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Out-of-Court Reorganization

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Out-of-court reorganization is a legal instrument, envisaged in Law 11,101/2005 (Law on Out-of-Court and Court-Supervised Reorganization and Bankruptcy), which allows a company to renegotiate with its creditors the payment conditions of its private debts, except labor dues.

This renegotiation is formalized through an Out-of-Court Reorganization Plan, which is characterized as a contract between one or more debtor companies and their creditors covered by that Plan. The Out-of-Court Reorganization Plan may cover the full amount of one or more types of debts mentioned in article 83, clauses II, IV, V, VI and VIII, of Law 11,101/2005, or a group of creditors of the same nature and subject to similar payment terms.

If more than 60% of the creditors adhere to the Out-of-Court Reorganization Plan, the debtor company can submit the Plan to the court and request its ratification. Once ratified, the Plan is binding on all creditors holding debts covered by the Plan even if they have not adhered to it.

The restructuring that is intended to be carried out is structured in the form of two Out-of-Court Reorganization Plans: the Plan jointly submitted by TPI and its subsidiaries Dable Participações Ltda., Maestra Serviços de Engenharia S.A., NTL – Navegação e Logística S.A. and Vessel-Log Serviços de Engenharia S.A. (“OR Plan of TPI”) and the Plan submitted by Companhia de Concessão Rodoviária Juiz de Fora-Rio (“OR Plan of Concer”). Both Plans cover only financial debts, which are debts resulting from operations conducted within the National Financial System and/or Capital Markets. Other types of debts were not, and will not be, included in these Plans.

On July 21, 2017, the Company, together with the above-mentioned subsidiaries, filed an application in court requesting ratification of the Out-of-Court Reorganization Plans. The application received the number 1071904-64.2017.8.26.0100 and is pending before the 2nd Bankruptcy Court of the Judicial District of São Paulo.

On July 25, 2017, the Honorable Judge of the 2nd Bankruptcy Court of the Judicial District of São Paulo approved the processing of the Out-of-Court Reorganization and ordered the suspension of all lawsuits and executions related to the debts covered by the Plans.

Triunfo has a history of investing in concessions in the main infrastructure sectors of the country, having entered new markets in recent years in line with its strategy of growth and providing differentiated and quality infrastructure services, while satisfying customers and becoming one of the most valued companies in the market in this business segment. Due to the discontinuation of certain operating segments of the Company, the worsening macroeconomic conditions, the unstable political scenario and executions by creditors, the Company drafted a financial restructuring plan and started implementing it when it announced the possibility of divesting its assets in the market. The proceeds from the divestment of assets will be used to reduce the debts of the Company and its subsidiaries, and one component of this strategy is the out-of-court reorganization plan announced by it. The agreement with creditors for debt amortization and the announcement of the request for ratification of the out-of-court reorganization of Concer, TPI and the subsidiaries Vessel, NTL, Maestra and Dable is in line with this strategy, which seeks the best solution, given the Company's situation, for its indebtedness and for the sustainability of its business.

The main documents related to the Out-of-Court Reorganization of the Company and its subsidiaries referred to above can be accessed below. The Company will keep the market informed on the progress of its Out-of-Court Reorganization.

Documents related to the Out-of-Court Reorganization proceedings

  • Jul/21: Request for ratification of Out-of-Court Reorganization Plans of TPI and Concer
  • Jul/24: Addendum to the ratification request
  • Jul/21: Out-of-Court Reorganization Plan of TPI, NTL, Vessel, Maestra and Dable
  • Jul/21: List of Creditors Covered by Out-of-Court Reorganization Plan (ORP) of TPI (Loans with Security Interest)
  • Jul/21: List of Signatory/Adhering Creditors of the ORP of TPI (Loans with Security Interest)
  • Jul/24: List of Creditors Covered by the ORP of TPI (Unsecured)
  • Jul/24: List of Signatory/Adhering Creditors of the ORP of TPI (Unsecured)
  • Jul/21: Out-of-Court Reorganization Plan of Concer
  • Jul/21: List of Creditors Covered by the ORP of Concer
  • Jul/21: List of Signatory/Adhering Creditors of the ORP of Concer
  • Jul/25: Decision that approved the processing of the Out-of-Court Reorganization Plan and suspended lawsuits and executions

Material Facts

  • Jul/21: Material Fact on request for ratification of out-of-court reorganization plans
  • Jul/25: Material Fact on approval of request for out-of-court reorganization

Call notices

  • Jul/28: Call notice for Creditors
  • Jul/28: Call Notice for Extraordinary Shareholders Meeting
  • Jul/28: Proposal of Extraordinary Shareholders Meeting

 

Out-of-Court Reorganization Plan of Triunfo and subsidiaries


1)    Out-of-court Reorganization Plan of Triunfo and subsidiaries Maestra, NTL, Vessel and Dable   

Debt Balance: excludes fines and interest on arrears.

Payment System – Auction: 30 days after approval, the Company will conduct a reverse auction, with the reserve price being R$100 million, which could possibly be increased up to R$112 million. Creditors who offer the highest discount in their debts will be proportionately paid with proceeds from the auction.  

Payment System – Amortization: creditors who opt for this system or did not win the reverse auction will have a four year grace period with four years to pay through the SAC system.

Restructuring of Triunfo's suretyships: inclusion of suretyships for the debts of Triunfo’s subsidiaries in the plan.    

Financial Reorganization of Concer

2)    Assumptions for Payment of Senior Creditors (BB, Itaú and Santander)    

Debt Balance: excludes fines and interest on arrears.

Payment System: monthly amortization through the SAC system, with settlement in February 2021.

Emerging Rights: if the emerging rights are received before February 2021, senior creditors may amortize their debts in advance and the balance payment will be recalculated in a SAC maturing in February 2021. 

Cash Sweep: if the accumulated Adjusted EBITDA of the concessionaire exceeds the project amount by R$20 million, extraordinary amortizations of senior creditors will be made in the excess amount. 

3)    Assumptions of Out-of-court Reorganization Plan of Concer    

Debt Balance: excludes fines and interest on arrears.

Payment System: creditors will be paid monthly at the Contract index + 0.5%. Creditors who adhered to the plan and are signatories will be paid from the third quarter of 2017 and other Covered Creditors will be paid after the court approval of the Plan.

Payment System - Principal: the principal of the Debt will be paid after grace period by 2019, followed by 5% in 2019, 25% in 2020 and the balance in 2021. In case of default of the payment of principal, the debt will be paid according to the out-of-court reorganization plan of Triunfo.

Payment System - Spread: the spread on debts (deducting 0.5% already paid with the Index) will be waived. If the Emerging Rights are received, the spread and the settlement of the principal will be paid in 2021, up to the limit of the amount received.

Decision Regarding of Out-of-Court Reorganization Plan of Triunfo and subsidiaries

3 November 2017