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Vale to Offer Two Series of Mandatorily Convertible Notes
07/07/2009 - Vale SA announces plans to offer two series of mandatorily convertible notes due 2012 through its wholly-owned subsidiary, Vale Capital II.
Vale SA announced plans to offer two series of mandatorily convertible notes due 2012 through its wholly-owned subsidiary Vale Capital II.
At their maturity, the Series VALE-2012 Notes will be mandatorily converted to American Depositary Shares, each representing one common share of Vale, and the Series VALE.P-2012 Notes will be mandatorily converted to American Depositary Shares that will each represent one preferred class A share of Vale. Together, the American Depositary Shares will represent up to an aggregate of 18,415,859 common shares and 47,284,800 preferred class A shares of Vale, all of which Vale currently holds in treasury.
Under an agreement to be entered into between Vale and Vale Capital II, Vale will sell to Vale Capital II the number of Shares that Vale Capital II will require to satisfy its obligations under the terms of the notes. Vale's use of treasury stock to constitute the American Depositary Shares has been authorized by the Brazilian Securities Commission (CVM).
The notes will be unsecured and unsubordinated obligations of Vale Capital II and will be fully and unconditionally guaranteed by Vale. The guarantee will be an unsecured and unsubordinated obligation of Vale.
Vale said that it plans to use net proceeds of the offering for general corporate purposes.
Citi and J.P. Morgan are acting as book-running underwriters.
Vale (formerly Companhia Vale do Rio Doce, or CVRD) is a global company with a mission to transform mineral resources into prosperity and sustainable development. Headquartered in Brazil, Vale has a workforce of over 100,000 employees, including outsourced workers.
