RIO DE
JANEIRO, April 29, 2016 /CNW/
- Petro Rio S.A. ("PetroRio" or the "Company")
(BM&FBOVESPA: PRIO3, TSX-V: PRJ) hereby announces that, at the
Annual and Special Shareholders Meeting held today, April 29, 2016, all the matters proposed on the
agenda have been approved.
Board of Directors and Fiscal Council
According to the Management Proposal, the current
members of the Board of Directors, Messrs. Helio Calixto Costa, Vinícius do Nascimento Carrasco, William Connel Steers, Ronaldo Carvalho da Silva, Haroldo Borges Rodrigues Lima and Pedro Grossi Junior have been re-elected for a
two year term of office. For the Fiscal Council, with a term of
office until the next Annual General Shareholders Meeting, Messrs.
Elias de Matos Brito, Roberto Portella and Gilberto Braga, have been re-elected as
effective members, and Messrs. Ronaldo dos Santos Machado, Anderson dos Santos Amorim, and Luis
Alberto Pereira de Mattos, as alternates, respectively.
Reverse Split of Shares
In the context of discussions about the
Management Proposal for the reverse stock split at a ratio of 15
(fifteen) common shares to one (1) common share, also including the
reverse split of the Global Depositary Shares ("GDSs") issued by
the Company, at the rate of 15 (fifteen) GDSs to 1 (one), the
Company's shareholders resolved by majority, to approve the reverse
stock split at a ratio of 5 (five) common shares to 1 (one) common
share, also including the reverse split of the Global Depositary
Shares ("GDSs") issued by the Company, at the rate of 5 (five) GDSs
to 1 (one), maintaining the same proportion currently in force of 2
(two) GDSs to 1 (one) common share.
- Reasons for the Reverse Split
Management of the Company proposed the reverse
split of shares to mitigate the excessive risk of volatility in the
price of these securities, given that it will allow the price per
share and per GDS not to be so low that minor fluctuations could
represent a high percentage. Additionally, the reverse split
reduces the possibility of breaching the BM&FBovespa rules
(Regulamento para Listagem de Emissores e Admissão à Negociação de
Valores Mobiliários), which do not allow stock prices quoted below
R$ 1.00 (one
Brazilian Real).
PetroRio shareholders (holders of common shares
or GDSs) will have until June 10,
2016 to, at their own discretion, dispose of or acquire as
many shares as necessary to eliminate fractional shares that may
result from the implementation of the reverse split by the Company.
After the deadline mentioned above, the group of shares formed by
fractions of shares will be sold by auction on the stock exchange,
intermediated by a brokerage firm in Brazil and a selling agent in Canada. The amount resulting from the sale of
fractional common shares or GDSs will be credited to their holders.
From June 13, 2016 on, the common
shares and GDSs start to be traded aggregated, according to the
reverse split. The reverse split of shares will not impact (i) the
value in Brazilian Reais (R$) of the Company's consolidated
capital, (ii) the rights attributed to common shares and GDSs, or
(iii) the interest of each shareholder in the Company's capital,
except if the reverse split, otherwise, result in a holder holding
a fraction of a common share or GDS, as the case may be. The
reverse split will not result in the Company's name change. On this
date, April 29, 2016, the Company has
65,945,675 common shares issued and outstanding. After the
conclusion of the reverse split of shares approved herein, there
will be 13,189,135 common shares issued and outstanding (on an
undiluted basis and subject to the fractions mentioned in this
Material Fact). Also on this date, the Company has 8,078,546 GDSs
issued and outstanding. After the conclusion of the reverse split
of the GDSs there will be approximately 1,615,709 GDSs issued and
outstanding (on an undiluted basis and subject to the fractions
mentioned in this Material Fact).
The reverse split is subject to the approval of
the TSX Venture Exchange.
Common Shares Buyback Program
Also according to the Management Proposal,
PetroRio shareholders approved the proposal of implementation of a
buyback program of up to 16,500,000 common shares issued by the
Company (3,300,000 common shares after the conclusion of the
reverse split of shares now approved) within 18 (eighteen) months,
without capital reduction, to be held in treasury, cancellation
and/or subsequent sale. The share buyback program, as it relates to
GDSs, is subject to the approval of the TSX Venture Exchange and no
GDS shall be purchased by the Company before such approval is
received.
The common shares buyback program aims to ensure
that the market price of PetroRio's shares more appropriately
reflects the Company's intrinsic value. Due to the amount in the
proposed buyback program compared to the Company's cash
availability history and considering the general evaluation from
Management regarding PetroRio's financial situation, it is
understood that the share buyback shall not affect the compliance
with creditors or the payment of mandatory dividends.
- Number of outstanding shares to be acquired:
The common shares buyback program approved on
this date authorizes the buyback of up to 16,500,000 common shares
issued by the Company (3,300,000 common shares after the conclusion
of the reverse split of shares now approved), without capital
reduction.
The maximum period for the acquisition of shares
approved in the buyback program is of 18 (eighteen) months as of
this date, ending on November 02,
2017.
Itaú Corretora de Valores S.A.,
headquartered in the city and state of São Paulo, at Avenida
Brigadeiro Faria Lima, 3500, 3º andar, Itaim Bibi, CEP: 04538-132,
inscribed in the corporate roll of taxpayers (CNPJ/MF) under no.
61.194.353/0001-64;
XP Investimentos CCTVM S.A., headquartered
in the city and state of Rio de
Janeiro, at Praia de
Botafogo, 501, Sala 601 (bloco Pão de Açúcar), inscribed in the
corporate roll of taxpayers (CNPJ/MF) under no.
02.332.886/0001-04;
Santander Corretora de Câmbio e Valores
Mobiliários S.A., headquartered in the city and state of São
Paulo, at Avenida Presidente Juscelino Kubitschek, 2041/2235, 24º
andar, Vila Olímpia, CEP 04543-011, inscribed in the corporate roll
of taxpayers (CNPJ/MF) under no. 51.014.223/0001-49.
The Minutes of the Annual and Special
Shareholders Meeting are available on the websites of Comissão de
Valores Mobiliários - CVM (www.cvm.gov.br), BM&FBOVESPA S.A. -
Bolsa de Valores, Mercadorias e Futuros (www.bmfbovespa.com.br) and
the Company (www.petroriosa.com.br).
Sedar Profile # 00031536
Neither the
TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
About PetroRio
PetroRio is one of the
largest independent companies in the oil and gas production in
Brazil. It is the operator of the
Polvo Field, located in the Campos Basin, which has Brazil's seventh largest daily production of
barrels of oil equivalent (boe). PetroRio is the owner of "Polvo A"
fixed platform and a 3.000HP drilling rig, currently in operation
in this Field, being the platform connected to the "Polvo FPSO"
vessel, with capacity to segregate hydrocarbons and water
treatment, oil storage and offloading. Polvo Field license covers
an area of approximately 134km2, with several prospects with
potential for further explorations.
The Company´s corporate culture seeks to increase
production through the acquisition of new production assets, the
re-exploration of assets, increased operational efficiency and
reduction of production costs and corporate expenses. PetroRio's
main objective is to create value for its shareholders with growing
financial discipline and preserving its liquidity, with full
respect for safety and the environment. For further information,
please visit the Company's website: www.petroriosa.com.br.
Disclaimer
This news release contains
forward-looking statements. All statements other than statements of
historical fact contained in this news release are forward-looking
statements, including, without limitation, statements regarding our
drilling and seismic plans, operating costs, acquisitions of
equipment, expectations of finding oil, the quality of oil we
expect to produce and our other plans and objectives. Readers can
identify many of these statements by looking for words such as
"expects", "believe", "hope" and "will" and similar words or the
negative thereof. Although management believes that the
expectations represented in such forward-looking statements are
reasonable, there can be no assurance that such expectations will
prove to be correct. By their nature, forward-looking statements
require us to make assumptions and, accordingly, forward-looking
statements are subject to inherent risks and uncertainties. We
caution readers of this news release not to place undue reliance on
our forward-looking statements because a number of factors may
cause actual future circumstances, results, conditions, actions or
events to differ materially from the plans, expectations, estimates
or intentions expressed in the forward-looking statements and the
assumptions underlying the forward-looking statements.
The following risk factors could affect our
operations, as well as our ability to complete the proposed
acquisition: the contingent resource and prospective resource
evaluation reports involving a significant degree of uncertainty
and being based on projections that may not prove to be accurate;
inherent risks to the exploration and production of oil and natural
gas; limited operating history as an oil and natural gas
exploration and production company; drilling and other operational
hazards; breakdown or failure of equipment or processes; contractor
or operator errors; non-performance by third party contractors;
labor disputes, disruptions or declines in productivity; increases
in materials or labor costs; inability to attract sufficient labor;
requirements for significant capital investment and maintenance
expenses which PetroRio may not be able to finance; cost overruns
and delays; exposure to fluctuations in currency and commodity
prices; political and economic conditions in Brazil; complex laws that can affect the cost,
manner or feasibility of doing business; environmental, safety and
health regulation which may become stricter in the future and lead
to an increase in liabilities and capital expenditures, including
indemnity and penalties for environmental damage; early
termination, non-renewal and other similar provisions in concession
contracts; and competition. We caution that this list of factors is
not exhaustive and that, when relying on forward-looking statements
to make decisions, investors and others should also carefully
consider other uncertainties and potential events. The
forward-looking statements herein are made based on the assumption
that our plans and operations will not be affected by such risks,
but that, if our plans and operations are affected by such risks,
the forward-looking statements may become inaccurate.
The forward-looking statements contained herein
are expressly qualified in their entirety by this cautionary
statement. The forward-looking statements included in this news
release are made as of the date of this news release. Except as
required by applicable securities laws, we do not undertake to
update such forward-looking statements.
SOURCE PetroRio