LUKoil increases bond issue from $270m to $350m

LUKoil said today as a result of a successful beginning of the placement of the company's bonds convertible into Global Depository Receipts (GDRs) and issued for foreign investors, a decision had been made to increase the volume of the issue up to $350m including a greenshoe option. Morgan Stanley & Co. International Ltd. and UBS Warburg were appointed as the lead managers of the issue.

As it was reported earlier, LUKoil announced plans to place $300m in bonds among foreign investors. Later the securities will be converted into GDRs issued for LUKoil shares, the company's press service reported. LUKoil's common shares are traded in the form of ADRs at the London Stock Exchange. The bonds and GDRs are also expected to be admitted there. The maturity of the bonds is 5 years. Holders may redeem the bonds by converting them into LUKoil shares at any time 40 days after the date of the beginning of the issue.

Bonds were issued under LUKoil's guarantees. The Russian government has never used and will never use its stake in LUKoil for issuing convertible bonds. Revenues from this issue will be used to pay off the company's current debts and to invest in promising projects in the Russian oil sector.

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