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Message
From:
Sent:
To:
CC:
Subject:
Alex Monteiro ["cn=alex monteiro/ou=rio/o=vale"]
13/04/2010 13:06:07
Fabio Barbosa ["cn=fabio barbosa/ou=rio/o=vale@vale"]
Pedro Rodrigues ["cn=pedro rodrigues/ou=rio/o=vale@vale"]
Re: Res: Project Hills
Attachments: _.png; Business Plan vl.ppt
Fabio,
dando sequencia ao email abaixo, estou anexando apresenta9ao que descreve o projeto e mensura as responsabilidades e cronograma de desembolso, preparado pela area de neg6cio. Este Business Plan constitui anexo do acordo principal, eo cronograma de desembolso eo necessaria para atender as condi96es da concessao e a elaborayao do FS, que devera ser apresentado ao nosso board em aproximadamente 3 anos, da data da negocia9ao.
Segue recap das principais condi96es do neg6cio:
1) Aquisi9ao de 51% da BSGR Guinee Guernsey- controladora integral da BSGR Guinee SARL (baseada na Guine) - nas seguintes condi96es:
a) USD 500 MM no signing (previsto pra acontecer ainda em Abril/1 0)
b) USD 2 bi a serem pagos ap6s e se obtida a aprova9ao do Feasibility Study pelo Board da Vale, a ser apresentado aproximadamente em 3 anos- antecipa9ao de USD 500 MM caso a BSGR obtenha solu9ao de safda pela Liberia, com todos os consents, licenses e permits nesse pals;
c) Caso o Feasibility Study nao seja aprovado, seremos imediatamente dilufdos para 10 ou 20% do K total, em fun9ao de termos pago apenas 1 ou as duas parcelas de USD 500MM (signing+ adiantamento=20%)
2) Vale assume 100% do funding do projeto- CAPEX estimado em USD 8 bi- 100% estruturado com dfvida atraves de loan agreement da Vale Int. com a ProjectCo. BSGR repagara a Vale o equivalents aos 49% de participa9ao que detem com 50% dos dividendos que receber;
3) Ativos envolvidos na aquisi9ao: mining concession para explorayao dos blocos 1 e 2 de Simandou e Zogota, licen9as para explorayao de areas de minerio de ferro na Liberia;
4) Ambos os acionistas tem Lock up de aproximadamente 5 anos, a partir da data de assinatura dos contratos, s6 ha safda se houver algum breach contratual ou se nao aprovarmos o feasibility study, caso contrario, nao ha trava;
5) Garantias e lndemninities caped em USD 500 MM, a exce9ao de tax, titles, que ficaram full, uncaped;
6) Alem do purchase price - descrito no item 1 acima - antes do feasibility study teremos que desembolsar aproximadamente USD 3,5 bi para atendimento as condi96es do mining concession, que ja exige produ9ao em 2012 e toda infra pronta pra produzir em ritmo de 30 Mtlano, vide business plan;
7) RFOR para ambas as partes, com tag along para o minoritario;
8) Caso a BSGR venda sua participa9ao tera a obriga9ao de repagar toda sua parte na dfvida na JV, proporcionalmente a participa9ao vendida.
Qto ao FCPA, adicionalmente ao que se comentou, podero que o risco de fecharmos sem escrow nao e apenas reputacional, mas sim "risk is of civil administrative liability to the SEC for the Company" transcrevendo as palavras do especialista de FCPA do Clifford Chance.
Business Plan v1.ppt
Sds,
Alex Monteiro VALE Vale - New Business Development Department +55 21 3814-4210/4939 +55 21 9480-1486 email: [email protected]
Alex Monteiro/Rio/Vale
VALE-LCIA-0001451 0
Alex Monteiro/RioN i
ale Assuntoll~J{ doclink: document= '520E2F829C7C434E83257704001623CE' view= 1310412010 I'DA652E76E4E9CA5A48256FDD0048011E' database= '832576500055C65B' } 05:37
----------------------------------------------------------------------------------------------------l--------------------------------------------------------------------------------------------------1
Fabio,
Tendo em vista os riscos juridicos envolvidos, principalmente qto a FCPA, solicitei ao juridico que fizesse chegar a vc parecer tecnico, que so foi emitido ontem.
Ainda, assim, entendo da necessidade de update mas frequente e vou faze-lo .
Qto ao cronograma, encerraram-se na noite de ontem as negociacoes do Framework agreement e do Shareholders agreement. Ainda pendentes e em negociacao pel a area de negocios o Loan agreement e o Off take agreement, que devem acontecer ainda esta semana . Segundo o Eduardo, a intencao eh convocar extraordinaria e submeter a aprovacao ainda essa semana ou na proxima.
Nossas recomendacoes a area de negocios tem sido as seguintes, baseada nos riscos legais e comerciais :
1) Sea decisao for por fechar, que se faca em escrow (fianca bancaria nao elimina o risco FCPA). A posicao dos advogados eh clara, uma vez que consolidamos, corremos o risco deja estar quebrando o FCPA no 0+1, visto que nao conseguimos fazer um books and accounts review da 4 empresas que vem no pacote aquisicao (domiciliadas em Guernsey, Guine, Liberia e BVI);
2) Nao assinar sem antes fechar os contratos de offtake e Loan, visto que a outra parte tem direito de veto sobre contratos com partes relacionadas. Se nao fecharmos agora tx de juros e descontos comercais, estaremos em posicao muito mais dificil depois;
3) Due Dilligence- o resultado da due dilligence nao eh satisfatorio, tampouco exaustivo, eh preciso mais tempo e mais informacoes da outra parte. A protecao que inserimos foi de warranties e indemnities para alguns issues, como tax, uncaped. Contudo para outras liabilities a indenizacaop esta caped.
Estou no projeto Universe a partir de hj, mas seguirei acompanhando o desenrolar de Simandou e te mantendo atualizado.
Abraco, Alex.
Fabio Barbosa
----- Mensagem original ----
De: Fabio Barbosa
Enviada em: 04/13/2010 01:04AM ZW3
Para: Alex Monteiro; Pedro Rodrigues
Caro Alex,
Eu nao estou me sentindo tempestiva e apropriadamente informado sobre o chamado Projeto Hills, cuja discussao na Diretoria Executiva devera envolver varias dimens6es importantes. Pe9o que envie um briefing urgentemente sobre as discuss6es e mantenha uma retina mais adequada de informayao para mim.
Obrigado Fabio 0. Barbosa VALE Chief Financial Officer I Diretor Executive if (55-21) 3814-8888 I Fax (55-21) 3814-8820 I 8840 ~ [email protected]
VALE-LCIA-00014511
Ana Lúcia Campbell Sworn Public Translator and Commercial Interpreter
English – Portuguese – Spanish Edifício de Paoli
Av. Nilo Peçanha, 50/ 2606 CPF-MF: 430.405.357/49 20044-900 Rio de Janeiro Brazil Registry at JUCERJA No 147
Tel.: +55-21-2262.9371 Telefax: +55-21-3084.8484 e-mail: [email protected]
I, the undersigned, Sworn Public Translator and
Commercial Interpreter in and for the City and
State of Rio de Janeiro, Federative Republic of
Brazil, duly registered under No 147 at JUCERJA,
on February 7th 2001, CERTIFY and ATTEST that a 5
document written in PORTUGUESE was presented to
me for translation into ENGLISH, which I have
duly performed by reason of my official capacity,
as follows:
TRANSLATION Nº 1139/2016 10
VALE-LCIA-00014510
Message
From: Alex Monteiro
Sent: 13/04/2010 13:06:07
To: Fabio Barbosa 15
CC: Pedro Rodrigues
Subject: Re: Project Hills
Attachments: Business Plan v1.ppt
Fábio,
Following the email below, I’m attaching a 20
presentation which describes the project and
measures the responsibilities and expenditure
schedule, prepared by the business team. This
Business Plan is attached to the main agreement,
and the expenditure schedule is necessary to meet 25
Ana Lúcia Campbell
1139/2016 fl. 2
the conditions of the concession and the
preparation of the FS, which must be presented to
our board in approximately three years, counting
from the agreement date.
Below is a recap of the main terms of agreement: 5
1. Acquisition of 51% of BSGR Guinea Guernsey –
parent company of BSGR Guinea SARL (based in
Guinea) – in the following terms:
a) USD500MM in the signing act (expected to
happen even in April/2010); 10
b) USD 2 Billion to be paid after the (if
obtained) approval of the Feasibility Study by
the Vale Board, to be presented in approximately
3 years – anticipation of USD 500MM in case BSGR
obtains export solution through Liberia, with all 15
the consents, licenses and permits in that
country;
c)In case the Feasibility Study is not approved,
we will be immediately diluted to 10 or 20% of
the total K, for having paid only one or two sums 20
of USD500MM (signing + 20% in advance).
2. Vale is responsible for 100% of the project
funding- capital expenditure estimated in USD 8
Bi – 100% structured debt through loan agreement
of Vale Int. with ProjectCo. BSGR will repay Vale 25
Ana Lúcia Campbell
1139/2016 fl. 3
the equivalent to 49% of its shareholding with
50% of the dividend they receive.
3. Assets involved in the acquisition: mining
concession for exploration of Blocks 1 and 2 of
Simandou and Zogota, licenses for exploration of 5
iron ore areas in Liberia.
4. Both shareholders have Lock Up of
approximately five years, starting from the date
of signing the contracts, the only way out being
if a contractual breach takes place or if we 10
don’t approve the feasibility study; otherwise,
there are no locks.
5. Warranties and Indemnities capped at USD500
MM, with the exception of tax, titles, which are
full, uncapped. 15
6. Beside the purchase price – described in item
1 above- prior to the feasibility study we will
have to spend approximately USD 3,5 Bi for make
up for the mining concession terms, which demand
production as early as 2012, and all the 20
infrastructure to produce at a pace of 30Mt/year,
see business plan;
7. RFOR for both parts, with tag along for the
minority.
8. In case BSGR sells its shareholding it will be 25
Ana Lúcia Campbell
1139/2016 fl. 4
obliged to repay the entirety of its part in the
debt of the JV, proportionally to the amount of
shareholding sold.
In regard to FCPA, adding to what has been said,
I think the risk of closing the deal without 5
escrow is not only reputational, rather, “risk is
of civil administrative liability to the SEC for
the Company”, transcribing the words of Clifford
Chance’s specialist in FCPA .
(Attached link) 10
Regards,
Alex Monteiro
Vale
Vale – Ne Business Development Department
+55 21 3814-4210/4939 +55 21 9480-1486 15
Email: [email protected]
Alex Monteiro/ Rio/ Vale
-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-
Message
From: Alex Monteiro/Rio/Vale 20
Sent: 13/04/2010 05:37
To: Fabio Barbosa
Fabio,
In light of the legal risks involved,
particularly in regard to the FCPA, I asked the 25
Ana Lúcia Campbell
1139/2016 fl. 5
legal team to deliver to you a technical report,
which was only issued yesterday.
Nonetheless I do understand the necessity of more
frequent updates and will do so.
As to the schedule, were closed yesterday evening 5
the negotiations of Framework agreement and
Shareholders agreement. Still pending and in
negotiation by the business department, are the
Loan agreement and the Off take agreement, which
must still take place this week. According to 10
Eduardo, the intention is to convene a special
meeting of the board and submit for approval in
this week or the next.
Our recommendations to the business department
have been the following, based on the legal and 15
commercial risks:
1. If the decision is of closing the deal, that
it be made in escrow (bank financing doesn’t
eliminate FCPA risk). The lawyers’ standing is
clear, once we close it, we run the risk of 20
already being in violation the FCPA on D+1, given
that we couldn’t do a books and accounts review
of the 4 companies that come in the acquisition
package (located in Guernsey, Guinea, Liberia and
BVI); 25
Ana Lúcia Campbell
1139/2016 fl. 6
2. Not to sign it before closing the off take and
loan contracts, given that the other part has
veto rights over contracts with related parties.
If we don’t close the interest rate and
commercial discount now, we will be in a much 5
tougher position later on;
3. Due Diligence- the result of the due diligence
is not satisfactory, nor exhaustive; more time
and information is needed from the other party.
The protection we inserted was related to 10
warranties and indemnities for some issue, such
as tax, uncapped. However for other liabilities
the indemnity is capped.
I’m in the Universe project as of today, but will
keep on following the developments of Simandou 15
and keeping you updated.
Regards,
Alex
-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-
Original Message 20
From: Fabio Barbosa
Sent: 13/04/2010 01:04 AM ZW3
To: Alex.Monteiro; Pedro Rodrigues
Dear Alex
I’m not feeling timely and properly informed 25
Ana Lúcia Campbell
1139/2016 fl. 7
about the so called Project Hills, whose
discussion in the Executive Board should involve
several important dimensions. I ask you to send a
briefing urgently about the discussions and
maintain a more adequate information routine for 5
me.
Thank you.
Fabio O. Barbosa
Vale
Chief Financial Officer / Executive Director 10
Tel: (55-21) 3814-8888 / Fax: (55-21) 3814-8820/
8840
Email: [email protected]
-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-
Disclaimer 15
This email and its attachments may contain
privileged and/or confidential information. Use,
disclosure, copying or distribution of this
message by anyone other than the intended
recipient is strictly prohibited. If you have 20
received this email in error, please notify the
sender by reply email and destroy all copies of
this message.
**** THE ABOVE WAS the whole text of said
document, the true translation whereof I 25