Nova Governança
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Vale is in an important period of transition. In the Extraordinary General Meeting, which took place on June 27th, the company’s shareholders approved the corporate restructuring proposal, which seeks to make Vale a True Corporation and to adapt its governance to the rules of BM&FBovespa’s New Market, the highest segment of the market listing in terms of corporate governance, management and transparency.
By means of this operation, Vale may become a company without a defined controlling shareholder, which gives more independence to the company’s administration and greater protection and expansion of the minority shareholders’ power.
Procedure for conversion of shares
Until August 11th, all shareholders who have preferential shares from Vale have to decide if they agree with the conversion of their shares into ordinary shares. See below how to convert your shares:
Shares in Brokerage Houses
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The shareholder shall contact his custody agent and request the participation in the process of voluntary conversion, according to the rules defined in Bovespa.
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The shareholders must contact their custody agents to check the conversion terms as the conversion window begins on June 28th, 2017 up until August 11th, 2017. These terms may vary depending on the procedures of the custody agent.
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The Company recommends that shareholders with positions in Bovespa’s Asset Loan Service (“BTC”), due to share loan contracts, consult their custody agents regarding the treatment that will be conferred on their preference shares, which are subject of such contracts, and the procedures and operational rules of Bovespa applicable to the conversion of these shares.
Shares in Underwriters – Banco Bradesco
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Attend one of the branches of Banco Bradesco;
Individual Shareholder:(i) identity card and (ii) CPF
Legal Entity Shareholder: (i) original version and copy of the bylaws and the minutes of election of the current board or the consolidated incorporation act in force, (ii) documentation granting powers of representation, and (iii) original versions of the identity card, and shareholders’ CPF;
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Sign the conversion form available at the branches of Banco Bradesco.
Holders of Preference ADSs
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If the holder is a registered holder of Preference ADSs in the books of Citibank, deliver the Letter of Transmittal and other required ADSs documents and certificates duly filled in the format made available by Citibank as Swap Agent; or
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If the holder is a beneficiary of Preference ADSs by means of a broker or other securities intermediaries, request that their broker or other securities intermediaries swap the Preference ADSs by means of a book-entry transfer to an account held by the Swap Agent in the Depository Trust Company (“DTC”); or
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Assign their Preference ADSs for cancellation and withdraw the preference shares backed by the Preference ADSs of their ownership, incurring any governmental fees and charges, in addition to the cancellation fees required by Citibank, as depositary of the Preference ADSs issued by the Company. As a result of the cancellation and withdrawal of the preference shares, the holder of Preference ADSs will directly hold preference shares registered in Bovespa’s Depository Center and must obtain his foreign investor registration, in case he does not have it, in accordance with Appendix I of the Resolution of the National Monetary Council No. 4.373, sufficiently in advance to complete the procedures established by Bovespa for the conversion of the shares;
Requests for assistance and/or information may be directed by the holders of Preference ADSs to Morrow Sodali, information agent for the Swap Offer in the United States:
Morrow Sodali LLC
Call inside USA: (800) 662-5200
Call outside USA: (203) 658-9400
E-mail: ELEC.info@morrowsodali.com
Don't forget the deadline for the conversion of shares: from June 28th to August 11th
Main points of the proposal
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Exchange ratio of 0,9342 common shares for each preference share, which is determined based on the average price of 30 days prior to the announcement of the transaction (February 20th, 2017).
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Required minimum adherence of shareholders owning 54,09% of preference shares issued by the company.
How will the New Shareholders’ Agreement be beneficial to Vale?
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Stability and safety
The operation promotes greater liquidity for the shareholders with the access of Vale to the BM&F Bovespa’s New Market segment, with the same rights and benefits with shares of a single class.
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Best practices of corporate governance
Greater alignment of interests among groups of shareholders, and between shareholders and managers, in addition to the strengthening of the Board of Directors as the most important decision-making body.
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Increase in liquidity
The operation promotes greater liquidity for the shareholders, who may have the same rights and benefits with shares of a single class.
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Greater access to capital markets
The adaptation to best practices in governance and the unification of share classes allow Vale to fulfill the prerequisites to access new segments of the capital market (for example, BM&Bovespa’s New Market segment).
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Diversification of the shareholding base/h3>
Dissolution of the current block of control and consequent diversification of the shareholding base, bringing greater independence to the company’s administration.
Common Questions
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What is the term for adherence to the conversion by the holders of preference shares?
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From June 28th, 2017 to August 11th, 2017, inclusively. In the specific case of holders of Preference ADSs, the term for participation in the Swap Offer will be closed at 5:00 p.m., New York local time (6 p.m., Brasilia local time), on August 11th, 2017. Contact your custody agent as timetables and/or dates may vary according to your procedures.
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Is there any condition for the effective implementation of the conversion?
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Yes. The conversion will only be implemented if there is minimum adherence of shareholders owning 54,09% of preference shares issued by Vale, including preference shares represented by Preference ADSs and excluding shares in treasury.
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If I decide to adhere the conversion, will my preference shares be converted into how many common shares?
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Each preference share held by the shareholder, who has adhered to the conversion, will be converted into 0,9342 common share. In case of Preference ADSs, each Preference ADS will be exchanged for 0,9342 Common ADS.
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If I adhere to the conversion, will my preference shares be immediately converted into common shares?
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No. Upon the closure of the Conversion Period, Bovespa and the Bookkeeping Agent will determine the percentage of adherence of the holders of preference shares, including Preference ADSs, to the conversion and will inform Vale the quorum of adherence.
Preference shares of shareholders, who have adhered to the conversion, will be converted into common shares and will be available for negotiation on August 15th, considering that the availability for negotiation of the new common shares may vary between different brokerage houses.
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If I adhere to the conversion, may I change my mind later?
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Until the closure of the Conversion Period indicated above, a shareholder who has requested the conversion of part or all of his preference shares may request the withdrawal of part or all of his conversion order, following the procedures established by Bovespa. After the closure of the Conversion Period, the conversion request will constitute a manifestation of irrevocable and irreversible will by the requesting shareholder, in the sense of authorizing the conversion of the preference shares indicated and the issuance of the corresponding common shares into the shareholder’s deposit account. Shareholders who offer Preference ADSs on the Swap Offer may decide to withdraw the Preference ADSs at any time prior to 5 p.m. (New York local time) / 6 p.m. (Brasília local time) on August 11th, 2017, following the procedures described in the procedure for Voluntary Conversion.
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If I adhere the conversion, may I continue to negotiate normally with my shares?
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No. The preference shares indicated in the conversion order will be blocked for negotiation. As from August 15th, 2017, the common shares resulting from the conversion may be negotiated by their owners in Bovespa. The owners of Preference ADSs will not be able to negotiate the Preference ADSs that are held in the account held by the DTC Swap Agent. After the conversion, the owners may negotiate new Common ADSs since they are credited to their accounts, as described in the Swap Offer.
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Once the minimum adherence condition mentioned above has been reached, will all the preference shares issued by the company be converted into common shares, including shares held by shareholders who have not adhered to the conversion?
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No. The proposal for conversion of preference shares is voluntary. This means that it is at the discretion of the shareholders to convert, or not to convert, their preference shares into common shares within the stipulated term. Once the minimum adherence established as a condition is reached, only the shares that have been made available by their respective holders for conversion will be converted. The shareholders who have not adhered to the conversion will continue to be holders of preference shares, without any change.
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Considering that the exchange ratio established for the conversion is of 0,9342 common share for each converted preference share, what happens if I hold a fractional number of common shares as a result of the conversion of my preference shares?
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The fractions of shares resulting from the conversion will be aggregated into whole numbers of shares and sold in an auction of unsold shares that will be timely held at Bovespa, with net worth resulting from the sale (after deduction of applicable fees and expenses, including sales commissions) reverted to holders of fractions in proportion to the fractions held by them.
After the effective conversion of the preference shares into common shares, Bovespa shall send a report with the fractional number of resulting shares to the bookkeeping agent, which will group all the fractions into whole numbers of shares, and keep them in custody until the indication of a custody agent hired by Vale, who will be responsible for coordinating the auction of unsold shares in the environment of Bovespa.
The fractions of Preference ADSs resulting from the voluntary conversion will be aggregated and sold by the Swap Agent on the open market. The net result of the sale (after deduction of commissions, fees and expenses, including sales commissions) will be reverted to holders who are entitled to the fractions of Preference ADSs.
Detailed Schedule of the Conversion
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Jun/2017
Jun 27th: AShareholders’ General Meeting that approved the proposal for Voluntary Conversion of Shares, change of the Bylaws and incorporation of Valepar by Vale.
Jun 28th - Beginning of the Voluntary Conversion Period.
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Jul/2017
Jun 28th – Aug 11th: Voluntary Conversion Period
- Shareholders wishing to adhere to the voluntary conversion of shares must contact their custody agent and express their interest in adhering to the conversion.
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Ago/2017
Aug 11th: Closure of the Conversion Period and Conversion of the Preference Shares into Common Shares
- Counting of the quorum for adherence to the conversion offer.
- After the end of the trading session, in case the minimum quorum is reached, the Bookkeeping Agent and B3 will execute the conversion of the preference shares that have expressed interest in the conversion.
Aug 14th – 15th: Effectiveness of the Voluntary Conversion of Shares
Through August 15th, the adherent shareholders will have credited in their respective accounts the whole number ofcommon shares resulting from the conversion (the availability for negotiation of the new common shares may vary betweendifferent custody agents).
Aug 16th – 28th: Accomplishment of the Auction of Unsold Shares
Until August 28th: the net worth resulting from the sale (after deduction of the applicable fees and expenses, includingsales commissions) shall be reverted to the holders of the fractions in proportion to the fractions held by them at the endof the conversion of their preference shares.
Do you still have questions?
Please contact Vale’s Investor Relations sector.
If you have any questions, please contact the Investor Relations Department
Call
Send a email
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