RIO DE JANEIRO, April 1, 2015 /PRNewswire/ -- Oi S.A.
("Oi" - Bovespa: OIBR3, OIBR4; NYSE: OIBR and OIBR.C), pursuant to
art. 157, paragraph 4, of Law No. 6,404/76 and Instruction No.
358/02 of the Brazilian Securities and Exchange Commission
(Comissao de Valores Mobiliarios – CVM), and in furtherance
with the Material Fact published on March
26, 2015, informs its shareholders and the market in
general, that on this date, Telemar Participacoes S.A. ("TmarPart")
disclosed the following Material Fact.
"Telemar Participacoes S.A. ("TmarPart"), pursuant to art. 157,
paragraph 4, of Law No. 6,404/76 and Instruction No. 358/02 of the
Brazilian Securities and Exchange Commission (Comissao de
Valores Mobiliarios – CVM), and in furtherance of the Material
Fact published on March 26, 2015,
informs that, in the shareholders' meeting scheduled for
March 31, 2015, in accordance with
the terms of TmarPart's Shareholders' Agreement, the management of
TmarPart and Oi, respectively, received the approval to begin
taking the applicable steps to adopt a set of measures to meet the
main goals of the planned business combination of Oi, TmarPart, and
Portugal Telecom, SGPS, S.A. ("PT SGPS"), as published on
February 20, 2014, (the
"Transaction"), according to the terms below.
The shareholders of TmarPart unanimously approved the adoption
of an alternative share structure, after analyzing options and
taking into consideration the current obstacles to a registration
of TmarPart shares with the U.S. Securities and Exchange Commission
("SEC") that would be necessary to allow the incorporacao de
acoes ("Merger of Shares") of Oi and TmarPart, as described in
the Material Fact of March 26, 2015.
The adopted alternative share structure allows the main goals of
the Transaction to be met, with Oi able to adopt the corporate
governance best practices prescribed by the regulations of the
Novo Mercado segment of the BM&F Bovespa S.A. – Bolsa
de Valores, Mercadorias e Futuros ("BM&F Bovespa") and
disperse its voting rights, keeping in mind the final objective of
opportunely completing the Transaction with the result of listing
the shares currently held by Oi shareholders, and, at a later
point, those of the shares held by PT SGPS, on the Novo
Mercado.
1. Measures Approved by the Shareholders of TmarPart to Meet
the Goals of the Transaction
The alternative share structure includes a voluntary exchange of
Oi's preferred shares for common shares (in other words, at the
option of the preferred shareholder), at an exchange rate of 0.9211
common shares for each preferred share issued by Oi, as already
published for the Merger of Shares between Oi and TmarPart, and
used for the pricing of the public offering of shares by Oi on
April 28, 2014.
The voluntary exchange proposal requires that at least
two-thirds of Oi's preferred shareholders (ex-treasury) agree to
exchange their shares for common shares (the "Condition for the
Exchange"), within a period of 30 days, commencing after the
General Shareholders' Meeting of Oi at which the opening of the
period for the exchange is deliberated (the "Voluntary Exchange of
Preferred Shares").
As preliminary steps for the beginning of the period for the
Voluntary Exchange of Preferred Shares, the following steps, which
are closely related to one another, need to be approved and
implemented simultaneously, concurrently and inseparable one from
the other (the "Preliminary Steps"):
(i) Merger of the entities that directly or indirectly own
shares of Oi ("Simplification of Corporate Ownership");
(ii) Approval of the new by laws of Oi, reflecting the
improved standards of Oi's corporate governance;
(iii) Election of Oi's new Board of Directors, with a term
expiring at the General Shareholders' Meeting that approves Oi's
financial statements for the year ending on December 31, 2017.
2. Main Steps of the Simplification of Corporate
Ownership
The following corporate restructuring transactions will be
completed with the goal of simplifying the share capital structure
of Oi, and are to be deliberated during the shareholders' general
meetings, to be held on the same date, and before the start of the
period for the Voluntary Exchange of Preferred Shares: (i) merger
of AG Telecom Participacoes S.A. ("AG Tel") into Pasa Participacoes
S.A. ("PASA"), LF Tel S.A. ("LF") into EDSP75 Participacoes S.A.
("EDSP75"), and PASA and EDSP75 into Bratel Brasil S.A. ("Bratel");
(ii) merger of Valverde Participacoes S.A. into TmarPart; (iii)
merger of Venus RJ Participacoes S.A. ("Venus"), Sayed RJ
Participacoes S.A. ("Sayed") and PTB2 into Bratel; (iv) merger of
Bratel into TmarPart; and finally (v) the merger of TmarPart into
Oi.
As previously disclosed in the Material Fact, dated February 20, 2014, the Simplification of
Corporate Ownership will be done without diluting the interests of
the other shareholders that hold interests in the companies
involved, given that the established exchange ratios solely take
into account the direct and indirect interests between them and in
Oi's share capital, observing the premise that these companies will
not have, with the possible exception of goodwill recorded in
relation to their investments, relevant assets or liabilities (or
they will have sufficient cash and cash equivalents to fully repay
such liabilities). Any goodwill, or other assets, recorded by the
companies whose structure will be simplified may be transferred to
Oi or to TmarPart, as the case may be, for the benefit of their
shareholders, and these amounts will not be considered when
establishing exchange ratios.
The TmarPart Shareholders' Agreements will terminate as a
consequence of the Simplification of Corporate Ownership
3. Proposal for New Oi Bylaws
The shareholders of TmarPart approved the proposal for new
by-laws of Oi that will be submitted to the Board of Directors and
the General Meeting of Oi's shareholders, which will allow Oi to
adopt improved levels of corporate governance, as well as to
disperse the right to vote, in accordance with governance pledges
made with to market.
Oi's new bylaws will include, among other things, the following
main provisions:
(i) A 100% tag along for common shares;
(ii) Preferred shares without the right to vote, but
would maintain the rights currently held by the preferred
shareholders;
(iii) Convertibility of the preferred shares, during
the time periods and in accordance with the conditions approved by
the Board of Directors;
(iv) The voting rights of a single shareholder cannot
exceed 15%;
(v) As stipulated by the Regulations of the Novo
Mercado, at least 20% of the Directors must be independent;
(vi) A collective term of two years for the members of
the Board of Directors, with exception to the first Board of
Directors, which shall have a term of three years;
(vii) Prohibition against the same person holding the
positions of Chairman of the Board of Directors and Chief Executive
Officer (except during the first three years from adoption of the
new Bylaws);
(viii) The Board of Directors is obligated to
address any public offer to repurchase Oi's shares;
(ix) The requirement to complete an offer to purchase
common shares at a price at least equal to the economic value of
the shares in the case of termination of the registration or exit
from Level 1 Corporate Governance of the BM&F Bovespa, except
in the event that Oi enters the Level 2 Corporate Governance or the
Novo Mercado segment of the BM&F Bovespa;
(x) Mandatory resolution of disputes or
controversies through arbitration in front of the Market
Arbitration Chamber (Camara de Arbitragem do Mercado).
The limitation on voting rights will cease to be in effect in
the following events:
(i) capital increase or corporate reorganization that
results in a dilution of the current shareholder base of more than
50%;
(ii) as a result of an offer to purchase all outstanding
common shares of Oi in which the offeror acquires at least 20% of
the outstanding common shares or such offeror or group of
shareholders representing the same or related interest of the
offeror by voting agreement comes to hold, either individually or
together, an interest in excess of 50% of Oi's voting capital;
or
(iii) at any time, no shareholder of Oi or group of
shareholders representing the same or related interest by voting
agreement, holds, individually or together, an interest in excess
of 15% of Oi's voting capital.
4. Commitment to Convert Shares Assumed by the Shareholders
of TmarPart
The shareholders of TmarPart that hold shares of Oi, have
committed to convert their preferred shares in Oi to common shares
pursuant to the approved exchange ratio of 0.9211 common shares for
each preferred share issued by Oi. This commitment will remain in
effect until the earlier of October 31,
2015 and the end of the 30-day term for the completion of
the conversion of Oi's preferred shares into common shares under
the structure for the Voluntary Exchange of Preferred Shares,
subject to implementation of the Condition for the Exchange.
5. Commitment to Merge the Shareholder Bases of Oi and PT
SGPS
In addition, TmarPart, Oi and PT SGPS executed on the date
hereof an amendment to the Terms of Commitment Agreement, dated
September 8, 2014, which requires the
parties to use their best efforts and take all reasonable steps to
cause the listing of Oi's shares (or securities backed by the
shares of Oi or its successor in the event of a corporate
reorganization) on the NYSE Euronext Lisbon (a regulated market),
in addition to the New York Stock Exchange and BM&FBovespa,
where the shares of Oi are already listed.
6. Amendment to the Option Agreement with PT SGPS
In addition, Oi also adjusted an amendment to the Option
Agreement with PT SGPS, in order to allow PT SGPS to assign its
call option to purchase Oi's shares. In consideration for the
foregoing, Oi will have a right of first refusal exercisable prior
to such assignment. The effectiveness of the amendment to the
Option Agreement is subject to the approval at Oi's General
Shareholders' Meeting at which holders of preferred shares will be
entitled to vote and approval by the CVM, if applicable. Oi's
General Shareholders' Meeting to deliberate on the amendment to the
Option Agreement will be called on or prior to August 31, 2015 and held on or prior September 30, 2015.
The General Shareholders' Meeting of Oi to approve the amendment
to the Option Agreement will take place within the above time
frame, and if possible, during the same General Shareholders'
Meeting at which the Preliminary Steps will be approved, unless the
decision of the CVM is still pending with respect to the amendment
to the Option Agreement. Certain shareholders of TmarPart
have agreed to vote their shares in favor of the above amendment
during Oi's General Shareholders' Meeting that will vote on the
amendment to the Option Agreement.
7. Conditions for Implementation, Approvals and other
Information
Within the next few days, Oi and TmarPart's management, as the
case may be, will initiate the appropriate actions, including the
preparation of all corporate acts and relevant contracts, for the
adoption of the matters described in this Material Fact to be
submitted for approval in new Preliminary Meetings of shareholders
to be called in due course.
In addition to the relevant corporate approvals, the
transactions and matters described in this Material Fact are
subject to prior approval of the National Telecommunications Agency
(Agencia Nacional de Telecomunicacoes, or "ANATEL").
The Voluntary Exchange of Preferred Shares and the Preliminary
Steps will also be submitted for consent to certain creditors and
debenture holders, pursuant to their respective debt instruments,
but are not, however, subject to their approval.
The other conditions of the transactions described in this
Material Fact, notably the full terms of the merger of TmarPart
into Oi, in the form required by CVM Instruction No. 319/99, will
be disclosed in the form of a Material Fact after the approval of
the transactions by the management of Oi and TmarPart.
8. Expected Timeline
It is estimated that the general meetings which will deliberate
regarding the Preliminary Steps, as well as the opening date for
the shareholders of Oi's preferred shares to express their intent
to convert their preferred shares into common shares, will be
called in approximately 130 days, subject to ANATEL's prior consent
to the implementation of the transactions and matters described in
this Material Fact."
The shareholders also set October 31,
2015 as the deadline for the implementation of the
Preliminary Steps.
*
* *
Consummation of the Exchange
Oi reports that, following the approval by its General
Shareholders' Meeting held on March 26,
2015, the exchange contracted for on September 8, 2014 by Oi, TmarPart, PT SGPS,
Portugal Telecom International Finance B.V. ("PT Finance") and PT
Portugal, SGPS, S.A. ("PT Portugal") was consummated, under which
PT SGPS transferred 47,434,872 Oi common shares and 94,869,744 Oi
preferred shares to PT Finance; and Oi, through PT Finance, in
turn, transferred to PT SGPS securities issued by Rio Forte
Investments, S.A. in the aggregate principal amount of €897
million, without remainder (the "Exchange").
As a result of the consummation of the Exchange, PT SGPS's
direct interest in Oi declined from 104,580,393 common shares and
172,025,273 preferred shares, representing 37.66% of the voting
capital (ex-treasury) and 32.82% of the total share capital of Oi
(ex-treasury), to 57,145,521 common shares and 77,155,529 preferred
shares, representing 24.81% of the voting capital (ex-treasury) and
19.17% of the total share capital of Oi (ex-treasury). Oi's shares
received by PT Finance as a result of the Exchange remain in
treasury.
Pursuant to the terms of the Option Agreement entered into on
September 8, 2014 between PT SGPS, PT
Finance, PT Portugal, Oi and TmarPart, and amended on the date
hereof, the call option to acquire Oi's shares granted to PT SGPS
becomes exercisable from the date hereof for a period of six years,
according to the terms and conditions already disclosed to the
market.
*
* *
Oi will maintain its shareholders and the market informed of any
developments of relevant events related to the matters described in
this Material Fact.
Rio de Janeiro,
March 31, 2015.
Oi S.A.
Bayard
De Paoli Gontijo
Chief Executive and Financial Officer and Investor Relations
Officer
Additional Information and Where to Find It:
This
Material Fact is for informational purposes only and is not an
offer to purchase or a solicitation of an offer to sell any shares
of Oi. The proposed Voluntary Exchange of Preferred Shares
described in this Material Fact has not commenced.
Any offer to purchase or the solicitation of an offer to sell
preferred shares of Oi will be made only pursuant to an offer to
purchase and related materials that Oi intends to file with the SEC
upon commencement of this offer. Oi urges shareholders
who are eligible to participate in the Voluntary Exchange of
Preferred Shares to carefully read the offer to purchase and
related materials relating to the Voluntary Exchange of
Preferred Shares when they become available and prior to
making any decisions with respect to the Voluntary Exchange
of Preferred Shares as these documents will contain
important information about the Voluntary Exchange of
Preferred Shares.
Following the filing with the Commission of (1) the offer
to purchase and related materials relating to the Voluntary
Exchange of Preferred Shares, or (2) any other offer materials
related to the Voluntary Exchange of Preferred Shares, shareholders
of Oi will be able to obtain the filed documents free of charge on
the SEC's website at www.sec.gov or from Oi.
Special Note Regarding Forward-Looking Statements:
This Material Fact contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and Brazilian applicable regulation. Statements that are not
historical facts, including statements regarding the beliefs and
expectations of Oi and TmarPart, business strategies, future
synergies and cost savings, future costs and future liquidity are
forward-looking statements. The words "will," "may," "should,"
"could," "anticipates," "intends," "believes," "estimates,"
"expects," "forecasts", "plans," "targets," "goal" and similar
expressions, as they relate to Oi, TmarPart or their respective
management, are intended to identify forward-looking statements.
There is no guarantee that the expected events, tendencies or
expected results will actually occur. Such statements reflect the
current views of Oi's or TmarPart's management and are subject to a
number of risks and uncertainties. These statements are based on
many assumptions and factors, including general economic and market
conditions, industry conditions, corporate approvals, operational
factors and other factors. Any changes in such assumptions or
factors could cause actual results to differ materially from
current expectations. All forward-looking statements attributable
to Oi, TmarPart or their respective affiliates, or persons acting
on their behalf, are expressly qualified in their entirety by the
cautionary statements set forth in this paragraph. Undue reliance
should not be placed on such statements. Forward-looking statements
speak only as of the date they are made. Except as required under
the Brazilian and U.S. federal securities laws and the rules and
regulations of the CVM, the SEC or of regulatory authorities in
other applicable jurisdictions, Oi, TmarPart and their respective
affiliates do not have any intention or obligation to update or to
publicly announce the results of any revisions to any of the
forward-looking statements to reflect actual results, future events
or developments, changes in assumptions or changes in other factors
affecting the forward-looking statements. You are advised, however,
to consult any further disclosures Oi or TmarPart makes on related
subjects in reports and communications that Oi and TmarPart file
with the SEC.
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SOURCE Oi S.A.