A Saudi Arabian prince has pledged up to $360 million of equity capital toward Commonwealth Oil Refining Inc.'s plan to purchase bankrupt Circle K Corp.

Prince Turki bin Fahd bin Jalawki Al Saud, a former commander of the Mujahedin in Afghanistan, would obtain 42.5% interest in Commonwealth Oil in return for the equity capital, according to Commonwealth Chairman Stanford Phelps.

Commonwealth would use the proceeds to buy out convenience store Circle K's senior notes and bank debt, Phelps said. The store operator's bank debt is estimated at about $340 million, while the senior notes total about $180 million, Commonwealth sources said.

The banks and senior noteholders together would also get a 20% equity stake in the reorganized Circle K. Commonwealth would get an 80% stake.

"Everybody wins on the thing, which is the way it should be," Phelps said yesterday.

He expects the $360 million to be held in escrow by Citibank, Phelps said Commonwealth Oil's amended reorganization plan could be filed in a Phoenix court by tomorrow.

Judy States, a Circle K spokeswoman, said her company had seen a press release on the revised plan but had not been contacted by Commonwealth Oil or its counsel. She said the company is withholding comment for the time being.

However, she added: "We have a signed contract for the purchase of the company by CK Acquisitions, which is supported by three of the four creditor groups." The contract calls for a $399.5 million purchase price, she said.

Commonwealth first proposed a reorganization plan in October. Under that plan, the company would become the predominant stockholder in the reorganized Circle K. Commonwealth would then pay off creditors with new secured notes.

Under the amended plan, Commonwealth would pay the banks and senior noteholders about $350 million in cash. That figure is slightly more than what is called for in Circle K's own plan, which is based on its acquisition by CK Acquisition Corp.

The unsecured creditors, most of whom are Circle K trade suppliers, would be paid cash under Commonwealth's amended plan in an amount slightly more than under the CK Acquisition plan.

Phelps added that his company's amended plan also has the advantage of ending the bondholders' litigation against Circle K's banks, since it offers them an equity stake in the reorganized company. Because the company's plan offers the bondholders nothing, they lose nothing if they continue their litigation, he said.

"Since the Commonwealth plan provides bondholders with a meaningful recovery, there is a real incentive to put all the litigation behind us and wrap up the case," Duncan N. Darrow, an attorney with Anderson Kill Olick & Oshinsky P.C., which represents the Official Bondholders Committee in the Circle K case, said in the release. "We assume the other creditors should like the Commonwealth deal, since it gives them all cash and more cash than the CK deal does."

Although they support certain aspects of the Commonwealth plan, bondholders have not given up on their own reorganization plan, which was filed Oct. 21, a spokesman for Anderson Kill said.

In secondary trading yesterday, high-yield bonds were mostly unchanged. High-grades followed Treasuries slightly higher.

New Issues

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