Resource item

PHAROL SGPS SA: informs on Proposal of point 1 of the agenda of the General Meeting of Shareholders to be held on March 25, 2022







PHAROL, SGPS SA

2021 ANNUAL REPORT

01 MANAGEMENT REPORT

3

2 SEPARATE FINANCIAL STATEMENTS

7

03 QUALIFIED ENTRIES

33

04 INFORMATION TO BE SUBMITTED PURSUANT TO ARTICLE 447 OF THE

CODE OF COMMERCIAL COMPANIES

34

“PHAROL”, “PHAROL Group”, “Group” and “Company” refer to the companies forming part of PHAROL SGPS, SA or to one of them, depending on the context.

1. MANAGEMENT REPORT

INTRODUCTION

As of December 31, 2021, PHAROL’s main assets are composed of (1) 320,200,159 ordinary shares of Oi, SA (“Oi”), representing 5.38% (excluding treasury shares held by Oi itself) of the capital Oi Total Social,

  1. debt securities of Rio Forte Investments SA (“Rio Forte”) with a nominal value of €897 million and currently valued at €51.9 million.

As of December 31, 2014, after the capital increase of Oi, concluded on May 5, 2014 (the “Oi Capital Increase”), PHAROL held a direct and indirect stake of 39.7% in Oi. This included a portion classified as non-current assets held for sale, following the exchange agreement (“Exchange”) entered into on September 8, 2014 and finalized on March 8, 2015, and the remaining interest of 22, 8% classified as investment in joint ventures and associates and therefore accounted for using the equity method.

On March 30, 2015, the exchange was completed, whereby PHAROL (1) transferred to Portugal Telecom International Finance, BV (“PT Finance”), a subsidiary of Oi, a total amount of 47,434,872 ordinary shares and 94,869,744 preferred shares of Oi, and (2) received from PT Finance debt securities of Rio Forte with a nominal value of €897 million and a call option on the shares transferred (“Option to purchase”). After completion of the exchange, PHAROL held an effective 27.48% stake in Oi corresponding to the 22.8% stake mentioned above plus 4.7% due to the decrease in the number of shares outstanding. by Oi.

The relevant agreements for the implementation of the new structure of Oi were signed on July 22, 2015. On September 1, 2015, a general meeting of shareholders of Oi was held during which the new structure was approved .

As of September 30, 2015, after the implementation of the New Structure, but before the voluntary conversion of preferred shares into ordinary shares of Oi, PHAROL held, directly or indirectly through wholly-owned subsidiaries, 84,167 978 ordinary shares and 108,016,749 preferred shares of Oi.

As of October 8, 2015, following the voluntary conversion of preferred shares into ordinary shares of Oi, PHAROL now holds, directly and indirectly through wholly-owned subsidiaries, 183,662,204 ordinary shares of Oi, representing 27 .18% of Oi’s total share capital (excluding treasury shares held by Oi itself). PHAROL’s voting rights in Oi were limited to 15% of the total ordinary shares of Oi.

With the implementation of the New Structure on July 30, 2015, the shareholders’ agreements, by which the joint control of Oi was exercised, were terminated. Until that date, PHAROL accounted for its interest in Oi as an investment in joint ventures. After this date, PHAROL considers that it has significant influence over Oi and qualifies it as an associated company. As a result, from July 30, 2015, the investment in Oi continued to be accounted for using the equity method, based on PHAROL’s economic interest in the results of Oi.

On April 29 and May 19, 2016, PHAROL, due to a corporate reorganization, transferred the direct ownership of 128,213,478 ordinary shares issued by Oi SA, to its wholly owned subsidiary BRATEL BV. Due to corporate reorganization, BRATEL BV now directly owns (and PHAROL indirectly owns) 183,662,204

ordinary shares of Oi SA, which represented 22.24% of the total share capital of Oi SA (27.18% excluding own shares held by Oi itself).

On September 15, 2017, in order to concentrate all its operations in Luxembourg, PHAROL transferred the ownership of all the shares that BRATEL BV holds in Oi SA to its subsidiary BRATEL S.à.rl, 100% owned by BRATEL BV

In December 2017, and after the decision of the Court of the 7th Commercial Court of Rio de Janeiro (of which it deals with the Judicial Recovery of Oi) and which decided to withdraw the rights of the members of the Board of Directors of Oi upon approval of the Judicial Recovery Plan, it was understood that PHAROL would lose the significant influence it had hitherto had over its partner Oi. Therefore, as of December 31, 2017, PHAROL started valuing its investment in Oi at market value and classifying it as “Financial Assets”.

Oi SA, in the publication of its consolidated results for 2017, announced that it had restated its consolidated shareholders’ equity as of January 1, 2016 and December 31, 2016, amounting to BRL 18 billion and BRL 19 billion respectively. Following this restatement, PHAROL’s stake in Oi, being accounted for using the equity method, was restated and valued at zero over the periods of January 1, 2016 and December 31, 2016.

On July 20, 2018, following the approval of the Capital Increase by conversion of debt into shares, Oi’s share capital decreased from 825,760,902 shares to a total of 2,340,060,505 shares, i.e. a dilution of the PHAROL’s stake in Oi at less than 8%.

On January 9, 2019, as part of the capital increase due to the Entry of New Resources, Oi went from 2,340,060,505 shares to a total of 5,954,205,001 shares representing its share capital, with a dilution of PHAROL’s stake in Oi to less than 4%, even if it partially accompanied the targeted capital increase.

On April 2, 2019, with the approval of an agreement between PHAROL and Oi on January 8, 2019, by which Oi undertook to reimburse PHAROL for the damages suffered as a result of the actions and means of Oi for the acquisition of the Oi shares subscribed in the aforementioned capital increase, PHAROL now holds a 5.51% stake in the share capital of Oi.

In 2020, PHAROL sold all the preferred shares of Oi and a small part of the common shares, resulting in a final 5.37% stake in the share capital of Oi.

In 2021, after carrying out operations to buy and sell shares in Oi, PHAROL held a position of 5.38% in Oi (excluding own shares held by Oi itself).

In 2021, PHAROL’s negative results only reflect the costs of the operation during the year, being mainly personnel costs and external supplies and services. In terms of equity, and following the implementation of the receivership plan also impacted by Brazilian political and economic instability, the value of PHAROL’s investment in Oi was reduced to 38.6 million euros. euros, being responsible for reducing PHAROL equity to 70.7 million euros. Concerning the credit on Rio Forte, despite some timid progress in the legal proceedings underway in Luxembourg and Portugal, nothing very relevant has affected its valuation. Reason for which it was chosen not to record changes in its value in the 2021.

This is an excerpt from the original content. To continue reading it, access the original document here.

Warning

Pharol SGPS SA published this content on February 25, 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unmodified, on February 25, 2022 21:15:11 UTC.

Public now 2022

All the news of PHAROL, SGPS SA

Sales 2020

Net result 2020 -14.3M
-16.1M
-16.1M
Net cash 2020 20.5 million
23.1M
23.1M
2020 PER ratio -7.27x
2020 performance
Capitalization 66.2 million
74.6 million
74.6 million
EV / Sales 2019
EV / Sales 2020
# of employees 8
Floating 66.6%


Duration :

Period :




PHarol, SGPS SA Technical Analysis Chart |  MarketScreener

Trends in technical analysis PHAROL, SGPS SA

Short term Middle term Long term
Tendencies Bearish Neutral Bearish



Evolution of the income statement