Legal Guide for Foreign Investors in Brazil - Apex-Brasil

Legal Guide for Foreign Investors in Brazil
If, at the end of the Public Offer for the Acquisition of Shares, less than 5% of
all shares issued by the company remain in the market, the general meeting of
shareholders may authorize redemption of the shares for the price established in
the Public Offer for the Acquisition of Shares, thereby withdrawing them from
circulation.
The Public Offer for the Acquisition of Shares must be effected by auction on
the stock exchange or organized over-the-counter market on which the shares
covered by the offer are traded; otherwise, the offer may be effected on the
stock exchange or organized over-the-counter market at the discretion of the
proponent.
6.6. Primary and Secondary Public Offerings
Public stock companies may make public offerings for distribution of securities
in the primary and secondary markets, subject to requirements established under
applicable legislation, particularly CVM Instruction 400/03.
An offering is said to be primary when the issuing company offers securities for
distribution to the public in order to raise funds. A secondary offering is when
one or more of the issuer’s shareholders offers to transfer all or part of their
holdings or securities to the public. Primary and secondary offerings often occur
simultaneously.
Any public offering of securities in Brazil must be submitted for prior registration
with the CVM. Among the most pertinent registration requirements established
by CVM Instruction 400/03 are those relating to the prospectus, which must
contain information on the offer, the securities offered, the issuing company,
and its financial status. The prospectus must be written in readily accessible
language and the information it contains must be complete, precise, accurate,
current, clear, and objective, so to enable investors to make an informed decision
regarding the investment.
Any use of advertising materials in connection with the offer requires prior
approval by the CVM. Under no circumstances may information that differs or
is inconsistent with the prospectus be presented to potential investors.
The CVM may, depending upon the specific characteristics of the offer, waive
certain registration requirements, including publication, deadlines, and other
procedures foreseen in the regulations.
Public stock companies that have already effected public offerings may file
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