IRB Brasil RE informed, on Wednesday (July 08th), that its Board of Administration approved the company’s capital increase, through the issuance of common stock. As announced some days ago, the theme was being studied internally. The value of the issuance is minimum BRL2.1 billion and maximum BRL2.3 billion, with the minimum and maximum number of stocks being 303,030,304 and 331,890,331, respectively.
“The capital increase is the best alternative for the company to reach its reclassification within the rule of technical provisions by the Federal Insurance Commissioner (Susep), in addition to strengthening IRB Brasil RE’s capital structure and improving its cash position”, says the chairperson of the Board of Administration and current CEO, Antonio Cassio dos Santos. “This is an equitable, balanced and long-term solution, which ensures the future of a so traditional company in Brazilian and Latin-American market. It is a new phase for IRB Brasil RE.”
Shareholders Bradesco Seguros S.A. and Itaú Seguros S.A. – part of the two largest financial groups in the country – undertook to follow the capital increase proportionally to their interest, respectively 15.4% and 11.3%, and showed that they intend to subscribe any amounts possibly remaining after the first offering, so as to guarantee the subscription of the minimum value of BRL2.1 billion for the issuance.
The price for the issuance of the securities shall be BRL6.93. The term for exercising the preemptive right to subscribing the stock starts with the trading day on July 14th, 2020 and ends on August 12th, 2020. According to the rules by B3, the limit date for taking part in the issuance is July 13th, 2020 – it is important to highlight all stockholders in the base for the trading on such day have the same conditions to take part in the issuance.
The stockholders have preemptive right to subscribe stock within the proportion of 0.35938828 new common stock for each share held by them – that is, each stockholder can subscribe an amount of new stock representing 35.938828% of the number of stocks held by them at the closing of the trading by B3 on the limit date.
100 days of new executive board – “IRB Brasil RE is a market-leading company and has a good customer portfolio, with all conditions for start growing and generating results again”, says Antonio Cassio. “We are working to take IRB to the next level, not in a hurry but not nonstop, as we have constantly said throughout these 100 days of the new administration of the company.”
In these first months, IRB Brasil RE’s new administration has promoted a complete revision of the company’s management, in spite of the restriction during the pandemic, due to the needed distance to preserve its employees. During such period, it performed an independent investigation to assess the disclosure of fake information on the supposed interest by Berkshire Hathaway as IRB Brasil RE’s stockholder, as well as internal assessments that revealed the undue payment to executives from the former administration, summing up BRL60 million, and evidences of reckless management showed in the buyback of stock without the limit approved by the Board of Administration. The information was delivered to the regulators (Susep and Securities and Exchange Commissions – CVM) and to the Federal Prosecution Office, for the irregularity signals to be duly assessed and its authors to be made liable.
In addition to it, there was a complete revision and a new presentation of the financial statements for the fiscal years of 2018 and 2019, from a forensic consultancy, and the improvement to the governance and management internal practices, with the increase in the number of officers appointed in the articles of incorporation and the revision of the procedures.
Besides, the Board of Administration had an increase in its number directors to nine, with a major renewal of the group: seven positions are held by nine directors, professionals with a broad experience in different areas and acknowledged by the market.