Comissão de Valores Mobiliários - CVM
C/O: Mr. Cláudio José Paulo - Manager
Copy to: B3 S.A. - Brasil, Bolsa, Balcão
Ref.: Official Letter 379/2017/CVM/SEP/GEA-1 - Clarification on news item
BANCO BTG PACTUAL S.A. ("Bank"), in response to Official Letter 379/2017/CVM/SEP/GEA-1, transcribed below, which requests clarification on a news item published by the media ("Letter"), hereby clarifies the following:
Firstly, the Bank clarifies that it does own shares or is a creditor of Lojas Leader SA ("Leader"), a company whose corporate control was held until the completion of the Transaction (as defined below) by the private equity fund BTG Pactual Principal Investments FIP ("FIP Principal") - in which PPLA Participations, Ltd. ("PPLA") invests through a joint venture with other investors - and by PPLA, also by means of a subsidiary. The Bank, through one of its subsidiaries, acted only as manager of FIP Principal at the time of the Transaction.
On April 13, 2016, PPLA published a notice to the market, informing the public in general that it had entered into a purchase and sale agreement with FIP Principal, in which both parties committed to selling, for a symbolic amount, the totality of their shares in Leader to Legion Holdings, an investment company founded by Mr. Fábio Carvalho and specialized in corporate restructuring, in particular for restructurings within the retail sector ("Transaction"). The conclusion of the Transaction was subject to certain predefined conditions. Following this announcement, PPLA issued, on July 28, 2016, a new notice to the market stating that all previous conditions had been met and that the Transaction had been executed on that date.
Within the scope of the Transaction and aiming to enable a debt equalization plan with the entry of a new investor (Legion Holdings), Leader‘s debt was absorbed by a subsidiary of PPLA, who will receive credits for such debt through Leader’s cash flow generation, including credits arising from a possible sale of shares by the current controllers, as disclosed in PPLA’s financial statements and corresponding explanatory notes. Thus, in an eventual recovery scenario of the company, any paid amount will derive exclusively from such credit agreement and will only be payable to PPLA in its condition as Leader’s creditor, with no payment being related to the sale of equity interest by PPLA, FIP Principal or any other co-investors. It is important to highlight that neither PPLA, nor the Bank, have any political rights over Leader’s shares, which are now held and whose powers are exercised independently by Legion Holdings. Additionally, since the Transaction, PPLA has already made expressive accounting provisions for the aforementioned credits, as disclosed in its quarterly financial statements.
Finally, the Bank clarifies that it has not been notified of any legal proceedings involving the matter which was subject of the Official Letter and, as manager of FIP Principal, hereby states that it is not aware of and denies any agreement for reimbursement of equity investments that were originally made in Leader, either by FIP Principal, PPLA or any other investor
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Rio de Janeiro, November 24, 2017.
BANCO BTG PACTUAL S.A.
João Marcello Dantas Leite
Investor Relations Officer