CORRAL PETROLEUM HOLDINGS AB (PUBL) - Preem

RISK FACTORSThe risk factors below are associated with our company. You should carefully consider the risks anduncertainties described below. The risks and uncertainties described below are not the only ones we face. Additionalrisks and uncertainties of which we are not aware or that we currently believe are immaterial may also adversely affectour business, financial condition, results of operation, cash flows or prices of our securities. If any of the possible eventsdescribed below occur, our business, financial condition or results of operations could be materially and adverselyaffected. If that happens, we may not be able to pay interest or principal on the Senior Secured Notes when due and youcould lose all or part of your investment. The selected order in which the following risks are presented does not have anysignificance in regard to the likelihood of their realization or the severity of their economic impact on us.This Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actualresults may differ materially from those anticipated in these forward-looking statements as a result of various factors,including the risks described below and elsewhere in this Annual Report.Risks related to our BusinessOur substantial indebtedness could adversely affect our operations or financial results and prevent us from fulfillingour debt obligations.We have and will continue to have a substantial amount of outstanding indebtedness and obligations withrespect to the servicing of such indebtedness. As of December 31, 2010, our total debt on a consolidated basis (consistingof total long-term debt and total current debt) was SEK 14,630 million (€1,625 million) (including approximately €320million and $305 million of Senior Secured Notes and Subordinated Notes), and the amount available under ourunutilized credit facilities was SEK 1,926 million (€214 million). Our substantial indebtedness could adversely affectour operations or financial results and could have important consequences for you. For example, such indebtednesscould:make it more difficult for us to fulfill our obligations under the Senior Secured Notes and other agreementsto which we are a party (see “Description of Certain Indebtedness”) and our failure to fulfill any suchobligations could result in a default under the related obligation which could, in turn, result in a crossdefaultunder our other indebtedness;restrict our ability to borrow money in the future for working capital, capital expenditures, acquisitions orother purposes;expose us to the risk of increased interest rates with respect to the debt we carry at variable interest rates;make us more vulnerable to economic downturns and adverse developments in our business;reduce our flexibility in responding to changing business and economic conditions, including increasedcompetition in the oil and gas industry; andlimit our ability to take advantage of significant business opportunities, to respond to competitive pressuresand to implement our business strategies.The 2008 Credit Facility matures on September 17, 2011 and the Senior Secured Notes mature on September18, 2011. We are considering a number of alternatives with respect to repayment or refinancing the Senior SecuredNotes and the 2008 Credit Facility. There can be no assurances that we will be able to repay or refinance the SeniorSecured Notes or the 2008 Credit Facility prior to their maturities. If we are unable to refinance or repay theseobligations, the lenders and the holders of the Senior Secured Notes may proceed against the collateral securing theseobligations, which collateral securing the 2008 Credit Facility includes our refineries.We are a holding company with no revenue generating operations of our own. We depend on our subsidiaries andour shareholder to distribute cash to us.We are a holding company. As a holding company, to meet our debt service and other obligations, we aredependent upon equity contributions from our parent company, Moroncha Holdings, or its shareholder, dividends,permitted repayment of intercompany debt, if any, and other transfers of funds from Preem. Substantially all of ourassets consist of 100% of the share capital of Preem.Preem is currently prohibited from declaring any dividends or otherwise transferring any funds to us under the2008 Credit Facility, subject to limited exceptions as described elsewhere in this Annual Report. See “Description ofCertain Indebtedness—2008 Credit Facility.”Additional restrictions on the distribution of cash from our subsidiaries arise from, among other things,applicable corporate and other laws and regulations and by the terms of other agreements to which Preem is or maybecome subject. Under Swedish law, Preem may only pay a dividend to the extent that it has sufficient distributable1