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PBR » Topics » Holders of ADSs may be unable to exercise preemptive rights with respect to the common or preferred shares underlying the ADSs.This excerpt taken from the PBR 20-F filed May 22, 2009. Holders of
ADSs may be unable to exercise preemptive rights with respect to
the common or preferred shares underlying the
ADSs.
Holders of ADSs who are residents of the United States may not
be able to exercise the preemptive rights relating to the common
or preferred shares underlying our ADSs unless a registration
statement under the U.S. Securities Act is effective with
respect to those rights or an exemption from the registration
requirements of the Securities Act is available. We are not
obligated to file a registration statement with respect to the
common or preferred shares relating to these preemptive rights,
and therefore we may not file any such registration statement.
If a registration statement is not filed and an exemption from
registration does not exist, JPMorgan Chase Bank, N.A., as
depositary, will attempt to sell the preemptive rights, and
holders of ADSs will be entitled to receive the proceeds of the
sale. However, the preemptive rights will expire if the
depositary cannot sell them. For a more complete description of
preemptive rights with respect to the common or preferred
shares, see Item 10. “Additional
Information—Memorandum and Articles of Association of
Petrobras—Preemptive Rights.”
Restrictions
on the movement of capital out of Brazil may impair the ability
of holders of ADSs to receive dividends and distributions on,
and the proceeds of any sale of, the common or preferred shares
underlying the ADSs and may impact our ability to service
certain debt obligations, including guarantees and standby
purchase agreements we have entered into in support of
PifCo’s notes.
The Brazilian government may impose temporary restrictions on
the conversion of Brazilian currency into foreign currencies and
on the remittance to foreign investors of proceeds from their
investments in Brazil. Brazilian law permits the Brazilian
government to impose these restrictions whenever there is a
serious imbalance in Brazil’s balance of payments or there
are reasons to foresee a serious imbalance.
The Brazilian government imposed remittance restrictions for
approximately six months in 1990. The Brazilian government could
decide to take similar measures in the future. Similar
restrictions, if imposed, could impair or prevent the conversion
of dividends, distributions,
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or the proceeds from any sale of common or preferred shares
from reais into U.S. dollars and the remittance of
the U.S. dollars abroad. If such restrictions were imposed,
the depositary for the ADSs would hold the reais it
cannot convert for the account of the ADS holders who have not
been paid. The depositary would not invest the reais and
would not be liable for the interest.
Similar restrictions, if imposed, could also impair or prevent
the conversion of payments under guaranty and standby purchase
agreements supporting PifCo’s notes from reais into
U.S. dollars and the remittance of the U.S. dollars
abroad. In the case that the PifCo noteholders receive payments
in reais corresponding to the equivalent U.S. dollar
amounts due under PifCo’s notes, it may not be possible to
convert these amounts into U.S. dollars. These
restrictions, if imposed, could also prevent us from making
funds available to PifCo in U.S. dollars abroad, in which
case PifCo may not have sufficient U.S. dollar funds
available to make payment on its debt obligations.
In addition, payments of dividends and other distributions to
shareholders and payments under Petrobras’ guarantees and
standby purchase agreements in connection with PifCo’s
notes do not currently require approval by or registration with
the Central Bank of Brazil. The Central Bank of Brazil may
nonetheless impose prior approval requirements on the remittance
of U.S. dollars abroad, which could cause delays in such
payments.
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