Clarifications
about the Capitalization
Rio de Janeiro, June 25 2010 � Petr�leo Brasileiro S.A. -
Petrobras, in response to an official letter from the Comiss�o de Valores
Mobili�rios, the Brazilian securities regulator or CVM
(OF�CIO/CVM/SEP/GEA-1/No. 272/2010), hereby provides the following
clarification about a report published in the June 23 2010 Economy &
Business section of the O Estado de S�o Paulo newspaper that discusses a
possible alternative plan for the Company�s capitalization and on other
reports published by the press.
First, it is important to clarify that the transfer of
rights with compensation (transfer of rights) and the Company�s
capitalization, despite being part of the same bill approved by Congress on
June 10 and currently pending signature by the President of the Republic, are
legally separate operations. The former involves a commercial agreement
between Petrobras and the Brazilian Federal Government, while the latter is a
corporate transaction resulting in an increase of the Company�s capital
stock. The two operations are connected in that Petrobras intends to use part
of the resources that it hopes to raise from the capitalization to pay for
the transfer of rights.
Petrobras reiterates that it is not working on any plan B,
whether for the capitalization or for the transfer of rights. When consulted,
Finance Minister Guido Mantega stated that the possible plan B he mentioned
refers solely to a possibility, not yet examined by the Brazilian Federal
Government, to transfer oil and natural gas exploration and production rights
to Petrobras by means of a production sharing contract - an indirect means
for the Brazilian Federal Government to raise funds to settle its share of
the public share offer Petrobras intends to carry out. Contrary to the report
in the newspaper article in question, this possible plan B, unlike stated in
the story in question, is not related to a possible alternative plan for the
capitalization but, rather to a scenario without a transfer of rights.
Petrobras reaffirms its previous statements, including by
means of the Chairman of its Board of Directors, Minister Guido Mantega, that
there is no "plan B" to the capitalization, and that it maintains
its intention to undertake a public offering of shares as described in our
press release of June 22, 2010.
It is important to emphasize that even assuming that the
legislation that allows the transfer of rights and also authorizes the
Brazilian Federal Government to subscribe for new shares of Petrobras� stock
is signed by the President of the Republic, such authorization relates only
to the Brazilian Federal Government�s ability to participate in the Company�s
capitalization. The decision to undertake a public offering of share of a
publicly traded company is the sole responsibility of its management.
Pursuant to Article 4 of Petrobras� Articles of Incorporation, this decision
is made by Petrobras� shareholders at a General Shareholder Meeting, who may
delegate it to the Board of Directors.
Given the importance and scale of the transfer of rights
and capitalization operations, unprecedented for the Company and for the
market itself, and the planning of which depends on a number of factors, some
of which are outside the Company�s control, it is natural that in the
planning process various scenarios and alternatives are assessed., As the
situation evolves, and uncertainties are clarified, it is natural that
changes to initial plans will occur.
That is why, with a better definition of the schedule and
all the requirements needed for a successful capitalization, the Company
revised its target date to hold the public share offer. The Company now
considers that a precise value of the rights to be transferred, based on two
reports prepared by two specialized certification firms, one hired by the ANP
and the other by the Company, will serve as the best foundation for a
successful transaction by defining with certainty the size of the
capitalization.
Thus, with regard to the transfer of rights, Petrobras has
already hired its certifier and constituted a Minority Shareholder Committee
of its Board of Directors. In addition, the legislation relating to the
transfer of rights has already been approved by the Brazilian Congress and
the ANP has already hired its certifier, with a deadline that will allow
Petrobras to execute the operation by September of this year, and the terms
of the agreement for the transfer of rights to be signed between the
Brazilian Federal Government and Petrobras are already being negotiated.
Regarding the capitalization, Petrobras has already named
the banks and consultants who will act in the transaction, the General
Shareholders Meeting held on June 22, 2010 approved the new authorized
capital limit, and the Company has issued its Business Plan for 2010-2014. It
must be emphasized that in order to carry out the capitalization it is not
mandatory for the certifiers� reports to be completed. However, the Company
believes that with the definition of the amount of the transfer of rights,
shareholders and investors will have more information available to them in
order to make their decision on whether or not to participate in the
capitalization.
Petrobras reiterates its commitment to transparency in the
capitalization process and to the good corporate governance practices, and
highlights that it continues working on structuring the operation in line
with these principles, seeking to ensure the success of the operation for
Petrobras and for its shareholders.
This announcement is not an offer of Petrobras shares.
Petrobras shares may not be offered or sold in the United States absent
registration or an exemption from registration, and Petrobras currently
intends to register the proposed offering in the United States. Any public
offering of Petrobras shares will be made by means of a prospectus containing
detailed information about Petrobras and the offering.
Sincerely,
Investors Relations
www.petrobras.com.br/ri/english
Contacts: PETR�LEO BRASILEIRO S. A. - PETROBRAS
Investor Relations Department I E-mail: petroinvest@petrobras.com.br /
acionistas@petrobras.com.br
Av. Rep�blica do Chile, 65 � 22nd floor - 20031-912 - Rio de Janeiro, RJ I
Tel.: 55 (21) 3224-1510 / 9947
This document may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (Securities
Act), and Section 21E of the Securities Exchange Act of 1934, as amended
(Exchange Act) that merely reflect the expectations of the Company�s
management. Such terms as �anticipate�, �believe�, �expect�, �forecast�,
�intend�, �plan�, �project�, �seek�, �should�, along with similar or
analogous expressions, are used to identify such forward-looking statements.
These predictions evidently involve risks and uncertainties, whether foreseen
or not by the Company. Therefore, the future results of operations may differ
from current expectations, and readers must not base their expectations
exclusively on the information presented herein.
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