PREVI - Relatório Anual 2007

A firm attitude at the right time resulted in a gain of R$636 million

When the owner of the largest group of steel mills in the world (Mr. Mittal) bought the controlling stock of Arcelor in Europe, he thought of offering only R$32.68 for each share to the minority holders of Arcelor Brasil. PREVI did not agree with that attitude and initiated a discussion, taking this case to the Comissão de Valores Mobiliários (CVA) (Stock Exchange Commission). Based on the allegations presented by PREVI, CVM accepted most of our positions, and that fact raised the price per share to R$53.89.

Thus, PREVI sold all its participation in Arcelor Brasil by approximately R$1,6 billion, price which exceeded the initial offer by R$636 million.

Further progress in the re-structuring of the telephonic sector

"Slowly, one goes far". That saying, which not always proves to be true, applies to the administration of the telephone sector in PREVI's portfolio. Through a process that took several years and that has required determination to improve its governing, value and liquidity, important steps were taken.

First, PREVI organized the selling of Telemig and Amazônia Celular, conducted under good negotiating conditions.

Secondly, we acquired, together with the other partners of Brasil Telecom, the participation held by Italia Telecom in that company. That acquisition had a positive impact in the simplification of the shareholders' composition and the elimination of conflicts of interests within that company.

Improvement in the management of the real estate portfolio

PREVI tried to sophisticate the control systems on its real estate investments, with a view to accompany the work of the administrating companies, in addition to continuing with the auditing of the accounting, financial and asset management of real estate undertakings.

Defending a novel attitude, PREVI advocates for the adoption of good governing practices in real estate undertakings, as it is already followed in other sectors. To that end, it has promoted technical committees that supervise the works intended to improve and modernize shopping centers. PREVI also encourages the book-keeping of all entries and the creation of separate entities to invest funds originating from transactions made in shopping-centers.

Plano 1 sold R$5,5 billion in excellent conditions

In order to meet our cash budget as well as our Regularization Plan, Plano 1 sold R$5,5 billion in stock shares from different companies. The selling process was carefully executed, taking advantage of opportunities offered by the market. With that, we obtained good results in the sales and liquidity for the plan to pay its benefits.

Top in profitability

Plano 1: 35 % in 2006 and 37.27 % in 2007. Plano PREVI Futuro: 17.9 % in 2006 and 15.96 % in 2007. Those figures are among the best ones reached in the Pension Plan sector, and even by investment funds as a whole. With that, PREVI's associates will be benefited by having an increase in the value of their investments, which means more guarantees and better benefits.

New flags in corporate governing

PREVI's campaign to increase the standards of governing in corporations moves on. In addition to the eforts to establish statutory audit committees in the corporations that do not have them yet, and with a view to segregate and further improve the accounting analysis in those institutions, PREVI is heading a discussion to transform the Shareholders' General Assemblies in more transparent events, counting with a greater participation of the minority shareholders. The scope here is to encourage the consolidation of the capital market in Brazil.