAPAN OR AUSTRALIA.

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 the United States.

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 $249,924,310 Varying Rate Senior Secured Notes due 2011, a $600 million cash contribution by its parent and the refinancing of Preem's credit facilities.    

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) $249,924,310 (the "Existing $ Notes") varying rate senior secured notes due September 18, 2011 (together, the "Existing Notes"); (ii) a commitment  by Moroncha Holdings Co. Limited, the company's direct parent, or its affiliates (the "Moroncha Affiliates") to contribute $600 million to the Group in the form of equity or subordinated debt; (iii) a refinancing in full of Preem AB's ("Preem") existing syndicated term and revolving facilities with a new $650 million five-year amortizing term loan and a $1,850 million multi-currency five-year borrowing base working capital facility provided by a syndicate of six Nordic banks, $73 million of which is uncommitted (the "New Credit Facility") and (iv) extension of the maturity of its (as initially issued) €78,588,101 and (as initially issued) $35,058,579 varying rate subordinated notes due 2015 ("Subordinated Notes") to December 31, 2019.

• 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 of June 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 to Preem 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 on August 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 on September 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 $100,000 and integral multiples of $1 in excess thereof (in the case of Existing $ Notes). New Notes will be issued in minimum denominations of €50,000 (in the case of New Euro Notes) and $100,000 (in the case of New Dollar Notes).  Cash Elections will be accepted only in minimum denominations of €50,000 and in increments of €1,000 in excess thereof (in the case of Existing € Notes) and $100,000 and in increments of $1,000 in excess thereof (in the case of Existing $ Notes).

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 $1,000. This resultant amount will be the principal amount of such Existing Notes for which Holders who have submitted Cash Submission Instructions will receive cash. In exchange for the remaining principal amount of such Existing Notes (together with accrued and unpaid interest up to but not including the Closing Date), each relevant Holder will receive New Notes.

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 $1,000. The resultant amount will be the principal amount of such Existing Notes for which Holders who have elected to receive New Notes will receive cash.  In exchange for the remaining principal amount of such Existing Notes (together with accrued and unpaid interest up to but not including the Closing Date), each relevant Holder will receive New Notes.

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, 436 Essex Road, London N1 3QP, United Kingdom, Attn:  Sunjeeve Patel and Thomas Choquet, Telephone:  +44 (0)20 7704 0880, Facsimile:  +44 (0)20 7067 9098, Email:  [email protected] and providing certain representations as to their status as eligible holders.  The Exchange Offer Memorandum and Consent Solicitation Statement contains details of how Holders can tender their Existing Notes, provide Consents and enter into Lock-up Agreements.  All enquiries in relation to these matters and their consequences in relation to trading the Existing Notes should be directed to Lucid.

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 including December 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

1. (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 September 30, 2012, the Company, at its option may, on any one or more occasions, redeem all or a part of the New Notes upon not less than 15 and no more than 60 days' notice, at a redemption price equal to 102% of the principal amount of the New Notes redeemed plus any accrued and unpaid interest, if any, to the date of redemption. On or after September 30, 2012, the Company, at its option may, on any one or more occasions redeem all or a part of the New Notes upon not less than 15 and no more than 60 days' notice, at a redemption price equal to 100% of the principal amount of the New Notes redeemed plus any accrued and unpaid interest, if any, to the date of redemption.

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 Preem and each of the other subsidiaries of the Company, including the New Credit Facility, whether or not such debt is secured.

Application will be made to the Luxembourg Stock Exchange for the New Notes to be admitted to listing on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market, which is not a regulated market (as defined by Article 1(13) of Directive 2004/39/EC).  

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=$1.4193 and $1.00=SEK 6.4853) as published in the Financial Times on the record date set by the existing trustee in collaboration with the Company for purposes of calculating the euro equivalent of the Existing $Notes, which is August 8, 2011.  We have also used these rates to calculate the sources and uses of funds set out in the Appendix hereto, in the Exchange Offer Memorandum and Consent Solicitation Statement as well as to present the principal amount of New Notes outstanding after giving effect to the Refinancing Transactions and the principal amount of Subordinated Notes outstanding as of September 14, 2011 under the Pro Forma Capitalization table set out in the Appendix hereto, in the Exchange Offer Memorandum and Consent Solicitation Statement.  In collaboration with the existing trustee, we intend to set a new record date, which we expect will be one business day following the date on which Expiration Time occurs, to determine the allocation of exchange consideration between the Cash Consideration and the New Notes as well as to determine the breakdown of the total principal amount of New Euro Notes and New Dollar Notes to be issued in the Exchange Offer.

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 Swedish Central Bank's exchange rate for the krona against the euro on June 30, 2011, which was €1.00=SEK 9.1467.

Source: Corral Petroleum Holdings AB (publ)

Appendix

Illustrative Examples

The following examples illustrate what a holder of $1,000,000 of Existing Notes as of June 30, 2011 would  receive under the terms of the proposed Exchange Offer and Consent Solicitation.  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).  

Example A - the US $ 300M Cash Amount is allocated pro-rata to all holders of Existing Notes

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 $1,060,446 comprising:

1) An Early Lock-Up Fee of $10,304 in cash (i.e. 1% of the Existing Notes (including accrued interest);

2) A cash paydown of approximately $466,812, representing such holder's pro-rata share of the Cash Consideration  of $300 million); and

3) A total amount of New Notes of approximately $583,330, representing $563,604 in respect of the Existing Notes not repaid in cash under 2) plus a Consent Premium of approximately $19,726

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 $1,040,721 comprising:

1) An Early Lock-Up Fee of $10,304 in cash,; and

2) A cash paydown of approximately $1,030,417.

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 $1,076,785 comprising:

1) An Early Lock-Up Fee of $10,304 in cash; and

2) A total amount of New Notes of approximately $1,066,481, representing such holders' exchange of Existing Notes of $1,030,417 plus a Consent Premium of approximately $36,064.

The illustrative examples assume that:

1. The closing of the Exchange Offer takes place on September 14, 2011

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=$1.4193 (as published in the Financial Times on 8 August 2011). We have provided this translation solely for your convenience.  In collaboration with the existing trustee, we intend to set a new record date, which we expect will be one business day following the date on which Expiration Time occurs, to determine the allocation of exchange consideration between the Cash Consideration and the New Notes as well as to determine the breakdown of the total principal amount of New Euro Notes and New Dollar Notes to be issued in the Exchange Offer.

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 $300M.  Accordingly, the actual amounts of New Notes and cash that will be received by holders of Existing Notes may differ from the amounts that such holders have elected to receive.

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.

United States

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 the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.

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 the United States transacting in an offshore-transaction (in accordance with Regulation S under the Securities Act) (together, "Eligible Investors").

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.

United Kingdom

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 United Kingdom save in circumstances where section 21(1) of the said Act does not apply.  The communication of the Exchange Offer Memorandum and Consent Solicitation Statement is only being made to those persons in the United Kingdom falling within the definition of Investment Professions (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or to persons who fall within Article 43 of the Order or any person to whom it may otherwise lawfully be made by virtue of an exemption to section 21(1) of the said Act or otherwise in circumstances where it does not apply.

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.

Sweden

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 Sweden unless (A) a prospectus in relation to such New Notes has been approved by Finansinspektionen ("FI") and published or, where a prospectus has been approved by the competent authority of another Relevant Member State, where such approval has been notified to FI; or (B) such offer, invitation or sale is made pursuant to any of the exemptions to the obligation to have approved and published a prospectus in Sweden, all in accordance with the provisions of lag (1991:980) om handel med finansiella instrument and any other applicable laws and regulations in Sweden.

Italy

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 Italy, the Exchange Offer is conducted in reliance on the exemption under Article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended, and Article 35-bis, paragraph 3 of the CONSOB Regulation No. 11971 of May 14, 1999, as amended (the "Regulation on Issuers") and, therefore, is intended for, and directed only at institutional investors (investitori qualificati, "Institutional Investors"), as defined pursuant to Article 34-ter, letter b) of the Regulation on Issuers.  Accordingly, the Exchange Offer cannot be extended, nor may copies of this Exchange Offer Memorandum and Consent Solicitation Statement or any other document relating to the Exchange Offer, the Existing Notes or the New Notes be distributed, mailed or otherwise forwarded, or sent, to the public in the Republic of Italy, whether by mail or by any means or other instrument (including, without limitation, telephonically or electronically) or any facility of a national securities exchange available in the Republic of Italy, other than to Institutional Investors.  Persons receiving the Exchange Offer Memorandum and Consent Solicitation Statement must not forward, distribute or send it in or into or from the Republic of Italy.

Holders of Existing Notes other than Institutional Investors are hereby notified that, to the extent such holders are Italian residents or are located in the Republic of Italy, the Exchange Offer is not available to them, and neither the Exchange Offer Memorandum and Consent Solicitation Statement or any other document relating to the Exchange Offer, the Existing Notes or the New Notes may be distributed or made available to them in the Republic of Italy.

Cyprus

No offering material has been or will be submitted to the approval of the Cyprus Securities and Exchange Commission in connection with the offering of the New Notes, and consequently the New Notes will not be offered, advertised, distributed, marketed or sold, whether directly or indirectly, to the public in Cyprus, nor any offering material and any disclosure statements or information therein relating to the New Notes will be released, issued, published, communicated, advertised or disseminated to the public in Cyprus.

The New Notes may be offered, marketed or sold in Cyprus if addressed or sold to professional investors or in circumstances where the offer, marketing or sale of the exchange consideration is permitted under the Cyprus national law implementing the Prospectus Directive (Public Offer and Prospectus Law, No. 114 (I) of 2005) and Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 (Investment Services and Activities and Regulated Markets Law, No. 144 (I) of 2007).

Neither this press release nor the Exchange Offer Memorandum and Consent Solicitation Statement constitutes investment advice or a recommendation under Cyprus law, nor does it constitute an offer of securities in Cyprus, it is not intended to be and must not be distributed to the information distribution channels or the public in Cyprus, nor (when distributed by a duly licensed investment firm established or operating through a branch in Cyprus) to any person in Cyprus other than a "professional client" as defined in the Law on Investment Services and Activities and Regulated Markets (Law No. 144 (I) 2007).

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 Cyprus laws to make such an offer or solicitation.

Belgium

The Exchange Offer is not being made, directly or indirectly, to the public in Belgium. Neither the Exchange Offer Memorandum and Consent Solicitation Statement nor any other document or material relating to the Exchange Offer have been submitted to or will be submitted for approval or recognition to the Belgian Banking, Finance and Insurance Commission (Commission bancaire, financière et des assurances/Commissie voor het Bank-,Financie- en Assurantiewezen) and, accordingly, the Exchange Offer may not be made in Belgium by way of a public offering, as defined in Article 3 of the Belgian Law of 1 April 2007 on public takeover bids (the "Belgian Public Offer Law"), as amended or replaced from time to time. Accordingly, the Exchange Offer may not be advertised and the Exchange Offer will not be extended, and no documents or materials relating to the Exchange Offer (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than "qualified investors" in the sense of Article 10, §1 of the Belgian Law of 16 June 2006 on the public offering of securities and the admission of securities to trading on a regulated market (as amended from time to time, the "Belgian Public Offer Law"), acting on their own account. Insofar as Belgium is concerned, the Exchange Offer Memorandum and Consent Solicitation Statement has been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Exchange Offer and Consent Solicitation. Accordingly, the information contained in the Exchange Offer Memorandum and Consent Solicitation Statement may not be used for any other purpose or disclosed to any other person in Belgium.

France

The Exchange Offer is not being made, directly or indirectly, to the public in the Republic of France ("France"). Neither the Exchange Offer Memorandum and Consent Solicitation Statement nor any other document or material relating to the Exchange Offer has been distributed or caused to be distributed and will be or caused to be distributed to the public in France. The Exchange Offer is and shall only be made in France to (a) qualified investors (investisseurs qualifiés) other than individuals and/or (b) legal entities whose total assets exceed €5 million, or whose annual turnover exceeds €5 million, or whose managed assets exceeds €5 million or whose annual headcount exceeds 50, acting for their own account (all as defined in, and in accordance with, Articles L.341-2, L.411-2, D.341-1 and D.411-1 to D.411-3 of the French Code monétaire et financier). The Exchange Offer Memorandum and Consent Solicitation Statement has not been and will not be submitted for clearance to nor approved by the Autorité des Marchés Financiers.

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]

SOURCE Corral Petroluem Holdings AB