US$75000000 Lupatech Finance Limited - Banco Best

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You should rely only on the information contained in this offering circular. Neither Lupatech Finance, the Guarantors, nor Citigroup Global Markets Limited or Merrill Lynch, Pierce, Fenner & Smith Incorporated, or the initial purchasers, has authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. None of Lupatech Finance, the Guarantors or the initial purchasers is making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. TABLE OF CONTENTS Enforceability of Judgments.........................................................................................................................................vi Cautionary Statement Regarding Forward-Looking Statements ............................................................................... viii Presentation of Financial and Other Information..........................................................................................................ix Summary........................................................................................................................................................................1 Summary of Terms and Conditions...............................................................................................................................9 Summary Financial and Other Information .................................................................................................................13 Risk Factors.................................................................................................................................................................19 Use of Proceeds ...........................................................................................................................................................28 Exchange Rates ...........................................................................................................................................................29 Capitalization...............................................................................................................................................................30 Selected Financial and Other Information ...................................................................................................................31 Management’s Discussion and Analysis of Financial Condition And Results of Operations .....................................37 Unaudited Pro Forma Combined Statement of Operations .........................................................................................62 Industry and Regulatory Overview..............................................................................................................................65 Business.......................................................................................................................................................................75 Ownership and Management .....................................................................................................................................108 Related Party Transactions ........................................................................................................................................114 Description of The Bonds..........................................................................................................................................116 Taxation.....................................................................................................................................................................132 European Union Directive on Taxation of Savings Income ......................................................................................138 Plan of Distribution ...................................................................................................................................................140 Form of Bonds...........................................................................................................................................................143 Notice To Investors ...................................................................................................................................................146 ERISA and Certain Other Considerations .................................................................................................................148 Validity of Bonds ......................................................................................................................................................149 Independent Auditors ................................................................................................................................................150 Listing and General Information ...............................................................................................................................151 Index To Financial Statements .................................................................................................................................. F-1 This offering circular constitutes a prospectus for the purpose of the Luxembourg Law dated July 10, 2005 on Prospectuses for Securities. In this offering circular, the terms “Lupatech,” “we,” “us,” “our” and “our company” mean, unless otherwise indicated, Lupatech S.A. and its subsidiaries unless expressly stated otherwise or unless the context indicates otherwise, and all references to “Lupatech Finance” refer to Lupatech Finance Limited. The term “Brazil” refers to the Federative Republic of Brazil and the term “Argentine” refers to the Republic of Argentina. The term “Brazilian government” refers to the federal government of the Federative Republic of Brazil and the term “Argentine government” refers to the federal government of the Republic of Argentina. This offering circular does not constitute an offer to sell, or a solicitation of an offer to buy, any bond offered hereby by any person in any jurisdiction in which it is unlawful for such person to make an offer or solicitation. Neither the delivery of this offering circular nor any sale made hereunder shall under any i Page
circumstances imply that there has been no change in our affairs or that the information set forth in this offering circular is correct at any date subsequent to the date of this offering circular. This offering circular has been prepared solely for use in connection with the proposed offering of the bonds described herein. Lupatech Finance, the Guarantors and the initial purchasers reserve the right to reject any offer to purchase, in whole or in part, for any reason, or to sell less than all of the bonds offered by this offering circular. No person is authorized to give any information or to make any representation not contained in this offering circular and any information or representation not so contained must not be relied upon as having been authorized by or on behalf of Lupatech Finance, the Guarantors or the initial purchasers. By accepting delivery of this offering circular, prospective investors agree to the foregoing and to make no photocopies of this offering circular. The distribution of this offering circular and the offering of the bonds in certain jurisdictions may be restricted by law. It may only be used for the purpose for which it has been published. Persons into whose possession this offering circular comes are required by us and the initial purchasers to inform themselves about and to observe any such restrictions. See “Notice to Investors” for information concerning certain transfer restrictions applicable to the bonds. You acknowledge that: • you have been afforded an opportunity to request from us, and to review, all additional information considered by you to be necessary to verify the accuracy of, or to supplement, the information contained in this offering circular; • you have had the opportunity to review all of the documents described herein; • you have not relied on the initial purchasers or any person affiliated with the initial purchasers in connection with your investigation of the accuracy of such information or your investment decision; and • no person has been authorized to give any information or to make any representation concerning us or the bonds other than those as set forth in this offering circular. If given or made, any such other information or representation should not be relied upon as having been authorized by us or the initial purchasers. In making an investment decision, prospective investors must rely on their own examination of our business and the terms of this offering circular, including the merits and risks involved. The bonds have not been approved or recommended by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon or endorsed the merits of the offering or confirmed the accuracy or determined the adequacy of this offering circular. Any representation to the contrary is a criminal offense. This offering is being made in reliance upon an exemption from registration under the Securities Act for an offer and sale of securities that does not involve a public offering. The bonds are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and applicable state securities laws, pursuant to registration or exemption therefrom. In making your purchase, you will be deemed to have made certain acknowledgments, representations and agreements set forth in this offering circular under the caption “Notice to Investors.” You should be aware that you may be required to bear the financial risks of this investment for an indefinite period of time. Application has been made to list the new bonds on the Official List of the Luxembourg Stock Exchange and admit the new bonds for trading on the Euro MTF market of the Luxembourg Stock Exchange (Euro MTF). The new bonds are expected to be eligible for trading in the PORTAL Market at the time of issuance thereof. We accept full responsibility for the information contained in this offering circular and, having taken all reasonable care to ensure that such is the case, declare that the information contained in this offering circular is, to ii
Page 1: OFFERING CIRCULAR US$75,000,000 Lup
Page 5 and 6: NOTICE TO MEMBERS OF THE PUBLIC OF
Page 7 and 8: Cayman Islands ENFORCEABILITY OF JU
Page 9 and 10: CAUTIONARY STATEMENT REGARDING FORW
Page 11 and 12: The following financial information
Page 13 and 14: • Jefferson Solenoid Valves U.S.A
Page 15 and 16: SUMMARY This summary highlights sel
Page 17 and 18: (2) Solely for the convenience of t
Page 19 and 20: Expand our product portfolio by dev
Page 21 and 22: industry allows for a significant r
Page 23 and 24: SUMMARY OF TERMS AND CONDITIONS Thi
Page 25 and 26: series as the initial bonds. Use of
Page 27 and 28: SUMMARY FINANCIAL AND OTHER INFORMA
Page 29 and 30: 2007 (pro forma) (in millions of US
Page 31 and 32: 17 As of December 31, 2007 2007 200
Page 33 and 34: RISK FACTORS An investment in our b
Page 35 and 36: nationalization, forced renegotiati
Page 37 and 38: period ended March 31, 2008. The pr
Page 39 and 40: The industries in which we operate
Page 41 and 42: proceeding or to bankruptcy, the re
Page 43 and 44: EXCHANGE RATES On May 29, 2008, the
Page 45 and 46: SELECTED FINANCIAL AND OTHER INFORM
Page 47 and 48: 2007 (pro forma) (in millions of US
Page 49 and 50: 35 As of December 31, 2007 2007 200
Page 51 and 52: MANAGEMENT’S DISCUSSION AND ANALY
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on February 29, 2008 in the main me
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Commodity prices and raw material p
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The following table shows a reconci
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Argentine income tax is imposed on
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Our year-on-year net revenue increa
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General and administrative expenses
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Net revenue. Our net revenue increa
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Income tax and social contribution.
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egular course of our activities, in
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57 Three-month period ended March 3
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The chart below shows certain of ou
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Jefferson Sudamericana S.A., Jeffer
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Unaudited Pro Forma Combined Statem
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General INDUSTRY AND REGULATORY OVE
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The ninth bidding round offered 271
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The chart below shows the percentag
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In addition to the conditions estab
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7 6 5 4 3 2 1 0 Revenue of the Foun
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Our Company BUSINESS Our business i
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for purposes of measuring our perfo
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Continued investments in operating
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Business Segments Oil & gas segment
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Sales, Marketing and Distribution.
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International Certifications. Petro
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Sales, Marketing and Distribution.
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Competition. The investment casting
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are a critical part of the sales st
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Customers. Microinox’s main custo
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metallographic and non-intrusive in
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Our policy is to protect our tradem
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aggregate of R$2.9 million, R$3.8 m
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We currently have valid environment
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• Law No. 25,612 on Integrated Ma
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April 25, 2008, as agreed by the pa
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Labor Lawsuits As of March 31, 2008
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Under the Brazilian Corporate Law,
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chief executive officer, a chief fi
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Unless otherwise decided by our boa
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We have entered into loan agreement
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• will be payable in cash quarter
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Tax Redemption The bonds will be re
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Transfer of Bonds Bonds may be tran
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such Debt to assets (including Capi
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(4) Lupatech Finance will have deli
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Defeasance Lupatech Finance or any
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Currency Indemnity U.S. dollars are
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“guarantee” means any obligatio
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may be necessary to ensure that the
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purposes. If the bonds were treated
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A U.S. Holder’s adjusted tax basi
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(b) in addition, that no tax to be
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• it has complied and will comply
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FORM OF BONDS Bonds sold in offshor
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governed by arrangements between th
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longer accurate, it will promptly n
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VALIDITY OF BONDS The validity of t
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LISTING AND GENERAL INFORMATION The
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Required information for the six-mo
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Deloitte Touche Tohmatsu Auditores
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(A free translation of the original
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Corporate development results from
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(i) Income and social contribution
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(e) Recording of minority interest
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8. Investments Goodwill Goodwill Go
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(g) Goodwill of R$ 105,000 was dete
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Consolidated Company 2008 2009 2010
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10. LOANS AND FINANCING AND PERPETU
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On July 11, 2007, the offering of s
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(c) Reconciliation of income and so
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F-30 Consolidated Likelihood of a f
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As part of the Company’s revenue
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[this page left blank] F-34
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Parent company Consolidated Liabili
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Parent company Consolidated 2007 20
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Jefferson Solenoid Valves 2007 Acqu
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The consolidated financial statemen
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7 Taxes Recoverable Taxes recoverab
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(a) The names of the subsidiaries a
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In the operation involving the acqu
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9 Property, Plant and Equipment Par
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10 Loans, Financing and Perpetual B
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Maturities of the noncurrent portio
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12 Related Parties Transactions and
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Year The reversal of deferred tax l
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(b) Contingent assets F-64 Parent c
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(c) Loans and financing They are su
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Headquartered in Mumbai, the Neterw
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Parent Company 2007 2006 Cash flows
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Parent company Consolidated Liabili
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Parent company Consolidated 2006 20
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On September 18, 2006, the Company
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(o) Statement of cash flows The Com
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8 Investments The analysis of inves
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assets: During 2006, the Company in
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The amortization schedule for the b
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Export financing ..................
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(b) Estimate of deferred tax assets
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Consolidated Probability of gain Re
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judgment and the use of assumptions
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Report of Independent Accountants o
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The CSL Offshore carve-out interim
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5 Taxes recoverable Excise Tax (IPI
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GASOIL SERVIÇOS LTDA. FINANCIAL ST
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EXHIBIT I GASOIL SERVIÇOS LTDA. BA
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EXHIBIT 3 GASOIL SERVIÇOS LTDA. ST
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(Convenience translation into Engli
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GASOIL SERVIÇOS LTDA. NOTES TO THE
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Name: Headquarter: Main Activity: F
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BALANCE SHEET At September 30, 2007
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STATEMENT OF CHANGES IN STOCKHOLDER
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REQUIRED INFORMATION ACCORDING TO A
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Value at beginning of the period In
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Notes to the financial statements a
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Name: Headquarter: Main Activity: F
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BALANCE SHEET at March 31, 2007 and
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DEFINITIONS SUBSCRIBED CAPITAL STAT
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ENTRY INFORMATION REQUIRED BY ART.6
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FINANCIAL STATEMENTS AT MARCH 31, 2
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Lupatech S.A. and subsidiaries Pro-
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Purchase price was R$ 73.3 and was
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A pro-forma adjustment has been rec
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WHERE YOU CAN FIND MORE INFORMATION
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