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Votorantim, Arainvest Agree on Investment Terms

Sept. 15, 2008 - (Press Release) Votorantim Celulose e Papel S.A. (VCP), announces, that Votorantim Industrial S.A. (VID), the controlling shareholder of VCP, and Arainvest Participações S.A. (Arainvest), entered into an agreement to establish the obligations of the parties with respect to their investments in VCP and Aracruz Celulose S.A. (Aracruz). This agreement represents one more step in the Corporate Restructure of VCP and Aracruz.

Pursuant to the agreement, VID and Arainvest agreed to contribute all of each of their stakes of VCP and Aracruz, respectively, in a recently formed holding company (.Holding.), through which VID and Arainvest will maintain joint control of both VCP and Aracruz.

The transfer to the Holding of each of VID.s and Arainvest.s stakes in VCP and Aracruz is conditioned on the acquisition by VCP of approximately 28% of the common stock of Aracruz owned by Arapar, on the terms agreed on and disclosed on the material fact released on August 6, 2008. Arainvest agrees with this acquisition and, in accordance with the terms and modified conditions of the February 5, 2003 agreement between Arainvest and Arapar, will renounce both its right of first refusal and its tag-along rights.

With the conclusion of the transactions referred to above, as is expected to occur by October 6, 2008:

  • the Holding will own 100% of the common stock of VCP, approximately 28% of the common shares of Aracruz, and 14.8% of the preferred shares of Aracruz;
  • VCP will own approximately 56% of the common stock of Aracruz;
  • VID and Arainvest will each hold 50% of the voting stock of Holding and 57,23% and 42,77%, respectively, of Holding.s total capital, and will exercise their voting rights as contemplated, among other matters, in a Shareholders. Agreement; and
  • Arainvest will have paid approximately R$530 million to VID pursuant to the terms agreed upon between them.

VID and Arainvest also confirm their intention to integrate the activities of Aracruz and VCP. The terms of this integration will be submitted for approvals pursuant to applicable law.

SOURCE: VCP




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