THE ERROR IS HERE
(translated by direct of document in portuguese)
"(xxii) Right of First Refusal: Right of Preference will be safeguarded for the subscription of Debentures to shareholders of record at the end of the day October 24, 2014 ("Shareholders") of proportional to the equity position held by each shareholder on that date form ("Law Preference "). On this date, the total amount of Debentures of the Issue is 15.13% of all shares representing the capital stock of the Issuer (the "Shares"). like this,
for every 1 (one) share held, the shareholder will Preemptive Rights to subscribe for 0.1513 Debentures. The Shares will be traded without Preemptive Rights (formerly subscription) from October 27, 2014 (inclusive). Because of the private nature and characteristics of Issue will not be extended to holders of GDSs subscription right of the Debentures, as provided in Section 4.04 of the Deposit Agreement, signed on April 8, 2011 and amended on May 4, 2012, between Deutsche Bank Trust Company Americas and the Issuer. Deutsche Bank Trust Company Americas, the GDS depositary institution will effect the sale of corresponding subscription rights of the Debentures, allocating the resources it arising, if any, to holders of GDSs"
>>>>>But this is the big error, it do not represent 15% of all because one share gives the right to subscribe for debentures 0.15, but this has no numerical equivalence. A debenture that shareholders will pay R$20.00 real exact entitles to convert into 2.5 shares (20.00 / 8.00(average share price with 25% discount) = 2.5 shares per converted debentures ). This parameter is only for the purpose of calculation for conversion of debentures into shares.
However, as described in the document will be issued 4.5 million of debentures that will be converted into 2.5 shares / each and will ride approximately 11.25 million shares when converted. The way it is described, which represents 15% of total shares, is misleading, since it actually represents a 38% increase in participation trigger (11.25 mi will be a total of 30m shares today). The numerical equivalence can not be made on the same basis. Used a number of actions and compared with the numerical amount on debentures. Elementary error.
Considering only the issue of dilution
As each debenture will equal approximately 2.5 HRTP3, so the 4.5 million debentures are equivalent if converted, to 11.25 million HRTP3 (eleven million, two hundred fifty thousand shares).
If we consider the total shares issued today, 29,748,449, representing a percentage of 38% of the total. What will the terms on October 24, 2019 a total of 40,998,499 HRTP3 (forty million nine hundred ninety-eight thousand, four hundred forty-nine shares). As at the date of 27.10.2014, officially, if this issue passes, the HRT will increase capital and its shareholding, shareholders today that not recompose its position by acquiring this issue will only proportionally 73% stake that held on 24/10/2014.
The shareholders GDSs can not participate in debentures, therefore, will be diluted and will be equivalent to 73% of the share that shareholders have today participation.
lack of knowledge in basic math of HRT staff is unbelievable!
Imagine that this document passed into the hands of everyone there ... CEO, CFO, fiscal and administrative, legal Council, Investor Relations ...