DGAP-UK-Regulatory: Alliance Group launches recommended Cash Offer for Alliance Oil Company

DGAP-UK-Regulatory: Alliance Group launches recommended Cash Offer for Alliance 
Oil Company

Alliance Oil Company Ltd  / Miscellaneous

31.10.2013 09:45

Dissemination of a UK Regulatory Announcement, transmitted by
DGAP - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Lambros Overseas S.A., OJSC Alliance Group and Alliance Oil Company Ltd., 31
October 2013, at 09.45 CET 

For immediate publication

THIS PRESS RELEASE IS NOT AND MUST NOT, DIRECTLY OR INDIRECTLY, BE DISTRIBUTED
OR MADE PUBLIC IN AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA. THE
TRANSACTION IS NOT BEING MADE TO PERSONS IN THOSE JURISDICTIONS OR ELSEWHERE
WHERE THEIR PARTICIPATION REQUIRES FURTHER OFFER DOCUMENTS, FILINGS OR OTHER
MEASURES. 



Alliance Group launches recommended Cash Offer for Alliance Oil Company

The Boards of Directors of Lambros Overseas S.A. and OJSC Alliance Group
(together 'Alliance Group') and Alliance Oil Company Ltd. ('AOC', the
'Company') today announce a recommended cash offer, pursuant to which Alliance
Group, through its jointly owned subsidiary Alford Financial Ltd ('Alford'),
would acquire all of the ordinary shares in AOC (the 'Ordinary Shares'),
represented by Swedish Depositary Receipts ('SDRs'), and all the preference
shares in AOC (the 'Preference Shares'), represented by SDRs, which are held by
parties other than Alliance Group and its affiliates (the 'Transaction'). 

Prior to the Transaction, Alliance Group and its affiliated companies control
45 per cent. of the SDRs over Ordinary Shares in AOC, and 7 per cent. of the
SDRs over Preference Shares in AOC. 

SDRs representing the Ordinary Shares and the Preference Shares are listed on
NASDAQ OMX Stockholm Large Cap under the ticker symbols AOIL SDB and AOIL SDB
PREF, respectively. Upon successful completion of the Transaction, all of the
SDRs will be delisted and cancelled in exchange for cash payment. 

Summary of the Transaction:

  -- Under the terms of the Transaction, holders of Ordinary Shares and
     Preference Shares (together referred to herein as the 'Shares') in AOC (the
     'Shareholders'), except for the holder(s) of Shares held by or on behalf of
     Alliance Group and its affiliated companies, are offered a cash
     consideration consisting of:

  -- SEK 60 in cash for each Ordinary Share; and
  -- SEK 313 in cash for each Preference Share, plus SEK 7.5 for each Preference
     Share multiplied by the percentage of the period between the most recent
     dividend record date and the subsequent dividend record date, which has
     elapsed at the registration of the Amalgamation
[1]
      (the cash consideration for all Shares together referred to as the 'Cash
     Consideration');

  -- The Independent Directors (as defined below) unanimously recommend the
     Transaction. Merrill Lynch International ('BofA Merrill Lynch') and
     Carnegie Investment Bank ('Carnegie') have acted as financial advisors to
     the Company in connection with the Transaction, and BofA Merrill Lynch has
     provided the Independent Directors with an opinion in relation to the
     fairness of the value, from a financial point of view, of the Cash
     Consideration to be received by the holders of Ordinary Shares and
     Preference Shares. For more details, see Recommendation by the Independent
     Directors of AOC, page 4.
  -- The Independent Directors have confirmed that they intend to undertake
     irrevocably to vote in favour of the Transaction at the SGM in respect of
     their own beneficial holdings of 264,718 of AOC's Ordinary Shares
     (representing approximately 0.2 per cent. of the total number of votes in
     AOC as of 30 September 2013).
  -- Two of the directors of AOC, Arsen Idrisov (a beneficiary of Alliance
     Group) and Isa Bazhaev (Managing Director of one of Alliance Group's
     subsidiaries), have absented themselves from all deliberations of the board
     in connection with the Transaction.

  -- The cash offer represents a premium for each Ordinary Share of
     approximately:
  -- 4 per cent. to the closing price of the relevant SDRs on 30 October 2013
     (being the last trading day before this announcement);
  -- 17 per cent. to the volume weighted average closing price of the relevant
     SDRs over the 3 month period prior to 31 October 2013;
  -- 25 per cent. to the volume weighted average closing price of the relevant
     SDRs over the 6 month period prior to 31 October 2013; and
  -- 48 per cent. to the closing price on 24 July 2013, which is the last date
     prior to press speculation about a potential third party acquisition of a
     significant stake in the Company or its assets.

  -- The cash offer represents a premium for each Preference Share of
     approximately:

  -- 4 per cent. to the closing price, net of accrued dividend, of the relevant
     SDRs on 30 October 2013;

  -- 6 per cent. to the volume weighted average closing price, net of accrued
     dividend, of the relevant SDRs over the 3 month period prior to 31 October
     2013; and
  -- 6 per cent. to the volume weighted average closing price, net of accrued
     dividend, of the relevant SDRs over the 6 month period prior to 31 October
     2013.

  -- The Transaction is proposed to be made by way of amalgamation between AOC
     and Alford under Bermuda law (the 'Amalgamation'), which requires the
     approval of Shareholders at a Special General Meeting of AOC (the 'SGM').
     The threshold for approval at the SGM is at least 75 per cent. of the votes
     cast at the SGM for which the required quorum is two persons at least
     holding or representing by proxy more than one third of the issued Shares.
  -- Upon approval of the Amalgamation at the SGM, AOC and Alford will be
     permitted to amalgamate under Bermuda law and continue as one company (the
     'Amalco').
  -- Alliance Group and its affiliated companies controlling 45 per cent. of the
     total votes in AOC will utilize their right to vote in favour of the
     Amalgamation at the SGM.
  -- An SGM has been scheduled for and is expected to take place on or around 2
     December 2013.
  -- The Transaction will be funded by a committed debt facility, as described
     in more detail below, which will be provided by Gazprombank (Open
     Joint-Stock Company) as lender (the 'Lender').
  -- The Transaction is conditional on, inter alia, approval at the SGM, receipt
     of relevant antitrust clearances in Russia, Germany and Cyprus, and that no
     bona fide third party offer is made for all the Shares that is deemed more
     attractive in the view of the Independent Directors.
  -- The board of directors of Repsol Exploration S.A., one of the largest
     holders of SDRs, representing 3 per cent. of the total number of SDRs
     representing the Shares, corresponding to 3 per cent. of the total number
     of votes in AOC as of 30 September 2013, has approved to vote in favour of
     the Transaction at the SGM.

  -- An information memorandum detailing the Transaction (the 'Information
     Memorandum') will be made available on AOC's website at the latest around 4
     November 2013.
  -- As part of the Transaction, a tender offer of a total of US$ 278,250,000 in
     cash and a related consent solicitation (the 'Convertible Bond Tender Offer
     and Consent Solicitation') is intended to be launched on 4 November 2013 by
     AOC for its outstanding US$ 265,000,000 convertible bonds due 2014 (the
     'Convertible Bonds').
  -- 'The Independent Directors of AOC have carefully considered the offer from
     Alliance Group. We believe the offer provides all AOC's independent
     shareholders with an opportunity to realise cash value of their investment
     at a fair price that reflects the future prospects for the Company', says
     Eric Forss, Chairman of AOC.

Background to and reasons for Alliance Group making an offer

Alliance Group has been a supportive and committed long-term shareholder of AOC
as a public company since the creation of AOC through the merger of Alliance
Oil and West Siberian Resources in 2008. 

Alliance Group began work on a potential take-private transaction as it became
clearer that the strategy being pursued by the Company was not being
appropriately rewarded by the public equity market. Alliance Group believes
that AOC management's time would be best spent on the fundamental strategy and
challenges of the Company, including on-going operational challenges in
Timan-Pechora and the impact of fiscal changes on the downstream business,
without the additional and simultaneous pressure of addressing the market
volatility these challenges can bring. 

In the current environment, Alliance Group believes public equity markets do
not represent the optimal ownership structure for AOC. As a private company: 

  -- It will be easier to take a strategic approach to operational challenges
     and opportunities facing AOC today;
  -- Earnings will be improved through the increased leverage afforded by the
     high liquidity and low interest rates the debt markets offer, which will be
     more easily accessed under private ownership; and
  -- AOC's corporate structure, administration and corporate governance will be
     simplified, enabling more efficient operations and cost reductions.



Finally, Alliance Group believes that while in the past access to the public
equity capital markets has been a significant benefit, the relative value of
the optionality of this access is now significantly reduced as funds would only
be available at a cost of unacceptable dilution to current shareholders. 

Alliance Group would enter into the Transaction as a strategic investor, with
the aim of developing AOC as an independent oil company under its ownership.
Alliance Group is acting as principal and not as agent in the Transaction, and
is not in discussion with any third parties about the on-sale of AOC or all or
significant parts of AOC's business. 

Recommendation by the Independent Directors of AOC

Two of the directors of AOC, Arsen Idrisov (a beneficiary of Alliance Group)
and Isa Bazhaev (Managing Director of one of Alliance Group's subsidiaries),
have absented themselves from all deliberations of the board in connection with
the Transaction. Accordingly, the Transaction has been considered only by the
Independent Directors: Eric Forss, Raymond Liefooghe, Fred Boling, Claes Levin
and Fernando Martinez-Fresneda (the 'Independent Directors'). 

The Independent Directors have, together with their financial and legal
advisors, evaluated the Transaction, and the Independent Directors have
determined that it is in the interest of the Shareholders that the cash offer
is presented to them for resolution at an SGM. 

The Independent Directors unanimously recommend that the Shareholders vote in
favour of the Transaction. In making their recommendation, the Independent
Directors have considered a number of factors, including the considerations
described in the section 'Background to and reasons for the recommendation by
the Independent Directors.' 

BofA Merrill Lynch and Carnegie have acted as financial advisors to the Company
in connection with the Transaction, and BofA Merrill Lynch has provided the
Independent Directors with an opinion in relation to the fairness of the value,
from a financial point of view, of the Cash Consideration to be received by the
holders of Ordinary Shares and Preference Shares. In providing their advice,
BofA Merrill Lynch has taken into account the commercial assessments of the
Independent Directors as well as their consideration of the Company's bye-laws
with respect to the provisions relating to the Preference Shares. 

The Independent Directors have confirmed that they intend to undertake
irrevocably to vote in favour of the Transaction at the SGM in respect of their
own beneficial holdings of 264,718 of AOC's Ordinary Shares (representing
approximately 0.2 per cent. of the total number of votes in AOC as of 30
September 2013). 

Background to and reasons for the recommendation by the Independent Directors

Offer for Ordinary Shares

In evaluating the Transaction, the Independent Directors have considered
several factors deemed to be relevant. These factors include AOC's current
position, its future potential to realise value as well as the evolving risks
to that value. 

The Independent Directors are pleased with the historic track-record of the
Company's upstream and downstream volume growth, as well as EBITDA and earnings
growth, achieved since the merger of AOC with West Siberian Resources in 2008.
The Independent Directors also recognise the potential for future value
creation from current upstream projects as well as from the Company's
substantial refinery modernisation programme, due to be completed in 2014. The
Independent Directors also believe, however, that there are a number of risks
to realising additional value, including geological complexity in the
Timan-Pechora region, changes in domestic gas tariffs and taxation for
independent oil and gas producers, fiscal risks for Russian refiners and market
risk in the Company's domestic market for refined products. 

The Independent Directors note that the offer price for the Ordinary Shares of
SEK 60 represents a modest premium of 4 per cent. to the closing price of the
relevant SDRs on 30 October 2013 (being the last trading day before this
announcement) and believe that the premium level needs to be considered against
the background of the SDR price increasing over 48 per cent. to the closing
price on 24 July 2013, which is the last date prior to press speculation about
a potential third party acquisition of a significant stake in the Company or
its assets. The Independent Directors have based their assessment of the offer
from Alliance Group on their views on the fundamental value of the Company,
including the commercial prospects and risks facing AOC. 

In arriving at their decision to recommend the Transaction, the Independent
Directors have also taken into account Alliance Group's significant
shareholding in AOC and its limiting effect on the Company's ability to attract
an alternative offer. 

In light of these considerations, the Independent Directors consider the terms
of Alliance Group's offer to be fair and reasonable and believe that the
Transaction represents an opportunity for all of AOC's independent Shareholders
to realise cash value for their investment at a fair price that reflects the
future prospects of the Company. 

Offer for Preference Shares

The Independent Directors believe that the offer for the Preference Shares,
including the payment of accrued dividend up to completion of the Transaction,
is fair and reasonable, reflecting the fundamental debt-like characteristics of
Preference Shares as well as the trading performance of the Preference Shares.
In arriving at their recommendation to the holders of the Preference Shares,
the Independent Directors have considered the Company's bye-laws with respect
to the provisions relating to the Preference Shares. 

Alliance Group's ownership in AOC, support for the Transaction

Alliance Group currently holds SDRs representing 76,700,878 Ordinary Shares and
494,700 Preference Shares, representing 43 per cent. of the total number of
Shares and 45 per cent. of the total number of votes in AOC as of 30 September
2013. Under Bermuda law, Alliance Group is entitled to vote regarding the
Amalgamation and intends to vote in favour of the Transaction. 

The board of directors of Repsol Exploration S.A., one of the largest holders
of SDRs, representing 3 per cent. of the total number of SDRs representing the
Shares, corresponding to 3 per cent. of the total number of votes in AOC as of
30 September 2013, has approved to vote in favour of the Transaction at the SGM 

The Transaction

Alliance Group has decided to effect the Transaction through Alford. Affiliates
of Alliance Group, including Alford, and AOC entered into a conditional
implementation agreement on 30 October 2013 with respect to the proposed
Amalgamation (the 'Implementation Agreement'). Pursuant to the Implementation
Agreement, Alford and AOC also entered into an amalgamation agreement on 30
October 2013 (the 'Amalgamation Agreement'), in order to effect the
Amalgamation if the conditions to the Implementation Agreement are satisfied. 

If the conditions to the Amalgamation are satisfied, the Independent Directors
and executive management of AOC expect the Amalgamation to be completed on or
about 11 December 2013. 

Two of the directors of AOC, Arsen Idrisov (a beneficiary of Alliance Group)
and Isa Bazhaev (Managing Director of one of Alliance Group's subsidiaries),
have absented themselves from all deliberations of the Board in connection with
the Transaction. Accordingly, the Transaction has been considered only by the
Independent Directors of AOC. 

Alliance Group offers:

  -- SEK 60 in cash for each Ordinary Share; and
  -- SEK 313 in cash for each Preference Share, plus SEK 7.5 for each Preference
     Share, multiplied by the percentage of the period between the most recent
     dividend record date and the subsequent dividend record date, which has
     elapsed at the registration of the Amalgamation.

The Transaction represents a premium for each Ordinary Share of approximately:

  -- 4 per cent. to the closing price of the relevant SDRs on 30 October 2013
     (being the last trading day before this announcement);
  -- 17 per cent. to the volume weighted average closing price of the relevant
     SDRs over the 3 month period prior to 31 October 2013;
  -- 25 per cent. to the volume weighted average closing price of the relevant
     SDRs over the 6 month period prior to 31 October 2013; and
  -- 48 per cent. to the closing price on 24 July 2013, which is the last date
     prior to press speculation about a potential third party acquisition of a
     significant stake in the Company or its assets.

The Transaction represents a premium for each Preference Share of approximately:

  -- 4 per cent. to the closing price of the relevant SDRs on 30 October 2013;
  -- 6 per cent. to the volume weighted average closing price of the relevant
     SDRs over the 3 month period prior to 31 October 2013; and
  -- 6 per cent. to the volume weighted average closing price of the relevant
     SDRs over the 6 month period prior to 31 October 2013.

The total value of the Transaction, excluding the value of the Shares
beneficially held by Alliance Group and its affiliated companies, amounts to
approximately SEK 7,813,451,060 (excluding the amount of accrued dividends
relating to the Preference SDRs). 

No brokerage fee will be charged of those who tender Shares. Holders of SDRs
will be responsible for paying customary fees to custodians or intermediaries
through whom such SDR interests are held. 

The Swedish Securities Council (as defined below) concluded in AMN 2013:35
that, as AOC is a Bermuda company and the Transaction is made by way of
amalgamation under Bermuda law, the Securities Council did not, from a sound
stock market practice point of view, have any additional requirements other
than those required under Bermuda law. The Securities Council, emphasized the
importance of informing the Shareholders, including the holders of SDRs, of the
planned actions in a manner as similar as possible to the information which
would have be given had AOC been a Swedish listed company. Please refer to
www.aktiemarknadsnamnden.se for the full statement. 

Financing

The Transaction will be funded by a committed facility provided under a
facility agreement between, among others, the Lender and Daumier Investments
Limited as borrower (the 'Borrower') (the 'Facility Agreement'). 

Drawdown of the facility is conditional upon delivery of certain customary
conditions precedent to funding, the majority of which are within the
Borrower's control, such as corporate approvals, delivery of financial
statements and execution of security documents (which are in an agreed form).
Certain other conditions precedent to funding allow the Lender some discretion,
for example, provision of satisfactory legal opinions of the Lender's counsel
as well as evidence that all necessary and desirable authorisations and
consents have been obtained in connection with the Transaction. 

The representations, covenants and events of default contained in the Facility
Agreement are customary for a facility of this nature. The facility is provided
on a committed basis and the Lender will therefore be obliged to fund a loan if
requested to do so (subject to delivery of the conditions precedent referred to
in the previous paragraph) provided that no misrepresentation, breach of
covenant or other event of default (actual or potential) exists at the time of
the request or when the funds are due to be advanced. If such an event has
occurred then the Borrower is required to notify the Lender thereof and the
Lender has discretion to refuse a funding request in such circumstances. 

Examples of representations contained in the Facility Agreement include those
in relation to the status of the obligors under the Facility Agreement (the
Borrower, Alford, Geltome Financial Ltd. and Betino Investments Ltd.) and AOC
and its subsidiaries, absence of insolvency, absence of material litigation and
material breach of laws. Examples of covenants contained in the Facility
Agreement include those which restrict the creation of security, disposals, the
incurrence of financial indebtedness, a change of business and acquisitions.
Examples of events of default contained in the Facility Agreement include
cross-default over certain thresholds, insolvency, misrepresentation,
expropriation, litigation and moratorium. 

Management and Employees

Alliance Group values the skills, experience and industry knowledge of the
existing management and employees of AOC. Alliance Group confirms that, upon
completion of the Amalgamation, the existing contractual and statutory
employment rights, including in relation to bonuses and pensions, of all AOC
employees will continue to be fully safeguarded. 

AOC's Global Share Option Plan

Participants in AOC's Global Share Option Plan will be contacted regarding the
effect of the Amalgamation on their rights under AOC's Global Share Option
Plan. 

Pre-Amalgamation undertakings

The Implementation Agreement includes undertakings from AOC that it will,
during the period from the date of this announcement until the date of
registration of the Amalgamation with the Registrar of Companies in Bermuda,
carry on its business in the ordinary course of business and will not, other
than as publicly announced at the date hereof, without the prior written
consent of Alliance Group, take any of the following actions: 

  1. subject to dividends previously resolved at the AOC AGM 2013 to holders of
     Preference Shares, make any distributions or resolve to make any
     distributions to Shareholders or to issue, sell, purchase or redeem any
     financial instruments;
  2. commit to merge, de-merge, amalgamate or enter into any corporate
     restructuring, liquidation, dissolution or any business combination
     transaction, or make any corporate acquisition or disposals or discontinue
     from Bermuda;
  3. enter into, or announce an intention to enter into, any transaction which
     is material and outside the ordinary business of AOC; or
  4. fail to comply in any material respect with any law or any of its
     regulatory obligations, including all filings in connection therewith, or
     include any information in such filings that is untrue, inaccurate or
     misleading in any material respect.

Conditions to the Transaction

The Transaction is subject to the following conditions:

  1. that the Amalgamation is approved at the SGM, as required under Bermuda law
     (namely, approval at the SGM by 75 per cent. of the votes cast at the SGM
     for which the required quorum is two persons at least holding or
     representing by proxy more than one third of the issued Shares) (the
'Approval'
); 
  2. that all permits and approvals of the authorities that are necessary for
     the Amalgamation have been obtained on terms that are acceptable for AOC,
     Alford and Alliance Group, in the opinion of each respective Board of
     Directors;
  3. that the pre-amalgamation undertakings made by AOC as set out under the
     'Pre-amalgamation undertakings' section are not breached before the day of
     the registration of the Amalgamation;
  4. Subject to what Alford and/or Alliance Group could reasonably have foreseen
     or had knowledge of, that no event occurs which is outside the control of
     Alliance Group and Alford, which will materially adversely affect the
     results, liquidity or profit of AOC; and
  5. Subject to what Alford and/or Alliance Group could reasonably have foreseen
     or had knowledge of, that the Amalgamation is not, in whole or in part,
     made impossible, made materially more difficult or negatively affected to a
     considerable extent by legislation, decisions of the courts, decisions by
     public authorities or other circumstances outside the control of AOC,
     Alford and Alliance Group in Sweden, Bermuda or Russia.

Alliance Group and Alford reserve the right to waive, in whole or in part, the
conditions to the Transaction other than the requirement for Shareholder
approval of the Amalgamation under Bermuda law. The Transaction may, however,
only be withdrawn with reference to condition 3 to 5 if the non-satisfaction of
such conditions is of material importance to Alford's acquisition of the
Shares. 

Information regarding the SGM, implementation of the Amalgamation and Alliance
Group's voting at the SGM 

Notice convening the SGM, which will be held on 2 December 2013 at 3.00 p.m.
CET at Nalen, Regeringsgatan 74, Stockholm, Sweden, will be available on 4
November 2013 (the 'Notice'). Holders of SDRs in Sweden will be sent an
information brochure summarizing the Amalgamation and a form of instruction to
enable them to cast their votes at the SGM. In addition, an information
memorandum will be made available on AOC's webpage around the time of the
Notice. 

SDR holders who hold their interest in Shares through SDRs will require
authorisation from Skandinaviska Enskilda Banken AB (publ) ('SEB') in order to
attend the SGM. The manner in which this authorisation may be requested will be
set out in the Notice. 

Alliance Group and its affiliated companies will be permitted to vote in favour
of the Transaction at the SGM in respect of all of the Shares beneficially held
through SDRs on their behalf. 

Upon Approval of the Amalgamation at the SGM, the record date for settlement of
the Cash Consideration (the 'Cash Consideration Record Date') will be confirmed
and notified to the market in due course and in well in advance of settlement.
Within approximately 10 days following Approval, provided that all other
conditions to the Transaction have been satisfied or waived, as appropriate,
the Amalgamation will be registered with the Bermuda Registrar of Companies,
which will issue a certificate of amalgamation confirming implementation of the
Amalgamation. As a result of the Amalgamation, Alford and AOC will be
amalgamated into Amalco and continue as one company. Following registration of
the Amalgamation, all of the Shares will be cancelled and the SDRs will be
delisted from NASDAQ OMX Stockholm. 

Shareholders who are entered in AOC's register of members kept at AOC's
registered office in Bermuda on the Cash Consideration Record Date are entitled
to receive the Cash Consideration. SEB will be responsible for on-payment of
the Cash Consideration to holders of SDRs who are entered in the register of
SDR holders kept by Euroclear Sweden AB on the Cash Consideration Record Date. 

Any SDR holders who hold their interest in Shares through SDRs who do not vote
in favour of the Amalgamation at the SGM are entitled, if they do not consider
the Cash Consideration to represent a fair price for their Shares, to apply to
the Court in Bermuda under Section 106 of the Companies Act 1981 of Bermuda (as
amended) for an appraisal of the fair value of their Shares. Such dissenting
shareholders are advised to obtain the advice of counsel before proceeding, and
the following does not constitute legal advice. In brief, dissenting
shareholders will likely be required to exchange their SDRs for registered
Shares, vote against the Amalgamation at the SGM and apply to the court for
appraisal within one month of the giving of the Notice of SGM. 

Right to postpone settlement of the Cash Consideration

Subject to relevant antitrust clearances, Alliance Group and Alford reserve the
right to defer the date for settlement of the Cash Consideration to a date not
occurring later than two weeks following completion of the Amalgamation. 

Statement from the Swedish Securities Council

On 1 September 2013, Alliance Group requested a statement from the Swedish
Securities Council (Sw. Aktiemarknadsnamnden) (the 'Securities Council') in
relation to interpretation of the NASDAQ OMX Stockholm Takeover Rules (Sw.
NASDAQ OMX Stockholms regler rorande offentliga uppkopserbjudanden pa
aktiemarknaden) (the 'Takeover Rules') and sound stock market practice in
Sweden in the context of the Transaction. 

The Securities Council concluded in AMN 2013:35 that, as AOC is a Bermuda
company and the Transaction is made by way of amalgamation under Bermuda law,
the Securities Council did not, from a sound stock market practice point of
view, have any additional requirements other than those required under Bermuda
law. The Securities Council, however, emphasised the importance of informing
the Shareholders of the planned actions in a manner as similar as possible to
the information which would have been required had AOC been a Swedish listed
company. Please refer to www.aktiemarknadsnamnden.se for the full statement. 

As the Stock Market (Takeover Bids) Act (Sw. lagen (2006:451) om offentliga
uppkopserbjudanden pa aktiemarknaden) and the Takeover Rules will not apply to
the Transaction, the Information Memorandum will not be registered with, or
approved by, the Swedish Financial Supervisory Authority. 

Alliance Group has agreed to comply with AOC's bye-laws, mandatory Bermuda law,
any special directions given in the SGM and the information requirements, as
appropriate, set out in Chapter 2a, section 2 of the Financial Instruments
Trading Act (Sw. lagen (1991:980) om handel med finansiella instrument) and
rule II.3 of the Takeover Rules. 

Delisting of SDRs and cancellation of Shares and SDRs

Following Approval of the Amalgamation by the Shareholders at the SGM and
registration of the Amalgamation by the Bermuda Registrar of Companies, the
SDRs will be cancelled, delisted from NASDAQ OMX Stockholm and deregistered
from Euroclear Sweden AB. 

Convertible Bonds Tender Offer

AOC is intending to launch a Convertible Bond Tender Offer and Consent
Solicitation for its outstanding Convertible Bonds on 4 November 2013. The
Convertible Bond Tender Offer and Consent Solicitation will be conditional upon
Approval of the Amalgamation being obtained at the SGM. Holders of the
Convertible Bonds who participate in the Convertible Bond Tender Offer and
Consent Solicitation by a specified early participation date will be offered,
by AOC, 105 of par, plus accrued but unpaid interest, which represents a 2.3
per cent. premium to the price of the Convertible Bonds as of 30 October 2013.
Holders of the Convertible Bonds who participate in the Convertible Bond Tender
Offer and Consent Solicitation after such early participation date will be
offered, by AOC, 100 of par. 

The Convertible Bond Tender Offer and Consent Solicitation is subject amongst
other things to completion of the Amalgamation, at the discretion of the
Independent Directors, and sufficient financing. 

Commitment and disputes

The Amalgamation (including the Implementation Agreement and the Amalgamation
Agreement) is governed by Bermuda law. Any dispute arising out of the
Transaction shall be subject to the jurisdiction of the Bermuda courts applying
Bermuda law. 

Preliminary timetable

 31 October 2013                  Announcement of the Transaction by AOC

4 November 2013                  Notice of SGM and Information Memorandum
published 

2 December 2013                  SGM

Announcement of SGM outcome, disclosure of last trading day, delisting, record
date and settlement date 

10 December 2013                Confirmation regarding all regulatory approvals
expected to be received 

11 December 2013                Delisting of the SDRs

11 December 2013       The Bermuda Registrar of Companies issues certificate of
amalgamation for Amalco 

13 December 2013                Cash Consideration Record Date

18 December 2013      Date for settlement of the Cash Consideration

All the dates above are preliminary and, inter alia, subject to relevant
regulatory clearances being obtained. A firm timetable will be announced by
Alliance Group and AOC in due time if the above dates change. 

Other Information

A conference call has been scheduled at 10.30 CET on Thursday October 31, 2013
to present the Transaction. The conference call will be hosted by Eric Forss,
Chairman of the Board, Alliance Oil Company, and Magomed A. Galaev, advisor to
the CEO of Alliance Group. Presentations slides will be available at
www.allianceoilco.com. 



To participate in the conference call you may choose one of the following
options: 



Web

The conference will be webcasted live at Alliance Oil's website
www.allianceoilco.com. 



Telephone

Dial one of the following numbers a few minutes before the conference starts:



Location        Local Number       Toll-Free    
------------------------------------------------
Russia          +7 (495) 580 9543               
------------------------------------------------
Sweden          + 46 8 505 202 78  0200 125 058 
------------------------------------------------
United Kingdom  +44 20 7190 1596   0800 358 5279
------------------------------------------------



Conference ID: 4648577

Advisors

Morgan Stanley & Co. International plc ('Morgan Stanley') is acting as
financial advisor and Linklaters (Swedish, English and Russian law) and Appleby
(Bermuda) Limited (Bermuda law) are acting as legal advisors to Alliance Group
and Alford in connection with the Transaction. Morgan Stanley is acting as
financial advisor to Betino Investments Ltd. ('Betino'), a wholly-owned
indirect subsidiary of OJSC Alliance Group in relation to the Transaction and
is not acting for any other person and accordingly will not be responsible to
any person other than Betino for providing the protections afforded to clients
of Morgan Stanley or for providing advice in relation to the contents of this
document or the Transaction or arrangements referred to herein. 

BofA Merrill Lynch and Carnegie are acting as financial advisors to the
Independent Directors in relation to the Transaction and are not acting for any
other person and accordingly will not be responsible to any person other than
the Independent Directors for providing the protections afforded to clients of
BofA Merrill Lynch and Carnegie or for providing advice in relation to the
contents of this document or the Transaction or arrangements referred to
herein. Baker & McKenzie (Swedish, English and Russian law) and Conyers Dill &
Pearman (Bermuda law) are acting as legal advisors to AOC in connection with
the Transaction. 

For additional information please contact:

Alliance Group

Magomed A. Galaev, Advisor to the CEO                             Phone: +7
495-212-2288 

Andrei Roumyantsev, Chief of PR Department                     Phone. +7
495-745-5810 

Morgan Stanley

Gergely Voros, Managing Director                                       Phone:
+7 495 287-2280 
E-mail: Gergely.Voros@morganstanley.com

Adrian Doyle, Managing Director                                         Phone:
+44 20 7425-7491 
E-mail: Adrian.Doyle@morganstanley.com

AOC

Eric Forss, Chairman of the Board                                       Phone +
46 8 611 49 90 

Pavel Kim, Head of Investor Relations                                 Phone. +7
495 777 18 08, ext 1056 
E-mail: pkim@aoil.ru

Jakob Sintring, Investor Relations                                       
Phone. +46 8 611 49 95 
E-mail: sintring@allianceoilco.com

BofA Merrill Lynch

Thomas Westin, Managing Director                                      Phone:
+46 8 459 12 80 
E-mail: Thomas.Westin@baml.com

Carnegie

Lars-Erik Sjoberg, Head of Investment Banking Sweden       Phone: +46 8 5886 85
00 
E-mail: Lars-Erik.Sjoberg@carnegie.se

Information about Alford, Alliance Group and AOC

Alford

Alford is a newly created subsidiary of Alliance Group, incorporated in Bermuda
for the purpose of the Amalgamation as an exempted company limited by shares
(registration number 48233). Alford has never conducted, and at present does
not conduct, any business. Its registered office is at Canon's Court, 22
Victoria Street, PO Box HM 1179, Hamilton HM EX, Bermuda. 

Alliance Group

OJSC Alliance Group is incorporated and existing under the laws of Russia as an
open joint stock company, with its registered offices at 39 Sivtsev Vrazhek,
Moscow 119002, Russia, owning assets in a range of sectors. 

Lambros Overseas S.A. is incorporated and existing under the laws of the
British Virgin Islands, with its first registered office at Shirley Trust
Company Limited, P.O. Box 3099, Road Town, Tortola, British Virgin Islands. 

AOC

Alliance Oil Company Ltd. is incorporated and existing under the laws of
Bermuda as an exempted company limited by shares (registration number 25413)
with its registered office at Clarendon House,            2 Church Street,
Hamilton HM 11, Bermuda. For further information, please see AOC's website at
www.allianceoilco.com. 

                                    - END -



IMPORTANT INFORMATION

Certain statements included in this press release constitute or are based on
forward-looking statements. Examples of forward-looking statements include,
among others, statements regarding the Alliance Group's future financial
position, income growth, assets, business strategy, leverage, projected levels
of growth, projected costs, plans and objectives for future operations,
statements related to the planned amalgamation of Alford and AOC and
anticipated benefits associated therewith, and other statements that are not
historical fact. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances, including,
but not limited to, domestic and global economic and business conditions, the
effects of continued volatility in credit markets, market related risks such as
changes in interest rates and exchange rates, effects of changes in valuation
of credit market exposures, changes in valuation of issued notes, the policies
and actions of governmental and regulatory authorities, changes in legislation,
the further development of standards and interpretations under International
Financial Reporting Standards (IFRS) applicable to past, current and future
periods, evolving practices with regard to the interpretation and application
of standards under IFRS, the outcome of pending and future litigation, the
success of future acquisitions and other strategic transactions and the impact
of competition - a number of such factors being beyond the Alliance Group's
control. These statements as they appear throughout this press release are not
guarantees of future performance and are subject to inherent risks and
uncertainties. Forward-looking statements may be identified by the fact that
they do not relate strictly to historical or current facts and include, without
limitation, words such as 'may,' 'will,' 'expects,' 'believes,' 'anticipates,'
'plans,' 'intends,' 'estimates,' 'projects,' 'targets,' 'forecasts,' 'seeks,'
'could,' or the negative of such terms, and other variations on such terms or
comparable terminology. Actual results could differ materially from those
expressed or implied in such forward-looking statements. 

Any forward-looking statements made herein speak only as of the date they are
made. Except as required by NASDAQ OMX Stockholm or applicable law, Alliance
Group expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained in this
announcement to reflect any change in Alliance Group expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based. The reader should, however, consult any additional
disclosures that Alliance Group has made or may make in documents it has filed
or may file with the Securities Exchange Commission. 

The Convertible Bonds Tender Offer and Solicitation is not being made, and will
not be made, directly or indirectly in or into, or by use of the mail of, or by
any means or instrumentality of interstate or foreign commerce of or of any
facilities of a national securities exchange of, the United States. This
includes, but is not limited to, facsimile transmission, electronic mail,
telex, telephone, the internet and other forms of electronic communication. The
Convertible Bonds may not be tendered in the Convertible Bonds Tender Offer and
Solicitation by any such use, means, instrumentality or facility from or within
the United States or by persons located or resident in the United States as
defined in Regulation S of the U.S. Securities Act of 1933 (the 'Securities
Act') or to U.S. persons as defined in Regulation S of the Securities Act. 





[1]    For example, if the registration of the Amalgamation takes place on 11
December 2013, each Preference Share holder will be entitled to receive from
the Company SEK 313 of principal amount per one Preference Share plus an
accrued dividend of SEK 7.5 multiplied by 12/91, which represents the
proportion of the number of days between 30-Nov-2013 and 11-Dec-2013
(inclusive) to the number of days between 30-Nov-2013 and 28-Feb-2014
(inclusive) (29-Nov-2013 and 28-Feb-2014 being the upcoming quarterly dividend
record dates).

Click on, or paste the following link into your web browser, to view the
associated documents

https://newsclient.omxgroup.com/cds/DisclosureAttachmentServlet?messageAttachmen
tId=449140

News Source: NASDAQ OMX



31.10.2013 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language:           English
Company:            Alliance Oil Company Ltd
                    
                     
                    Sweden
Phone:              
Fax:                
E-mail:             
Internet:           
ISIN:               XS0493579238
Category Code:      MSC
LSE Ticker:         0QBX
Sequence Number:    1736
Time of Receipt:    Oct 31, 2013 09:45:02
 
End of Announcement                             DGAP News-Service
 
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