This excerpt taken from the PBR 6-K filed Feb 2, 2006.
Petrobras enters into an agreement for the acquisition of the companies, El Paso Rio Claro Ltda. (Macaé Merchant) and El Paso Rio Grande Ltda.
Rio de Janeiro, February 02 , 2006 PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], , a Brazilian international energy company, advises that it signed, yesterday, a Memorandum of Understanding (MOU), containing the terms for the acquisition of the companies El Paso Rio Claro Ltda. (Macaé Merchant) and El Paso Rio Grande Ltda (Marketco). Following the signature of the MOU, the parties will now commence a due diligence process, the negotiation and the preparation of the definitive contracts to conclude the transaction.
The parties will make every effort to conclude the transaction in the least possible time, and definitive contracts shall be signed by mid-March 2006.
With the signature of the MOU, the parties will jointly request the temporary suspension of the international arbitration proceedings and of the Cautelar Court proceedings in process in the Courts of the State of Rio de Janeiro. In the event the process of due diligence, the detailing and negotiation of the acquisition process take place to the satisfaction of the parties, the definitive contracts will be executed with a price of US$ 357.5 million for the debt and transfer of the quotas. Once this transaction is concluded, the parties are to jointly request the termination of the international arbitration proceedings and of the Cautelar Court proceedings.
The total sum of approximately R$ 518 million which was deposited by Petrobras with Banco Itaú S.A. for the benefit of El Paso Rio Claro Ltda., against provision of a bank guarantee letter issued by the same bank, will be returned to Petrobras upon the conclusion of the transaction, together with corresponding interest.
The final terms of the definitive contracts will need to be submitted for the approval of the Board of Directors and of the Administrative Council of Petrobras and for the approval of the relevant bodies of El Paso.