LONDON, UK: Financial Conduct Authority (FCA) has approved the disposal of Contour Global to Brasil Participações S.A.
Kani Lux Holdings S.à r.l., a majority-owned subsidiary of ContourGlobal, had signed a definitive agreement with Infraestrutura Brasil Holding XVII S.A. (“Pátria Investments”) to sell the entire issued share capital of ContourGlobal.
Brasil Participações S.A., together with its subsidiaries, owns nine run-of-river hydro-electric generating plants operating under long-term contracts with 168MW of gross capacity in Brazil, together comprising ContourGlobal’s Brazil Hydro-Electric Generation Business.
In 2021, ContourGlobal announced that it had started the process of monetizing its renewables business in Brazil, in addition to considering further transactions with respect to other renewable assets, in order to unlock value for shareholders and close the gap between its share price and the intrinsic value of the Company’s assets as valued by the private market.
The Disposal represents a first step in this direction, creates compelling value for ContourGlobal shareholders, strengthens ContourGlobal’s balance sheet and enables more effective capital allocation. The Disposal is cash flow and credit accretive from a parent company perspective and a major step in the exit of the only meaningful non-EUR or USD currency exposure for the Company.
ContourGlobal further announces that the FCA has granted the Company, upon the publication of this announcement and the Circular, a dispensation from the requirement under the Listing Rules to hold a general meeting for the purpose of approving the Disposal as a Class 1 transaction, in accordance with the temporary modifications made to the Listing Rules pursuant to the terms of the FCA’s Statement of Policy and Technical Supplement entitled “Technical Supplement – modification of general meeting requirements under the Listing Rules”, each published on 8 April 2020.
Such dispensation has been granted on the basis that, in accordance with the FCA’s Statement of Policy, the Company has obtained written undertakings from shareholders holding more than 50 per cent of the Company’s issued share capital (being the requisite majority required to pass a resolution to approve the Disposal as a Class 1 transaction under the Listing Rules) that they approve the Disposal, and would vote in favour of a resolution to that effect at a general meeting of the Company, if such meeting were to be held.
ContourGlobal L.P., the Company’s majority shareholder holding, as at 7 April 2022, approximately 71.36 per cent of the Company’s issued share capital (excluding shares held in treasury), has provided a written irrevocable undertaking in these terms.
On the basis that the dispensation has been granted by the FCA upon publication of this announcement and the Circular, the Company is therefore not proceeding with a general meeting with respect to a resolution to approve the Disposal.
Accordingly, following the publication of this announcement and the Circular, the Disposal may be implemented subject to the satisfaction or (where applicable) waiver of the remaining conditions to which the Disposal is subject, details of which are contained in the Circular. As previously announced, the Disposal is expected to complete during Q2 2022.
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