Cielo SA (CIOXY: OTC Link) | Management Proposal fo the Capital Budget

Management Proposal fo the Capital Budget

Feb 17, 2012

OTC Disclosure News Service

Barueri, SP, Brazil –

CIELO S.A.

Corporate Taxpayer’s ID no. 01.425.787/0001-04    

Corporate Registry no. 35.300.147.073.

Publicly-Held Company

 

 

 

MANAGEMENT PROPOSAL FOR THE CAPITAL BUDGET

 

 

Dear Shareholders,

 

The Board of Directors of CIELO S.A., as per Article 196 of Law no. 6,404/76, as amended by Law no. 10,3030/01 (Brazilian Corporate Law), as well as in compliance with the Company’s Bylaws, submits to your appreciation, at the Annual General Meeting to be held on April 20, 2012, the following proposal for the capital budget for the 2012 fiscal year:

 

Due to the Company’s growth expectations and business projections for the current year, the Company believes it necessary to retain 30% (thirty percent) of its Net Income for the 2011 fiscal year, totaling R$527,267,926.52 (five hundred twenty-seven million, two hundred sixty-seven thousand, nine-hundred twenty-six reais and fifty-two centavos), in addition to the profit reserve constituted in the previous fiscal year in the amount of R$180,933,420.35 (one hundred eighty million, nine hundred thirty-three Thousand, four hundred twenty reais and thirty-five centavos), for a total reserve of R$708,201,346.87 (seven hundred eight million, two hundred one thousand, three hundred forty-six reais and eighty-seven centavos) to be allocated to reinforce working capital to provide significant support for the prepayment of receivables operation – ARV. Management believes that strengthening working capital via this retention will provide increased stability and speed in financing its operations, especially the prepayment of receivables (“ARV”) operation.

 

Moreover, the Company believes that should this proposal be approved by the General Meeting, a portion of the retained profits should be used for a capital stock increase such as to make the Company’s capital stock compatible with its operations and industry, providing an increased return on investment and greater possibility for payment of Interest on Equity.

 

The capital budget for the current year is R$708,201,346.87 (seven hundred eight million, two hundred one thousand, three hundred forty-six reais and eighty-seven centavos), with the proposed capital stock increase in the amount of R$236,165,226.14 (two hundred thirty-six million, one hundred sixty-five Thousand, two hundred twenty-six reais and fourteen centavos) which, should it be approved, would increase the Company’s capital stock to R$500,000,000 (five hundred million reais).

 

Validity of the Budget: until the Annual General Meeting that approves the accounts for the fiscal year ended December 31, 2012.

 

Moreover, the allocation hereby proposed is reflected in the Financial Statements elaborated by the Company’s Management, which will be widely disclosed as per current legislation.

 

Considering the reasons above, the propose approval of the proposed capital budget above.

 

 

Barueri, February 8, 2012

 

BOARD OF DIRECTORS

The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.

Article source: http://www.otcmarkets.com/stock/CIOXY/news?id=42551

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