Petro Rio S.A. (PRIO”), following the Material Fact disclosed on the September 1st, 2022, informs its shareholders and the market in general that, on October 1, 2022, the Company’s Board of Directors approved, and the managements of the Company, as consenting intervening party, and of Dommo Energia S.A (“Dommo”) and Petro Rio OPCO Exploração Petrolífera (“OPCO”) executed the Protocol and Justification of Merger of Shares Issued by Dommo (“Protocol”).
Pursuant to the terms of the Protocol, OPCO will incorporate all the shares issued by Dommo (“Merger of Shares”). In exchange for the Merger of Shares, Dommo’s shareholders shall receive class “A” preferred shares issued by OPCO, automatically and compulsorily redeemable upon the delivery of shares issued by PRIO (in the proportion of 0.005 common share issued by PRIO for each PNA Share), and OPCO shall be allowed to pay a portion in cash in order to full the obligation to pay Income Tax withheld at the source due by non-resident shareholders as a result of the Merger of Shares (“IRRF”). Alternatively, Dommo’s shareholders may, at their sole discretion, choose to receive class “B” preferred shares issued by OPCO, automatically and compulsorily redeemable in local currency on the redemption date (through the constitution of a credit in the amount of R$1.85, to be paid in Brazilian currency, to its holders, within 90 days as of the closing of the Transaction, plus the accumulated variation of 100% of the CDI between the date of the Dommo’s General Meeting that deliberates about the Transaction and the date of its effective payment), being OPCO allowed to withhold amounts for payment of IRRF (“PNB Shares”) (“Redemption of PN Shares” and, together with the Merger of Shares, “Transaction”).
The Protocol also regulates the treatment granted to the holders of subscription warrants issued by Dommo currently outstanding (“Warrants”), which provides that, if the holders do not exercise their Warrants in the next exercise window pursuant to item (vi)(h) of the minutes of Dommo’s General Meeting that approved its issuance on November 26, 2018, their Warrants will be replaced by PNA Shares, in the proportion of 1 (one) PNA Shares for every 5 (five) Warrants,; and may choose to have their Warrants replaced by: (i) PNB shares, in the proportion of 1 (one) PNB Shares for every 5 (five) Warrants; or (ii) call options to purchase shares issued by PRIO (or similar instrument), granted by OPCO, in the scope of the Transaction, on terms essentially similar to the terms of the Warrants, which will give their holders the right to acquire 1 share issued by PRIO, at an exercise price of R$685.78 per share, subject to monetary correction by the IGP-M.
The Company also informs that, for these purposes, PRIO’s Board of Directors has approved, based on article 25, “I” of the Company’s Bylaws and on article 2, item I and article 4, §1 of CVM’s Resolution 77/22, the acquisition of shares issued by PRIO (“Shares Repurchase Program”).
PRIO clarifies that the closing of the Transaction remains subject to conditions precedent which are usual for transactions of this nature, such as approval at Dommo’s Shareholders’ Meeting, as well as the publication of the certificate confirming the transit in res judicata of the unconditioned approval of the Transaction by the Administrative Council for Economic Defense – CADE and approval by Austrian governmental authorities. The Company will keep its shareholders and the market in general informed about the relevant developments of the Transaction, in accordance with the law and CVM regulations.
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