1. Investments1.1 Oi’s takeover of BrT completes the restructuring of PREVI’S stakes in the telecommunications sector
In December, the National Telecommunications Agency (Anatel) approved Oi/Telemar’s takeover of Brasil Telecom (BrT). With the operation, PREVI received R$1.23 billion for the controlling stakes it had in Invitel and in the Institutional Investors' Fund. Another R$400 million will be paid for the stock PREVI held directly in Brasil Telecom Participações, as per the tag along of 80% of the control sale price, as provided for by the law. Oi took-on the commitment of paying a total of R$5.37 billion for the equivalent of 61% of BrT’s voting capital.
PREVI added value to its 12.96% stakes in Oi/Telemar, since it will go on to be part of the block that controls the new company, which will be stronger and more competitive. Pursuant to legislation that is specific to the sector, since PREVI held controlling stock in BrT, by means of Invitel, it could not control Telemar as well.
In April, when the proposal for the sale of BrT’s control to Oi/Telemar was made formal, several agreements were signed putting an end to legal disputes with Banco Opportunity. Since 2000, PREVI and other shareholders had been seeking repair for their rights to preserve the investments that had been made.
There were years of discussions and accumulated divergences until this outcome was reached. The result allowed the partnership and regulatory conflicts to be overcome and will allow PREVI to focus on the effort of boosting Oi/Telemar’s value.1.2 PREVI followed-up on the increase in Vale’s capital
In order to ensure resources for the internationalization strategy it has designed for its activities, in the early second half of the year, Vale made a public offer of 445,989,984 new shares to the domestic and international market, corresponding to a total of some R$19.5 billion. PREVI, together with the other partners, kept its stakes in Valepar’s ordinary stock and, thus, in the control of Vale.1.3 Firm position in the Aracruz and Sadia cases
In September, Sadia and Aracruz announced major financial losses in operations they had carried out in the derivatives market. As a minority shareholder in these companies, PREVI acted swiftly and requested the convening of Extraordinary General Meetings (EGM) to get more information about losses and demand responsibility be determined.
Based on the corporate law and as a minority shareholder, holding more than 5% of the ordinary stock, PREVI sent a letter to Sadia to request an EGM be convened, and was readily responded to. At Aracruz, meanwhile, since it did not hold more than 5% of the ordinary stock, PREVI led a movement among other minority shareholders and influenced the decision of Aracruz’s Board of Directors to convene a Meeting too.1.4 Invepar enhances its performance in infrastructure
In late October, based on its growth and diversification strategy, Invepar – Investimentos e Participações em Infraestrutura S.A., the company that administers the so-called “Linha Amarela,” in Rio de Janeiro, and the Concessionária Litoral Norte, in Bahia, made the winning bid, together with OAS Construtora, for the longest section of the highway auction held by the government of the State of São Paulo, totaling 444 kilometers of the Raposo Tavares Corridor. With this move, Invepar was able to add-on new partners (Petros and Funcef), to get ready for growth, to and contribute to reduce PREVI’S misalignment in this company.
On 12/29, Invepar made its acquisition of the direct and indirect shareholding control over the Rio de Janeiro Subway system formal. PREVI held stakes in the two tips: in Invepar, holding some 83% of the company’s joint stock, and indirectly, with 12.9% stakes in the capital of the Rio de Janeiro Subway. The total value of the purchase and sale agreements reached approximately R$995 million. The completion of the sale is still dependent on the agreement of the government of the State of Rio de Janeiro.1.5 Liquidation of Paranapanema’s debt
The Paranapanema holding completed its financial restructuring process in November. PREVI went on to control 24% of a holding that is not only debt-free, but has a good cash position. In the beginning of the restructuring process, the company’s debt was higher than its economic value.1.6 Kepler Weber retakes leadership
The company’s financial restructuring, completed in 2008, echoed very well in the market: minority stakeholder stakes in the capital soared from 2% to upwards of 40%. Aiming to enhance its communications with these new shareholders, Kepler Weber hired a professional to serve as the company’s CFO and Investor Relations director.
The company, in which PREVI holds 17.67% stakes, reclaimed its leadership of the agricultural product storage equipment market.1.7 Changes at Tupy
After the completion of the financial restructuring process at the company, in which PREVI holds 35.61% stakes, Tupy’s capital structure became compatible with the market and with the range of its performance.1.8 PREVI puts the share lease strategy into practice
In July, the Executive Board approved the strategy of leasing part of PREVI’S market portfolio shares to boost the profitability of the Variable Income assets. The lease is made for a certain term, and PREVI continues receiving dividends, interest on equity, and other security yields, and the transaction is necessarily reversed before the companies’ meetings.
In the stock loan service, those who make the loan guarantee the shares for an amount equivalent to 100% of the price of the lot of stock, added of additional as per these shares’ price volatility.1.9 Opportunities in the crisis: private equity and venture capital
Plano 1 gave continuity to its investments in private equity and venture capital funds. A total of R$280.42 million were taken-on in commitments in five new funds. These are selected investments in companies with major appreciation potential and in several sectors of the economy.1.10 Real estate is up
The Brazilian real estate market experienced expressive growth as of 2007, a fact that was reflected in PREVI’S portfolio. Plano 1’s real estate portfolio topped out, in December 2008, at R$3.2 billion, with accumulated profit of 21.61% in the year, the highest among the Entity’s investments. This rate was well above the accumulated actuarial index of 12.60%.1.11 In favor of accessibility
PREVI set initiatives into motion among the properties in which it holds stakes to provide office buildings with accessibility mechanisms for people with debilities. The administrators are instructed, for example, to create special parking spaces, to install access ramps, and to adapt their bathrooms and elevators. Some condominiums have already implemented part of the required measures, while others are still preparing their projects.1.12 Shopping centers refurbished
PREVI holds stakes in 14 shopping centers, in a total investment of nearly R$1.06 billion. This amount accounts for 33% of Plano 1’s Real Estate portfolio. Several refurbishment projects were carried out in 2008, and PREVI invested in expanding four shipping centers. With a few projects under development, and others already being deployed, investments were in the order of R$48 million.1.13 The PREVI Futuro plan invested in IBrX-50 stock
Since late 2006, the PREVI Futuro plan had been allocating Variable Income resources, however, only to purchase PIBB – Fundo de Índice Brasil-50 – Brazil Tracker quotas. PIBB fund quotas are traded at Bovespa and it reflects the variations and profitability of the IBrX-50 (a portfolio of the most traded shares at Bovespa).
As of February 2008, the PREVI Futuro Plan started investing directly in stock featured in the IBrX-50 Index. The main assets that were acquired were: Bradespar PN (R$50 million), Petrobras PN (R$44.2 million), Petrobras ON (R$30.4 million), Bradesco PN (R$22.3 million), Itaubanco PN (R$20 million), Gerdau (R$12.5 million) and Vale PNA (R$9.1 million).