This excerpt taken from the PBR 6-K filed Nov 28, 2006.
INCREASE OF AUTHORIZED CAPITAL AND INCORPORATION OF PETROQUISAS SHARES
At an Extraordinary General Meeting held together with the General Ordinary Meeting, on April 3, 2006, our shareholders approved an increase in our capital to U.S.$ 22,397 million (R$ 48,248 million) through the capitalization of retained earnings accrued during previous financial years, in the amount of U.S.$ 6,969 million (R$ 15,012 million), and without the issuance of new shares, in accordance with article 169, paragraph 1, Law No. 6,404/76. This capitalization aimed to bring our capital in line with the investments of an oil company given intensive use of capital and extended operating cycles.
Shareholders at the Extraordinary General Meeting held June 1, 2006 approved the incorporation of shares in Petroquisa by PETROBRAS, pursuant to the re-ratification of the Protocol of Merger and Incorporation on the share incorporation transaction executed by the two companies. The Board of Directors of the Company approved the issue of 886,670 preferred shares of the Company in connection with the incorporation of shares in Petroquisa by PETROBRAS. All share and per share information in the accompanying financial statements and notes has been adjusted to reflect the result of the issue of shares in connection with the incorporation of Petroquisas shares.