CVRD pays US$ 13.3 billion for the acquisition of Inco

10/26/2006

CVRD pays US$ 13.3 billion for the acquisition of Inco

Rio de Janeiro, October 26, 2006 – Companhia Vale do Rio Doce (CVRD) made today the payment of US$ 13.3 billion to the depositary agent, Computershare Investor Services Inc., for the acquisition of 174,623,019 shares of Inco Limited (Inco), representing 75.66% of its outstanding shares on a fully-diluted basis.

In accordance with its stated purpose of acquiring 100% of the outstanding shares of Inco, CVRD will take the steps to acquire the remaining 56,189,554 Inco shares.

In order to provide Inco security holders who have not yet accepted the offer with the opportunity to analyze and accept the offer, CVRD has extended the expiry time of the offer to midnight (Toronto time) on November 3, 2006. This extension constitutes a “subsequent offering period” under the U.S. law.

CVRD financial disbursement with the acquisition of 100% of Inco shares is estimated to reach US$ 17.6 billion. The Company will use US$ 2.0 billion out of its own cash holdings and will finance the remaining US$ 15.5 billion with the bridge loan supplied by a syndicate of 37 banks based in North America, Brazil, Europe, Asia and Australia. The bridge loan has a two-year tenor, with an interest rate of Libor plus 40 basis points during the first year and Libor plus 60 basis points during the second year.

Therefore, to finance the acquisition, the Company will use much less than half of the value originally offered by the bank syndicate, which amounted to US$ 34 billion.

CVRD expects to conclude several transactions to take out the bridge loan aiming to preserve its average debt maturity close to the pre-acquisition level, longer than seven years, to keep a low risk debt profile and to minimize its weighted average cost of capital in order to consolidate its excellent reputation in global financial markets.

IMPORTANT INFORMATION

This press release may be deemed to be solicitation material in respect of CVRD’s tender offer for the shares of Inco. On August 14, CVRD filed a tender offer statement on Schedule TO (containing an offer to purchase and a takeover bid circular) with the United States Securities and Exchange Commission (“SEC”). CVRD, if required, will file other documents regarding the proposed tender offer with the SEC.

INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE TAKEOVER BID CIRCULAR, THE SCHEDULE TO AND ANY OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE OFFER FOR COMMON SHARES OF INCO. These documents will be available without charge on the SEC’s website at www.sec.gov. Free copies of the documents can also be obtained by directing a request to Kingsdale Shareholder Services Inc., The Exchange Tower, 130 King Street West, Suite 2950, P.O.Box 361, Toronto, Ontario, M5X 1E2, by telephone to 1-866-381-4105 (North American Toll Free) or 416-867-2272 (Overseas), or by email to: contactus@kingsdaleshareholder.com.

 

For further information, please contact:
+55-21-3814-4540

Rogério Nogueira: rogerio.nogueira@vale.com
André Figueiredo: andre.figueiredo@vale.com
Carla Albano Miller: carla.albano@vale.com
Fernando Mascarenhas: fernando.mascarenhas@vale.com
Andrea Gutman: andrea.gutman@vale.com
Bruno Siqueira: bruno.siqueira@vale.com
Claudia Rodrigues: claudia.rodrigues@vale.com
Marcio Loures Penna: marcio.penna@vale.com
Mariano Szachtman: mariano.szachtman@vale.com

This press release may include statements that present Vale’s expectations about future events or results. All statements, when based upon expectations about the future and not on historical facts, involve various risks and uncertainties. Vale cannot guarantee that such statements will prove correct. These risks and uncertainties include factors related to the following: (a) the countries where we operate, especially Brazil and Canada; (b) the global economy; (c) the capital markets; (d) the mining and metals prices and their dependence on global industrial production, which is cyclical by nature; and (e) global competition in the markets in which Vale operates. To obtain further information on factors that may lead to results different from those forecast by Vale, please consult the reports Vale files with the U.S. Securities and Exchange Commission (SEC), the Brazilian Comissão de Valores Mobiliários (CVM), the French Autorité des Marchés Financiers (AMF), and The Stock Exchange of Hong Kong Limited, and in particular the factors discussed under “Forward-Looking Statements” and “Risk Factors” in Vale’s annual report on Form 20-F.

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CVRD pays US$ 13.3 billion for the acquisition of Inco