Dias d'Ávila, August 8, 2017. Paranapanema S.A. ("Company", B3: PMAM3), in compliance with Law No. 6404, dated December 15, 1976, as amended ("Brazilian Corporate Law") and the Brazilian Securities and Exchange Commission ("CVM") regulations, especially CVM's Instruction 358, of January 3, 2002, as amended, in continuation of the process of readjustment of its capital structure and restructuring of its indebtedness, in accordance with the material fact disclosed on July 21, 2017 ("Debt Restructuring"), hereby informs its shareholders and the market in general that, on this date, the Company signed, together with its subsidiary CDPC - Centro de Distribuição de Produtos de Cobre Ltda. ("CDPC"), as guarantor, and with its main creditors ("Creditors"), the Global Restructuring Agreement, within the scope of the Restructuring. The Global Restructuring Agreement involves the renegotiation of existing debts with Creditors in the total amount of approximately $ 616 million1 ("Debt Subject to Restructuring").
The obligation of the Creditors to implement the Debt Restructuring of the Company under the Global Restructuring Agreement is subject to certain suspensive conditions:
The Company should make a capital increase through a public offering of shares, with restricted placement efforts, in compliance with CVM's Instruction 476, of January 16, 2009, as amended ("CVM Instruction 476"), to be decided by the Board of Directors, with the purpose of strengthening the Company's cash flows ("Restricted Offering"). It is estimated that the amount to be offered by the Company in the Restricted Offering will be between BRL 290,000,000 (two hundred and ninety million reais), which is the minimum volume of the Restricted Offering, and BRL 450,000,000 (four hundred and fifty million reais), subject to occasional modifications, being acceptable a partial distribution of
1 Amounts estimated based on the remaining debt on 06/30/2017 using the exchange rate of BRL 3.3082 (PTAXV of 06/30/17).
We make forward-looking statements that are subject to risks and uncertainties. These statements are based on estimates and assumptions of our management and information to which the Company currently has access. Forward-looking statements include information on our intentions, beliefs or current expectations, as well as those of the Board of Directors and Officers of the Company. Reservations in relation to statements and information about the future also include information on possible or presumed operating results, as well as statements preceded by, followed by or include the words "believes", "may", "will", "continue" "expects", "anticipates", "intends", "plans", "estimates" or similar expressions. The statements and information about the future are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Future results and the creation of value for shareholders may differ materially from those expressed or suggested by statements in the future. Many of the factors that will determine these results and values are beyond our ability to control or predict Paranapanema.
shares;
The conversion of convertible debentures into shares issued by the Company, by the Creditors, in an amount equivalent to BRL 360,000,000 (three hundred and sixty million reais) of Debts Subject to Restructuring. The convertible debentures shall be issued by the Company and distributed through a public offering with restricted placement efforts, in compliance with CVM's Instruction 476, to be submitted to the decision of the Extraordinary General Meeting of the Company's shareholders.
Additional information on the Global Restructuring Agreement may be found in the minutes of the Board of Directors made available on this date at the CVM (Brazilian SEC) and at the Company's website.
The Company will keep its shareholders and the market in general informed of any development related to the Debt Restructuring, specially regarding the facts of this communication, observing all relevant legislation.
For any questions, please contact the Investor Relations area: (11) 2199-7604 or ri@paranapanema.com.br.
André Luís da Costa GaiaChief Financial Officer and Investor Relation's Officer