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FAQ – FREQUENTLY ASKED QUESTIONS ABOUT CEMIG’S 2017 CAPITAL INCREASE
 

 

Questions related to theExtraordinary General Meeting - 03/24/2011

 

1. What is the period for subscription of shares?

A: The right of preference (‘right of first refusal’) has to be exercised in the period October 30 to November 29, 2017 (this is called ‘the First Refusal Period’), in the proportion of 15.8876242% of the shares held (of each type) by the stockholder at the close of the day on which the General Meeting of Stockholders (EGM) is held, that is to say the close of October 26, 2017. Shares subscribed must be paid for at the time of subscription.

 

2. Can a stockholder subscribe at a percentage proportion lower than 15.8876242%?

A: Yes.
The stockholder may subscribe only a part, and may assign the rest of his/her first refusal entitlement, or may trade it on the stock exchange.
Assignment is done through the Bookkeeping Bank.
Buying or selling of these entitlements takes place through the stock exchange.

 

3. What is the procedure for a stockholder to subscribe shares?

A. Holders of shares deposited with the B3 Exchange should exercise their rights through their custody agents (brokers), in accordance with the rules and deadlines specified by B3. 
Holders of common and preferred shares that are registered with Itaú will, if their registration details with the bank are up to date, receive pre-printed forms using which they may subscribe the issue, and also opt to subscribe leftover shares. They may sign and present these forms at any branch of Itaú, with corresponding payment or authorization for debit in current account.
Stockholders who do not receive the printed material from Itaú and wish to exercise their right to subscribe the issue should visit any branch of Itaú.
For further explanations in relation to subscription of the shares at Itaú, stockholders may contact the Itaú Investfone investment center, by phone on these numbers:

From State capital cities: 3003-9285
From other locations: 0800-720-9285.
Lines are open on business days from 9 a.m. to 6 p.m.

 

4. Can a stockholder who has a right of first refusal (i.e. right of preference in the subscription) assign that right?

A. Holders of shares or Units issued by Cemig who want to trade their rights of first refusal (preference) in the subscription may do so within the First Refusal Period, subject to the rules, periods and practices of B3 (the São Paulo stock exchange). They should ensure that they do so in time for their subscription rights to be exercised within that period. 
Holders whose shares are held in custody at the Assets Deposit Center of B3 should contact their custody agents (brokers). Holders of shares deposited at Itaú who want to trade their first refusal rights may do so at one of the specialized branches of Itaú.

 

5. Can a person who has not participated in the subscription take part in the subscription of ‘leftover shares’ (i.e. shares not initially subscribed)?

A: No. By not taking part in the initial subscription, that person loses the right to allocation of any ‘leftovers’.
A stockholder who subscribes only a proportion of their entitlement will only have that same proportion of entitlement in allocation of the ‘leftover’ shares.
On the other hand, if there are shares remaining after the allocations of ‘leftover’ shares, the Company will sell them on the stock exchange. At that point, any person, whether a stockholder or not, will be able to buy them.

 

6. What are the periods for the allocation of the ‘leftover’ shares?

A: The first allocation of ‘leftover’ shares will take place on December 5, 6 and 7, 2017, in the proportion in which stockholders have subscribed shares during the preference period.
The second allocation will be on December 13 and 14, in proportion to the aggregate totals of shares which each stockholder has subscribed in the aggregate of (a) the first allocation and (b) the preference period.

 

7. Is a stockholder who misses the period for subscription of shares able, even so, to take part in the allocations of ‘leftovers’ (i.e. those shares that were not allocated in the subscription period)?

A: No. In this case the stockholder loses the right to take part in the subsequent allocation.

 

8. Can a holder of one type of share subscribe shares of the other class?

A: No. Stockholders may only subscribe shares of the same class as they held at the close of October 26, 2017.

 

9. What is the ‘ex-’ date?

A. The ‘ex-date’, in this case, is October 27, 2017.

 

10. When will the stockholder have the right to sell (a) the shares subscribed, or (b) the shares acquired on a stock exchange after the allocations of ‘leftovers’?

A: (a) As soon as a stockholder has the Subscription Receipt, that Receipt may be traded immediately.
(b) If the stockholder does not want to trade the Subscription Receipt, and opts to trade the new shares: the new shares will be available for trading five business days after the date of the Extraordinary General Meeting of Stockholders (EGM) that finally ratifies the capital increase.

 

11. Can holders of ADRs (American Depositary Receipts) take part in the capital increase?

A: No. Holders of ADRs may not take subscribe any part of the capital increase. 
Due to the complexity of registration of the capital increase with the US Securities Exchange Commission (SEC), and the high costs involved, Cemig opted not to register this capital increase with the SEC.
Citibank, as the Depositary Bank for ADRs, will try to sell the rights in the Brazilian market and, if there is a market and if the sale is possible, will make a distribution of the net proceeds arising from the sale (gross revenue from the sales, less charges and expenses), in US dollars, to the holders of ADRs.

 

Questions related to theExtraordinary General Meeting - 03/24/2011 

1 What is the number of shares in Light that are subject to the Put Option?

Answer:The Put Option granted by Cemig to the Shareholder Banks is not an option to sell shares in Light, but an option to sell shares in Lepsa (Luce Empreendimentos e Participações S.A.) and RME (Rio Minas Energia Participações S.A.).

 

2 What is the value of the Put Option per share in Light? Is the published amount of R$ 1,560 million the whole amount payable, or only the premium (i.e. the difference between the market value of the shares and the price of the Put Option)?

Answer:The figure of R$ 1,560 million is the total exercise price, on September 1, 2017, of the Put Option on the shares in RME and Lepsa.

 

3 What is the new date that Cemig is seeking for exercise of the Option (item ‘f’ of the proposal)?

Answer: November 30, 2018.

 

4 What is the financial cost of this postponement? Is there any change in the financial terms of the Put Option? Please confirm the present financial terms of the Put Option, and the new terms?

 Answer:The present financial terms of the Put Option will be maintained, that is to say, the financial cost of the operation is the CDI rate +0.9%. The conditions of the Put Option can be seen in the minutes of the Extraordinary General Meeting of Stockholders held on March 24, 2011, which is available on our website at: http://cemig.infoinvest.com.br/enu/8458/AGE_240311_H_ing.pdf

 

 

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