Petrobras: Petrobras Distribuidora Bylaws reform and corporate restructuring approved

Petrobras Distribuidora Bylaws reform and corporate restructuring approved

BR-blog.jpgThe General Shareholders’ Meeting (GSM) of Petrobras Distribuidora S.A. (BR), at a meeting held on August 31, approved the corporate restructuring consisting of a capital increase of R$6.3 billion and the reform of the Bylaws.

The main amendments to the Bylaws consider the requirements of Act 13,303/2016 and Decree 8945/2016, as well as the legal rules regarding publicly-held companies and the “Novo Mercado” (New Market) regulation.

Main changes in the Bylaws

· Joining the New Market: (i) Exclusive existence of Common Shares; (ii) Rules for the Public Offering for the Acquisition of Shares, including a requirement for the agreement of shareholders holding 1/3 (one third) of the outstanding shares for a possible exit of the segment, without selling the shares; (iii) Tag Along Concession, granting equal treatment to the other company’s shareholders; and (iv) Joining the Market Arbitration Chamber.

· Governance, Risk, and Compliance Area linked to the Board of Directors (BD);

· New competencies attributed to BR’s BD and Executive Board (EB);

· Composition of the Board of Directors with, at least, 3 (three) minority shareholder representatives, notwithstanding their shareholding, in addition to a minimum of 50 percent of the independent members, considering those elected by the minority shareholders;

· Compliance with integrity requirements for the appointment of the Officers and members of the Audit Committee, in addition to those featured in the Law;

· Inclusion of an express clause regarding the incompatibility of participation in BR’s management bodies and in those of its subsidiaries and controlled companies, of a member who is a candidate to an elected public mandate, and the interested party must resign from office, under penalty of dismissal, as soon as their intent to become a candidate becomes public;

· Creation of new BD Advisory Committees;

· Disciplining Transactions with Related Parties, requiring that, in certain cases, in addition to prior review by the Audit Committee, with the establishment of the Minority Committee, the Minority Committee shall provide prior advice, issuing its opinion regarding the intended transaction. The transactions must be approved by the vote of 2/3 of the members of the BD;

It is worthy of note that compliance with the New Market Listing Rules and the appointment of the members of the Board of Directors by the minority shareholders are conditional on the opening of BR’s capital, which is still subject to internal and Securities Commission approvals and favorable conditions on the domestic and international capital markets.

The new Bylaws will be available on Petrobras Distribuidora’s website (www.br.com.br/governancacorporativa).

Corporate Restructuring

BR’s corporate restructuring was approved at the same General Shareholders’ Meeting, and consists of a capital increase of R$6.3 billion and of the partial transfer of the receivables with the Eletrobras System and other companies of the Petrobras System, for the same amount. As a result, BR’s capital stock remains unchanged after the transactions have been completed.

BR used the capital contribution (R$6.3 billion) and a cash availability of R$1.4 billion for the early settlement of debts with Banco do Brasil, in the amount of R$4.5 billion, and Banco Bradesco, in the amount of R$3 billion.

We emphasize that we were the financial guarantors of these two BR loans. With the completion of these transactions, we can hire new credit lines with the banks under the same value, term, and cost conditions originally agreed to by BR. Therefore, this new fund raising has no impact on our net indebtedness.

Finally, this announcement should not be considered as an offer announcement, and facts deemed material regarding this issue will be communicated to the market.