Alliance Oil Company Ltd. announces Tender Offer and Proposal for its U.S.$265,000,000 7.25 per cent. Convertible Bonds due 2014 (convertible into Swedish Depositary Receipts representing Ordinary Shares (the Bonds)

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS OR TO ANY U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED) (SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW)

4 November 2013 Alliance Oil Company Ltd. (the Company) today announces its invitations to:

1. holders (the Bondholders) of the Bonds to tender any and all of their Bonds for purchase by the Company for cash (such invitation the Offer); and
2. Bondholders to approve, by Extraordinary Resolution, the modification of the terms and conditions of the Bonds (the Conditions) to provide the Company the option to redeem (the Call Option) all, but not some only, of the Bonds remaining (if any) on completion of the Offer (together the Proposal),

subject, in each case, to the terms and conditions set out in the Tender and Consent Memorandum dated 4 November 2013 (the Tender and Consent Memorandum) including, in the case of the Offer, the offer and distribution restrictions described below and set out more fully in the Tender and Consent Memorandum.

Copies of the Tender and Consent Memorandum are available from the Tender and Tabulation Agent as set out below. Capitalised terms used in this announcement but not defined have the meanings given to them in the Tender and Consent Memorandum

* The total consideration payable to Bondholders who submit tender instructions prior to the Early Tender Deadline and whose Bonds are accepted for purchase pursuant to the Offer comprises (i) the Purchase Price of 100 per cent. and (ii) the Early Tender Payment of 5 per cent. in each case of the principal amount of the relevant Bonds, plus Accrued Interest, all as further described herein.

Rationale for the Offer and the Proposal

On 31 October 2013 the Boards of Directors of Lambros Overseas S.A. and OJSC Alliance Group (together Alliance Group) and the Company announced a recommended transaction, pursuant to which the Company would become wholly owned by Alliance Group by way of an amalgamation between the Company and Alford Financial Ltd (Alford), which is a jointly owned subsidiary of Alliance Group. Under the terms and conditions of the transaction, which is to be implemented under Bermuda law, Alliance Group would acquire all of the ordinary shares in the Company (the Ordinary Shares) and preference shares in the Company (the Preference Shares and together with the Ordinary Shares, the Shares), each represented by Swedish Depositary Receipts (SDRs), which are held by parties other than Alliance Group and its affiliated companies (the Transaction). As of 30 September 2013, Alliance Group and its affiliated companies controlled 45 per cent. of the SDRs over Ordinary Shares in the Company and 7 per cent. of the SDRs over Preference Shares in AOC. In total, Alliance Group controls approximately 43 per cent. of the votes in AOC.

In view of the above mentioned paragraph and the fact that the Transaction (if completed) will result in the cancellation of all Shares in the Company, the Company wishes to provide to the Bondholders an opportunity for their Bonds to be purchased and for the Company to be able to acquire all outstanding Bonds.

On the date of this announcement the Alliance Group has published an information memorandum (the Information Memorandum) in connection with the Transaction. For the avoidance of doubt the Information Memorandum is not incorporated by reference into this announcement or the Tender and Consent Memorandum and is referred to for information purposes only. None of the Company, the Dealer Manager, the Tender and Tabulation Agent or the Trustee has any responsibility to the Bondholders for the information contained in the Information Memorandum.

The Dealer Manager and its affiliates have provided and continue to provide certain investment banking services to the Company for which it has received and will receive compensation that is customary for services of such nature. The Dealer Manager has acted as financial advisor to the Company in connection with the Transaction.

Details of the Offer

In order to participate in the Offer, Bondholders must validly tender their Bonds for purchase by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender and Tabulation Agent by 4.00 p.m. (London time) on 22 November 2013 (the Expiration Deadline).

The Company will pay, on the Settlement Date, a cash purchase price (the Purchase Price) equal to 100 per cent. of the principal amount of the Bonds accepted by it for purchase pursuant to the Offer.

Each Bondholder that validly tenders its Bonds by 4.00 p.m. (London time) on 13 November 2013 (the Early Tender Deadline) (and does not subsequently revoke such tender in the limited circumstances in which such revocation is permitted) and whose Bonds are accepted for purchase pursuant to the Offer will receive, in addition to the Purchase Price and the relevant Accrued Interest Payment, and as additional consideration for its tender of Bonds, an additional cash payment (the Early Tender Payment) equal to 5 per cent. of the principal amount of the relevant Bonds.

Without limitation to the Company’s right to reject any tender of Bonds under the Offer for any reason, the Company proposes, subject to the conditions to the Offer (see Transaction and Financing Conditions below), to accept any and all validly tendered Bonds for purchase. If the Company decides in its sole discretion to accept valid tenders of any Bonds for purchase to the Offer, it will accept for purchase all of the Bonds so validly tendered, without scaling.

To be eligible for the Purchase Price and (where applicable) the Early Tender Payment, Bondholders who tender their Bonds must not attend, or seek to attend, the Meeting in person or make any other arrangements to be represented at the Meeting (other than by way of the relevant Tender Instructions). Any such Bondholder that separately seeks to appoint a proxy to vote at the relevant Meeting on its behalf or attends the Meeting in person or makes other arrangements to be represented at the Meeting (other than by way of the relevant Tender Instructions) will not be eligible for the Purchase Price and (where applicable) the Early Tender Payment, irrespective of whether such Bondholder has delivered a Tender Instruction or such other arrangements are made by the above deadlines.

The Company will also pay, on the Settlement Date, an Accrued Interest Payment in respect of those Bonds accepted for purchase pursuant to the Offer.

Details of the Proposal

The Company is inviting the holders of the Bonds to approve certain modifications to the Conditions of the Bonds to provide the Company the option to redeem all, but not some only, of the Bonds remaining (if any) on completion of the Offer, at an early redemption price of 100 per cent. of the principal amount of the Bonds (the Early Redemption Amount) plus Accrued Interest, subject to the conditions to the implementation of such modifications to the Conditions being satisfied or waived by the Company (see Transaction and Financing Conditions below).

Bondholders should refer to the Notice and the draft Supplemental Trust Deed for full details of the manner in which the Conditions will be modified as referred to above.

By tendering Bonds in the Offer, Bondholders will automatically instruct the Agent to arrange for the appointment of one or more representatives of the Tender and Tabulation Agent as a proxy to vote in favour of the Extraordinary Resolution at the Meeting. It will not be possible to validly tender Bonds in the Offer without at the same time giving such instructions to the Agent.

Transaction and Financing Conditions

The purchase of the Bonds is, at the Company’s option, conditional on:

(i) the successful completion of the amalgamation between the Company and Alford Financial Ltd (Alford) as approved by the shareholders of The Company (under Bermuda law and the Company’s bye-laws by resolution passed in a special general meeting of shareholders of The Company convened by the board of directors of the Company);

(ii) the issue of a Certificate of Amalgamation by the Registrar of Companies in Bermuda with respect to the amalgamation;  and

(iii) the Company obtaining financing on terms satisfactory to it (in its absolute discretion) to enable it to finance the purchase of Bonds tendered pursuant to the Offer, the payment of the Early Tender Payment and the Early Consent Amount, and the redemption of the Bonds pursuant to the exercise of the Call Option.

The Meeting, the Extraordinary Resolution and Implementation of the Proposal

Notice (the Notice) of a meeting (the Meeting) of the Bondholders to be held at the offices of Baker & McKenzie LLP, 100 New Bridge Street, London EC4V 6JA, United Kingdom on 26 November 2013 in the form set out in the Annex to the Tender and Consent Memorandum has been given to Bondholders in accordance with the Conditions by delivery of the Notice to Euroclear and Clearstream, Luxembourg and via the website of the Luxembourg Stock Exchange (www.bourse.lu). The Meeting will commence at 4.00 p.m. (London time).

At the Meeting, the Bondholders will be asked to consider and, if thought fit, pass an extraordinary resolution as set out in the Notice (the Extraordinary Resolution), which will provide, among other things, for the Trustee to be authorised and requested to concur in and execute the Supplemental Trust Deed to effect the necessary modifications pursuant to the Extraordinary Resolution which will implement the Proposal.

If passed, the Extraordinary Resolution shall be binding on all Bondholders, whether present or not at the Meeting and whether or not voting. The implementation, if passed, of the Extraordinary Resolution is conditional on the acceptance for purchase by the Company of the Bonds that have been validly tendered in the Offer and the execution of the Supplemental Trust Deed.

Voting Only Instructions in favour of the Proposal

Any Bondholder who does not wish, or who is not able, to tender its Bonds for purchase pursuant to the Offer may be eligible, to the extent permitted by applicable laws and regulations, to receive an amount of 5 per cent. of the principal amount of such Bondholder’s Bonds (the Early Consent Amount) as subject to the conditions set out in the Tender Offer Consent Memorandum.

In order to be eligible for the Early Consent Amount, Bondholders must deliver, or arrange to have delivered on their behalf, a valid Voting Only Instruction in favour of the Proposal that is received by the Tender and Tabulation Agent by the Early Tender Deadline. Eligibility for the Early Consent Amount is subject in each case to the relevant Voting Only Instruction not being subsequently revoked (in the limited circumstances in which such revocation is permitted).

By submitting a Voting Only Instruction in favour of the Proposal, Bondholders will automatically instruct the Agent to arrange for the appointment of one or more representatives of the Tender and Tabulation Agent as a proxy to vote in favour of the Extraordinary Resolution at the Meeting. It will not be possible to validly submit Voting Only Instructions in favour of the Proposal without at the same time giving such instructions to the Agent.

Payment of any Early Consent Amount is further conditional on the acceptance by the Company of the Bonds validly tendered in the Offer, the passing of the Extraordinary Resolution and the execution by the Company and the Trustee of the Supplemental Trust Deed, and satisfaction or waiver of the Transaction and Financing Conditions.

Where payable, the Early Consent Amount will be paid by the Company to relevant Bondholders on the Settlement Date in the same manner as the payment of the Purchase Price and Early Tender Payment (if applicable) is made to eligible Bondholders.

Announcements

The Company will announce the result of the Meeting, and its decision whether to accept valid tenders of Bonds for purchase pursuant to the Offer, as soon as reasonably practicable after the Meeting.

General

The Company may at any time, in its sole discretion, extend, re-open, amend, waive any condition of or terminate the Offer and/or the Proposal (other than any amendment to the terms of the Extraordinary Resolution), subject to applicable law and as provided in the Tender and Consent Memorandum. Details of any such extension, re-opening, amendment, waiver or termination will be announced as soon as reasonably practicable after the relevant decision is made.

Under the Offer and the Proposal, all Tender Instructions and Voting Only Instructions in favour of the Proposal will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum. Bondholders are advised to check with any bank, securities broker or other intermediary through which they hold Bonds when such intermediary would require to receive instructions from a Bondholder in order for that Bondholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer or the Proposal before the deadlines specified below.

Indicative Timetable

This is an indicative timetable showing one possible outcome for the timing of the Offer and the Proposal based on the dates in the Tender and Consent Memorandum and assuming that the Meeting is not adjourned. This timetable is subject to change and dates and times may be extended, re-opened or amended by the Company in accordance with the terms of the Offer and the Proposal as described in the Tender and Consent Memorandum. All the dates below are preliminary and, inter alia, subject to relevant regulatory clearances being obtained to execute the proposed amalgamation between Alford and the Company.  Accordingly, the actual timetable may differ significantly from the timetable below.

The above dates and times are subject to the right of the Company to extend, re-open, amend, and/or terminate the Offer and/or the Proposal. Bondholders are advised to check with any bank, securities broker or other intermediary through which they hold Bonds when such intermediary would require to receive instructions from a Bondholder in order for that Bondholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer or the Proposal before the deadlines specified above.

The deadlines set by any such intermediary and each Clearing System for the submission of Tender Instructions and Voting Only Instructions will be earlier than the relevant deadlines above.

Subject as provided in the Tender and Consent Memorandum, the Settlement Date for the Offer and the Proposal may be earlier or later than the above date and could be different. The Company will confirm the final Settlement Date for the Offer and the Proposal at the same time as the announcement(s) of the results of the Offer and the Proposal.

The Company is under no obligation to accept any tender of Bonds for purchase pursuant to the Offer. Tenders of Bonds for purchase may be rejected in the sole discretion of the Company for any reason and the Company is under no obligation to Bondholders to furnish any reason or justification for refusing to accept a tender of Bonds for purchase. For example, tenders of Bonds may be rejected if the Offer is terminated, if any such tender does not in the determination of the Company comply with the requirements of a particular jurisdiction or if the Company decides not to accept any tenders of Bonds should the Extraordinary Resolution not be passed or for any other reason.

Unless stated otherwise, announcements will be made: (i) by the issue of a press release to a Notifying News Service; (ii) by the delivery of notices to the Clearing Systems for communication to Direct Participants; and (iii) via the website of the Luxembourg Stock Exchange, and may also be found on the relevant Reuters International Insider Screen. Copies of all announcements, notices and press releases can also be obtained from the Tender and Tabulation Agent.

Bondholders are advised to read carefully the Tender and Consent Memorandum for full details of and information on the procedures for participating in the Offer and the Proposal.

Requests for information in relation to the Offer or the Proposal should be directed to:

Requests for information in relation to the procedures for tendering Bonds and participating in the Offer, and the submission of a Tender Instruction or a Voting Only Instruction in favour of the Proposal should be directed to:

DISCLAIMER This announcement must be read in conjunction with the Tender and Consent Memorandum. This announcement and the Tender and Consent Memorandum contain important information which should be read carefully before any decision is made with respect to the Offer or the Proposal. If any Bondholder is in any doubt as to the action it should take or is unsure of the impact of the implementation of the Proposal or the Extraordinary Resolution to be proposed at the Meeting, it is recommended to seek its own financial and legal advice, including as to any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial or legal adviser. Any individual or company whose Bonds are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to tender Bonds in the Offer or otherwise participate in the Proposal. None of the Dealer Manager, the Tender and Tabulation Agent, the Trustee or the Company makes any recommendation whether Bondholders should tender Bonds in the Offer or otherwise participate in the Proposal.

OFFER AND DISTRIBUTION RESTRICTIONS

Neither this announcement nor the Tender and Consent Memorandum constitutes an offer to buy or the solicitation of an offer to sell Bonds (and tenders of Bonds for purchase pursuant to the Offer will not be accepted from Bondholders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer and either Dealer Manager or any of their respective affiliates is such a licensed broker or dealer in any such jurisdiction, the Offer shall be deemed to be made by such Dealer Manager or such affiliate, as the case may be, on behalf of the Company in such jurisdiction.

The distribution of this announcement and/or the Tender and Consent Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender and Consent Memorandum comes are required by the Company, the Dealer Manager and the Tender and Tabulation Agent to inform themselves about, and to observe, any such restrictions.

United States: The Offer 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 Bonds may not be tendered in the Offer 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, as amended (the Securities Act) or to U.S. persons as defined in Regulation S of the Securities Act (each a U.S. Person). Accordingly, copies of this announcement, the Tender and Consent Memorandum and any other documents or materials relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any U.S. Person. Any purported tender of Bonds in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Bonds made by, or by any person acting for the account or benefit of, a U.S. Person or by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

This announcement and the Tender and Consent Memorandum are not offers of securities for sale in the United States or to U.S. persons. Securities may not be offered or sold in the United States absent registration under, or an exemption from the registration requirements of, the Securities Act. The Bonds have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, U.S. persons. The purpose of this announcement and the Tender and Consent Memorandum is limited to the Offer and the Tender and Consent Memorandum may not be sent or given to a person in the United States or otherwise to any person other than in an offshore transaction in accordance with Regulation S under the Securities Act.

Each holder of Bonds participating in the Offer will represent that it is not a U.S. Person, it is not located in the United States and is not participating in the Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in the Offer from the United States and is not a U.S. Person. For the purposes of this and the above paragraph, United States means the United States of America, its territories and possessions.

Italy: None of the Offer, this announcement, the Tender and Consent Memorandum or any other documents or materials relating to the Offer have been or will be submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations.

The Offer is being carried out in the Republic of Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 3 of CONSOB Regulation No. 11971 of 14 May 1999, as amended (the Issuers’ Regulation).

Accordingly, the Offer is only addressed to holders of Bonds located in the Republic of Italy who are “qualified investors” (investitori qualificati) as defined pursuant to and within the meaning of Article 100 of the Financial Services Act and article 34 ter, paragraph 1, letter (b) of the Issuers’ Regulation (Eligible Italian Investors). Holders of Bonds located in Italy that do not qualify as Eligible Italian Investors may not participate in the Offer and neither this announcement, the Tender and Consent Memorandum nor any other documents or materials relating to the Offer may be distributed or otherwise made available to them, as part of the Offer.

Eligible Italian Investors can tender Bonds through authorized persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Bonds or the Offer.

United Kingdom: The communication of this announcement, the Tender and Consent Memorandum and any other documents or materials relating to the Offer is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Financial Promotion Order)) or persons who are within Article 43(2) of the Financial Promotion Order or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

France: The Offer is not being made, directly or indirectly, to the public in the Republic of France (France). Neither this announcement, the Tender and Consent Memorandum nor any other documents or materials relating to the Offer have been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d’investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés) other than individuals, in each case acting on their own account and all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code Monétaire et Financier, are eligible to participate in the Offer. This announcement, the Tender and Consent Memorandum and any other document or material relating to the Offer have not been and will not be submitted for clearance to nor approved by the Autorité des Marchés Financiers.