On Monday, August 5, the board of Net Serviços decided that each new share to be issued as part of the company?s capitalization process will be priced at 70 cents of a Brazilian Real (now about 0.23 US Dollars). Following the announcement, Net fell 12% to 0.61 BRL on the São Paulo Stock Exchange (Bovespa). The number of new shares to be issued totals some 854.3 million (431.1m common, 423.2m preferred), for a capital increase of 598.1m BRL. In light of the stock?s low market price, an extraordinary meeting has been convened for August 16 to authorize another capital increase in line with the controlling shareholders? firm commitment to inject 1bn BRL. Augusto Rocha, director of investor relations, says it?s also necessary to meet outstanding demand for new shares, mostly from convertible debenture holders. Declining to cite precise numbers, he says CEO Luiz Antônio Viana?s forecast of 1.25bn BRL could be reached when the capitalization process is complete. ?It may be a bit more or a bit less,? he adds.
Capitalization
