America Latina Logistica plans R$1.3 billion three-year convertibles

By Angela McDaniels

Tacoma, Wash., Sept. 17 - America Latina Logistica, SA plans to offer R$1,300,750,000 principal amount of three-year convertible debentures to its shareholders, according to a company notice.

The debentures will have a yield equal to Brazil's consumer price index, the IPCA, plus 300 basis points, and interest will be payable upon conversion or at maturity.

The debentures will be convertible into voting shares that are subject to trading restrictions for three years or units that are free of any trading restrictions, at the option of each subscriber.

The price for the conversion into a multiple of shares for the creation of units is R$12.10, and the price for the conversion into five voting shares is R$11.00.

The conversion prices represent discounts of 2.7% and 11.5%, respectively, to the weighted average closing price of the company's units in the past 90 days.

The company is required to maintain a group of controlling shareholders that holds more than half of its voting shares and is subject to transfer restrictions and a shareholders' agreement. The company said that as a result, there are substantial limitations on its capacity to issue additional units if its controlling shareholders do not add additional voting shares to the controlling block.

Some of the controlling shareholders want to acquire new voting shares and add them to the controlling block. The company is issuing the debentures in order to allow them to do so and to give its remaining shareholders the ability to maintain their stake in the company.

The controlling shareholders that participate will convert their debentures into restricted voting shares and add these to the controlling block.

The private offering is subject to the issuance of at least R$350 million of debentures, and shareholders will consider the proposal at an upcoming meeting.

The proceeds will be used to finance the company's investment plan over the next five years.

America Latina Logistica is a rail-based logistics operator with headquarters in Curitiba, Brazil.

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