PETROLEUM HEAT AND POWER CO., INC.
OFFER TO EXCHANGE
1,200,000 SHARES OF 12 7/8% SERIES B EXCHANGEABLE PREFERRED STOCK DUE 2009
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
FOR
1,200,000 SHARES OF 12 7/8% SERIES A EXCHANGEABLE PREFERRED STOCK DUE 2009
THAT WERE ISSUED AND SOLD IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
To Our Clients:
Enclosed for your consideration is a Prospectus dated April , 1996 (as
the same may be amended or supplemented from time to time, the "Prospectus") and
a form of Letter of Transmittal (the "Letter of Transmittal") relating to the
offer (the "Exchange Offer") by Petroleum Heat and Power Co., Inc., a Minnesota
corporation (the "Issuer") to exchange up to 1,200,000 shares of its 12 7/8%
Series B Exchangeable Preferred Stock with a liquidation preference of $25 per
share (the "New Preferred Stock") for an equal number of shares of its
outstanding 12 7/8% Series A Exchangeable Preferred Stock with a liquidation
preference of $25 per share (the "Old Preferred Stock") that were issued and
sold in a transaction exempt from registration under the Securities Act of 1933,
as amended.
The material is being forwarded to you as the beneficial owner of Old
Preferred Stock carried by us for your account or benefit but not registered in
your name. A tender of any Old Preferred Stock may be made only by us as the
registered holder and pursuant to your instructions. Therefore, the Issuer urges
beneficial owners of Old Preferred Stock registered in the name of a broker,
dealer, commercial bank, trust company or other nominee to contact such
registered holder promptly if they wish to tender Old Preferred Stock in the
Exchange Offer.
Accordingly, we request instructions as to whether you wish to tender any or
all Old Preferred Stock, pursuant to the terms and conditions set forth in the
Prospectus and Letter of Transmittal. We urge you to read carefully the
Prospectus and Letter of Transmittal before instructing us to tender to your Old
Preferred Stock.
Your instructions to us should be forwarded as promptly as possible in order
to permit us to tender Old Preferred Stock on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
New York City time, on , , 1997, unless extended (the "Expiration
Date"). Old Preferred Stock tendered pursuant to the Exchange Offer may be
withdrawn, subject to the procedures described in the Prospectus , at any time
prior to 5:00 p.m.. on the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for the exchange of 1,200,000 shares of the
New Preferred Stock for an equal number of shares of the Old Preferred Stock
with the Holders thereof. The terms of the New Preferred Stock are identical
in all material respects to the terms of the Old Preferred Stock, except
that the New Preferred Stock has been registered under the Securities Act of
1933, as amended, is freely tradable by the holders thereof (except as
provided in the Prospectus) and, therefore will not bear legends restricting
its transfer and will not contain certain terms providing for an increase in
the dividend on the Old Preferred Stock under certain circumstances as
provided in the Registration Rights Agreement dated as of February 18, 1997
between the Company and Donaldson, Lufkin & Jenrette Securities Corporation,
the Initial Purchaser of the Old Preferred Stock. The Company is effecting
the Exchange Offer in order to satisfy certain obligations of the Company
contained in the Registration Rights Agreement.
2. THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CONDITIONS, SEE "THE
EXCHANGE OFFER--CONDITIONS" IN THE PROSPECTUS.
3. The Exchange Offer and withdrawal rights will expire at 5:00 p.m.,
New York City time, on , 1997, unless extended.
4. The Issuer has agreed to pay the expenses of the Exchange Offer
except as provided in the Prospectus and the Letter of Transmittal.
5. Any transfer taxes incident to the transfer of Old Preferred Stock
from the tendering Holder to the Issuer will be paid by the Issuer, except
as provided in the Prospectus and the Letter of Transmittal.
The Exchange Offer is not being made to nor will exchange be accepted from
or on behalf of holders of Old Preferred Stock in any jurisdiction in which the
making of the Exchange Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction.
If you wish to have us tender any or all of your Old Preferred Stock held by
us for your account or benefit, please so instruct us by completing, executing
and returning to us the instruction form that appears below. The accompanying
Letter of Transmittal is furnished to you for informational purposes only and
may not be used by your to tender Old Preferred Stock held by us and registered
in our name for your account or benefit.
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer of Petroleum Heat
and Power Co., Inc., including the Prospectus and the Letter of Transmittal.
This form will instruct you to exchange the aggregate number of shares Old
Preferred Stock indicated below (or, if no aggregate number amount is indicated
below, all Old Preferred Stock) held by you for the account or benefit of the
undersigned, pursuant to the terms and conditions set forth in the Prospectus
and Letter of Transmittal.
Number of shares of Old Preferred Stock to be exchanged
$ *
* I (we) understand that if I (we) sign these -------------------------------------------------
instruction forms without indicating an aggregate
number of shares Old Preferred Stock in the space
above, all Old Preferred Stock held by you for my
(our) account will be exchanged.
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Signature(s)
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(Please print name(s) and address above)
Dated: , 1997
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(Area Code & Telephone Number)
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(Taxpayer Identification or
Social Security Number)
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