elmat,
I own RIO-P, as I figure the Preferred shares will eventually catch up with the Common. The yield on the Preferred is higher, as they are cheaper. The dividend amount is the same.
finance.yahoo.com
finance.yahoo.com
David
----- Original Message -----
From: barbara.geluda@cvrd.com.br
To:
Sent: Monday, February 21, 2005 11:52 AM
Subject: Re: Enc: Difference between RIO and RIO-P
Dear David,
There is no big differences between the two classes of shares as both have rights to vote upon any matter in the shareholders meetings.
The only two differences between them established in the by laws are the following:
(1) Regarding dividends: Holders of class A preferred and special class shares shall be entitled to receive dividends calculated in accordance with the following criteria:
a) priority in receipt of dividends corresponding to: (i) a minimum of 3% (three percent) of the stockholders' equity of the share, calculated based on the financial statements which served as reference for the payment of dividends, or (ii) 6% (six percent) calculated on the portion of the capital formed by this class of share, whichever higher;
b) entitlement to participate in the profit distributed and any bonuses, on the same conditions as those for common shares, once a dividend equal to the minimum priority established in accordance with letter “a” above is ensured; and
c) entitlement to participate in any bonuses, on the same conditions as those for common shares, the priority specified for the distribution of dividends being observed.
Those clauses are only related to minimum dividend. In practical terms, historically common and preferred shareholders have received the same amount in dividends.
(2) Regarding sits in the Board of Directors:
CVRD's Board of directors has 11 members. 1 (one) member and his alternate, may be elected and removed, by means of a separate vote at the general meeting of shareholders, excluding the controlling shareholder, by the majority of holders, respectively, of:
a) common shares representing at least 15% (fifteen percent) of the total shares with voting rights; and
b) preferred shares representing at least 10% (ten percent) of share capital.
Having ascertained that neither the holders of common shares or preferred shares have respectively formed the quorum required above, they shall be entitled to combine their shares to jointly elect a member and an alternate to the Board of Directors, and in such hypothesis the quorum established in item b shall be observed.
According to the Brazilian corporate law, holders of voting shares (in CVRD´s case, the ON shares) have right of tag along of 80% if the Company is sold. In our case, Valepar (the controlling shareholder) would have to sell its stake at CVRD. What we have seen in the past is shareholders of Valepar seeling their stakes in Valepar, which does not trigger tag along rights to CVRD shareholders.
Related to the issuance of new shares, CVRD By-laws states that:
Article 6 - The company is authorized to increase its share capital up to the limit of 900,000,000 (nine hundred million) common shares and 1,800,000,000 (one billion, eight hundred million) class A preferred shares. Within the limit authorized by the present Article the company shall, by means of a decision of the Board of Directors, be entitled to increase the share capital without any alteration of the By-laws by means of the issuance of common shares and/or preferred shares.
§ 1 - The Board of Directors shall determine the conditions for issuance, including the price and the period of time prescribed for paying up.
§ 2 - At the option of the Board of Directors the preemptive right in the issuance of shares, bonds convertible into shares and subscription bonuses, the placement of which on the market may be by sale on the stock exchange or by public subscription as per the prescriptions set forth in Law no. 6.404/76, may be rescinded.
§ 3 - Provided that the plans approved by the General Meeting are complied with, the company shall be entitled to delegate the option of share purchase to its administrators and employees, with shares held in Treasury or by means of the issuance of new shares, the shareholders' preemptive right being excluded.
Please let me know if you need any further clarifications.
Best regards,
Barbara Geluda
Companhia Vale do Rio Doce - CVRD
Investor Relations Officer
Graça Aranha, 26 - 17th Floor - 20030-900, Rio de Janeiro - RJ, Brazil
((55-21) 3814-4557/ Fax: (55-21) 3814-9935
*barbara.geluda@cvrd.com.br
Roberto Castello Branco
21/02/2005 12:34
Para: Barbara Geluda/Rio/Vale@CVRD
cc:
Assunto: Enc: Difference between RIO and RIO-P
----- Repassado por Roberto Castello Branco/Rio/Vale em 21/02/2005 12:37 -----
06/02/2005 08:16
Para: <roberto.castello.branco@cvrd.com.br>
cc:
Assunto: Difference between RIO and RIO-P
Dear Mr. Castello,
At our investment group there is some confusion about RIO and RIO-P. If you respond to me, I can post the answer for everyone.
May I understand the differences in RIO and RIO-P?
I have studied the website and have a couple of questions:
1. Does RIO-P have some voting rights, such as in a takeover?
2. Could there be a situation where RIO-P is declared a dividend but not RIO? Has this happened in the past?
3. Could there be a situation where RIO is declared a dividend but not RIO-P? Has this happened in the past?
4. There are more RIO-P issued than RIO, in the future, if additional shares are issued, would they be RIO or RIO-P? Are the authorized number of shares the same?
5. In the past were some shares reclassified (Common to Preferred or vice-versa?)? Could I know the reason?
Thank you,
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