Rio de Janeiro, December 15, 2016 – Petróleo Brasileiro S.A. – Petrobras reports that its wholly-owned subsidiary Petrobras Biocombustível S.A. (PBIO) closed, on this date, with group São Martinho S.A. (“São Martinho”) an Agreement (Acordo de Incorporação e Outras Avenças) under which Nova Fronteira Bioenergia S.A. (“Nova Fronteira”), in which PBIO holds 49% participation, will be incorporated by São Martinho.
Nova Fronteira is a joint venture, composed of PBIO and São Martinho, and its main asset is Usina Boa Vista, dedicated exclusively to ethanol production, located in Quirinópolis, in the state of Goiás.
São Martinho is one of the largest sugar and ethanol producers in Brazil. After the transaction, São Martinho will have a 12.3% increase in total milling, reaching 21.6 million tons of sugarcane and an approximate 18% growth in its Adjusted EBITDA, compared to the last 12 months (as of 09/30/2016).
PBIO will receive 24 million new common shares issued by São Martinho, representing 6.593% of its voting and total capital stock, in substitution and in proportion to the shares that Petrobras holds in Nova Fronteira. Those shares will not be subject to any kind of lock-up and PBIO may sell its interest in São Martinho in the future through a structured process.
This transaction is part of the 2015-2016 Divestment Program and it will be accounted for the divestment target in the amount of US$ 133 million, based on the average volume-weighted price for the last 30 days of trading of São Martinho shares in BM&FBovespa.
The closing of this transaction is subject to approval by the Shareholders’ Meeting of São Martinho and to compliance with the usual preceding conditions, including the approval of the Administrative Council for Economic Defense (Cade).