efacec power solutions, sgps s.a. · 2019. 7. 23. · matosinhos, district of oporto, in portugal,...
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EFACEC Power Solutions, SGPS S.A. Head Office: Lugar da Arroteia, 4465-587 – Leça do Balio, Matosinhos
Registration and tax number: 513 180 966 Share capital: €308,949,250.00
(Incorporated as a limited liability company under Portuguese law)
“EFACEC FIXED RATE NOTES 2019-2024”
€58,000,000 fixed rate notes 4.5% interest maturing in 2024 (the “Notes”)
INFORMATION MEMORANDUM (DOCUMENTO INFORMATIVO DE INCORPORACIÓN) ON THE ADMISSION (INCORPORACIÓN) TO TRADING OF €58,000,000 FIXED RATE NOTES DUE
2024, GUARANTEED BY EFACEC ENERGIA – MÁQUINAS E EQUIPAMENTOS ELÉCTRICOS, S.A., EFACEC – ENGENHARIA E SISTEMAS, S.A. AND EFACEC ELECTRIC MOBILITY, S.A., ON
THE ALTERNATIVE FIXED-INCOME MARKET (“MARF”)
EFACEC Power Solutions, SGPS S.A. (“EFACEC” or the “Issuer”), a limited liability company incorporated
under Portuguese law as a holding company (Sociedade Gestora de Participações Sociais sob a forma
de Sociedade Anónima), with registered office at Lugar da Arroteia, 4465-587 – Leça do Balio,
Matosinhos, district of Oporto, in Portugal, with a share capital of €308,949,250.00, registered at the
Commercial Registry Office of Oporto under registration and tax number 513 180 966 and LEI Code
549300CXEW4WALC4V197 (together with its subsidiaries, the “EPS Group” or the “Group”), has
requested admission to trading of the Notes (incorporación de valores) on the Alternative Fixed-
Income Market (Mercado Alternativo de Renta Fija) (“MARF”) under the provisions of this information
memorandum (Documento Informativo de Incorporación) (the “Information Memorandum”).
MARF is a multilateral trading facility (MTF) and is not a regulated market in accordance with the
provisions of Directive 2004/39/EC and Royal Decree Law 21/2017 of December 29, 2017, on urgent
measures to adapt Spanish law to the European Union securities market legislation (“RDL 21/2017”).
There is no guarantee that the price of the Notes on MARF will be maintained. There is also no
assurance that the Notes will be widely distributed and actively traded on the market. Nor is it possible
to ensure the development or liquidity of trading markets for the Notes.
The Notes entail certain obligations for the Issuer (covenants), as detailed in section VIII of the
Information Memorandum (Documento Informativo de Incorporación).
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The Notes will be represented in dematerialised book-entry form (“forma escritural”) registered by
and held through Interbolsa, according to the provisions of section VIII of this Information
Memorandum.
An investment in the Notes involves certain risks.
Read section III of the Information Memorandum on risk factors.
This Information Memorandum (Documento Informativo de Incorporación) is not a prospectus
(folleto informativo) and has not been registered with the Spanish National Securities Market
Commission (“CNMV”). The offering of the Notes does not constitute a public offering in accordance
with the provisions of Article 35 of Royal Legislative Decree 4/2015, of 23 October, by which a recast
text of the Securities Market Law (“RLD 4/2015”) was approved, and, therefore, there is no
obligation to approve, register and publish a prospectus (folleto informativo) with the CNMV. The
issue of the Notes is intended exclusively for professional clients and eligible counterparties, in
accordance with the provisions of Article 205 of the RLD 4/2015 and Article 39 of Royal Decree
1310/2005, of 4 November, which partially develops Law 24/1988, of 28 July, on the Securities
Market, with respect to the admission of securities to trading on official secondary markets, public
offerings or subscriptions and the prospectus required for this purpose (“Royal Decree 1310/2005”)
and, regarding investors resident in Portugal, Decree-Law no. 486/99, of 13 November, as amended
from time to time (the “Portuguese Securities Code”).
No action has been taken in any jurisdiction to permit a public offering of the Notes, or the
possession or distribution of the Information Memorandum (Documento Informativo de
Incorporación) or of any other offering material, in any country or jurisdiction where such action is
required for said purpose.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended
(the “Securities Act”), or any U.S. state securities laws and may not be offered or sold in the United
States or to, or for the account or benefit of, U.S. persons as defined in Regulation S under the
Securities Act, unless an exemption from the registration requirements of the Securities Act is
available, and in accordance with all applicable securities laws of any state of the United States and
of any other jurisdiction.
This Information Memorandum (Documento Informativo de Incorporación) is the one required by
MARF’s Circular 2/2018, of 4 December, on the inclusion and exclusion of securities on the
Alternative Fixed-Income Market (“Circular 2/2018”). MARF has not made any verification or check
in respect of this Information Memorandum (Documento Informativo de Incorporación) or over the
rest of the documentation and information provided by the Issuer in compliance with said Circular
2/2018.
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COORDINATORS
BEKA FINANCE, SOCIEDAD DE VALORES, S.A.
OPTIMAL INVESTMENTS, S.A.
DEALER
BEKA FINANCE, SOCIEDAD DE VALORES, S.A.
CO-DEALER
BANCO FINANTIA, S.A.
REGISTERED ADVISOR
VGM ADVISORY PARTNERS, S.L.U.
The date of this Information Memorandum (Documento Informativo de Incorporación) is 23 July 2019.
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TABLE OF CONTENTS
SECTION I IMPORTANT INFORMATION ...................................................................................... 5
SECTION II SUMMARY ............................................................................................................ 9
SECTION III RISK FACTORS ..................................................................................................... 27
SECTION IV DECLARATION OF LIABILITY ................................................................................... 42
SECTION V FUNCTIONS OF THE REGISTERED ADVISOR OF MARF .................................................. 43
SECTION VI INFORMATION ON THE ISSUER, THE GUARANTORS AND THE GROUP .......................... 46
SECTION VII INDEPENDENT AUDITOR ...................................................................................... 60
SECTION VIII TERMS AND CONDITIONS OF THE NOTES ............................................................... 61
SECTION IX ADMISSION (INCORPORACIÓN) OF THE SECURITIES .................................................. 87
SECTION X TAXATION ........................................................................................................... 89
SECTION XI THIRD PARTY INFORMATION, STATEMENT BY EXPERTS AND DECLARATIONS OF INTEREST100
SECTION XII DOCUMENTS INCORPORATED BY REFERENCE ........................................................ 101
ANNEX ............................................................................................................................. 102
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SECTION I
IMPORTANT INFORMATION
Neither the Issuer, nor Beka Finance, Sociedad de Valores, S.A. (“Beka Finance”), as Dealer, Optimal
Investments, S.A. (“Optimal Investments”) (together the “Coordinators”), nor Banco Finantia, S.A.,
(the “Co-Dealer”) have authorised anyone to provide information to potential investors different from
the information contained in this Information Memorandum and other publicly available information.
Potential investors should not base their investment decision on information other than that contained
in this Information Memorandum and alternative sources of public information.
The Coordinators, the Dealer and the Co-Dealer assume no liability for the content of the Information
Memorandum. The Coordinators, the Dealer and the Co-Dealer have signed a contract with the Issuer,
but neither the Coordinators, the Dealer the Co-Dealer nor any other entity has made any commitment
to underwrite the issue, without prejudice to the ability of the Coordinators, the Dealer and the Co-
Dealer to acquire part of the Notes on their own behalf.
Investors in the Notes should rely only on the information contained in this Information Memorandum.
No person is or has been authorised by the Issuer to give any information or to make any
representation not contained in or not consistent with this Information Memorandum, any other
information supplied in connection with the Notes, or any information supplied by the Issuer or such
other information as is in the public domain and, if given or made, such information or representation
must not be relied upon as having been authorised by the Issuer, the Coordinators, the Dealer or the
Co-Dealer.
Neither the delivery of this Information Memorandum nor the offering, sale or delivery of any Note
shall, in any circumstances, create any implication that the information contained in this Information
Memorandum is true, correct, complete and updated after the date hereof or the date on which this
Information Memorandum has been most recently amended or supplemented, or that there has been
any adverse change, or any event reasonably likely to involve any adverse change, in the prospects or
the financial or trading position of the Issuer since the date hereof or, if later, the date on which this
Information Memorandum has been most recently amended or supplemented, or that any other
information supplied in connection with the Notes is true, correct, complete and updated at any time
after the date on which it is supplied or, if different, the date indicated in the document containing the
same.
Neither this Information Memorandum, nor any other information supplied in connection with the
Notes (a) is intended to provide the basis of any credit or other evaluation, or (b) should be considered
as a recommendation by the Issuer, the Coordinators, the Dealer or the Co-Dealer that any recipient
of this Information Memorandum or of any other information supplied in connection with the Notes
should purchase any Notes. Each investor contemplating the purchase of any Notes should make its
own independent investigation of the financial condition and affairs, and its own appraisal of the
creditworthiness, of the Issuer. Neither this Information Memorandum, nor any other information
supplied in connection with the offering of the Notes, constitutes an offer or invitation by or on behalf
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of the Issuer, the Coordinators, the Dealer or the Co-Dealer to any person to subscribe for or purchase
any Notes.
The distribution of this Information Memorandum and the offering, sale and delivery of the Notes
in certain jurisdictions may be restricted by law. Persons into whose possession this Information
Memorandum comes are required by the Issuer, the Coordinators, the Dealer and the Co-Dealer to
inform themselves about and to observe any such restrictions. This Information Memorandum may
not be used for or in connection with any offer to, or solicitation by, anyone in any jurisdiction in
which such offer or solicitation is not authorised or to any person to whom it is unlawful to make
such offer or solicitation.
The Issuer, the Coordinators, the Dealer and the Co-Dealer do not make any representation to any
investor in the Notes regarding the legality of this investment under any applicable laws. Any investor
in the Notes should be able to bear the economic risk of an investment in the Notes for an indefinite
period of time. No comment is made or advice is given by the Issuer, the Coordinators, the Dealer and
the Co-Dealer in respect of taxation matters relating to the Notes and each investor is advised to
consult its own professional advisor.
Neither the delivery of this Information Memorandum, nor the offering, sale or delivery of any Notes,
shall in any circumstances imply that the information contained in the Information Memorandum
concerning the Issuer is correct at any time subsequent to its date or that any other information
supplied in connection with the Notes is correct as of any time subsequent to the date indicated in the
document containing the same. The Coordinators, the Dealer and the Co-Dealer expressly do not
undertake to review the financial condition or affairs of the Issuer during the life of the Notes, or to
advise any investor in the Notes of any information coming to their attention.
This Information Memorandum is not a prospectus (folleto informativo) and has not been registered
with the CNMV. The offering of the Notes does not constitute a public offering in accordance with the
provisions of Article 35 of the RLD 4/2015 and, therefore, there is no obligation to approve, register
and publish a prospectus (folleto informativo) with the CNMV.
Admission (incorporación) to MARF has been requested. MARF is a multilateral trading facility (MTF)
and not a regulated market in accordance with the provisions of Directive 2004/39/EC and RDL
21/2017 of 29 December. This Information Memorandum includes the information required by
Circular 2/2018. MARF has not made any verification or check with respect to this Information
Memorandum or over the rest of the documentation and information provided by the Issuer in
compliance with said Circular 2/2018. There is no guarantee that the price of the Notes on MARF will
be maintained. There is also no assurance that the Notes will be widely distributed and actively traded
on the market because at this time there is no active trading market, it being currently under
development. Nor is it possible to ensure the development or liquidity of trading markets for the issue.
The Notes will be represented in dematerialised book-entry form (“forma escritural”) registered by
and held through Interbolsa, according to the provisions of section VIII of this Information
Memorandum.
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NO PRIIPS REGULATION KID
No KID under the PRIIPs Regulation has been prepared by the Issuer, the Coordinators, the Dealer or
the Co-Dealer.
MIFID II PRODUCT GOVERNANCE / PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET
Exclusively for the purposes of the product approval process to be carried out by each producer,
following the assessment of the market for the Notes, it has been concluded that: (i) the market to
which the Notes are intended to be issued is solely “eligible counterparties” and “professional clients”
as each of these terms is defined in Directive 2014/65/EU of the European Parliament and of the
Council, of 15 May 2014, on markets in financial instruments, amending Directives 2002/92/EC and
2011/61/EC (“MiFID II”) and their implementing legislation; and (ii) all channels of distribution of the
Notes to eligible counterparties and professional clients are adequate.
Any person who, after the initial placement of the Notes, offers, sells or makes the Notes available (the
“Supplier”) shall take into account the assessment of the producer's target market. However, any
Supplier subject to MiFID II shall be responsible for carrying out its own assessment of the target
market with respect to the Notes and for identifying the most appropriate distribution channel.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS
The Notes are not intended for offer, sale or any other form of supply, nor should they be offered, sold
or made available to retail investors in the European Economic Area (“EEA”). For these purposes,
“retail investor” means a person who meets either or both of the following definitions: (i) ‘retail
customer’ in the sense of paragraph (11) of Article 4(1) of MiFID II; or (ii) ‘client’ within the meaning of
Article 4(1) of MiFID II. As a result, there was no need to prepare any of the key information documents
required by Regulation (EU) no. 1286/2014 of the European Parliament and of the Council, of 26
November 2014, on the key information documents relating to packaged retail investment and
insurance-based products (“Regulation 1286/2014”) for the purposes of offering or selling the Notes,
or making them available, to retail investors in EEA. Therefore, any such activity could be illegal under
Regulation 1286/2014.
SELLING RESTRICTIONS
No action has been taken in any jurisdiction to permit a public offering of the Notes or the possession
or distribution of the Information Memorandum or of any other offering material in any country or
jurisdiction where such action is required for said purpose.
In particular:
European Union
This private placement is only directed to eligible counterparties, according to the provisions in Article
2.1.e) of Directive 2003/71/EC. Therefore, neither the issue nor this Information Memorandum have
been registered with any competent authority of any Member State.
Spain
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This Information Memorandum has not been registered with the CNMV. The issue of the Notes does
not constitute a public offering in accordance with the provisions of Article 35 of RLD 4/2015. This issue
is intended exclusively for professional and eligible counterparties, in accordance with the provisions
of Article 205 of RLD 4/2015 and Article 39 of Royal Decree 1310/2005.
Portugal
Neither the issue of the Notes nor this Information Memorandum have been registered with the
Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários) and no
action has been undertaken that would be considered a public offer of the Notes in Portugal. According
to the above, the Notes may not be offered, sold or distributed in Portugal except in accordance with
the provisions of Articles 109, 110 and 111 of the Portuguese Securities Code (Código dos Valores
Mobiliários).
United States
This Information Memorandum must not be distributed, directly or indirectly, in (or sent to) the United
States of America (according to the definitions of the “Securities Act” of 1933 of the United States of
America. This Information Memorandum does not constitute an offer to sell securities or the
solicitation of an offer to buy any securities, or any offer of securities in any jurisdiction in which such
offer or sale is considered contrary to law. The Notes have not been (nor will be) registered in the
United States for the purposes of the U.S. Securities Act and may not be offered or sold in the United
States without registration or an application for registration exemption under the U.S. Securities Act.
There will not be a public offering of the Notes in the United States or in any other jurisdiction.
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SECTION II
SUMMARY
A. DESCRIPTION OF THE ISSUER AND OF THE GUARANTORS
A.1. The Issuer
Legal and commercial name of the Issuer
The legal name of the Issuer is EFACEC Power Solutions, SGPS, S.A. and the most frequent commercial
name is EFACEC.
Registration and legal person number of the Issuer
EFACEC is a limited liability company (sociedade aberta de responsabilidade limitada) with head office
at Lugar da Arroteia, 4465-587 – Leça do Balio, Matosinhos, district of Oporto, Portugal, registered
with the Commercial Registry Office, entity with all documents deposit in electronic format, under the
registration and tax number 513 180 966, and with a fully subscribed and paid-up share capital in the
amount of €308,949,250.00.
Incorporation of the Issuer
EFACEC was incorporated on 14 August 2014 for an unlimited period of time.
Head office, legal form and legislation that governs the Issuer’s activity
EFACEC has its head office at Lugar da Arroteia, 4465-587 – Leça do Balio,, located in the parish of
Custóias, Leça do Balio e Guifões, municipality of Matosinhos, district of Oporto and its telephone
number is (+351) 22 956 23 00.
EFACEC is a holding company under the legal form of a limited company, incorporated and operating
under the laws of the Portuguese Republic and, under article 2 of its by-laws, its corporate purpose is
the “management of holdings in other companies as an indirect way of carrying out economic
activities, also being able to provide technical and management services pursuant to law”.
Article 4 of its by-laws further provide that EFACEC may “acquire and dispose of holdings in national
or foreign law companies, with the same or a different corporate purpose to that referred to in the
second article, in companies governed by special laws and in unlimited liability companies” and
“associate with other legal entities, in particular to form new companies, including European limited
liability companies, complementary company groupings, European economic interest groupings,
consortia and joint ventures”.
EFACEC is governed by the Portuguese laws applicable to holding companies, particularly by the
Portuguese Commercial Companies Code, the Portuguese Securities Code and Decree-Law no. 495/88,
dated 30 December 1988, and by its by-laws.
As of 31 December 2018, EFACEC’s capital is €308,949,250.00, represented by 61,789,850 ordinary
shares with a nominal value of five euros each, and is fully subscribed and paid-up.
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A.2. The Guarantors
Efacec Energia – Máquinas e Equipamentos Eléctricos, S.A.
EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A., a limited liability company incorporated
and validly existing under Portuguese law, with head office at Lugar da Arroteia, 4465-587 – Leça do
Balio, Matosinhos, district of Oporto, Portugal, is registered with the Commercial Registry Office of
Oporto under registration and tax number 504 040 847.
EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A. is a wholly owned subsidiary of the Issuer.
EFACEC Engenharia e Sistemas, S.A.
EFACEC Engenharia e Sistemas, S.A., a limited liability company incorporated and validly existing under
Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-605 – Maia,
district of Oporto, Portugal, is registered with the Commercial Registry Office, entity with all
documents deposit in electronic format, under registration and tax number 502 533 447.
EFACEC Engenharia e Sistemas, S.A. is a wholly owned subsidiary of the Issuer.
EFACEC Electric Mobility, S.A.
EFACEC Electric Mobility, S.A., a limited liability company incorporated and validly existing under
Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, Oporto, is registered
with the Commercial Registry Office of Oporto under registration and tax number 510 893 376.
EFACEC Electric Mobility, S.A. is a wholly owned subsidiary of the Issuer.
B. BACKGROUND AND DEVELOPMENT OF THE ISSUER
EFACEC is a Portuguese company with a strong export profile and international presence in over 65
countries. A brand with 70 years of history, made by great people. Its origins go back to 1905, with the
establishment of a new company “A Moderna”, Sociedade de Serração Mecânica. In 1921, “A
Moderna” gives rise to the Electro-Moderna, Lda., a company with operations in the field of electrics
(motors, generators, transformers and electric accessories). Electro-Moderna had, at that time, the
necessary skills to support the major future development of what would come to be “EFACEC”.
On 12 August 1948, EFME – Empresa Fabril de Máquinas Eléctricas, SARL was founded. That was the
starting point of the Efacec project and the birth of the Efacec brand. The company’s equity capital
was, at that time, shared by Electro-Moderna (20%), ACEC – Ateliers de Constructions Électriques de
Charleroi (20%) and CUF – Companhia União Fabril (45%). The remaining 15% were distributed among
other shareholders. After several equity capital changes, namely due to the exit of CUF, ACEC became
the majority shareholder. As a result, the name EFACEC – Empresa Fabril de Máquinas Eléctricas, SARL
emerged in 1962, and a period of remarkable growth began that same year.
About 25 years later, in the context of Portugal’s integration in the EEC and the sale, by ACEC, of its
65% stake in EFACEC – Empresa Fabril de Máquinas Eléctricas, SARL, there was another period of strong
growth, namely in the international markets, along with important technological developments in
various fields, which endured until the global financial crisis of the first decade of twenty-first century.
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In response to the global economic and financial crisis, Efacec launched a restructuring process, namely
in the international markets structures, as well as a simplification of the company’s portfolio.
Alongside, the company sold some assets and business considered non-core. In 2014, EFACEC Power
Solutions, SGPS S.A. was incorporated to be the new holding company of the Group with a new
business perimeter, reinforcing its core businesses. The constitution of EFACEC in 2014 and the
replacement of EFACEC Capital, SGPS, S.A.’s (currently named MGI Capital, SGPS, S.A.) as the holding
company of the EPS Group was part of this restructuring process aimed at aligning the corporate
structure of the EPS Group with the market segments and target geographies addressed.
In October 2015, Winterfell 2 Limited acquired a majority stake in EFACEC Power Solutions SGPS, S.A.
and such of the EPS Group. EFACEC’s previous shareholders (José de Mello Group and Textil Manuel
Gonçalves) became minority shareholders (organized under MGI Capital, SGPS, S.A.) and a new
management was appointed to the Group.
Currently, facing the future head-on and prepared for new and important challenges, Efacec is
recognised as a prestigious brand and one of the largest industries in the country, based on its
resilience and flexibility but, above all, based on its continuous ability to innovate.
Following the corporate reorganisation, the EPS Group’s corporate structure stands as follows:
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C. PRINCIPAL ACTIVITIES
EFACEC activities are focused on energy sectors by developing its activity within three segments, organized in eight Business Units:
a. Products Segment (4 business units legally organized under EFACEC Energia, Máquinas e Equipamentos, S.A.) i. Transformers
EFACEC is a worldwide recognized manufacturer of Power Transformers, either of Shell and Core type, as well as Mobile Substations and Distribution Transformers.
ii. Automation EFACEC develops and sell energy management systems, distribution dispatch systems, command & controls systems (SCADA), PV Stations and Storage Solutions for Utilities, Electrical Power Grids, Transportation, Cities and Industries.
iii. Switchgear EFACEC is a manufacturer of switchgear, namely of primary and secondary distribution, compact substations and high and medium voltage switchgear for Eletrical Power Grids, Electric Distribution Systems and Industry and Infrastructure Systems.
iv. Service EFACEC provides vertically integrated services of maintenance, refurbishment and revamping of its own and third-parties equipment for industrial facilities, hydroelectric and thermoelectric power plants, cogeneration, wind farms, substations and transformer stations.
b. Systems Segment (3 Business Units legally organized under EFACEC Engenharia e Sistemas, S.A.) i. Energy
Within this Business Unit EFACEC design and develops complete turnkey solutions for solar photovoltaic plants (or hybrid), substations, hydro & thermal power generation plants (either of combined cycle or conventional plants) including the supply of its own distributed control systems and an integrated offer of maintenance and technical assistance.
ii. Environment EFACEC offers integrated solutions from design and planning to implementation, service and operation of systems for water and wastewater treatment, water supply, irrigation and solid waste treatment.
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iii. Transportation EFACEC is an EPC turnkey provider for railway, light rails and roadways with integrated electrical and automation solutions, providing mainly energy, signaling, fleet management, passengers information, cross-level, tunnel and central management solutions. The core capabilities of this business unit are also able to be used and provided for telecom.
c. Electric Mobility (one business unit legally organized under EFACEC Electric Mobility, S.A.) EFACEC is a very relevant player in the electric mobility market, where it positions itself as one of the world leaders in rapid and ultra-rapid segment for charging stations for electric vehicles. It has a full range of charging solutions to Electric Vehicles (private chargers / public chargers / quick charging / buses charging). It also provides integration solutions of cars, motorcycles and buses in management systems for an efficient use of the electric grid infrastructure.
INFORMATION ON THE ISSUE
This summary of the issue contains basic information, does not purport to be complete and may
be subject to limitations and exceptions detailed later in this Information Memorandum. All
information concerning the issue is outlined in section VIII (Terms and Conditions of the Notes).
Name of the issue EFACEC Fixed Rate Notes 2019-2024.
Issuer EFACEC Power Solutions, SGPS, S.A.
Currency Euro (€).
Debt issued €58,000,000 in nominal value, corresponding
to 580 Notes with a face value of €100,000
each, grouped in a single class and series.
ISIN Code PTEFWAOM0001.
Pricing date 19 July 2019.
Issue/Closing date 23 July 2019.
Maturity date 23 July 2024.
Economic rights for the holder The interest rate shall be a fixed interest rate
equal to 4.5% per year.
The interest on the Notes will accrue daily on
an Actual/Actual ICMA basis.
See “Interest” in section VIII.
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Order of priority The Notes are direct, senior, unconditional,
unsecured and unsubordinated obligations of
the Issuer, guaranteed by the Guarantors.
The Noteholders’ rights against the Issuer,
arising from the Issue of the Notes, will have
at least the same priority in ranking,
preferences or privileges, without any
preference among themselves (and save for
certain obligations required to be preferred
by law), as the rights arising from the senior
debt of other present or future creditors of
the Issuer, and a higher priority in ranking,
preferences or privileges than the rights
arising from the subordinated debt of other
present or future creditors of the Issuer.
Credit Rating of the Issue On 18 June 2019, the agency Axesor Risk
Management, S.L.U. (“Axesor”) assigned the
Issuer a credit rating of BBB-.
Guarantors EFACEC Energia – Máquinas e Equipamentos
Eléctricos, S.A., EFACEC – Engenharia e
Sistemas, S.A. and EFACEC Electric Mobility,
S.A.
Obligations of the Issuer Negative Pledge, pari passu, ownership
clause/change of control, cross-default.
Limitations on indebtedness (Net Debt /
EBITDA < 2.75x).
Annual testing based on the consolidated
financial statements of EFACEC Power
Solutions, SGPS, S.A.
Limitation on asset disposals > 10% of Total
Assets.
See “Description of the Notes” in section VIII.
Paying Agent Banco Comercial Português, S.A.
Common Representative Bondholders, S.L.
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Applicable law Portuguese Law.
Risk Factors Investing in the Notes involves risks and
investors should thus read the “Risk Factors”
section of this document for a detailed
description of the risks associated with this
operation that should be considered before
investing. See “Risk Factors” in section III.
Use of the proceeds General corporate purposes and refinancing
of existing corporate debt, including as a
result of the partial repayment of such
corporate debt, the full discharge and release
of any security interests granted to secure
such corporate debt.
5. FINANCIAL INFORMATION
A summary of the information contained in the audited individual and consolidated income
statement and statement of financial position of the Issuer and in the audited annual income
statement and statement of financial position of the Guarantors for the financial years ended
one 31 December 2017 and 31 December 2018 is included in this section.
The Issuer’s consolidated financial statements for the financial years ended on 31 December
2017 and 31 December 2018 are attached as Annex to this Information Memorandum.
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Issuer audited consolidated income statement for the years ended December 31, 2018 and
2017
Monetary values are expressed in euros
Sales and Services Rendered 426.551.800 431.886.771
Production Variation 6.873.030 -3.149.216
433.424.830 428.737.554
Cost of Sales and Materials Used -204.295.983 -198.635.735
Supplies and External Services -109.439.556 -121.332.255
Personnel Expenses -92.662.925 -85.730.375
Contract Termination Expenses -1.508.254 -925.635
Amortisations and depreciations -10.093.945 -8.178.990
Provisions and asset impairments -9.704.262 -6.907.171
Other operating expenses -5.327.925 -5.496.667
Other operating income 17.076.720 16.059.081
Operating Profit 17.468.700 17.589.807
Financial Losses and Expenses -7.361.446 -7.367.475
Financial Profits and Income 3.329.214 433.011
Pre-tax Profit 13.436.468 10.655.343
Income Tax - Deferred 3.869.461 -439.051
Income Tax - Current -3.140.948 -2.670.355
Consolidated Net Profit 14.164.981 7.545.937
Attributable to:
Efacec Power Solutions Shareholders 14.099.926 7.524.955
Non-controlling interests 65.055 20.982
Net profit per share
Basic 0,22 0,13
Diluted 0,22 0,13
EFACEC Power Solutions, SGPS, S.A. and Subsidiaries
Consolidated Income Statement by Nature
for the years ended 31 December 2018 and 2017
2018 2017
17
Issuer audited income statement for the years ended December 31, 2018 and 2017
Monetary values are expressed in euros
Sales and Services Rendered 5.800.008 5.812.454
Supplies and External Services -3.833.691 -7.381.124
Personnel Expenses -2.413.201 -2.747.060
Contract Termination Expenses -92.276 0
Amortisations and depreciations -757.367 -188.413
Other operating expenses -295.019 -70.221
Other operating income 1.836.343 1.873.592
Operating Profit 244.797 -2.700.773
Financial Expenses -4.051.209 -3.684.356
Financial Income 1.297.561 948.917
Losses/Profit in related entities 16.359.149 7.374.629
Result before taxes 13.850.298 1.938.416
Income Tax - Deferred 109.228 0
Income Tax - Current 397.719 1.101.796
Net Result 14.357.244 3.040.212
Net profit per share
Basic 0,23 0,05
Diluted 0,23 0,05
EFACEC Power Solutions, SGPS, SA
Income Statement by Nature
for the periods ended 31 December 2018 and 2017
2018 2017
18
Guarantors audited income statement for the years ended December 31, 2018 and 2017
Monetary amounts are expressed in Euros
Sales and services rendered 209 453 869 228 594 824
Production inventory variation 3 097 482 18 216
212 551 351 228 613 039
Cost of goods solds and material consumed -108 637 379 -118 173 893
External suppliers and services -56 911 728 -61 349 624
Staff costs -39 839 770 -37 727 364
Expenses with contractual terminations -815 646 -883 319
Amortizations and depreciations -4 906 507 -4 177 070
Provisions and assets impairment -5 035 085 62 178
Other operating costs -2 767 653 -2 322 237
Other operating income 9 594 201 5 805 165
Operating Income 3 231 785 9 846 875
Financial losses and costs -3 107 693 -3 502 733
Financial gains and income 1 187 925 407 556
Losses and gains on related parties 0 740 107
Income Before Tax 1 312 016 7 491 805
Income tax - deferred 3 039 045 -1 924 784
Income tax - current -903 322 -879 923
Consolidated Net Income 3 447 739 4 687 098
Net Earnings per Share
Basic 1,03 1,39
Diluted 1,03 1,39
EFACEC Energia, Máquinas e Equipamentos Eléctricos, SA
Income statement by nature
for the periods ended on December 31, 2018 and 2017
2018 2017
19
Monetary amounts are expressed in Euros
Sales and services rendered 144 040 379 157 749 990
Production inventory variation -1 092 765 -2 050 311
142 947 613 155 699 679
Cost of goods solds and material consumed -68 901 069 -73 129 058
External suppliers and services -45 719 846 -49 983 456
Staff costs -22 220 511 -20 778 155
Expenses with contractual terminations -105 366 0
Amortizations and depreciations -844 521 -756 310
Provisions and assets impairment -3 631 330 -5 195 449
Other operating costs -801 454 -1 265 678
Other operating income 3 224 081 6 824 688
Operating Income 3 947 598 11 416 261
Financial losses and costs -3 383 736 -2 785 447
Financial gains and income 3 054 687 3 224 167
Losses and gains on related parties 0 82 234
Income Before Tax 3 618 549 11 937 215
Income tax - deferred -17 275 963 881
Income tax - current -1 009 558 -1 960 179
Consolidated Net Income 2 591 716 10 940 917
Net Earnings per Share
Basic 1,15 4,86
Diluted 1,15 4,86
EFACEC Engenharia e Sistemas, S.A.
Income statement by nature
for the periods ended on December 31, 2018 and 2017
2018 2017
20
Monetary amounts are expressed in Euros
Sales and services rendered 34 397 416 16 888 285
Production inventory variation 72 882 -2 211 749
34 470 298 14 676 536
Cost of goods solds and material consumed -22 203 016 -7 944 592
External suppliers and services -4 916 645 -3 901 584
Staff costs -3 459 439 -2 210 217
Expenses with contractual terminations -82 715 0
Amortizations and depreciations -370 024 -74 364
Provisions and assets impairment -50 818 0
Other operating costs -138 852 -177 275
Other operating income 1 254 873 1 116 547
Operating Income 4 503 663 1 485 050
Financial losses and costs -395 328 -128 922
Financial gains and income 734 16
Income Before Tax 4 109 069 1 356 144
Income tax - deferred 432 556 35 995
Income tax - current -984 288 -54 093
Consolidated Net Income 3 557 337 1 338 046
Net Earnings per Share
Basic 14,82 5,58
Diluted 14,82 5,58
EFACEC Electric Mobility, SA
Income statement by nature
for the periods ended on December 31, 2018 and 2017
2018 2017
21
Issuer audited consolidated statement of financial position for the years ended December 31,
2018 and 2017
22
Monetary values are expressed in euros
Assets
Non-Current Assets
Tangible Assets 73.035.743 72.150.155
Intangible Assets 95.699.466 86.459.121
Goodwill 120.039.977 120.242.439
Financial assets available for sale 703.632 316.132
Debtors and Expenses to be recognised 1.261.794 1.000.000
Deferred Tax Assets 59.723.993 56.016.276
Derivative Financial Instruments 87.026 0
Total Non-Current 350.551.631 336.184.123
Current Assets
Stocks 36.883.082 29.106.894
Customers 167.557.223 159.484.155
Accrued Income 105.313.342 85.076.762
Loans to Related Entities 724.605 724.605
Debtors and Expenses to be recognised 30.797.197 30.259.747
Income tax 0 365.309
Derivative Financial Instruments 608.923 995.006
Cash and Cash Equivalents 38.184.891 31.148.216
Total Current 380.069.262 337.160.694
Total Assets 730.620.893 673.344.817
Equity and Liabilities
Equity
Capital 308.949.250 314.235.160
Share issuance premiums 1.947.730 1.947.730
Other equity capital instruments 11.490.052 35.900.000
Reserves and accumulated income 11.412.501 -2.672.500
Accumulated other comprehensive income -17.365.120 -3.611.455
Non-controlling interests -194.278 -78.244
Total Equity 316.240.135 345.720.692
Non-Current Liabilities
Provisions 9.547.308 11.892.451
Amounts owed to credit institutions 69.946.853 57.306.624
Suppliers 43.446 7.121
Deferred Tax Liabilities 21.401.471 22.009.762
Derivative Financial Instruments 109.289 0
Total Non-Current Liabilities 101.048.368 91.215.958
Current Liabilities
Amounts owed to credit institutions 24.802.889 13.367.561
Loans from Related Entities 5.000.000 0
Suppliers 112.723.474 75.778.258
Invoices received and pending approval 48.458.293 34.016.509
Creditors and Accrued Expenses 65.970.962 42.411.242
Income tax 1.009.014 0
Income to be recognised 53.628.989 70.692.095
Derivative Financial Instruments 1.738.769 142.502
Total Current liabilities 313.332.390 236.408.167
Total Equity Capital and Liabilities 730.620.893 673.344.817
2018 2017
EFACEC Power Solutions, SGPS, S.A. and Subsidiaries
Consolidated Statement of Financial Position
at 31 December 2018 and 2017
23
Issuer audited statement of financial position for the years ended December 31, 2018 and 2017
Monetary values are expressed in euros
Asset
Non-Current Assets
Tangible Assets 31.651.199 31.682.700
Financial Investments 375.327.833 375.327.833
Financial assets available for sale 688.632 301.132
Loans to Related Entities 31.246.655 21.470.846
Deferred Tax Assets: 454.327 345.100
Total Non-Current 439.368.647 429.127.611
Current Assets
Customers 201.007 21.127
Accrued Income 307.223 165.771
Loans to Related Entities 16.761.762 8.760.843
Debtors and Expenses to be recognised 14.862.179 12.773.226
Income Taxes 399.491 1.118.062
Cash and Cash Equivalents 453.362 185.006
Total Current 32.985.024 23.024.033
Total Assets 472.353.671 452.151.644
Equity and Liabilities
Equity
Share capital 308.949.250 314.235.160
Share Issuance Premiums 1.947.730 1.947.730
Additional Paid-In Capital 11.490.052 35.900.000
Reserves and accumulated income 17.397.456 3.040.212
Accumulated other comprehensive income 0 0
Total Equity 339.784.489 355.123.102
Non-Current Liabilities
Amounts owed to credit institutions 670.000 0
Loans from Related Entities 50.000.000 74.167.109
Total Non-Current Liabilities 50.670.000 74.167.109
Current Liabilities
Amounts owed to credit institutions 330.000 0
Loans from Related Entities 56.840.748 12.598.748
Suppliers 4.769.865 1.174.399
Creditors and Accrued Expenses 19.958.569 9.088.286
Total Current liabilities 81.899.183 22.861.433
Total Equity Capital and Liabilities 472.353.671 452.151.644
EFACEC Power Solutions, SGPS, SA
Statement of financial position
at 31 December 2018 and 2017
2018 2017
24
Guarantors audited statement of financial position for the years ended December 31, 2018
and 2017
Monetary amounts are expressed in Euros
Assets
Non-Current Assets
Tangible assets 9 571 576 9 315 390
Intangible assets 12 491 561 5 545 390
Financial Investments 506 912 506 912
Loans to related parties 3 756 708 5 062 965
Debtors and deferred costs 8 550 0
Deferred tax assets 51 551 063 48 110 078
Financial derivative instruments 87 026 0
Total Non-Current Assets 77 973 396 68 540 735
Current Assets
Inventories 19 390 481 16 425 894
Customers 73 699 768 74 311 434
Accrued income 49 219 725 42 546 974
Loans to related parties 22 091 602 12 849 042
Debtors and deferred costs 10 645 009 10 679 189
Income tax 230 277 0
Financial derivative instruments 608 923 995 006
Cash and cash equivalents 10 999 077 3 628 498
Total Current Assets 186 884 861 161 436 037
Total Assets 264 858 257 229 976 772
Equity and Liabilities
Equity
Capital 16 800 000 16 800 000
Other equity instruments 58 811 255 58 811 255
Legal Reserve 3 716 210 3 716 210
Reserves and retained earnings 8 868 001 9 937 598
Other accumulated comprehensive income 1 160 632 2 991 614
Total Equity 89 356 097 92 256 677
Total Non-Current Liabilities
Provisions 1 851 261 3 401 244
Bank loans 34 149 187 33 875 982
Deferred tax liabilities 0 129 636
Derivative financial instruments 109 289 0
Total Non-Current Liabilities 36 109 737 37 406 862
Current Liabilities
Bank loans 15 222 121 8 043 665
Loans from related parties 234 339 0
Suppliers 57 899 782 35 274 509
Invoices received and pending from approval 10 344 275 10 188 529
Creditors and acccrued costs 25 323 211 21 597 794
Income tax 0 294 749
Deferred income 28 629 927 24 771 483
Derivative financial instruments 1 738 769 142 502
Total Current Liabilities 139 392 423 100 313 232
Total Equity and Liabilities 264 858 257 229 976 772
EFACEC Energia, Máquinas e Equipamentos Eléctricos, SA
Statement of financial position
on December 31, 2018 and 2017
2018 2017
25
Monetary amounts are expressed in Euros
Assets
Non-Current Assets
Tangible assets 11 430 212 10 525 093
Intangible assets 1 297 411 597 941
Loans to related parties 50 000 000 71 000 000
Debtors and deferred costs 1 120 404 1 000 000
Deferred tax assets 5 198 448 5 215 723
Total Non-Current Assets 69 046 475 88 338 757
Current Assets
Inventories 3 381 902 4 019 942
Customers 84 036 227 81 122 369
Accrued income 32 078 737 34 707 921
Loans to related parties 30 086 412 201 736
Debtors and deferred costs 13 702 458 14 040 388
Cash and cash equivalents 11 526 467 8 104 813
Total Current Assets 174 812 203 142 197 169
Total Assets 243 858 678 230 535 926
Equity and Liabilities
Equity
Capital 11 250 000 11 250 000
Other equity instruments 32 500 000 32 500 000
Legal Reserve 3 590 670 3 590 670
Reserves and retained earnings 19 023 151 27 372 352
Other accumulated comprehensive income 1 926 505 2 127 505
Total Equity 68 290 326 76 840 527
Total Non-Current Liabilities
Provisions 7 080 173 8 050 516
Bank loans 35 121 941 23 415 703
Deferred tax liabilities 348 975 348 975
Total Non-Current Liabilities 42 551 088 31 815 193
Current Liabilities
Bank loans 7 542 604 4 411 601
Loans from related parties 201 372 103 307
Suppliers 38 895 696 38 432 805
Invoices received and pending from approval 41 323 788 24 947 595
Creditors and acccrued costs 24 074 011 14 395 532
Income tax 458 302 1 045 357
Deferred income 20 521 491 38 544 008
Total Current Liabilities 133 017 264 121 880 205
Total Equity and Liabilities 243 858 678 230 535 926
EFACEC Engenharia e Sistemas, S.A.
Statement of financial position
on December 31, 2018 and 2017
2018 2017
26
Monetary amounts are expressed in Euros
Assets
Non-Current Assets
Tangible assets 824 014 755 138
Intangible assets 2 225 354 1 082 598
Financial assets held for sale 15 000 15 000
Deferred tax assets 1 672 776 1 240 220
Total Non-Current Assets 4 737 144 3 092 956
Current Assets
Inventories 4 223 257 1 924 386
Customers 17 560 089 7 227 345
Accrued income 7 968 666 3 824 412
Loans to related parties 0 123
Debtors and deferred costs 1 205 458 2 006 877
Cash and cash equivalents 4 286 640 145 976
Total Current Assets 35 244 111 15 129 119
Total Assets 39 981 254 18 222 075
Equity and Liabilities
Equity
Capital 1 200 000 1 200 000
Share premiums 1 500 000 1 500 000
Legal Reserve 6 168 6 168
Reserves and retained earnings 4 788 557 2 132 116
Other accumulated comprehensive income 0 0
Total Equity 7 494 725 4 838 284
Non-Current Liabilities
Total Non-Current Liabilities 0 0
Current Liabilities
Loans from related parties 13 789 526 3 700 000
Suppliers 12 409 808 6 541 671
Creditors and acccrued costs 2 247 939 1 097 634
Income tax 972 854 68 250
Deferred income 3 066 402 1 976 237
Total Current Liabilities 32 486 529 13 383 791
Total Equity and Liabilities 39 981 254 18 222 075
EFACEC Electric Mobility, SA
Statement of financial position
on December 31, 2018 and 2017
2018 2017
27
SECTION III
RISK FACTORS
Before making a decision in relation to the subscription of the Notes, investors should carefully
consider all the information contained in this Information Memorandum, as well as the following risk
factors. Additional risks and uncertainties currently unknown or that the Issuer currently considers not
significant may have an adverse effect on the Notes, the Issuer’s activities, the development of its
business, its operating results, financial position, income, assets and liquidity, and on the Issuer’s
future prospects or capacity to achieve its goals.
The order in which the risk factors are presented below does not indicate the likelihood of these risks
occurring or the scope of any potential impairment these risks might cause to the business of the
Issuer. The risks could be realised individually or cumulatively.
A - RISK FACTORS RELATING TO THE ISSUER
Financial risks
The Issuer’s activities are exposed to a variety of financial risks including market risks, interest rate risk
and liquidity risk. The Issuer’s risk management programme focuses on the unpredictability of financial
markets, seeking to minimise potential adverse effects on the Issuer’s financial performance, and may
use various financial instruments to minimise the risks arising from its activity.
Financial risk management is carried out by the Corporate Finance Board within the framework of the
policies and guidelines approved by the Board of Directors. This board is responsible for the
identification, evaluation and coverage of financial risks, in close collaboration with the EPS Group’s
operating units. The Board of Directors establishes principles for overall risk management as well as
policies designed to cover specific areas, such as interest rate risk and liquidity risk, the use of
derivative and non-derivative financial instruments, and the investment of liquidity surpluses. These
transactions are closely monitored by the Board of Directors.
Despite its cautious and conservative risk management policies, the Issuer cannot exclude the
possibility of being impacted by some or a combination of the different financial risks listed below, or
others currently not considered material or unknown, and of this adversely affecting its business
and/or the results of its activities.
28
Market risks
Interest rate risk
Interest rate risk for the Issuer arises mainly from loans, since it does not have interest rate derivatives
or long-term remunerated assets. Loans with variable interest rates, exclusively denominated in euros,
expose the Issuer to the risk of changes in cash flows.
Exposure to interest rate risk is subject to a dynamic analysis. In addition to assessing future changes
based on forward rates, sensitivity tests are carried out on fluctuations in interest rate levels. The
Issuer is fundamentally exposed to the Euro interest rate curve. The sensitivity analysis is based on the
following assumptions:
• Changes in market interest rates affect interest income and costs in relation to financial
instruments with variable interest rates;
• Changes in market interest rates affect interest income and costs in relation to financial
instruments with fixed interest rates, if they are only recognised at fair value;
• Changes in market interest rates affect derivative financial instruments and other financial
assets and liabilities at fair value; and
• Changes in other financial assets and liabilities at fair value are estimated by discounting future
cash flows using year-end market rates.
For each analysis, regardless of the currency, the same changes are used in the interest rate curves.
These analyses are carried out for net financial debt, that is, loans are deducted from interest-bearing
deposits and treasury applications. Simulations are carried out based on the net debt values and the
fair value of derivative financial instruments at the relevant dates, and the respective change in the
interest rate curves.
At 31 December 2018, the EPS Group had no interest rate derivatives contracted. The Group’s
exposure on the same date was € 95,6 million on bank debt1, essentially denominated in euros minus
€ 1,2 million in treasury applications and term deposits. Based on the assets and liabilities at the end
of the year, if interest rates on loans and deposits were 0.25% higher/lower, and all other variables
1 “Bank debt” means current and non-current "Amount owed to credit institutions" excluding current and non-current “amortised cost”, as disclosed in statement of financial position at 31 December 2018 and 2017 and in Note 17 of 2018 Annual Report, respectively.
29
remained constant, the pre-tax result for the year would be 236 k € lower/higher, accordingly. These
effects are essentially due to a higher or lower cost of interest on variable rate loans.
31.12.2018
Non-current
Current account 25 000 000
Bank loans 39 626 813
Commercial paper 5 750 000
70 376 813
Current
Bank overdrafts 2 838 045
Current account 390 362
Bank loans 13 797 868
Commercial paper 7 250 000
Trade discount 967 449
25 243 724
Total 95 620 537
(Group’s total bank debt exposure as of 31.12.2018)
Despite the implementation of an interest rate risk management policy which aims to optimise the
cost of debt, reduce volatility in financial costs, and control and mitigate the risk of incurring losses as
a result of interest rate changes, the Issuer cannot predict the evolution in interest rates or its impacts.
Therefore, if interest rates increase more than expected or if obtaining new financing becomes more
expensive than anticipated, this may adversely affect the Issuer’s results or its activities.
Liquidity risk
In order to ensure the maintenance of an adequate level of cash and cash equivalents to meet
operational needs, and considering the contribution of possible financing facilities, the Issuer carries
out cash flow forecasts. These forecasts take into account the Issuer’s debt financing plans, the
fulfilment of internal objectives given as financial ratios and, if applicable, compliance with external
regulatory or legal requirements – for example, foreign currency restrictions and compliance with debt
covenants, namely: cross default, pari passu, negative pledges, debt ratios, shareholder changes and
others related to the operational activities and to the legal, fiscal and operational obligations of the
Issuer.
Cash surpluses necessary to maintain a balanced working capital management take into account EPS
Group’s instructions regarding maturity, liquidity and counterparty. The Issuer invests cash surpluses
30
by choosing instruments with adequate maturities or sufficient liquidity, which provide enough of a
margin, as determined by the aforementioned forecasts.
At 31 December 2018, the EPS Group held € 37 million in cash and demand deposits , € 0,5 million in
term deposits and € 0,7 million in treasury applications.
31.12.2018
Cash 122 337
Demand Deposits 36 909 939
Term deposits 463 719
Treasury applications 688 895
38 184 890
These were expected to promptly generate capital inflows capable of facilitating liquidity risk
management. The Group had, at that date, unused credit facilities amounting to approximately €7,8
Million.
The Issuer has implemented liquidity risk management policies with the objective of ensuring a stable
debt maturity profile, reducing short-term debt, and extending its average debt maturity. To fulfil
these objectives, the Issuer closely monitors the financial markets and carefully selects the most
efficient alternative at any given point in time.
However, the Issuer is not able to predict future credit or funding conditions available on the market,
particularly concerning liquidity. Limitations in accessing financing, due to lower loan capacity, from
financing institutions or higher costs of funding may adversely impact on the Issuer’s business or on
the results of its activities.
Capital risk
The Issuer seeks to maintain an adequate level of equity that enables it to ensure its continuity and
development, providing adequate return for its shareholders, and to optimise the cost of capital.
The Issuer may adjust the amount of dividends payable and shareholders’ capital return, or issue new
shares or debt, in order to maintain or adjust its capital structure.
According to industry market practices, the capital structure balance is monitored based on the gearing
ratio, calculated using the formula “Net Debt / Total Equity”. Net debt comprises the value of loans
(including current and non-current bank and related company loans, as presented in the statement of
financial position) minus cash and cash equivalents, other financial investments and current loans
conceded. The total capital is composed of equity, as presented in the financial statements, plus net
debt.
31
However, the Issuer is not able to ensure that the aforementioned “Net Debt / Total Equity” gearing
ratio and, for the purposes of the Notes, the Net Debt / EBITDA ratio as provided for in the Terms and
Conditions of the Notes, will be maintained in the future and that the Issuer will comply with such
ratios until the Notes are redeemed. The Issuer’s failure to comply with the Net Debt / EBITDA ratio
will lead to its breach of the financial covenants with respect to the Notes and will cause an event of
default thereunder if not remedied within the applicable remedy period.
Price risk
The Issuer (and the EPS Group in general) is exposed to short and long-term changes in the prices of
the raw materials used in its production processes whenever it purchases raw materials with prices
quoted on the stock exchange. This exposure mainly concerns copper. The EPS Group has implemented
policies aimed at mitigating the impact of changes in the price of these raw materials on consolidated
net income and has established hedging strategies that allow the use of derivative financial
instruments.
Together with the Purchasing Department and the Business Units that use these raw materials, the
Corporate Finance Board is the entity responsible for ensuring the EPS Group’s risk management.
Any variation in the prices of the raw materials used in its production processes may have an adverse
impact on the Issuer’s business, financial condition and operational results.
Credit risk
Credit risk is the risk of a counterparty not meeting its contractual obligations as and when the same
are due, which could lead to the recognition of a loss in the Issuer’s accounts. Credit risk results
primarily from the Issuer’s (and the EPS Group’s) activities, specifically credit risks to customers,
including receivables and commitments, and its investment and hedging activities, including derivative
financial instruments and deposits with financial institutions.
Nevertheless, without prejudice of any mitigating actions and measures that the Issuer may implement
from time to time, the Issuer’s exposure to credit risk may adversely affect its business and/or the
results of its activities.
B - RISK FACTORS RELATING TO THE ISSUER’S ACTIVITIES
The Issuer’s activity is subject to uncertainty in the economic context
The global economy and the global financial system have been experiencing a period of uncertainty
and turbulence. In the Eurozone, the key focus is on the ability of peripheral countries to repay their
32
debt, including Portugal. The persistent pressure on the sustainability of government finances in
advanced economies has led to strong tensions in credit markets. A new or further escalation of the
crises in the Eurozone could impair the Issuer’s ability to refinance its maturing debt. In addition, there
could be sudden fiscal reforms or changes in the European regulatory framework.
In addition, the ongoing instability and somewhat uncertain economic-financial situation may have a
negative impact on third parties with whom the Issuer does or could do business with. In particular,
the Iberian economies may continue to be restrained in the coming years, thus potentially adversely
impacting the business environment.
Any of the factors described above, whether in isolation or in combination with each other, could have
an adverse effect on the Issuer’s business, financial condition or operational results.
The Issuer’s activity presence in emerging markets
EPS Group has a presence in emerging markets. These emerging markets are exposed to political and
legal risks which are present to a greater degree than in established markets in Europe.
These risks include the risk of nationalisation and expropriation of private assets, political and social
instability, frequent changes in the general legal conditions and government policy as well as changes
in tax policy and price control. These markets also face a higher risk of macro-economic instability and
volatility than the markets in the industrialised nations, which may lead to restrictions in foreign
currency transactions, in repatriating profits and importing of investment goods.
These risks could have a material adverse effect on the business, the financial condition and the results
of operations of EPS Group.
The Issuer does not directly develop operational activities
The Issuer, as a holding company (SGPS), develops direct and indirect management activities over its
subsidiaries, whereby the fulfilment of its assumed obligations depends on the cash flows generated
by its subsidiaries. The Issuer thus depends on the distribution of dividends by its subsidiary companies,
interest payments, repayment of loans and other cash flows generated by those companies. The ability
of the Issuer’s subsidiaries to provide/repay funds to the Issuer depends, partly, on its ability to
generate positive cash flows within operational activities. The ability of these companies to, on the
one hand, distribute dividends and, on the other, pay interest and repay loans granted by the Issuer,
is subject to statutory and tax restrictions, its revenues, available reserves and its financial structure,
which may have an adverse impact on the Issuer’s business, financial condition and operational results.
Legal and regulatory tax changes or changes in the interpretation by the tax authorities
33
The Issuer may be adversely affected by tax changes in Portugal, in the European Union and in other
countries where it develops its activities. The Issuer does not control these tax changes or any changes
in the interpretation of tax laws by any tax authority. Significant legislative changes in Portugal, the
European Union or in countries where the Issuer develops its activities, or difficulties in implementing
or complying with new tax laws and regulations, can have an adverse impact on the Issuer’s business,
financial condition or operational results.
Customer’s credit risk
The Issuer (and the EPS Group in general, including the Guarantors) is exposed to customers’ credit
risk in terms of trade receivables, which may result in a counterparty failing to meet its contractual
obligations as and when the same fall due, with a potential negative impact on the Issuer’s financial
statements.
The Issuer (and the EPS Group in general, including the Guarantors) mitigates its exposure to this risk
by seeking to ensure that its customers have a solid credit profile or adequate financing to meet their
obligations and by negotiating contractual advances for some of the contracts. The credit risk quality
assessment is performed by the Corporate Finance Board in accordance with the following
methodology: if customers hold an independent external credit rating, this rating is used; otherwise,
their credit risk quality is evaluated taking into account their financial situation and past experience,
among other factors. The individual risk limits are determined according to the guidelines defined by
the Board of Directors of the Issuer, which is also responsible for the approval of projects considered
to be of high or significant risk.
Notwithstanding the measures mentioned above and the regular monitoring of the use of credit limits,
the Issuer (and the EPS Group in general, including the Guarantors) cannot ensure, at all times, that its
customers will fulfil their obligations as and when these fall due and any breach of such obligations
may have an adverse impact on the Issuer’s business, financial condition or operational results.
Risk of interruptions in the supply chain
The development by the EPS Group (notably the Guarantors) of their relevant activities and the
successful supply of their product depends on the supply of materials and critical components by third
parties. The timely supply of all those items the Guarantors require to develop their operational
activities and the supply of such items in the number and quality requested by the Guarantors is
essential to ensure that the Guarantors are able to provide their customers with the requested
products.
34
To mitigate the EPS Group’s risks in this respect, a policy of diversifying the relevant supplier base and
respective geographies has been implemented, alongside the EPS Group’s implementation of approval
processes for materials and critical components to the supplier group. On the other hand, the EPS
Group extends the scope of projects to the optimisation of inventory and logistics management.
However, any inefficient inventory management or relevant failure in the supply of materials and
critical components by third parties may lead to delays in the delivery of the relevant supply orders by
the Guarantors, which may in turn expose the Guarantors, and the EPS Group in general, to contractual
penalties and indemnities, as well as the reputational risk that may arise if the EPS Group fails to
comply with agreed delivery deadlines. Any of the factors described above, whether in isolation or in
combination with each other, could have an adverse effect on the Issuer’s business, financial condition
or operational results.
Risk of increased competition
The EPS Group operates in a highly competitive environment. Structural changes in competition in the
markets where the EPS Group operates, such as new market entrants, decline in demand, excess
capacity or the launch of new marketing campaigns, products or services, could have an impact on its
business activity.
The pressure and uncertainty generated by competitors already operating in the market and by those
that may potentially emerge in the future with their own market strategies, could have a negative
impact on the EPS Group’s performance. To mitigate its exposure to this risk, the EPS Group develops
R&D projects that allow for increased efficiency in terms of production and seeks to adapt the product
to customers’ needs in order to enhance its position in the industry and in the markets where the EPS
Group operates.
If the number of competitors were to increase significantly, or if such competitors are able to provide
services that the EPS Group, notably the Guarantors, are unable to provide its customers, this may
have an impact on its volume of customers, prices, market shares or on the EPS Group’s profit margins
and, consequently, may have an adverse impact on the Issuer’s business or on the results of its
activities.
Risk of corruption
The EPS Group is concerned with maintaining its reputation and ethical standards, irrespective of the
markets in which it operates and the relevant contractual counterparties. In this context, the EPS
Group regularly audits its business practices which reveal a higher identified risk and defines
35
contractual procedures and standards for its relationship with partners with a higher identified risk.
Additionally, the EPS Group seeks an effective implementation of its Code of Conduct and carries out
internal and external training courses aimed at complying with the ethical standards set.
However, due to the strong impact that any reputational risk may have, the occurrence of such a risk
may have an adverse effect on the Issuer’s business, financial condition or operational results.
Risks associated with health, safety and environment
Given the range and complexity of the EPS Group’s operations, the potential risks in terms of health,
safety and the environment are considerable. This includes major incidents involving safe processes
and installations, failure to meet approved policies, natural disasters and civil unrest, civil war and
terrorism. The EPS Group, notably the Guarantors, is further exposed to generic operational, health
and personal safety risks and potential criminal activities.
Such incidents may cause injury or loss of life, environmental damages and claims, destruction of
premises or similar events, and, depending on their cause, severity and extent, they may negatively
affect the EPS Group’s reputation and adversely affect the Issuer’s business, financial condition or
operational results.
Risks associated with business continuity and effective crisis management
The EPS Group is subject to business continuity risk, both its own and that of its partners, and may
suffer financial losses resulting from any kind of interruption to its business, namely due to natural
disasters, industrial accidents, power outages, and loss of information technology (IT) systems.
The EPS Group is also subject to the risk of labour disputes and adverse employee relations, which may
lead to strikes or work interruptions. Any such disputes or adverse relations could disrupt its business
operations and adversely affect the Issuer’s business, financial condition and results of operations.
Crisis management plans and the ability to deal with a crisis scenario are essential to deal with
emergencies at every level of the operations of the EPS Group. Additionally, an inability to restore or
replace critical capacity to an agreed level within an agreed time frame could prolong the impact of
any disruption. If the relevant EPS Group company does not respond or if it is perceived not to respond
in an appropriate manner to either an external or internal crisis, the EPS Group’s businesses and
operations could be severely disrupted, with a potential negative effect on the EPS Group’s reputation,
results of operations and financial condition.
36
Risks associated with the difficulty in hiring and retaining qualified personnel
In order to maintain and expand its business, the EPS Group needs to recruit, promote and maintain
its executive management and qualified technical personnel.
The inability to attract or retain sufficient technical and managerial personnel in the future could limit
or delay the EPS Group's development efforts or negatively affect its operations.
Risks associated with certain litigation proceedings
The Issuer and the Guarantors are, have been, and may be from time to time in the future, subject to
a number of judicial, arbitral or administrative claims and disputes in connection with their business
activities. The Issuer cannot ensure that it or that the Guarantors will prevail in any of these disputes
or that they are adequately reserved or insured against any potential losses.
The EPS Group cannot ensure the outcome such disputes or control the effect that they may have on
the EPS Group and its activities. An adverse outcome may negatively impact on the EPS Group’s
reputation and on the Issuer’s results of operations and financial condition.
The most relevant disputes are disclosed in the management report of the financial year ending 31
December 2018, which can be consulted on the Issuer’s website at www.efacec.pt.
Risks associated with technological developments
Innovation can dictate an organisation’s success. The EPS Group operates in a highly innovative
environment, where breakthrough products and services play a key role in measuring success. In order
for the EPS Group to maintain its competitiveness and to expand its business, it must effectively adjust
to technological changes. If the EPS Group is unable to modernise its technologies quickly and
regularly, and to take full advantage of industry trends, it could face increased pressure from
competitors and lose customers in the markets in which it operates. The inability to keep up with the
rapid pace of innovation may have negative impacts on the EPS Group, notably the Guarantors.
If the EPS Group does not proceed, on an ongoing basis, with the supply of cutting-edge products and
services, or if such products and services are not perceived by the relevant customers as innovative
and value-adding, this may have an adverse impact on the Issuer’s business or on the results of its
activities.
37
C - RISKS RELATING TO THE NOTES
Credit ratings may not reflect all risks, are not recommendations to buy or to hold securities and may
be subject to revision, suspension or withdrawal at any time
The agency Axesor assigned the Notes a credit rating of BBB-. The rating of the rating agency is a way
to measure risk. In the market, investors demand higher returns on higher risk and should assess the
likelihood of a downward variation in the credit quality of the Issuer or the Notes (if any is assigned),
which could lead to a loss of liquidity in the Notes purchased in the market and a loss in value. The
rating reflects only the view of the rating agency at the time of the evaluation and takes into
consideration the credit rating of the Issuer, as well as the structural characteristics and other aspects
of the Issue. However, the rating may not reflect the potential impact of risks related to structure,
market and other factors in the valuation of the Notes.
The credit rating can be revised upward or downward, suspended or even withdrawn by the rating
agency. The downward revision, suspension or withdrawal of the credit rating by the rating agencies
could alter the price of the Notes for the perception of the markets and hinder the Issuer’s access to
debt markets and impact on its ability to achieve financing.
Therefore, any change in creditworthiness, or the perception of it, could also adversely affect the
market value of the Notes. Credit ratings of the Notes are not a recommendation.
Notes may not be a suitable investment for all investors
Each potential investor in any Notes must determine the suitability of that investment in light of its
own circumstances. In particular, each potential investor should:
(i) have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the
merits and risks of investing in the Notes and the information contained or incorporated by
reference in this Information Memorandum or in any applicable supplement;
(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
specific financial situation, an investment in the Notes and the impact such investment will have
on its overall investment portfolio;
(iii) have sufficient financial resources and liquidity to bear all the risks of an investment in the Notes,
including where principal or interest is payable in one or more currencies, or where the currency
for principal or interest payments is different from the potential investor's currency; and
38
(iv) thoroughly understand the terms of the Notes and be familiar with the behaviour of any relevant
indices and financial markets; and
(v) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear
the applicable risks.
Some Notes are complex financial instruments and such instruments may be purchased as a way of
reducing risk or enhancing yield with an understood, measured, appropriate addition of risk to their
overall portfolios. A potential investor should not invest in Notes which are complex financial
instruments unless it has the expertise (either alone or with the help of a financial adviser) to evaluate
how the Notes will perform under changing conditions, the resulting effects on the value of such Notes
and the impact this investment will have on the potential investor's overall investment portfolio.
There is no active trading market for the Notes, in which case the ability to sell the Notes may be
limited
The Issuer cannot assure the Noteholders as to the liquidity of any market in the Notes, their ability to
sell the Notes or the prices at which they will be able to sell their Notes. Future trading prices for the
Notes will depend on many factors, including, among other things, prevailing interest rates, the Issuer’s
operating results and the market for similar securities.
Although the Issuer has requested admission (incorporación) to trading of the Notes on MARF, the
Issuer cannot guarantee that the Notes will be or will remain listed. Although no assurance is made as
to the liquidity of the Notes as a result of their admission on MARF, the failure to be approved for
admission or the exclusion (whether or not for an alternative admission to listing on another stock
exchange) of the Notes from the MARF market may have a material effect on a Noteholder’s ability to
resell the Notes, as applicable, in the secondary market.
Payment procedures in respect of the Notes
Payment in respect of the Notes will be (i) credited, according to the procedures and regulations of
Interbolsa, as operator of the Portuguese central securities clearing system (Central de Valores
Mobiliários), to TARGET2 payment current accounts held in the payment system of TARGET2 by
financial intermediaries for the purposes of the Portuguese Securities Code, and which are entitled to
hold control accounts with Interbolsa on behalf of the Noteholders (each, an “Affiliate Member of
Interbolsa”) whose accounts with Interbolsa are credited with such Notes, thereafter (ii) credited by
such Affiliate Members of Interbolsa from the respective above mentioned payment current accounts
39
to the accounts of the Noteholders or of Euroclear or Clearstream, Luxembourg with said Affiliate
Members of Interbolsa, as the case may be.
The Noteholders must rely on the procedures of Interbolsa and of Euroclear or Clearstream,
Luxembourg to receive payment under the Notes and the Issuer, the Paying Agent, the Coordinators,
the Dealer and the Co-Dealer will have no responsibility or liability for Interbolsa’s or of Euroclear’s or
Clearstream, Luxembourg’s records relating to payments made in respect of beneficial interests in the
Notes.
Applicable law and legal changes
Investors’ rights in their capacity as Noteholders shall be governed by Portuguese law, and thus some
aspects may differ from the rights usually recognised to Noteholders in companies governed by legal
systems other than the Portuguese.
It cannot be ensured that legal (including tax) or regulatory changes will not occur, or that any changes
in the interpretation or application of legal standards will not have an adverse effect on the rights and
obligations of the Issuer and/or of the investors in the Notes.
Modification and waiver
The conditions of the Notes contain provisions for the calling of meetings of Noteholders to consider
matters affecting their interests generally. These provisions permit defined majorities to bind all
Noteholders, including Noteholders who did not attend and vote at the relevant meeting and
Noteholders who voted in a manner contrary to the majority.
Compliance with offer and distribution restrictions
Investors are referred to, and are required to inform themselves about and to observe, the offer and
distribution restrictions and the agreements, acknowledgements, representations, warranties and
undertakings detailed in the applicable Terms and Conditions, which investors will be deemed to
accept and make upon submission of a subscription order.
Costs
Investors must inform themselves about any commissions, charges, taxes, expenses or other amounts
that they may have to pay or bear as a result of submitting, or having had submitted on their behalf, a
subscription order and/or as a result of such subscription order being accepted by the Issuer, including
any commissions charged by custodians or intermediaries. Accordingly, investors shall consult in
advance the price lists or other cost agreements in force with any such parties.
40
Investors shall have no rights against the Issuer, the Coordinators, the Dealer or the Co-Dealer in
respect of any costs related to the offer for subscription.
No recommendations
Investors in doubt as to the behaviour to be adopted should seek financial advice, including in relation
to possible tax consequences, from their respective broker, bank, manager, solicitor, accountant or
other independent financial, tax or legal adviser prior to their participation in the offer for subscription.
Neither the Issuer, the Coordinators, the Dealer nor the Co-Dealer, and their respective directors,
employees, affiliates or representatives, is acting for any investors, or will be responsible to any
investors for providing any protections which would be afforded to its clients or for providing advice
in relation to the offer for subscription. Accordingly, neither the Issuer, the Coordinators, the Dealer
nor the Co-Dealer, and their respective directors, employees, affiliates or representatives, makes any
recommendation whatsoever as to whether investors should subscribe for the Notes pursuant to the
offer for subscription.
Interest rate risk and foreign exchange controls
The Issuer will pay the principal and interest on the Notes in Euro (the “Selected Currency”), which
poses certain risks relating to currency conversions if the financial investments of an investor are
primarily denominated in a currency (the “Investor’s Currency”) different from the Selected Currency.
Such risks include the risk that exchange rates may change significantly (including due to the
depreciation of the Selected Currency or revaluation of the Investor’s Currency) and the risk that
authorities with jurisdiction over the Investor’s Currency or the Selected Currency may impose or
modify foreign exchange controls. An appreciation of the Investor’s Currency relative to the Selected
Currency will decrease (i) the equivalent yield of the Notes in the Selected Currency, (ii) the equivalent
principal of the Notes in the Selected Currency, and (iii) the equivalent market value of the Notes in
the Selected Currency.
Governments and monetary authorities of the relevant jurisdictions may impose (as has happened in
the past) rates likely to adversely affect the applicable foreign exchange rate. Accordingly, investors
may receive less interest or principal than expected, or not even receive principal or interest.
The interest attributable to the Notes is calculated with reference to a fixed rate. Accordingly,
investment in the Notes involves the risk that subsequent changes in market interest rates may
adversely affect the value of the Notes.
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Considerations about the lawfulness of the investment
The activities of certain investors are subject to investment laws and regulations and/or to review or
regulation by certain authorities. Each potential investor should use its own legal advisors to determine
whether and to what extent (i) the Notes are legally permitted investments to them, (ii) the Notes may
be used as collateral for various types of loans, and (iii) other restrictions apply to the
subscription/acquisition of the Notes.
42
SECTION IV
DECLARATION OF LIABILITY
1. Person responsible for the information contained in the Information Memorandum
(a) Mr. Francisco José Meira Silva Nunes, on behalf of the Issuer, as member of the Issuer’s
Board of Directors, is responsible for the entire content of this Information Memorandum;
and
(b) Mr. Francisco José Meira Silva Nunes is expressly authorised to provide any public or
private documents as may be necessary for the proper processing of the Notes issued by
virtue of the resolutions adopted at the meeting of 19 July 2019.
2. Statement of the person responsible for the content of the Information Memorandum
On behalf of the Issuer, Mr. Francisco Nunes hereby declares that the information contained in
this Information Memorandum is, to his knowledge and after acting with reasonable care to
ensure its completeness, in full accordance with the facts and contains no omissions likely to
affect its content.
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SECTION V
FUNCTIONS OF THE REGISTERED ADVISOR OF MARF
(a) VGM Advisory Partners, S.L.U. is a limited liability company incorporated on 24 July 2013, before
the notary public of Madrid, duly registered in the Commercial Register of Madrid, Volume
31259, Page 114, Sheet M-562699, and in the Registered Advisors Market Register pursuant to
market Operative Instruction 4/2014, 17 February 2014 (Instrucción Operativa 4/2014 de 17 de
febrero de 2014) (“VGM” or the “Registered Advisor”).
VGM is designated as the Registered Advisor of the Issuer and has therefore assumed the
compromise to cooperate with the Issuer on (i) the admission (incorporación) of the Notes
issued; (ii) compliance with any obligations and responsibilities that apply to the Issuer with
respect to its participation in MARF; (iii) the preparation and presentation of financial and
business information required thereunder and (iv) review of the information to ensure that it
complies with the applicable standards. Thus, VGM will collaborate with the Issuer helping it
comply with the obligations and responsibilities to be assumed by it when incorporating the
issue on MARF, acting as specialised interlocutor between MARF and the company and
facilitating its insertion and development in the new trading regime of the securities trading.
VGM shall provide the MARF with the periodic reports required by it and MARF may, in turn,
seek any information deemed necessary in connection with the Registered Advisor’s role (and
obligations as Registered Advisor) and take any measures to check the information provided.
The Issuer must have, at all times, a designated Registered Advisor listed in the “Registered
Advisors Market Register”.
(b) As Registered Advisor, VGM has, with respect to the admission (incorporación) of the Notes to
trading on MARF:
(i) confirmed that the Issuer complies with the requirements set out under the MARF
regulations for admission (incorporación) of the Notes to trading; and
(ii) assisted the Issuer in the preparation of the Information Memorandum, reviewed all
information furnished to the market in connection with the application for admission
(incorporación) of the Notes on MARF, and confirmed that the information contributed
by the Issuer complies, to the best of its knowledge, with the requirements of the
applicable laws and contains no omission likely to confuse potential investors.
(iii) Once the Notes are admitted, VGM will:
44
(1) review the information prepared and sent by the Issuer to MARF periodically or on
an ad hoc basis, and verify that the content meets the requirements and time limits
provided for in the rules;
(2) advise the Issuer on the events that might affect the performance of the obligations
it has assumed to admit the Notes to trading on MARF and on the best way to treat
such events to avoid breaching those obligations;
(3) inform the MARF of any facts that would constitute a breach by the Issuer of its
obligations in the event of a potential material breach by the Issuer which had not
been cured by its advice, and
(4) manage, attend to and answer any queries and requests for information from
MARF in relation to the Issuer’s situation, the evolution of its activity, the
performance of its obligations and such other market data deemed relevant.
(c) To this effect, the Registered Advisor shall perform the following actions:
(i) maintain regular and necessary contact with the Issuer and analyse any exceptional
situations that may occur in the evolution of the market price, trading volume and other
relevant trading indicators of the Notes of the Issuer;
(ii) sign such statements, in general, as may be required under the regulations, as a result of
the admission (incorporación) of the Notes on the MARF and in relation to the information
required from companies listed on said market; and
(iii) forward to the MARF, as soon as possible, information received in response to inquiries
and requests for information that the latter may issue.
(d) Any breach, by the Registered Advisor, of the requirements demanded of it, or of the tasks to
be carried out by it, may lead to the adoption, by the applicable organs of MARF, of any of the
following actions:
(i) The issue of a written warning, leading to the adoption by the Registered Advisor of
corrective measures for non-compliant actions. This action may be taken by the Managing
Director or the Market Supervision Committee;
(ii) suspension of the Registered Advisor, which would result in the Registered Advisor being
banned from being appointed for this role by new issuers. This action does not, however,
affect previous appointments and, therefore, the Registered Advisor in question may
continue to act as such for other issuers; and/or
(iii) exclusion of the entity from the Registered Advisors Registry.
45
Actions (b) and (c) must be agreed upon by the Board of Directors following a report issued by the
Securities Incorporation Commission and after hearing the person concerned. Such actions shall be
notified to the CNMV on the day of their adoption and published on MARF’s website.
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SECTION VI
INFORMATION ON THE ISSUER, THE GUARANTORS AND THE GROUP
A. Identification data of the Issuer and of the Guarantors
A.1. The Issuer
Legal and commercial name of the Issuer
The legal name of the Issuer is EFACEC Power Solutions, SGPS S.A. and the most frequent commercial
name is EFACEC.
Registration and legal person number of the Issuer
EFACEC is a limited liability company (sociedade aberta de responsabilidade limitada) with head office
at Lugar da Arroteia, 4465-587 – Leça do Balio, Matosinhos, district of Oporto, Portugal, registered
with the Commercial Registry Office under the registration and tax number 513 180 966, and with a
fully subscribed and paid-up share capital in the amount of €308,949,250.00.
Incorporation of the Issuer
EFACEC was incorporated on 14 August 2014 for an unlimited period of time.
Head office, legal form and legislation that governs the Issuer’s activity
EFACEC has its head office at Lugar da Arroteia, 4465-587 – Leça do Balio, located in the parish of
Custóias, Leça do Balio e Guifões, municipality of Matosinhos, district of Oporto, Portugal, and its
telephone number is (+351) 22 956 23 00.
EFACEC is a holding company under the legal form of a limited company, incorporated and operating
under the laws of the Portuguese Republic and, under article 2 of its by-laws, its corporate purpose is
the “management of holdings in other companies as an indirect way of carrying out economic
activities, also being able to provide technical and management services pursuant to law”.
Article 4 of its by-laws further provide that EFACEC may “acquire and dispose of holdings in national
or foreign law companies, with the same or a different corporate purpose to that referred to in the
second article, in companies governed by special laws and in unlimited liability companies” and
“associate with other legal entities, in particular to form new companies, including European limited
liability companies, complementary company groupings, European economic interest groupings,
consortia and joint ventures”.
47
EFACEC is governed by the Portuguese laws applicable to holding companies, particularly by the
Portuguese Commercial Companies Code, the Portuguese Securities Code and Decree-Law no. 495/88,
dated 30 December 1988, and by its by-laws.
As of 31 December 2018, EFACEC’s capital is €308,949,250.00 represented by 61,789,850 ordinary
shares with a nominal value of five euros each, and is fully subscribed and paid-up.
A.2. The Guarantors
EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A.
EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A., a limited liability company incorporated
and validly existing under Portuguese law, with head office at Lugar da Arroteia, 4465-587 – Leça do
Balio, Matosinhos, district of Oporto, Portugal, is registered with the Commercial Registry Office of
Oporto under registration and tax number 504 040 847.
EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A. is a wholly owned subsidiary of the Issuer.
EFACEC Engenharia e Sistemas, S.A.
EFACEC Engenharia e Sistemas, S.A., a limited liability company incorporated and validly existing under
Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-605 – Maia,
district of Oporto Portugal, is registered with the Commercial Registry Office of Maia under registration
and tax number 502 533 447.
EFACEC Engenharia e Sistemas, S.A. is a wholly owned subsidiary of the Issuer.
EFACEC Electric Mobility, S.A.
EFACEC Electric Mobility, S.A., a limited liability company incorporated and validly existing under
Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-605 – Maia,
district of Oporto Portugal, is registered with the Commercial Registry Office under registration and
tax number 510 893 376.
EFACEC Electric Mobility, S.A. is a wholly owned subsidiary of the Issuer.
B. History and performance of the Group
EFACEC is a Portuguese company with a strong export profile and international presence in over 65
countries. A brand with 70 years of history, made by great people. Its origins go back to 1905, with the
establishment of a new company “A Moderna”, Sociedade de Serração Mecânica. In 1921, “A
Moderna” gives rise to the Electro-Moderna, Lda., a company with operations in the field of electrics
48
(motors, generators, transformers and electric accessories). Electro-Moderna had, at that time, the
necessary skills to support the major future development of what would come to be “EFACEC”.
On 12 August 1948, EFME – Empresa Fabril de Máquinas Eléctricas, SARL was founded. That was the
starting point of the Efacec project and the birth of the Efacec brand. The company’s equity capital
was, at that time, shared by Electro-Moderna (20%), ACEC – Ateliers de Constructions Électriques de
Charleroi (20%) and CUF – Companhia União Fabril (45%). The remaining 15% were distributed among
other shareholders. After several equity capital changes, namely due to the exit of CUF, ACEC became
the majority shareholder. As a result, the name EFACEC – Empresa Fabril de Máquinas Eléctricas, SARL
emerged in 1962, and a period of remarkable growth began that same year.
About 25 years later, in the context of Portugal’s integration in the EEC and the sale, by ACEC, of its
65% stake in EFACEC – Empresa Fabril de Máquinas Eléctricas, SARL, there was another period of strong
growth, namely in the international markets, along with important technological developments in
various fields, which endured until the global financial crisis of the first decade of twenty-first century.
In response to the global economic and financial crisis, Efacec launched a restructuring process, namely
in the international markets structures, as well as a simplification of the company’s portfolio.
Alongside, the company sold some assets and business considered non-core. In 2014, EFACEC Power
Solutions, SGPS S.A. was incorporated to be the new holding company of the Group with a new
business perimeter, reinforcing its core businesses. The constitution of EFACEC in 2014 and the
replacement of EFACEC Capital, SGPS, S.A.’s (currently named MGI Capital, SGPS, S.A.) as the holding
company of the EPS Group was part of this restructuring process aimed at aligning the corporate
structure of the EPS Group with the market segments and target geographies addressed.
In October 2015, Winterfell 2 Limited acquired a majority stake in EFACEC Power Solutions SGPS, S.A.
and such of the EPS Group. EFACEC’s previous shareholders (José de Mello Group and Textil Manuel
Gonçalves) became minority shareholders (organized under MGI Capital, SGPS, S.A.) and a new
management was appointed to the Group.
Currently, facing the future head-on and prepared for new and important challenges, Efacec is
recognised as a prestigious brand and one of the largest industries in the country, based on its
resilience and flexibility but, above all, based on its continuous ability to innovate.
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C. Main shareholders of the Issuer
As of 31 December 2018, the capital of the Issuer is €308,949,250.00 fully subscribed and paid-up,
represented by 61,789,850 ordinary shares with the nominal value of 5 (five) euros each. These shares
are not admitted to trading.
As of 31 December 2018, the structure of the Issuer’s holdings know to it is the following:
% Capital
Shareholder No. of shares % Voting rights
Winterfell 2 Limited 41,525,275 67.20% 67.20%
MGI Capital, SGPS, S.A. 20,264,575 32.80% 32.80%
Total 61,789,850 100.00% 100.00%
D. Legal structure of the Group
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E. Organizational structure of the Group
F. Industry and activity of the Group
EFACEC activities are focused on energy sectors by developing its activity within three segments,
organized in eight Business Units
a. Products Segment (4 business units legally organized under EFACEC Energia, Máquinas e
Equipamentos, S.A.)
i. Transformers
EFACEC is a worldwide recognized manufacturer of Power Transformers, either of
Shell and Core type, as well as Mobile Substations and Distribution Transformers.
ii. Automation
EFACEC develops and sell energy management systems, distribution dispatch
systems, command & controls systems (SCADA), PV Stations and Storage Solutions
for Utilities, Electrical Power Grids, Transportation, Cities and Industries.
iii. Switchgear
EFACEC is a manufacturer of switchgear, namely of primary and secondary
distribution, compact substations and high and medium voltage switchgear for
Eletrical Power Grids, Electric Distribution Systems and Industry and Infrastructure
Systems.
iv. Service
EFACEC provides vertically integrated services of maintenance, refurbishment and
revamping of its own and third-parties equipment for industrial facilities,
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hydroelectric and thermoelectric power plants, cogeneration, wind farms,
substations and transformer stations.
b. Systems Segment (3 Business Units legally organized under EFACEC Engenharia e Sistemas,
S.A.)
i. Energy
Within this Business Unit EFACEC design and develops complete turnkey solutions
for solar photovoltaic plants (or hybrid), substations, hydro & thermal power
generation plants (either of combined cycle or conventional plants) including the
supply of its own distributed control systems and an integrated offer of
maintenance and technical assistance.
ii. Environment
EFACEC offers integrated solutions from design and planning to implementation,
service and operation of systems for water and wastewater treatment, water
supply, irrigation and solid waste treatment.
iii. Transportation
EFACEC is an EPC turnkey provider for railway, light rails and roadways with
integrated electrical and automation solutions, providing mainly energy, signaling,
fleet management, passengers information, cross-level, tunnel and central
management solutions. The core capabilities of this business unit are also able to
be used and provided for telecom.
c. Electric Mobility (one business unit legally organized under EFACEC Electric Mobility, S.A.)
EFACEC is a very relevant player in the electric mobility market, where it positions
itself as one of the world leaders in rapid and ultra-rapid segment for charging
stations for electric vehicles. It has a full range of charging solutions to Electric
Vehicles (private chargers / public chargers / quick charging / buses charging). It
also provides integration solutions of cars, motorcycles and buses in management
systems for an efficient use of the electric grid infrastructure.
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G. Declaration on the absence of significant changes in the Information Memorandum
(Documento Informativo de Incorporación) of the Issuer
Since publication of the last audited consolidated financial statements as of and for the year ended 31
December 2018, until the date of this Information Memorandum, there has been no material adverse
changes in the prospects of EPS Group.
H. Reasons for the Issue and use of proceeds
The Issuer will use the net proceeds from the issue of the Notes for general corporate purposes and
refinancing part of existing corporate debt, and as a result of the partial repayment of such corporate
debt, the security interests granted to secure such corporate debt will be fully discharged and released.
I. Consolidated Financial information of the Issuer
During 2018, the volume of orders2 achieved by the EPS Group was worth 533.1 million of euros, 7%
higher than the previous year, essentially with the contribution of the Energy Business, Electric
Mobility, Transformers and Service Units. The Management revenues3 of € 433 million remained in
line with the previous year, which resulted from the mixed performance of the eight business units
that make up the EPS Group. The Automation, Equipment and Electric Mobility Units made a positive
contribution, and the latter unit doubled its volume of receipts in comparison with the previous year.
As was set out in the Group’s Strategic Plan, the international market continues to be of fundamental
importance for the business and represents 77% of the orders and 75% of the revenue for 2018. The
European and North American markets are gaining a growing importance, which has had a particular
impact on the Business Units that undertake their activity in these regions. The Middle East is also
beginning to establish itself as a particularly important market.
(€ million) 2017 2018 ∆ ∆%
Orders 496.5 533.1 36.6 7%
Management revenues 431.7 433.2 1.5 0%
Direct costs -348.9 -336.4 12.5 -4%
Gross Margin 82.7 96.8 14.0 17%
Indirect Costs -48.7 -55.6 -6.8 14%
Other income 1.9 0.0 -1.9 n.a.
Management EBITDA4 35.9 41.2 5.3 15%
2 “Orders” refers to the contracts signed with Customers in a specific period, with a clear indication that the projects are to be executed by Efacec. 3 “Revenues” means “Sales and services rendered” and “Production variation”, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017, and “Management revenues” means “Revenues” minus “Non-core activity sales”. 4 “Management EBITDA” means the consolidated net profit of the Issuer before Financial Profits and Income, Financial Losses and Expenses, Income Tax – Deferred, Income Tax- Current, Amortisations and depreciations, Provisions and asset impairments as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017,
53
The Management EBITDA, used to assess the group’s performance and that of each of its Business
Units, is obtained by deducting the direct and indirect costs from the revenue:
• Direct costs include all the cost items allocated to projects or manufactured products (materials,
direct labour, sub-contracted services, general charges and expenses directly related to sales),
operational exchange differences and other necessary costs for the Business Units activity
(quality, logistics, and product development). The gross margin is calculated by the deduction of
direct costs from management revenues, and its average value for 2018 is set at 22.3% in
contrast to the 19.2% records for 2017.
• Indirect costs essentially include structural costs, and encompass the commercial,
administrative and management functions.
The management EBITDA, in contrast to statuary EBITDA, does not include the non-recurring rubrics
(see the section on the comparison of the main indicators are the end of this chapter).
In 2018, the Group’s management EBITDA grew by 14.8%, to € 41.2 million, whereby the Management
EBITDA represented 9.5% of the management revenues, in contrast to 8.3% the previous year. The
major contribution to this growth was provided by the Electric Mobility, Automation and Transport
Units. Despite the maintenance of the revenue level, an increased margin was achieved through the
better execution of projects, which was a common feature across the Business Units, and a change in
performance, which was reflected in the accounts for 2018 with a positive impact of around € 5 million
euros in Statutory EBITDA5.
(€ million) 2017 2018 ∆ ∆%
Management EBITDA 35.9 41.2 5.3 15%
Contract Rescission Expenses -0.8 -2.9 -2.1
Extra-operational Revenues -2.5 -1.0 1.5
Statutory EBITDA 32.7 37.3 4.6 14%
Management Amortisations and Depreciation6s -6.0 -8.8 -2.7
Provisions and asset impairments -6.9 -9.7 -2.8
Net Financial Expenses7 -7.0 -4.0 3.0
excluding “Contract Rescission Expenses” and “Extra-operational revenues”. “Contract Rescission Expenses” includes restructuring costs, namely contract termination expenses and “Extra-operational revenues” includes revenues from MGI Capital SGPS, S.A. group entities and strategic consulting expenses. 5“Statutory EBITDA” means, in respect of any Relevant Period, the Consolidated EBIT before provisions and asset impairments, amortisations and depreciations, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017. 6 “Management Amortisations and Depreciations” means “Amortisations and depreciations”, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017, excluding “PPA Amortisation”. 7“Net Financial Expenses” means “Financial Losses and Expenses” and “Financial Profits and Income”, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017.
54
Management EBT8 12.7 14.8 2.0 16%
PPA Amortisation9 -2.1 -1.3 0.8
Pre-tax Profit 10.7 13.4 2.8 26%
Taxes10 -3.1 0.7 3.8
Consolidated Net Profit 7.5 14.2 6.6 88%
The €2.8 million increase in the value of provisions and asset impairments recorded in 2018 compared
to 2017 arose mainly from required impairments, namely the €1.8 million impairment for the debt of
Corpolec, provisions for guarantee costs for the transformers business unit, and provisions for various
systems unit projects.
The significant improvement of financial results in 2018 resulted primarily from exchange gains
achieved through financial investment in Angolan treasury bonds indexed to the American dollar,
which were undertaken by the subsidiary Efacec Angola, Lda. as a means of protecting against the high
currency devaluation reported in this country. The Net Financial Expenses section also includes an
amount of €0.6 million for the amortisation expenses recorded in the financial year.
The group’s Management EBT increased from €12.7 million in 2017 to €14.8 million in 2018, above all
due to the EBITDA increase (14% for the Statutory EBITDA), and the Pre-tax Profit in 2018 was €13.4
million. The taxes had a positive contribution of €0.7 million on the net Consolidated Net Profit by
reporting €3.9 million in income tax deferred, compared to a cost of €0.4 million in 2017, which
included adjustments of previous years to deferred tax related to the tax benefits of investing €2.3
million. Together, these results allowed us to reach a positive Consolidated Net Profit of €14.2 million,
88% higher than the amount reached in 2017.
At the end of 2018, the group’s consolidated total assets amounted to €730.6 million, the company
total equity was €316.2 million, and the financial autonomy ratio11 was 43%.
(€ million) 2017 2018 ∆ ∆%
TOTAL ASSETS 673.3 730.6 57.3 9%
key items and changes:
Tangible and Intangible Assets 158.6 168.7 10.1 6%
Deferred tax assets 56.0 59.7 3.7 7%
Stocks 29.1 36.9 7.8 27%
Accrued income 85.1 105.3 20.2 24%
8 “Management EBT” means “Pre-tax Profit”, as disclosed in consolidated income statement by nature, excluding “PPA Amortisation”. 9 “PPA Amortisation” means the difference in the “Amortisations and depreciations” relates to the tangible and intangible assets which were revalued when subsidiaries of Efacec Power Solutions, SGPS, S.A. were acquired. 10 “Taxes” means “Income Tax – Deferred” and “Income Tax – Current”, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017. 11 “Financial autonomy ratio” means the ratio between “Total Equity” and “Total Assets”, as disclosed in consolidated statement of financial position at 31 December 2018 and 2017.
55
Customers 159.5 167.6 8.1 5%
Cash and Cash Equivalents 31.1 38.2 7.0 23%
NON CURRENT AND CURRENT LIABILITIES 327.6 414.4 86.8 26%
key items and changes:
Amounts owed to credit institutions 70.7 94.7 24.1 34%
Suppliers 75.8 112.8 37.0 49%
Creditors and Accrued expenses 42.4 66.0 23.6 56%
Income to be recognised 70.7 53.6 -17.1 -24%
TOTAL EQUITY 345.7 316.2 -29.5 -9%
The table above highlights the most relevant balance sheet items. Tangible and intangible assets
increased by 6%, mainly through investments in development projects. Customers increased slightly
in 2018, by 5%, in contrast to the downward trend reported in recent years, due to the fact that a
significant volume of invoices were produced in the final quarter of the year; overdue customer debt
has continued its downward trend over the course of the year.
The increase from €85.1 million to €105.3 million shown in the Accrued income section arose primarily
from a level of execution of projects which was higher than the invoices produced, particularly in the
Electric Mobility, Switchgear, Automation and Energy Systems business units. The increase of stocks
from €29.1 million to €36.9 million was due to the significant growth of some business units,
particularly Electric Mobility, which required investment in working capital.
The amount reported in the deferred tax assets section includes the tax effect of €44 million reported
by EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A. in 2014, resulting from the sale of assets
held by the subsidiary EFACEC Power Transformers Inc. in the United States. EFACEC Power
Transformers Inc. was liquidated in 2016. This allowed the effective loss recognised in previous years
to be materialised in previous years and the respective tax credit could then be used.
On the liabilities side, the largest fluctuation was reported in the suppliers section which underwent
an increase of 49%, primarily due to the high level of invoicing seen in the final quarter. At the end of
2018, the Creditors and Accrued Expenses section was affected by the decision of the Board of
Directors to refund part of the Additional Paid-in Capital to the shareholders. €11.6 million (out of a
total €24.4 million) was repaid, with the remaining amount (€12.8 million) staying in this section. It is
also worth noting the increase in credits from the state, in both VAT and Corporate Income Tax, and
the increases in expenses with commitments undertaken as multi-annual contracts.
56
In addition, there was an increase in gross financial debt12, due to (i) the partial refund of additional
paid-in capital, (ii) investment in fixed assets and in development projects, and (iii) in the opposite
direction, due to the contribution of €5 million in loans from related entities (shareholder Winterfell
2 Limited).
(€ million) 2017 2018 ∆%
Total Equity at the start of the financial year 309.1 345.7 36.6
Capital increases/ Capital reduction 28.4 -5.3 -33.6
Other equity capital instruments 0.0 -24.4 -24.4 Consolidated Net Profit attributable to Efacec Power Solutions Shareholders 7.5 14.1 6.6
Other changes13 0.7 -13.9 -14.6
Total Equity at the end of the financial year 345.7 316.2 -29.5
There was a capital reduction of €29.5 million, mainly resulting from the following:
a) the repayment of additional paid-in capital to the value of €24.4 million;
b) a €5.3 million reduction of capital, following the acquisition of company shares from the
shareholder MGI Capital, SGPS, S.A.;
c) the positive impact of net income, with the sharp increase in 2018 already analysed above; and
d) the adverse effects of €11.9 million exchange conversion reported in “Other changes”, arising
from the transposition of foreign subsidiary balances, which in 2018 were affected by strong
depreciation of the kwanza and Argentinian peso.
In terms of financing, the net debt balance reported in the Financial Statement on the 31st of
December 2018 and the 31st of December 2017 was as follows:
(€ million) 2017 2018 ∆ ∆%
Bank debt 72.1 95.6 23.5 33%
Cash and Cash Equivalents -31.1 -38.2 -7.0 23%
Net financial debt14 40.9 57.4 16.5 40%
Amortised cost (current and non-current) -1.4 -0.9 0.5 -38%
12 “Gross Financial debt” means current and non-current “Amounts owed to credit institutions”, as disclosed in consolidated statement of financial position at 31 December 2018 and 2017. 13 “Other changes” means "Others" disclosed in Consolidated statement of changes in equity for the years ended 31 December 2018 ad 2017 and Comprehensive Income for the period excluding "Reserves and Accumulated Profit" disclosed in Consolidated statement of changes in equity for the years ended 31 December 2018 ad 2017. 14 “Net financial debt” means bank debt minus “cash and cash equivalents”, as disclosed in consolidated statement of financial position at 31 December 2018 and 2017.
57
Net debt balance15 39.5 56.6 17.0 43%
During 2018, the group increased its bank debt from €72.1 million in 2017 to €95.6 million in 2018. At
the end of the year 2018, the group’s Statement of Financial Position reported a net financial debt of
€57.4 million, representing an increase of €16.5 million compared to 2017. This increase did not exceed
the contractual ratio the group is required to meet.
2017 2018 ∆ ∆%
Starting net financial debt 46.4 40.9 -5.4 -12%
Management EBITDA 35.9 41.2 5.3 15%
Capex16 -15.8 -21.3 -5.5
Changes to Working Capital (1) 10.1 -7.8 -18.0
Other items (2) -11.2 -9.5 1.7
Cash-Flow from operations 19.0 2.6 -16.5 -86%
Financial Charges17 (3) -6.4 -3.5 2.9
Other movements (4) -7.2 -15.6 -8.4
Net financial debt reduction 5.4 -16.5 -21.9
Final net financial debt 40.9 57.4 16.5 40%
Notes: 2018
(1) Working Capital (*) 22.6 Changes to Working Capital, see Balance Sheet
1.0 Extra-operational
-12.8 Additional paid-in capital to be repaid to the Shareholders
-5.3 Receipt of MGI Capital, SGPS, S.A. shares
-2.6 Customer impairment established in 2018
-3.1 Current tax accounting
-7.6 Currency Translation Differences
-7.8
(2) Other items 9.5 Cash-out related to use of provisions
(3) Interest -3.6 Interest and similar expenses paid, see
Statement of Cash Flow
0.5
Interest and similar income received, see
Statement of Cash Flow
-0.3 Other financial losses
-3.5
(4) Other movements -11.6 Additional paid-in capital paid to the Shareholders
5.0 Loans from related entities
-4.2 Restructuring costs
15 “Net debt balance” means current and non-current “Amounts owed to credit institutions” minus “Cash and cash equivalents”, as disclosed in consolidated statement of financial position at 31 December 2018 and 2017. 16 “Capex” means “Tangible Assets – Increases” and “Intangible Assets – Increases”, as disclosed in Note 5 and 6 of 2018 Annual Report, respectively. However, Capex 2017 excludes € 28,4 million, which corresponds a capital increase in kind recorded on 31 July 2017. For more details, see note 5.1. in 2017 Annual report. 17 “Financial charges” means “Interest and similar expenses paid” and “Interest and similar income received”, as disclosed in Consolidated Cash Flow Statements for the financial years ended on 31 December 2018 and 2017, plus other financial losses.
58
-4.7 Primarily exchange differences of net debt
-15.6
(*) The working capital mainly includes the following items: i) customers excluding impairment constitution and reversion of
the year and its advances; ii) accrued income; iii) stock including a stock adjustment; iv) suppliers, excluding non-core balances
and foreign currency translation effect; and v) deferred profits. Non-operational items are not included in the management
report. From a management viewpoint, the group’s consolidated working capital had a negative performance in 2018, with
an operational fluctuation of -€7.8 million. Overall, there was an increase in the main components of the working capital,
including €20.2 million in the area of accrued income and €11.4 million for customers. For the liability components, there was
an increase in the supplier area to the value of €28.2 million.
Maturity of medium and long term bank debt was prolonged until 2022 and the group’s average debt
cost, at the end of 2018, was 3.5% compared to 3.7% in the previous year. The ratio of net
debt/EBITDA, calculated based on the statutory consolidated accounts, was 1.5.
Conciliation of management indicators with statutory financial statements
EPS analyses its performance on a monthly basis, based on the management accounts, from the
perspectives of: i) organisation by business unit and ii) operational result generation. The economic
and financial analysis of consolidated accounts provided here is also based on this dual perspective
and should therefore be analysed in conjunction with the consolidated income statement and
statement of financial position.
With regards to conciliation of these management values with the statutory values, it is important to
note that the group is also involved in various non-core activities, whose development is not
represented in EPS’s regular operational management. These activities refer to specific projects which
are in the process of being closed or discontinued companies which, for formal and legal reasons, could
not be separated from the businesses which constituted them, thus continuing to be part of EPS
consolidation. Despite having a reduced manifestation, they represent part of the difference between
the statutory financial statements and the management statements, thus influencing the group’s
annual accounts. However, the impact of these noncore activities tend to cancel themselves out in the
following years.
Below we present comments, justifications, and respective values for 31 December 2018 which
reconcile the management accounts with the statutory accounts.
59
Indicator Management Accounts
Statutory Accounts
Difference Justification
Revenues 433.2 426.62 -6.7
In its management accounts, the EPS Group uses production undertaken for the record of business volume, given that all of its activity is based on firm contracts and orders with customers, while increases and decreases in ongoing production are merely temporary deviations. The EPS Group also includes some non-core activities, which make a marginal contribution and will be fully discontinued. These sales are not included for management purposes.
-6.9 Production variation.
0.2 Non-core activity sales.
EBITDA 41.2 37.3 -3.9
The management EBITDA shows profits and expenses related to operating activities in the various business areas. Profits and expenses which are extra-operational or related to other activities are shown after the EBITDA. In the statutory accounts, EBITDA = Operating profit + Amortisations and depreciations + Provisions and asset impairments.
-2.9 Contract Recession Expenses (Restructuring costs, namely contract termination expenses).
-0.9
Extra-operational revenues (Revenues from MGI Capital, SGPS, S.A. group entities: € 0.4 million; Strategic Consulting: €1.3 million).
Amortisations and depreciations
-8.8 -10.1 -1.3
The difference in the Amortisations and Depreciations section relates to the tangible and intangible assets which were revalued when subsidiaries of EFACEC Power Solutions, SGPS, S.A. were acquired (PPA Amortisation).
Management EBT vs. Pre-tax Profit
14.8 13.4 -1.3 The difference corresponds to the amortisations reported above (PPA Amortisation).
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SECTION VII
INDEPENDENT AUDITOR
A. Name and address of the Issuer’s auditors for the period covered by the historical financial information (together with their membership in a professional body)
The Issuer’s statutory auditor and independent auditor is PricewaterhouseCoopers & Associados –
Sociedade de Revisores Oficiais de Contas, Lda., with registered office at Palácio Sottomayor, Rua
Sousa Martins, 1 – 3º, 1069-316 Lisbon, registered with the professional body Ordem dos Revisores
Oficiais de Contas as SROC no. 183 and registered at the CMVM under the no. 20161485, represented
by Joaquim Miguel de Azevedo Barroso, ROC no. 1426.
B. If auditors have resigned, been removed from their duties or have not been re-appointed during the period covered by the historical financial information, indicate the details if material
The Issuer´s auditor has not resigned nor been removed from its duties during the financial years 2018
and 2017. PricewaterhouseCoopers & Associados – Sociedade de Revisores Oficiais de Contas, Lda. has
been designated as the Issuer’s auditor in the year of 2017, for a 3 (three) years period, up until the
end of the year of 2019.
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SECTION VIII
TERMS AND CONDITIONS OF THE NOTES
PROHIBITION OF SALES TO EEA RETAIL INVESTORS
The Notes are not intended to be offered, sold or otherwise made available to (and should not be
offered, sold or otherwise made available to) any retail investor in the European Economic Area (the
“EEA”). For these purposes, a retail investor means a person who is one (or more) of the following: (a)
a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU of the European
Parliament and of the Council, of 15 May 2014, on markets in financial instruments, and amending
Directive 2002/92/EC and Directive 2011/61/EU (“MiFID II”); (b) a customer within the meaning of
Directive 2002/92/EC, where that customer would not qualify as a professional client as defined in
point (10) of Article 4(1) of MiFID II; or (c) not an eligible counterparties as defined in Directive
2003/71/EC of the European Parliament and of the Council, of 4 November 2003, on the prospectus
to be published when securities are offered to the public or admitted to trading, and amending
Directive 2001/34/EC (as amended, the “Prospectus Directive”).
NO PRIIPS REGULATION KID
No key information document (“KID”), under Regulation (EU) No. 1286/2014 of the European
Parliament and of the Council, of 26 November 2014, on key information documents for packaged
retail and insurance-based investment products (the “PRIIPs Regulation”), has been prepared by the
Issuer and by the Sole Lead Manager.
MIFID II PRODUCT GOVERNANCE / PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET
Solely for the purposes of each manufacturer’s product approval process, the target market
assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes
is eligible counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels
for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any
person subsequently offering, selling or recommending the Notes (a “distributor”) should take into
consideration each manufacturers’ target market assessment; however, a distributor subject to MiFID
II is responsible for undertaking its own target market assessment in respect of the Notes (by either
adopting or refining the manufacturers’ target market assessments) and for determining appropriate
distribution channels.
62
DESCRIPTION OF THE NOTES
The following are the terms and conditions of the Notes.
The notes issued have a nominal value of €58,000,000, with a face value of €100,000, each grouped in
a single class and series, and pay a fixed interest rate of 4.5%, as is regulated in Condition 6 (Interest)
below. The issue of the Notes due 23 July 2024 (the “Notes”, which expression shall, unless otherwise
indicated, include any further notes issued pursuant to Condition 16 (Further issues) and consolidated
and forming a single series with the Notes) of EFACEC Power Solutions, SGPS S.A. (the “Issuer”) was
(save in respect of any such further notes to be issued pursuant to Condition 16 (Further issues))
authorised by a decision of the Issuer’s Board of Directors passed on 19 July 2019. The Notes will be
fully guaranteed by irrevocable guarantee issued by EFACEC Energia – Máquinas e Equipamentos
Eléctricos, S.A., EFACEC Engenharia e Sistemas, S.A. and EFACEC Electric Mobility, S.A. pursuant to the
guarantee described in Condition 10 (Guarantors: personal guarantee).
The Notes have the benefit of a paying agency agreement dated 19 July 2019, as amended or
supplemented from time to time (the “Paying Agency Agreement”), between the Issuer and Banco
Comercial Português, S.A. as paying agent (the “Paying Agent”, which expression includes any paying
agent appointed from time to time in connection with the Notes). Bondholders, S.L. is appointed as
the common representative of the Noteholders (the “Common Representative”, which expression
shall include any successor as common representative).
Any reference to “Noteholders” shall mean the persons in whose name the Notes are registered in the
individual securities account held with an Affiliate Member of Interbolsa (as defined below) in
accordance with Portuguese law and the relevant Interbolsa procedures and, for the purposes of
Condition 11 (Taxation), the effective beneficiary of the income attributable thereto.
1. FORM, DENOMINATION, PRICE AND STATUS
1.1. Form and Denomination
The Notes are issued in dematerialised book-entry form (“forma escritural”) and in the nominal
value of €58,000,000 in denomination of €100,000 each.
The Notes are “nominativas” which means that Interbolsa may, at the Issuer’s request, ask the
Affiliate Members of Interbolsa for information regarding the identity of the holders of the Notes
and transmit such information to the Issuer.
The Notes will be registered by, and held through, Interbolsa as management entity of the CVM
(Central de Valores Mobiliários).
63
1.2. Status of the Notes
The Notes are direct, senior, unconditional, unsecured (subject to the provisions of Condition
4.4 (Negative Pledge)) and unsubordinated obligations of the Issuer, guaranteed by the
Guarantors. The Noteholders’ rights against the Issuer, arising from the Issue, will have at least
the same priority in terms of ranking, preferences or privileges, without any preference among
themselves (and save for certain obligations required to be preferred by law), as the rights
arising from the senior debt of other present or future creditors of the Issuer, and a higher
priority in ranking, preferences or privileges than the rights arising from the subordinated debt
of other present or future creditors of the Issuer.
1.3. Price of the Notes: 100%
1.4. ISIN Code: Interbolsa – Sociedade Gestora de Sistemas de Liquidação e de Sistemas
Centralizados de Valores Mobiliários, S.A. has, as management entity of the CVM, assigned the
following ISIN to identify the Notes: PTEFWAOM0001.
1.5. Name of the Issue: EFACEC Fixed Rate Notes 2019-2024
2. REGISTER, TITLE AND TRANSFERS
2.1. Registration
The Notes will be registered with Interbolsa, as management entity of the CVM. Each
Noteholder's (as defined below) title to the corresponding principal amount of the Notes will be
evidenced by book-entry in individual securities accounts held with the relevant Affiliate
Member of Interbolsa, in accordance with the Portuguese Securities Code and the regulations
issued by, or otherwise applicable to, Interbolsa. Noteholders who do not have, directly or
indirectly through their custodians, a participating account with Interbolsa may participate in
the Notes through bridge accounts maintained by each of Euroclear Bank S.A./N.V. and
Clearstream Banking, société anonyme, Luxembourg.
2.2. Title
Title to the Notes will be evidenced by book-entries in individual securities accounts held with
the relevant Affiliate Member of Interbolsa, in accordance with the Portuguese Securities Code
and the regulations issued by, or otherwise applicable to, Interbolsa. Title to the Notes held
through Interbolsa is subject to compliance with all applicable rules, restrictions and
requirements of Interbolsa and under Portuguese law.
64
No physical document of title will be issued in respect of the Notes held through Interbolsa.
Each person shown in the individual securities accounts of an Affiliate Member of Interbolsa as
having an interest in the Notes (each, a “Holder”) shall (except as otherwise required by law) be
deemed, for all legal purposes, as the holder of the principal amount of the Notes recorded
therein (each, a “Noteholder”).
One or more certificates in relation to the Notes (each, a “Certificate”) attesting to the relevant
Holder's holding of the Notes in the relevant registry will be delivered by the relevant Affiliate
Member of Interbolsa, or, where the Holder is itself an Affiliate Member of Interbolsa, by
Interbolsa (in each case, pursuant to article 78 of the Portuguese Securities Code and in
accordance with the procedures of the relevant Affiliate Member of Interbolsa or, as the case
may be, of Interbolsa), to such Holder upon such Holder’s request.
The Issuer and the Paying Agent may (to the fullest extent permitted by the applicable laws)
deem and treat the person or entity registered in each individual securities account of an
Affiliate Member of Interbolsa as the holder of any Note and its absolute owner for all purposes.
Proof of such registration is made by means of a Certificate.
2.3. Transfer of Notes
The Notes are issued without any restrictions on their transferability.
Consequently, the Notes may be transferred and title to the Notes may pass (subject to
Portuguese law and to compliance with all applicable rules, restrictions and requirements of
Interbolsa or, as the case may be, of the relevant Affiliate Member of Interbolsa) upon
registration in the relevant individual securities accounts held with an Affiliate Member of
Interbolsa and/or Interbolsa itself, as applicable. Each Holder will be treated (except as
otherwise required by Portuguese law) as the legitimate owner of the relevant Notes for all
purposes (whether or not it is overdue and regardless of any notice of ownership, trust, or any
interest or annotation of, or the theft or loss of the Certificate issued in respect of it) and no
person will be liable for so treating the Holder.
3. DEFINITIONS
In these Conditions the following expressions have the following meanings:
“Affiliate Member of Interbolsa” means any authorised financial intermediary for the purposes
of the Portuguese Securities Code, and which are entitled to hold control accounts with
Interbolsa on behalf of Noteholders and includes any depository banks appointed by Euroclear
65
and Clearstream, Luxembourg, for the purposes of holding accounts on behalf of Euroclear and
Clearstream, Luxembourg;
“Business Day” means a day which is both (i) a day on which commercial banks and foreign
exchange markets settle payments and are open for general business (including dealing in
foreign exchange and foreign currency deposits) in Lisbon and in Madrid; and (ii) a Target
Settlement Day;
“Change of Control” means the event by which any person or group of persons acting in concert
gains control over the Issuer by means of acquiring shares that represent more than 50% of the
voting rights and/or being attributed with more than 50% of the voting rights and/or having the
power to appoint the majority of the members of its board of directors;
“Clearstream, Luxembourg” means Clearstream Banking société anonyme, Luxembourg;
“CMVM” means the Comissão do Mercado de Valores Mobiliários, the Portuguese Securities
Market Commission;
“Common Representative” means Bondholders, S.L. or any successor thereof;
“Consolidated Cash and Equivalents” means, in respect of the Issuer and its Subsidiaries, at any
time, the aggregate of the following:
(a) cash at bank and at hand;
(b) time deposits;
(c) securities, which are not convertible into any other form of security, issued, or
unconditionally guaranteed, by the government of any Specified Sovereign or issued by
any agency thereof and guaranteed or backed by the full faith and credit of the
government of any Specified Sovereign, in each case maturing within one (1) year of the
date of acquisition;
(d) commercial paper issued by any corporation organised under the laws of a Specified
Sovereign maturing no more than one (1) year from the date of acquisition thereof and,
at the time of acquisition which is not convertible into any other form of security and is
not issued or guaranteed by the Issuer and its Subsidiaries; and
(e) certificates of deposit or bankers’ acceptances issued by any commercial bank, other than
those referred to in paragraph (c) above, organised under the laws of a Specified
Sovereign and maturing within one (1) year from the date of acquisition thereof;
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“Consolidated EBIT” means, in respect of the Relevant Period, the consolidated operating profit
in respect of the Group;
“Consolidated EBITDA” means, in respect of any Relevant Period, the Consolidated EBIT before
provisions, depreciation and amortisation;
“Consolidated Net Debt” means, at any time, the Consolidated Total Debt less Consolidated
Cash and Equivalents;
“Consolidated Total Debt” means, in respect of the Group but excluding any intercompany
loans, shareholders loans, or any other form of indebtedness between companies within the
Group, at any time, without double counting, the aggregate of the following:
(a) moneys borrowed;
(b) any amount raised pursuant to any note sale facility or the issue of bonds, notes,
debentures or any similar instrument;
(c) receivables sold or discounted (other than any receivables sold on a non-recourse basis);
(d) any amount arising from any deferred payment agreement or any forward sale or
purchase agreement, when arranged primarily as a method for raising finance or financing
the acquisition of an asset; and
(e) the amount of any liability in respect of any guarantee or indemnity for any of the items
referred to in paragraphs (a) to (d) above,
excluding the lease of right-of-use assets in accordance with IFRS16;
“Coordinators” means Beka Finance, Sociedad de Valores, S.A. and Optimal Investments, S.A.;
“Co-Dealer” means Banco Finantia, S.A.;
“CVM” means the Central de Valores Mobiliários, the Portuguese central securities clearing
system managed by Interbolsa;
“Dealer” means Beka Finance, Sociedad de Valores, S.A.;
“EBITDA” means the consolidated profit of the Issuer before interest, taxes, depreciations,
provisions and other non-operating expenses and incomes for any 12 (twelve) month period
ending on the last day of the audited financial statements for each financial year;
“Euroclear” means Euroclear Bank SA/NV;
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“Event of Default” means any of the events listed in Condition 12 (Events of Default);
“Extraordinary Resolution” means a resolution passed at a meeting of Noteholders in respect
of any of the following matters: (i) change in any date fixed for payment of principal or interest
in respect of the Notes, reduction of the amount of principal or interest due on any date in
respect of the Notes, or variation in the method of calculating the amount of any payment in
respect of the Notes on redemption or maturity; (ii) change in the currency in which amounts
due in respect of the Notes are payable; (iii) approval of the modification or abrogation of any
of the provisions of these Conditions; (iv) approval of any amendment to this definition; (v)
approval of any modification or abrogation of any provisions of any Guarantee or the
substitution of any Guarantor; and (vi) approval of any other matter in respect of which these
Conditions require an Extraordinary Resolution to be passed;
“First Interest Payment Date” means 23 July 2020, provided that if it falls on a date which is not
a Business Day then the relevant payment will be made on the following Business Day;
“Group” means the Issuer and its Subsidiaries;
“Guarantee” means the irrevocable guarantee granted by each of the Guarantors in relation to
the Notes, as foreseen in Condition 10 (Guarantors: Personal Guarantee);
“Guarantors” means each of EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A.,
EFACEC Engenharia e Sistemas, S.A. and EFACEC Electric Mobility, S.A.
“Indebtedness for Borrowed Money” means (i) any indebtedness (whether being principal,
premium interest or any other amounts) for or in respect of notes, bonds, debentures,
debenture stock, loan stock or other securities; or (ii) any borrowed money, in each case other
than Intra-Group Indebtedness and shareholder’s loans;
“Interbolsa” means Interbolsa - Sociedade Gestora de Sistemas de Liquidação e de Sistemas
Centralizados de Valores Mobiliários, S.A., as management entity of the CVM;
“Interest Payment Date” means the First Interest Payment Date and the date that falls every 12
(twelve) months after the First Interest Payment Date (up to and including the Maturity Date),
provided that if an Interest Payment Date falls on a date which is not a Business Day then the
relevant payment will be made on the following Business Day;
“Interest Period” means each period beginning on (and including) the Issue Date or any Interest
Payment Date and ending on (but excluding) the First Interest Payment Date or the next Interest
Payment Date, as the case may be;
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“Interest Rate” means the rate of interest applicable to the Notes for each Interest Period, as
determined pursuant to Condition 6 (Interest);
“Intra-Group Indebtedness” means money borrowed by one entity within the Group from
another entity within the Group;
“Issue Date” means 23 July 2019;
“MARF” means the Spanish Alternative Fixed-Income Market (Mercado Alternativo de Renta
Fija);
“Material Assets” means, with respect to any date, the real estate assets of the Issuer and its
Material Subsidiaries;
“Material Subsidiary” means any Subsidiary whose EBITDA, according to the latest audited
annual accounts approved by the general meeting, represents at least 10 per cent. of the
consolidated EBITDA of the Issuer (according to the latest audited consolidated annual accounts
approved by the general meeting);
“Material Subsidiary Sale” means the sale of more than 50 per cent. of the shares of any
Material Subsidiary;
“Maturity Date” means the Interest Payment Date falling on 23 July 2024;
“Net Debt To EBITDA Ratio” means, on any date, the ratio of (i) Consolidated Net Debt to (ii)
Consolidated EBITDA;
“Noteholder” means each person shown in the individual securities accounts of an Affiliate
Member of Interbolsa as having an interest in the Notes;
“Paying Agency Agreement” means the agreement entered into by the Issuer and the Paying
Agent, and dated on or about the Issue Date;
“Portuguese Commercial Companies Code” means Decree-Law no. 262/86, of 2 September, as
amended from time to time;
“Paying Agent” means Banco Comercial Português, S.A.;
“Portuguese Securities Code” means Decree-Law no. 486/99, of 13 November, as amended
from time to time;
“Principal Amount Outstanding” means, on any day, (i) in relation to a Note, the principal
amount of that Note upon issue; and (ii) in relation to the Notes outstanding at any time, the
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aggregate amount of (i) with respect to all Notes outstanding;
“Relevant Period” means a period of 12 (twelve) months ending on the last day of a financial
year, as relevant;
“Security Interest” means any mortgage, charge, pledge, lien or other security interest
(“garantia real”), including, without limitation, anything analogous to any of the foregoing under
the laws of any jurisdiction, created upon the entirety or any part of the Issuer’s undertakings
or assets, present or future, which represent more than 25 (twenty-five) per cent. of its
consolidated net assets, except:
(i) security existing as at the date hereof and any that is or will be created to secure
obligations of the Issuer arising in connection with the Notes;
(ii) security created with the prior consent of the Noteholders, granted through an
Extraordinary Resolution of Noteholders;
(iii) security created upon assets to be acquired by the Issuer or for its benefit, to the extent
that (i) the relevant acquisition does not correspond to a mere substitution of assets, it
being understood that the investment in assets forming part of the real estate of the
Issuer, but which are obsolete or deteriorated, will not be deemed a mere substitution of
assets, and (ii) the security is created to secure the payment of the relevant price or is
otherwise associated with any credit extended for such purpose; and
(iv) Security Interest securing any indebtedness incurred in relation to any asset for the
purpose of financing the whole or any part of the acquisition, creation, construction,
improvement or development of such asset, where the financial institutions to whom
such indebtedness is owed have recourse solely to the applicable project borrower and/or
such asset and/or the shares held in such project borrower and any similar transaction in
nature.
To this effect, consolidated net assets (“ativo líquido consolidado”) means the total assets as
evidenced by the consolidated financial position statement (“demonstração da posição
financeira consolidada”);
“Specified Denomination” has the meaning given to that term in Condition 1 (Form,
Denomination, Price and Status) above;
“Subsidiary” means any entity that, from time to time, the Issuer (i) owns, directly or indirectly,
more than 50 (fifty) per cent. of its share capital or similar rights of ownership; or (ii) owns or is
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able to exercise, directly or indirectly, more than 50 (fifty) per cent. of the voting rights; or (iii)
has the right to appoint the majority of the members of its Board of Directors; and, in each case,
when such entity is within the accounting consolidation perimeter of the Issuer in accordance
with the accounting principles and rules approved by the European Union;
“Dealer Agreement” means the agreement entered into by the Issuer, the Coordinators, the
Dealer and the Co-Dealer, dated on or about the Issue Date;
“TARGET Settlement Day” means any day on which the Trans-European Automated Real-Time
Gross Settlement Express Transfer (TARGET2) System is open; and
“Total Assets” means the sum of the current and non-current assets as described under Section
VI (Consolidated Financial information of the Issuer).
4. COVENANTS AND UNDERTAKINGS
4.1. Issuer General Obligation
So long as any Note remains outstanding, the Issuer shall comply, at all times, with the legal
regulations and contractual obligations that apply to it in every jurisdiction, and with all payment
obligations regarding the payment of principal and interest on the Notes.
4.2. Authorisations
The Issuer has obtained and shall comply with the terms of, and do all that is necessary to
maintain in full force and effect, any authorisations, approvals, licenses, resolutions,
exemptions, notarizations, registrations and consents required pursuant to Portuguese law to
enable it to lawfully enter into and perform its obligations under the Terms and Conditions, the
Notes and the Paying Agency Agreement, and to ensure the legality, validity, enforceability or
admissibility in evidence in the Republic of Portugal of the Terms and Conditions, and/or the
Notes.
4.3. Trading of the Notes on the multilateral trading facility of MARF
So long as the Notes remain outstanding, the Issuer shall perform each and every action
available to it to ensure the continued trading of the Notes on MARF or on any other multilateral
trading facility as the Issuer and the Noteholders may agree from time to time.
4.4. Negative pledge
So long as the Notes remain outstanding, the Issuer shall not create or permit to subsist any
Security Interest upon their Material Assets to secure any Indebtedness without at the same
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time, or prior thereto, (a) securing the Notes through the creation of equivalent Security Interest
in favour of the Noteholders or (b) providing such other security for the Notes as may be
approved by an Extraordinary Resolution of the Noteholders.
4.5. Pari Passu Ranking
Without prejudice to the guarantee provided by the Guarantors with respect to the Notes, the
Issuer shall ensure that the Notes constitute direct, unconditional, unsecured and
unsubordinated obligations of the Issuer and will rank pari passu among themselves and at least
pari passu in right of payment with all other present and future unsecured obligations of the
Issuer subject to any laws affecting the rights of creditors generally.
4.6. Financial Covenants
So long as any Note remains outstanding, the Issuer must ensure that, in respect to each
Relevant Period, its Net Debt To EBITDA Ratio is equal to, or below, 2,75x.
4.7. Disposal of assets
So long as any Note remains outstanding, the Issuer will not, and will not cause or permit any of
its Material Subsidiaries to, sell or otherwise transfer all or a substantial part of its assets if such
transaction would result in a disposal exceeding 10 (ten) per cent. of the Total Assets.
Notwithstanding the above, any sale or transfer of assets by the Issuer or by its Material
Subsidiaries shall be carried out (i) in the ordinary course of business or (ii) on an arm’s length
basis.
4.8. Sale of Material Subsidiaries
So long as any Note remains outstanding, the Issuer undertakes not to carry out a Material
Subsidiary Sale.
5. CHANGE OF CONTROL
If a Change of Control occurs, then the Issuer shall, without undue delay and after becoming
aware thereof, give notice of the Change of Control (a “Put Event Notice”) to the Noteholders
in accordance with Condition 17 (Notices), specifying the nature of the Change of Control.
If a Change of Control (which is not considered an Event of Default) occurs, each Noteholder
may, having given not less than 15 (fifteen) nor more than 30 (thirty) days’ notice as from the
date on which the Change of Control has been notified by the Issuer to the Noteholders in
accordance with Condition 17 or, in the absence of such notice, as from the date on which the
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relevant Noteholder becomes aware of the Change of Control, shall have the option to require
the Issuer to redeem or, at the Issuer’s option, purchase (or procure the purchase of), in whole
or in part, all of the Notes then outstanding held by such Noteholder at 100 per cent. of their
nominal amount on the 15th (fifteenth) day as from the date of delivery of the relevant notice,
with interest accrued to (but excluding) the relevant redemption date. (the “Put Option”).
To exercise the right to require redemption of the Notes under this Condition 5, the relevant
Noteholder must deliver, at the specified office of the Portuguese Paying Agent at any time
during normal business hours, a duly completed and signed notice of exercise in the form
obtainable from any specified office of the Portuguese Paying Agent and attached as a schedule
to the Paying Agency Agreement (a “Put Notice”). The relevant Noteholder shall
specify/complete/provide such information as required in the form of put notice as attached to
the Paying Agency Agreement, including a certificate of ownership and blocking issued by the
relevant Affiliate Member of Interbolsa through which the Notes are held. Any Put Notice given
by a Noteholder pursuant to this paragraph shall be irrevocable.
To exercise the Put Option, a Noteholder must, within the Put Period, block the relevant Note(s),
or instruct CVM or its Affiliate Member of Interbolsa to block such Note(s), and deposit a duly
signed and completed notice of exercise, in the then current form, obtainable from the specified
office of the Paying Agent and attached as a schedule to the Paying Agency Agreement (a “Put
Notice”) and in which the Noteholder must specify a bank account to which payment is to be
made under this Condition 5 (Change of Control), at the specified office of the Paying Agent,
during normal business hours (on any business day) in the city of the specified office of the
Paying Agent.
The Issuer shall redeem or, at its option, purchase (or procure the purchase of) the relevant
Note(s) on the date (the “Put Date”) falling seven days after the expiration of the Put Period,
unless such Notes are previously redeemed or purchased and cancelled. A Put Notice, once
given, shall be irrevocable.
6. INTEREST
6.1. Interest Payment Dates. Interest period
The Notes bear interest from and including 23 July 2019 (the “Issue Date”) at the rate
established in Condition 6.2 (Interest Rate) below, payable annually in arrears on 23 July of each
year (each, an “Interest Payment Date”), commencing with the Interest Payment Date falling
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on 23 July 2020 and ending on 23 July 2024 (the “Maturity Date”), subject as provided in
Condition 9 (Payments). For the sake of clarity, the First Interest Payment Date will be 23 July
2020 and the last Interest Payment Date will be 23 July 2024.
For the purposes of calculating the applicable interest, the time between the Issue Date and the
Maturity Date of the issue will be deemed to be divided into successive interest periods (each
an “Interest Period”), with a duration adjusted as follows:
(a) Interest Periods will have a term of twelve months;
(b) The first Interest Period will start on 23 July 2019;
(c) At the end of each Interest Period a new Interest Period shall begin;
(d) The computation of each Interest Period takes into account the preceding Interest
Payment Date (or, if none, the Issue Date) included, but excluding the next Interest
Payment Date;
(e) For computation of the Interest Period, if the last day thereof is not a Business Day, the
end of the relevant Interest Period shall be deemed to fall on the very next Business Day;
(f) Each Note will cease to bear interest, where such Note is being redeemed or repaid
pursuant to Condition 8 (Redemption and Purchase) or Condition 12 (Events of Default),
from the due date for redemption thereof unless, upon due presentation thereof,
payment of the principal amount of the Notes is improperly withheld or refused, in which
event interest will continue to accrue at such rate (both before and after judgment) until
whichever is the earlier of (i) the day on which all sums due in respect of such Note up to
that day are received by or on behalf of the relevant Holder, and (ii) the day falling seven
(7) days after the Paying Agent has notified Noteholders of the receipt of all sums due in
respect of all the Notes up to that seventh day (except to the extent that there is any
failure in the subsequent payment to the relevant Holders under these Conditions).
If interest is to be calculated in respect of a period which is equal to or shorter than an Interest
Period, it shall be calculated by applying the corresponding interest rate established in Condition
6.2 (Interest Rate) below to the Specified Denomination, multiplying the product by the relevant
Day Count Fraction and rounding the resulting figure to the nearest cent (half a cent being
rounded upwards), where:
“Day Count Fraction” means, in respect of any period, the number of days in the relevant period,
from and including the date from which interest begins to accrue to but excluding the date on
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which it falls due, divided by the number of days in the Regular Period in which the relevant
period falls; and
“Regular Period” means each period from (and including) the Issue Date or any Interest Payment
Date to (but excluding) the next Interest Payment Date.
In accordance with the above, interest on the Notes will accrue daily on an Actual/Actual ICMA
basis.
6.2. Interest rate
The interest rate applicable to the Notes shall be a fixed rate equal to 4.5% per annum (the
“Fixed Interest Rate”).
6.3. Default Interest
Interest on overdue principal and interest on the Notes, if any, will accrue from the due date up
to the date of actual payment at a rate of 1 (one) per cent. higher than the interest rate then
applicable to the Notes.
7. PLACEMENT OF THE NOTES
The Issue of the Notes was subject to private placement among professional clients and eligible
counterparties by the Dealer, which signed a placement contract with the Issuer.
Immediately after the close of the placement period, the Dealer notified the Issuer of the
amount of the Notes placed by them, so that the Issuer could request the registration of the
Notes in the register of Interbolsa.
Neither the Dealer nor any other entity assumed underwriting commitments with the Issue.
8. REDEMPTION AND PURCHASE
8.1. Final redemption
Unless previously purchased and cancelled or redeemed as provided herein, the Notes will be
redeemed at their principal amount on the Maturity Date. The Notes may not be redeemed at
the option of the Issuer other than in accordance with this Condition 8 (Redemption and
Purchase).
8.2. No other redemption
The Issuer shall not be entitled to redeem the Notes other than as provided in Condition 8.1
(Final redemption), except in accordance with Condition 8.3 (Purchase) below.
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8.3. Purchase
Subject to the applicable laws and regulations in force from time to time, the Issuer may, at any
time, purchase Notes in the secondary market or otherwise at any price.
Subject to the applicable laws and regulations in force from time to time, such Notes may be
held, re-sold or, at the option of the relevant purchaser, cancelled and, while held by or on behalf
of the Issuer, the Notes shall not entitle the holder to vote at any meetings of Noteholders, and
shall not be deemed to be outstanding for the purposes of calculating quorums at meetings of
the Noteholders or for the purposes of Condition 15 (Meetings of Noteholders).
8.4 Cancellation
All Notes redeemed will forthwith be cancelled in accordance with Interbolsa’s regulations. All
Notes so cancelled and any Notes purchased and cancelled pursuant to Condition 8.3 (Purchase)
above shall be cancelled by Interbolsa and cannot be held, reissued or resold.
8.5 Notice of redemption
All Notes in respect of which any notice of redemption is given under this Condition shall be
redeemed on the date specified in such notice, in accordance with this Condition.
9. PAYMENTS
9.1 Principal and interest
Payment in respect of the Notes will be (i) credited, according to the procedures and regulations
of Interbolsa, as operator of the Portuguese central securities clearing system (Central de
Valores Mobiliários), to TARGET2 payment current accounts held in the payment system of
TARGET2 by financial intermediaries for the purposes of the Portuguese Securities Code, and
which are entitled to hold control accounts with Interbolsa on behalf of holders of the Notes
(each, an “Affiliate Member of Interbolsa”) whose accounts with Interbolsa are credited with
such Notes, thereafter (ii) credited by such Affiliate Members of Interbolsa from the respective
above mentioned payment current accounts to the accounts of the Noteholders or of Euroclear
or Clearstream, Luxembourg with said Affiliate Members of Interbolsa, as the case may be .
All payments to be made by the Issuer in connection with the Notes will be net and will therefore
be made free of any deductions, set offs or counterclaims.
9.2 Notification of non-payment
If the Issuer determines that it will not be able to pay the full amount of principal and/or interest
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in respect of the Notes on the relevant due date, the Issuer will, in accordance with Condition
17 (Notices), promptly give notice to the Noteholders of its inability to make such payment.
9.3 Notification of late payment
If the Issuer expects to pay the full amount in respect of the Notes on a date later than the date
on which such payments are due, the Issuer will, in accordance with Condition 17 (Notices), give
notice of such late payment to the Noteholders and MARF.
9.4 Payments subject to Applicable Laws
Payments in respect of principal and interest on the Notes are subject, in all cases, to any fiscal
or other laws and regulations applicable in the place of payment, but without prejudice to the
provisions of these Conditions.
9.5 Payments on Business Days
Where payment is to be made by transfer to a euro account (or other account to which euros
may be credited or transferred), payment instructions (for value the due date, or, if the due date
is not a Business Day, for value the next succeeding Business Day) will be initiated on the due
date for payment. A Holder of a Note shall not be entitled to any interest or other payment in
respect of any delay in payment resulting from the due date for a payment not being a Business
Day.
10. GUARANTORS: PERSONAL GUARANTEE
Without prejudice to the universal liability of the Issuer, the payment of principal and interest
in respect of the Notes outstanding from time to time is and will be unconditionally and
irrevocably guaranteed by a personal guarantee (the “Guarantee”) granted by the Guarantors.
The obligations guaranteed by the Guarantee shall be all current and future obligations due,
payable or incurred at any time by the Issuer against the Noteholders, either jointly or
separately, and as principal or guarantee or in any other capacity.
The intent and purpose of the Guarantee is to ensure that the holders of the Notes, under all
circumstances and regardless of the factual or legal circumstances, motives or considerations by
reason of which the Issuer may fail to effect payment, shall receive the amounts payable on the
due dates provided for in these Terms and Conditions.
The obligations of the Guarantors under the Guarantee constitute direct, unconditional,
irrevocable and unsecured obligations of the relevant Guarantor and rank, and will rank, at least
77
pari passu among themselves and with all other outstanding unsecured and unsubordinated
obligations of the Guarantor, present and future.
The main features of each of the Guarantors are described below:
EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A.
(a) Corporate domicile: Lugar da Arroteia, 4465-587 – Leça do Balio, parish of Custóias, Leça
do Balio e Guifões, municipality of Matosinhos, district of Oporto, Portugal;
(b) Corporate purpose: 1. Exercise of industry, trade, installation, repair and maintenance of
electrical and mechanical material, namely those destined to energy production and
distribution; 2. Study, development, design, project, production, trade, installation and
maintenance of systems, eletronic, electric and electromechanical equipment and
installations, telecommunications and software, for various industrial areas and services;
3. Provision of management, command and control systems of electric networks and
industrial premisses; 4. Development, production and trade of eletronic circuits and
boards; 5. The company is also dedicated to the provision of vocational training services;
(c) Registration details: a limited liability company incorporated and validly existing under
Portuguese law, with head office at Lugar da Arroteia, 4465-587 – Leça do Balio,
Matosinhos, district of Oporto, Portugal, is registered with the Commercial Registry Office
of Oporto under registration and tax number 504 040 847.
EFACEC Engenharia e Sistemas, S.A.
(a) Corporate domicile: Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-605 – Maia,
parish of Moreira, municipality of Maia, district of Oporto, Portugal;
(b) Corporate purpose: The company's object consists: a) in the study, development, design,
project, production, trade, installation and maintenance of equipment and electronic,
electrical and electromechanical systems, of telecommunications and software, for
several industrial sectors and of services, in execution of public and private works; b) in
activity on engineering and civil construction, c) in supply of management systems,
command and control of electrical power grids and industrial premisses; d) in the
production and trade of automatisation systems, robotisation and automatic storage; e)
carrying out installations of air-conditioning, gas distribution networks, communication
networks, dust removal, networks and water treatment facilities and sewage and
industrial waste waters and other anti-pollution systems, including the production of
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equipments needed for the purpose; f) in provision of services of exploitation of sewerage
service systems;
(c) Registration details: a limited liability company incorporated and validly existing under
Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-
605 – Maia, district of Oporto Portugal, is registered with the Commercial Registry Office
of Maia under registration and tax number 502 533 447.
EFACEC Electric Mobility, S.A.
(a) Corporate domicile: Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-605 – Maia,
parish of Moreira, municipality of Maia, district of Oporto, Portugal;
(b) Corporate purpose: Development, project, production, trade, installation and
maintenance of equipment and power electronics systems for various industrial sectors
and services;
(c) Registration details: a limited liability company incorporated and validly existing under
Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-
605 – Maia, district of Oporto Portugal, is registered with the Commercial Registry Office,
entity with all documents deposit in electronic format, under registration and tax number
502 533 447.
11. TAXATION
11.1. Payments of Interest without Withholding or Deduction
All payments in respect of the Notes made by or on behalf of the Issuer will be made without
any withholding or deduction for, or on account of, any present or future taxes, duties,
assessments or governmental charges of whatever nature (“Taxes”) imposed or levied by or on
behalf of a Relevant Jurisdiction, unless the withholding or deduction of such Taxes is required
by law.
In such event, the Issuer will pay such additional amounts to ensure the receipt, by the relevant
Beneficiaries, of the amounts they would have been received had no such withholding or
deduction been required, except that no additional amounts shall be payable in relation to any
payment in respect of any Note:
(a) to, or to a third party on behalf of, a Beneficiary who is liable for Taxes in respect of the
Note by reason of having some connection with the Relevant Jurisdiction other than the
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mere holding of the Note; or
(b) to, or to a third party on behalf of, a Beneficiary in respect of whom the information
required in order to comply with Decree-Law no. 193/2005, of 7 November 2005, as
amended (“Debt Securities Taxation Act”), and any implementing legislation, is not
received by the Affiliate Member of Interbolsa with which securities are registered in the
name of the Beneficiary, no later than the second Business Day prior to the Relevant Date
(as defined in Condition 11.2(a)), or which does not comply with the formalities to benefit
from tax treaty benefits, when applicable; or
(c) to, or to a third party on behalf of, a Beneficiary (i) resident for tax purposes in the
Relevant Jurisdiction, or when the investment income is imputable to a permanent
establishment of the Beneficiary located in Portuguese territory, or (ii) resident in a tax
haven jurisdiction, as defined in Ministerial Order (“Portaria”) 150/2004, of 13 February
2004, as amended by Ministerial Order No. 292/2011, of 8 November 2011, and by
Ministerial Order No. 345-A/2016, of 30 December 2016, with the exception of (a) central
banks and governmental agencies, as well as international institutions recognised by the
Relevant Jurisdiction, of those tax haven jurisdictions; and (b) tax haven jurisdictions
which have a double taxation treaty or a tax information exchange agreement in force
with the Relevant Jurisdiction; and/or
(d) to, or to a third party on behalf of, (i) a Portuguese resident legal entity subject to
Portuguese corporate income tax, with the exception of entities that benefit from a
waiver of Portuguese withholding tax or from Portuguese income tax exemptions, or (ii)
a legal entity not resident in Portuguese territory acting with respect to the holding of the
Notes through a permanent establishment in Portuguese territory, with the exception of
entities that benefit from a waiver of Portuguese withholding tax (for the avoidance of
doubt, an Affiliate of Interbolsa holding Notes on behalf of a Noteholder should not be
considered as having a permanent establishment in Portuguese territory).
11.2. Interpretation
In these Conditions:
(a) “Relevant Date” means the date on which the payment first becomes due but, if the full
amount of the money payable has not been received by the Paying Agents on or before
the due date, it means the date on which, the full amount of the money having been
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received, notice to that effect has been duly given to the Noteholders by the Issuer in
accordance with Condition 9 (Payments);
(b) “Relevant Jurisdiction” means the Republic of Portugal or any political subdivision or any
authority thereof or therein having power to tax, or any other jurisdiction or any political
subdivision or any authority thereof or therein having power to tax, to which the Issuer,
as the case may be, becomes subject in respect of payments made by it of principal and
interest on the Notes; and
(c) “Beneficiary” means the holder of the Notes who is the effective beneficiary of the
income arising thereto.
11.3. Additional Amounts
Any reference in these Conditions to any amounts in respect of the Notes shall be deemed to
also refer to any additional amounts which may be payable under this Condition 11 (Taxation)
or under any undertakings given in addition to, or in substitution for, this Condition 11
(Taxation).
12. EVENTS OF DEFAULT
12.1. Events of Default
If any of the following events (each an “Event of Default”) occurs and is continuing:
(a) Non-payment: The Issuer fails to pay, on the relevant due date, any amount of principal
or interest in respect of any of the Notes or any of the Guarantors fails to pay any amount
of principal or interest under the Guarantee and such failure continues for a period of 7
(seven) days after the Maturity Date, in the case of principal, and 14 (fourteen) days after
the relevant Interest Payment Date, in the case of interest; or
(b) Breach of other obligations or undertakings: The Issuer defaults on the performance or
observance of any of its other obligations or undertakings under or in respect of the Notes
and such default (if capable of remedy) remains unremedied for a period of 30 (thirty)
calendar days (or a longer period allowed by the common representative of the
Noteholders (if any) or by the Noteholders) after written notice thereof, addressed to the
Issuer by any Noteholder, has been delivered to the Issuer; or
(c) Breach of financial covenant: Any requirement of Condition 4.6 (Financial Covenants), if
applicable, is not satisfied, provided that no Event of Default under this paragraph will
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occur as a result of failure to comply with the financial covenants specified in Condition
4.6 (Financial Covenants) if such failure is cured, as evidenced by a certificate signed by
two (2) of its directors, attorneys or senior officers on its behalf, delivered after a period
of 180 (one hundred and eighty) days from the date on which the Net Debt To EBITDA
Ratio has been breached; or
(d) Guarantee: The Guarantees is or becomes inexistent, invalid, ineffective or
unenforceable, or is or becomes not (or is claimed by the relevant Guarantor not to be) in
full force and effect; or
(e) Cross-default of Issuer or Material Subsidiary: The occurrence of an event of default in
respect of any Indebtedness for Borrowed Money of the Issuer or a Material Subsidiary,
provided that the amount in question exceeds €5,000,000.00 (or its equivalent in another
currency), considered individually or in aggregate; or
(f) Insolvency, etc.: Any corporate action, legal proceedings or other procedure or step is
taken in relation to:
(i) the suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of the Issuer or any Material Subsidiary;
(ii) a composition, compromise, assignment or arrangement with any creditor of the
Issuer or any Material Subsidiary;
(iii) the appointment of a liquidator, receiver, administrative receiver, administrator,
compulsory manager or other similar officer in respect of the Issuer or any Material
Subsidiary;
(iv) enforcement of any Security over the generality of the assets of the Issuer or any
Material Subsidiary; or
(v) any analogous procedure or step is taken in any jurisdiction;
(g) Cessation of business: The Issuer or any Material Subsidiary ceases, or threatens to cease,
to carry on all or substantially all of its business or operations, except for the purposes of
and followed by a reconstruction, amalgamation, reorganisation, merger or consolidation
(i) on terms approved by a resolution of the Noteholders; or (ii) in the case of a Material
Subsidiary, whereby the undertaking and assets of the Material Subsidiary are transferred
to or otherwise vested in the Issuer or another of its Material Subsidiaries; or
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(h) Failure to take action: Any action, condition or thing (including the obtaining or effecting
of any necessary consent, approval, authorisation, exemption, filing, licence, order,
recording or registration) at any time required to be taken, fulfilled or done in order (i) to
enable the Issuer to lawfully enter into, exercise its rights and perform and comply with
its obligations under the Notes; (ii) to ensure that those obligations are legal, valid, binding
and enforceable; and (iii) to make the Notes admissible in evidence in the courts of
Portugal, is not taken, fulfilled or done; or
(i) Analogous events: The occurrence of any event which the Issuer has, directly or indirectly,
caused and which, under the laws of any relevant jurisdiction, has an analogous effect to
any of the events referred to in any of the foregoing paragraphs; or
(j) Unlawfulness: It is or becomes unlawful for the Issuer to perform or comply with any of
its obligations under or in respect of the Notes;
then any Note may, by notice in writing given to the Issuer by (i) the Common Representative
acting upon a resolution of the Noteholders, in respect of all Notes, or (ii) unless there has been
a resolution to the contrary by the Noteholders, any Noteholder in respect of such Note, be
declared immediately due and payable, whereupon it shall become immediately due and
payable at its principal amount, together with accrued interest, without further action or
formality.
12.2. Issuer to inform
Immediately upon becoming aware of the occurrence of an Event of Default, or of any event
likely to cause an Event of Default, the Issuer shall forthwith notify the Noteholders and the
Common Representative, with copy to the Paying Agent and MARF.
13. PRESCRIPTION
Claims against the Issuer for principal and interest in respect of the Notes shall become void
unless made within a period of 20 (twenty) years, in the case of principal, and 5 (five) years, in
the case of interest, from the Relevant Date (as defined in Condition 11.2(a)) in respect of the
Notes.
14. PAYING AGENT
When acting under the Paying Agency Agreement and in connection with the Notes, the Paying
Agent acts solely as agent of the Issuer and does not assume any obligations towards, or
relationship of agency or trust for or with, any of the Noteholders.
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The Paying Agent and its initial specified office is Banco Comercial Português, S.A..
The Issuer reserves the right to, at any time, vary or terminate the appointment of any Paying
Agent and to appoint a successor agent, and additional or successor agents, provided, however,
that:
(i) the Issuer shall at all times maintain a paying agent;
(ii) so long as the Notes are held through Interbolsa, there will at all times be a paying agent
with a specified office in such place of registration and complying with any requirements
that may be imposed by the rules and regulations of Interbolsa; and
(iii) so long as the Notes are listed on any stock exchange, or listed or admitted to trading by
any competent authority, multilateral trading facility and/or quotation system which
requires the appointment of a paying agent in any particular place, there will at all times
be a paying agent with a specified office in such place, as may be required by the rules
and regulations of the relevant competent authority, multilateral trading facility and/or
quotation system.
Notice of any change in the Paying Agent or in its specified offices shall promptly be given to the
Noteholders and MARF.
15. MEETING OF NOTEHOLDERS; MODIFICATION AND WAIVER
15.1. Meetings of Noteholders
Meetings of the Noteholders to consider any matter affecting their interests, including the
modification or abrogation of any of these Conditions by Extraordinary Resolution and the
appointment or dismissal of a common representative, are governed by the Portuguese
Commercial Companies Code.
15.2. Request for Meetings
Meetings may be convened by a common representative (if any), or by the chairman of the
general meeting of shareholders of the Issuer before the appointment of, or in case of refusal
to convene the meeting by, a common representative, and when the common representative
and the chairman of the general meeting of shareholders refuse to convene a meeting,
Noteholders holding not less than five (5) per cent. in principal amount of the Notes for the time
being outstanding may petition the court to order the convening of a meeting.
15.3. Quorum
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The quorum required for a convened meeting to pass a resolution other than an Extraordinary
Resolution will be any person or persons holding or representing the Notes then outstanding,
regardless of the principal amount thereof; and an Extraordinary Resolution will require the
attendance of a person or persons holding or representing at least fifty (50) per cent. of the
principal amount of the Notes then outstanding or, at any adjourned meeting, the attendance
of a person or persons holding or representing the Notes then outstanding, regardless of the
principal amount thereof.
15.4. Majorities
The majority required to pass a resolution other than an Extraordinary Resolution is the majority
of the votes cast at the relevant meeting; the majority required to pass an Extraordinary
Resolution, including, without limitation, a resolution relating to the modification or abrogation
of certain provisions of these Conditions, is of at least fifty (50) per cent. of the principal amount
of the Notes then outstanding or, at any adjourned meeting, two thirds (2/3) of the votes cast
at the relevant meeting.
Resolutions passed at any meeting of the Noteholders will be binding on all Noteholders,
whether or not they were present at the meeting or voted against the approved resolutions.
Resolutions involving the increase of charges for Noteholders require unanimity to be approved.
15.5. Appointment, dismissal and substitution of common representative
Pursuant to, and in accordance with, the relevant provisions of the Portuguese Commercial
Companies Code, Bondholders, S.L. has been appointed as Common Representative on or about
the Issue Date.
The dismissal and substitution of the common representative, pursuant to the relevant
provisions of the Portuguese Commercial Companies Code, shall be made by way of a resolution
passed by the Noteholders for such purpose, pursuant to these Conditions and the relevant
provisions of the Portuguese Commercial Companies Code. Each of the Noteholders may also
request a court to dismiss (for cause) the Common Representative.
All fees, commissions and expenses related to the functions of the Common Representative shall
be borne by the Issuer.
15.6. Notification to the Noteholders
Any modification, abrogation, waiver or authorisation, in accordance with this Condition 15
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(Meetings of Noteholders), shall be binding on all Noteholders and shall be notified by the Issuer
to the Noteholders as soon as practicable thereafter, in accordance with Condition 17.1. (Notices
to Noteholders).
15.7. Resolutions bind all Noteholders
A Resolution approved at any meeting of Noteholders shall be binding on all holders of Notes,
whether or not they were present at the meeting.
16. FURTHER ISSUES
The Issuer may, from time to time, subject to the Conditions and without the Noteholders’
consent, create and issue further notes having the same terms and conditions as the Notes in
all respects (or in all respects except for the first payment of interest) and also the same
Common Representative (if one has been appointed), so as to form a single series with the
Notes.
17. NOTICES
17.1. Notices to Noteholders
So long as the Notes are admitted (incorporadas) to trading on MARF, notices to the Noteholders
will be published in the official website of MARF. Any such notice will be deemed to have been
given on the date of the first publication.
In addition, notices to the Noteholders shall be valid if made by registered mail, by publication
in a leading newspaper having general circulation in Portugal, or by any other means which
complies with the Portuguese Securities Code and Interbolsa’s rules on notices to investors,
including the disclosure of information through the official website of the CMVM. Any such
notice shall be deemed to have been given on the date of first publication (or, if required to be
published in more than one newspaper, on the first date on which it was published in all the
required newspapers) or, if applicable, on the day after being mailed.
17.2. Notices to the Common Representative
Copies of any notice given to any Noteholder will also be given to the Common Representative.
18. GOVERNING LAW AND SUBMISSION TO JURISDICTION
18.1. Governing law
The Notes, and any non-contractual obligations arising out of or in connection with them, are
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governed by, and will be construed in accordance with, Portuguese law.
18.2. Jurisdiction
The courts of Lisbon, Portugal, shall have jurisdiction to settle any disputes arising out of or in
connection with the Notes.
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SECTION IX
ADMISSION (INCORPORACIÓN) OF THE SECURITIES
1. Request for admission (incorporación) of the Notes on the Alternative Fixed Income Market
(MARF). Deadline for admission to trading
Admission to trading has been requested for the Notes described in this Information
Memorandum on the multilateral trading facility (MTF) known as the Alternative Fixed Income
Market (Mercado Alternativo de Renta Fija or “MARF”). Said listing will take place within thirty
(30) days of the Closing Date.
MARF adopts the legal structure of a multilateral trading facility (MTF), under the terms
provided for in Articles 26 et seq. of the RLD 21/2017, constituting an alternative, unofficial,
market for the trading of fixed-income securities.
EFACEC has requested the admission of the Notes on MARF with the aim of: (i) diversifying its
sources of external financing through access to capital markets; (ii) raising funds to strengthen
its financial ability to obtain financing at longer maturities; (iii) benefitting from the flexibility of
requirements concerning securities markets, with lower costs; and (iv) providing the issue with
liquidity through a multilateral trading facility.
This Information Memorandum follows the applicable proceedings on admission to trading and
removal of MARF set out in its own Regulations and other
applicable regulations.
Neither MARF, the National Securities Market Commission (Comisión Nacional del Mercado de
Valores or CNMV), CMVM, the Coordinators, the Dealer, nor the Co-Dealer have approved or
made any verification or test in relation to the contents of the Information Memorandum, the
financial statements of the Issuer, the rating report or the risk of the issuance required under
Circular 2/2018. The intervention of MARF does not constitute a statement, acknowledgement
or confirmation of the completeness, comprehensibility and consistency of the information
included in the documentation provided by the Issuer.
It is recommended that the investor fully and carefully read this Information Memorandum prior
to any investment decision.
The Issuer declares that it is aware of and knows the requirements and conditions necessary for
admission (incorporación) and exclusion of securities on MARF, under the current legislation and
the requirements of its governing bodies, and expressly agrees to comply therewith.
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The Issuer further declares that it has met all the requirements for the registration and
settlement of a transaction in Interbolsa. Operations settlement will be made through
Interbolsa.
2. Costs of all legal, financial, and audit services and other costs for the Issuer, placement costs
and, if necessary, underwriting costs, originated by the Issue and by the placement and
admission (incorporación) of the Notes
The cost of the issuance and admission (incorporación) to trading on MARF of the Notes amounts
to a total of €1,325,459.75.
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SECTION X
TAXATION
Prospective purchasers of the Notes are advised to consult their tax advisers as to the tax consequences,
under the tax laws of the country in which they are resident, of a purchase of Notes, including, but not
limited to, the consequences of receipts deriving from interest, as well as from the sale or redemption
of the Notes.
The following descriptions are general summaries of certain taxation matters based on applicable law
and practice currently in effect in the relevant jurisdictions. Nothing in this section constitutes tax, legal
or financial advice, and the summaries contained herein are of a general nature and do not cover all
aspects of taxation in the jurisdictions that may be relevant to any particular holder of Notes.
Prospective investors in the Notes should consult their professional advisers on the tax implications for
them of an investment in the Notes.
Portuguese Taxation
The economic advantages derived from interest, amortisation, reimbursement premiums and other
types of remuneration arising from Notes issued by private entities are qualified as investment income
for Portuguese tax purposes and are considered to be Portuguese sourced income, generally subject
to taxation in Portugal.
General Tax Regime applicable to Debt and Equity securities
Resident individuals
Investment income (including dividends and interest) obtained from the Notes by a Portuguese
resident individual are subject to individual income tax. If payment of investment income is made
available to Portuguese resident individuals, withholding tax applies at a rate of 28 per cent., which is
the final tax on that income, unless the individual elects to aggregate his taxable income, subject to
tax at the current progressive income tax rates of up to 48 per cent. In the latter case, additional
income tax will be due on the part of the taxable income exceeding €80,000, as follows: (i) 2.5 per cent.
on the part of the taxable income exceeding €80,000 up to €250,000 and (ii) 5 per cent. on the
remaining part (if any) of the taxable income exceeding €250,000. Investment is deemed a payment
on account of the final tax due. Income paid or made available to accounts opened in the name of one
or more accountholders acting on behalf of one or more unidentified third parties is subject to a final
withholding tax rate of 35 per cent., unless the relevant beneficial owner(s) of the income is/are
identified and, as a result, the tax rates applicable to such beneficial owner(s) will apply.
Capital gains obtained by Portuguese resident individuals on the repayment or transfer of Notes are
taxed at a special rate of 28 per cent. levied on the excess of such gains (and gains on other securities)
over the losses on securities, unless the individual elects to aggregate that same balance to his taxable
income, subject to tax at the current progressive rates of up to 48 per cent. In the latter case, additional
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income tax will be due on the part of the taxable income exceeding €80,000, as follows: (i) 2.5 per cent.
on the part of the taxable income exceeding €80,000 up to €50,000 and (ii) 5 per cent. on the remaining
part (if any) of the taxable income exceeding €250,000. The amount of accrued interest on the date of
the transfer qualifies as interest, rather than capital gains, for tax purposes.
Legal persons resident in Portugal and those non-resident but with a permanent establishment to which
the income derived from the Notes is attributable
Investment income derived from the Notes and capital gains derived from the transfer of the Notes by
legal persons resident for tax purposes in Portugal and by non-resident legal persons with a permanent
establishment in Portugal, to which the income or gains are attributable, are included in their taxable
income and are subject to corporate income tax at a 21 per cent. rate, or at a 17 per cent. rate on the
first €15,000 in the case of small and medium-sized enterprises, to which a municipal surcharge
(“derrama municipal”) may be added of up to 1.5 per cent. of the taxable income. A state surcharge
(“derrama estadual”) also applies, at 3 per cent. on taxable profits in excess of €1,500,000 up to
€7,500,000, 5 per cent. on taxable profits in excess of €7,500,000 up to €35,000,000 and 9 per cent.
on taxable profits in excess of €35,000,000.
As a general rule, withholding tax at a rate of 25 per cent. applies on interest and other investment
income, which is deemed a payment on account of the final tax due.
Interest payments made to financial institutions, pension funds, retirement and/or education savings
funds, share savings funds, venture capital funds and collective investment undertakings incorporated
and operating under the laws of Portugal, and some other exempt entities, are not subject to
withholding tax.
Investment income paid or made available to accounts opened in the name of one or more
accountholders acting on behalf of one or more unidentified third parties is subject to a final
withholding tax rate of 35 per cent., unless the relevant beneficial owner(s) of the income is/are
identified and, as a result, the tax rates applicable to such beneficial owner(s) will apply.
Non-resident individuals and legal persons without a permanent establishment to which the income
derived from the Notes is attributable
Without prejudice to the Debt Securities Taxation Act further described below, the general tax regime
on debt and equity securities applicable to non-resident entities is the following:
Investment income obtained by non-resident individuals without a permanent establishment in
Portugal to which the income is attributable is subject to withholding tax at a rate of 28 per cent.,
which is the final tax on that income. Investment income obtained by non-resident legal persons
without a permanent establishment in Portugal to which the income is attributable is subject to
withholding tax at a rate of 25 per cent., which is the final tax on that income.
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Investment income paid or made available to accounts opened in the name of one or more
accountholders acting on behalf of one or more unidentified third parties is subject to a final
withholding tax rate of 35 per cent., unless the relevant beneficial owner(s) of the income is/are
identified and, as a result, the tax rates applicable to such beneficial owner(s) will apply.
A withholding tax rate of 35 per cent. applies in the case of investment income payments made to non-
resident individuals or non-resident legal persons without a permanent establishment in Portugal to
which the income is attributable and which are resident in a country, territory or jurisdiction subject
to a clearly more favourable tax regime included in the “low tax jurisdictions” list approved by
Ministerial Order (Portaria) No. 150/2004, of 13 February 2004, as amended from time to time.
Under the tax treaties entered into by Portugal, which are in full force and effect on the date of this
Information Memorandum, the applicable withholding tax rate may be reduced to 15, 12, 10 or 5 per
cent., depending on the applicable treaty and provided that the relevant formalities (including
certification of residence, by the tax authorities, of the beneficial owners of the interest and other
investment income) are met. The reduction may apply at source or through the refund of the excess
tax paid. The forms currently applicable for these purposes are available for viewing and downloading
at www.portaldasfinancas.gov.pt.
Capital gains derived from the transfer of the Notes by non-resident individuals without a permanent
establishment in Portugal to which the gains are attributable are exempt from Portuguese capital gains
taxation, unless the non-resident individual is resident in a country, territory or jurisdiction subject to
a clearly more favourable tax regime included in the “low tax jurisdictions” list approved by Ministerial
Order (Portaria) no. 150/2004, of 13 February, as amended from time to time, are exempt from
personal income tax. Capital gains derived by non-resident individuals that are not entitled to said
exemption will be subject to taxation at a 28 per cent. flat rate. Under the tax treaties entered into by
Portugal, such capital gains are usually not subject to Portuguese personal income tax, but the
applicable rules should be confirmed on a case-by-case basis. The amount of accrued interest on the
date of the transfer qualifies as interest, rather than capital gains, for tax purposes.
Capital gains derived from the transfer of Notes by a legal person non-resident in Portugal for tax
purposes and without a permanent establishment in Portugal to which the gains are attributable are
exempt from Portuguese capital gains taxation, unless the share capital of the non-resident entity is
more than 25 per cent. directly or indirectly held by Portuguese resident entities or the beneficial
owner is resident in a country, territory or jurisdiction subject to a clearly more favourable tax regime
included in the “low tax jurisdictions” list approved by Ministerial Order (Portaria) No. 150/2004, of 13
February 2004, as amended from time to time. The 25 per cent. threshold referred above will not be
applicable when the following cumulative requirements are met by the seller: (i) the seller is an entity
resident in the European Union, or in a European Economic Area State which is bound to cooperate
with Portugal under an administrative cooperation agreement in tax matters similar to the exchange
of information schemes for tax matters existing within the EU Member States, or in any country with
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which Portugal has a double tax treaty in force that foresees the exchange of information; (ii) such
entity is subject to and not exempt from a tax referred to in article 2 of Council Directive 2011/96/EU,
of 30 November 2011, or a tax of a similar nature with a rate not lower than 60 per cent. of the
Portuguese corporate income tax rate; (iii) it holds at least 10 per cent. of the share capital or voting
rights of the entity subject to disposal, for at least one uninterrupted year; and (iv) it does not
participate in an artificial arrangement or a series of artificial arrangements put into place with the
main purpose, or one of the main purposes, of obtaining a tax advantage. Although the
abovementioned cumulative requirements are in full force and effect since 31 March 2016 and apply
to securities in general, the law is not clear on the application thereof for holders of debt
representative securities, as some of the alluded requirements appear not to apply to debt
representative securities.
If the exemption does not apply, the gains will be subject to corporate income tax at a rate of 25 per
cent. Under the tax treaties entered into by Portugal, such capital gains are usually not subject to
Portuguese corporate income tax, but the applicable rules should be confirmed on a case-by-case
basis.
Debt Securities Taxation Act
Resident Individuals
Investment income obtained from Notes by a Portuguese resident individual is subject to individual
income tax. If payment of investment income is made available to Portuguese resident individuals,
withholding tax applies at a rate of 28 per cent., which is the final tax on that income unless the
individual elects to include this income in his taxable income, subject to tax at progressive rates of up
to 48 per cent. In the latter case, additional income tax will be due on the part of the taxable income
exceeding €80,000, as follows: (i) 2.5 per cent. on the part of the taxable income exceeding €80,000
up to €250,000; and (ii) 5 per cent. on the remaining part (if any) of the taxable income exceeding
€250,000. In this case, the tax withheld will be creditable against the recipient's final tax liability. The
relevant tax shall be withheld by the relevant direct registering entity.
Investment income paid or made available to accounts opened in the name of one or more
accountholders acting on behalf of one or more unidentified third parties is subject to a final
withholding tax rate of 35 per cent., unless the relevant beneficial owner(s) of the income is/are
identified and, as a result, the tax rates applicable to such beneficial owner(s) will apply.
Capital gains obtained by Portuguese resident individuals on the transfer of Notes are taxed at a special
rate of 28 per cent. levied on the positive difference between such gains and gains on other securities,
and losses on securities, unless the individual chooses to aggregate his taxable income, subject to tax
at the current progressive rates of up to 48 per cent. In the latter case, additional income tax will be
due on the part of the taxable income exceeding €80,000, as follows: (i) 2.5 per cent. on the part of
the taxable income exceeding €80,000 up to €250,000 and (ii) 5 per cent. on the remaining part (if any)
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of the taxable income exceeding €250,000. Interest accrued on the date of the transfer qualifies as
interest, rather than capital gains, for tax purposes.
Legal persons resident in Portugal and those non-resident but with a permanent establishment to which
the income derived from the Notes is attributable
Investment income derived from Notes and capital gains obtained from the transfer of Notes by legal
persons resident for tax purposes in Portugal and by non-resident legal persons with a permanent
establishment in Portugal to which the income or gains are attributable are included in their taxable
income and are subject to Corporate Income Tax at a rate of 21 per cent., or at a 17 per cent. tax rate
on the first €15,000 in the case of small and medium-sized enterprises, to which a municipal surcharge
(derrama municipal) may be added of up to 1.5 per cent. of the taxable income. A state surcharge
(derrama estadual) also applies, at 3 per cent. on taxable profits in excess of €1,500,000 up to
€7,500,000, 5 per cent. on taxable profits in excess of €7,500,000 up to €35,000,000 and 9 per cent.
on taxable profits in excess of €35,000,000.
As a general rule, withholding tax at a rate of 25 per cent. applies on investment income, which is
deemed a payment on account of the final tax due. The relevant tax shall be withheld by the relevant
direct registering entity. Payments to financial institutions subject to tax in Portugal, pension funds,
retirement and/or education savings funds, share savings funds, venture capital funds and collective
investment undertakings incorporated under the laws of Portugal, as well as some other exempt
entities, are not subject to Portuguese withholding tax.
Investment income paid or made available to accounts opened in the name of one or more
accountholders acting on behalf of one or more unidentified third parties is subject to a final
withholding tax rate of 35 per cent., unless the relevant beneficial owner(s) of the income is/are
identified and, as a result, the tax rates applicable to such beneficial owner(s) will apply.
Non-resident individuals
Pursuant to the Debt Securities Taxation Act, investment income paid on, as well as capital gains
derived from, a repayment, sale or other disposition of the Notes to non-resident beneficial owners
will be exempt from Portuguese income tax, provided that the debt securities are integrated in (i) a
centralised system for securities managed by an entity resident for tax purposes in Portugal (such as
the CVM, managed by Interbolsa), or (ii) an international clearing system operated by a managing
entity established in an EU Member State other than Portugal or in a European Economic Area Member
State, provided, in this case, that such State is bound to cooperate with Portugal under an
administrative cooperation arrangement in tax matters similar to the exchange of information
schemes for tax matters existing within the EU Member States, or (iii) integrated in other centralised
systems not covered above, provided that, in this last case, the Portuguese Government authorises
the application of the Debt Securities Taxation Act, and the beneficiaries are:
(i) central banks or governmental agencies; or
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(ii) international bodies recognised by the Portuguese State; or
(iii) entities resident in countries or jurisdictions with whom Portugal has a double tax treaty or a
tax information exchange agreement in force; or
(iv) other entities without headquarters, effective management or permanent establishment in
Portuguese territory to which the relevant income is attributable and which are not resident in
a country, territory or jurisdiction subject to a clearly more favourable tax regime included in
the “low tax jurisdictions” list approved by Ministerial Order (“Portaria”) No. 150/2004, of 13
February 2004, as amended from time to time.
For the purposes of application at the source of this tax exemption regime, the Debt Securities Taxation
Act requires the completion of certain procedures and the provision of certain information. Under
these procedures (which are aimed at verifying the non-resident status of the Noteholder), the
Noteholder is required to hold the Notes through an account held with one of the following entities:
(i) a direct registering entity, with which the debt securities accounts integrated in the centralised
system are opened;
(ii) an indirect registering entity, which, although not assuming the role of the “direct registering
entity”, is its client; or
(iii) an international clearing system, which proceeds, in the international market, to clear, settle or
transfer securities integrated in centralised systems or in their own registration systems.
The special regime approved by the Debt Securities Taxation Act sets out the detailed rules and
procedures to be followed to provide proof of non-residence by the beneficial owners of the
instruments to which it applies.
Under these rules, the direct registering entity is required to obtain and retain proof, in the form
described below, that the beneficial owner is a non-resident entity entitled to the exemption. As a
general rule, proof of non-residence should be provided to, and received by, the direct registering
entities prior to the relevant date for payment of any interest and, in the case of domestically cleared
Notes, prior to the transfer of any Notes, as the case may be.
The following is a general description of the rules and procedures pertaining to the proof required for
the exemption to apply at source, as they stand at the date of this Information Memorandum.
(a) Domestically Cleared Notes
The beneficial owner of the Notes must provide proof of non-residence in Portuguese territory,
substantially in the terms set forth below:
(i) if the beneficial owner of the Notes is a central bank, a public law entity or agency, or an
international organisation recognised by the Portuguese State, it must provide (a) a
declaration of tax residence issued by the beneficial owner of the Notes, duly signed and
95
authenticated; or (b) proof of non-residence pursuant to the terms of paragraph (iv)
below;
(ii) if the beneficial owner of the Notes is a credit institution, a financial company, a pension
fund or an insurance company domiciled in any of the Organisation for Economic Co-
operation and Development (“OECD”) countries or in a country with which Portugal has
entered into a double taxation treaty and which is subject to a special supervision regime
or administrative registration, it must provide: (a) its official tax identification document;
or (b) a declaration issued by the entity responsible for its supervision or registration, or
by the relevant tax authorities, confirming the legal existence of the beneficial owner of
the Notes and its domicile; or (c) proof of non-residence pursuant to (iv) below. The
respective proof of non-residence in Portugal is provided only once, its periodic renewal
not being necessary, and the beneficial owner should immediately inform the direct
registering entity of any change in the required conditions that may prevent the tax
exemption from applying, pursuant to the terms of paragraph (iv) below;
(iii) if the beneficial owner of the Notes is either an investment fund or other type of collective
investment scheme domiciled in any OECD country, or in a any country or jurisdiction with
which Portugal has entered into a double tax treaty or tax information exchange
agreement in force, it shall make proof of its non-resident status by providing the
following documents: (a) a declaration issued by the entity responsible for its supervision
or registration, or by the relevant tax authorities, confirming its legal existence, domicile
and law of incorporation; or (b) proof of non-residence pursuant to the terms of
paragraph (iv) below. The respective proof of non-residence in Portugal is provided only
once, its periodic renewal not being necessary, and the beneficial owner should inform
the direct registering entity immediately of any change in the required conditions that
may prevent the tax exemption from applying;
(iv) Other investors will be required to make proof of their non-resident status by way of: (a)
a certificate of residence or equivalent document issued by the relevant tax authorities;
or (b) a document issued by the relevant Portuguese consulate certifying residence
abroad; or (c) a document, specifically issued by an official entity which forms part of the
public administration (either central, regional or peripheral, indirect or autonomous) of
the relevant country, certifying residence. For these purposes, an identification document
(such as a passport or an identity card) or a document by means of which it is only
indirectly possible to determine the respective tax residence (such as a work or
permanent residency permit) is not acceptable. The rules on the authenticity and validity
of the required documents specifically state that the Noteholder must provide an original
or a certified copy of such documents and, as a rule, if these documents do not refer to a
specific year and do not expire, they must have been issued within the 3 (three) years
96
prior to the relevant payment or maturity dates or, if issued after the relevant payment
or maturity dates, within the following 3 (three) months. The Noteholder must inform the
registering entity immediately of any change in the required conditions that may annul
the tax exemption, the relevant residence certificate or equivalent document. This
document must be issued up to 3 (three) months after the date on which the withholding
tax would have been applied and will be valid for a 3 (three) year period, starting on the
date the document in question is issued.
In the cases referred to in paragraphs (i), (ii) and (iii) above, proof of non-residence is required
to be provided only once; however, the beneficial owner of the Notes is required to immediately
inform the registering entity of any changes that may have an impact on its entitlement to the
tax exemption.
(b) Internationally Cleared Notes
If the Notes are registered in an account held with an international clearing system, the entity
managing such system is required to provide to the direct registering entity, or its
representative, prior to the relevant date for payment of any interest, the number and
identification of the relevant securities, as well as the respective income, and, when applicable,
the tax withheld, itemised by type of beneficial owner, as follows:
(i) Portuguese resident entities or permanent establishments of non-resident entities to
which the income is attributable which are not exempt from tax and are subject to
withholding tax;
(ii) entities resident in a country, territory or jurisdiction subject to a clearly more
favourable tax regime included in the “low tax jurisdictions” list approved by Ministerial
Order (Portaria) No. 150/2004, of 13 February 2004, as amended by Ministerial Order
(Portaria) No. 292/2011, of 8 November 2011, and by Ministerial Order (Portaria) No.
345-A/2016, of 30 December 2016, which are not exempt from tax and are subject to
withholding tax;
(iii) other non-Portuguese resident entities.
In addition, the managing entity of the international clearing system must provide the direct
registering entity, in relation to each income payment, with at least the following information
concerning each of the beneficiaries identified in (i), (ii) and (iii) above: name and address, tax
identification number, if applicable, identification of the securities held and amount thereof, and
amount of income.
No Portuguese exemption shall apply at source under the special regime approved by the Debt
Securities Taxation Act if the above rules and procedures are not followed. Accordingly, the general
Portuguese tax provisions shall apply as described above.
97
If the conditions for an exemption to apply are met, but, due to inaccurate or insufficient information,
tax is withheld, a special refund procedure is available under the regime approved by the Debt
Securities Taxation Act. The refund claim is to be submitted to the direct registering entity of the Notes
within 6 (six) months of the date on which the withholding took place. A special form is yet to be
approved for this purpose.
After the abovementioned 6 (six) month period, any refund of withholding tax must be claimed from
the Portuguese tax authorities through the submission of an official form available at
http://www.portaldasfinancas.gov.pt, within 2 (two) years from the end of the year in which the
relevant tax was withheld. The refund is to be made within 3 (three) months, after which interest is
due.
Administrative cooperation in the field of taxation
Council Directive 2014/107/EU of 9 December 2014, which amended Council Directive 2011/16/EU of
15 February 2011, implemented a new automatic exchange of information system under the
administrative cooperation framework in the field of taxation, which is based on the format
established by the OECD known as the Common Reporting Standard (“CRS”).
Council Directive 2014/107/EU, of 9 December 2014, on the mandatory automatic exchange of
information in the field of taxation was transposed into Portuguese law through Decree-Law no.
64/2016, of 11 October. Under such law, as amended from time to time, the Issuer will be required to
collect information regarding certain accountholders and to report this information to the Portuguese
tax authorities – under forms which, in turn, will report such information to the tax authorities of the
relevant EU Member States or States which have signed the Multilateral Competent Authority
Agreement on Automatic Exchange of Financial Account Information for the Common Reporting
Standard.
In view of the regime enacted through Decree-Law no. 64/2016, of 11 October, which was amended
by Law no. 98/2017, of 24 August, and by Law no. 17/2019, of 14 February, all information regarding
the registration of the financial institution, the procedures to comply with the reporting obligations
arising therefrom, and the forms to be used for such purposes was provided by the Ministry of Finance,
through Order (Portaria) no. 302-B/2016, of 2 December 2016, Order (Portaria) no. 302-C/2016, of 2
December 2016, Order (Portaria) no. 302-D/2016, of 2 December 2016, and Order (Portaria) no. 302-
E/2016, of 2 December 2016, all as amended from time to time.
Foreign Account Tax Compliance Act
Pursuant to certain provisions of the U.S. Internal Revenue Code of 1986, commonly known as FATCA,
a “foreign financial institution” (as defined by FATCA) may be required to withhold on certain payments
it makes (“foreign passthru payments”) to persons that fail to meet certain certification, reporting or
related requirements. The Issuer is a foreign financial institution for these purposes.
98
A number of jurisdictions (including Portugal) have entered into, or have agreed in substance to,
intergovernmental agreements with the United States to implement FATCA (“IGAs”), which modify the
way in which FATCA applies in their jurisdictions. Under the provisions of IGAs, as currently in effect, a
foreign financial institution operating in an IGA jurisdiction would generally not be required to
withhold, under FATCA or an IGA, from payments that it makes. Certain aspects of the application of
FATCA and IGA provisions to instruments such as the Notes, including whether withholding would ever
be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Notes,
are uncertain and may be subject to change. Even if withholding would be required pursuant to FATCA
or an IGA with respect to payments on instruments such as the Notes, such withholding would not
apply prior to 1 January 2019 and Notes issued on or prior to the date falling six months after the date
on which final regulations defining foreign passthru payments are filed with the U.S. Federal Register
would generally be grandfathered for purposes of FATCA withholding, unless materially modified after
such date.
However, if additional Notes not distinguishable from previously issued Notes are issued after the
grandfathering period has expired and are subject to withholding under FATCA, then withholding
agents may treat all Notes, including the Notes offered prior to the expiration of the grandfathering
period, as subject to withholding under FATCA.
Portugal signed its IGA with the United States on 6 August 2015 and has implemented, through Law
no. 82-B/2014, of 31 December 2014, the legal framework for the reciprocal exchange of information
with the United States on financial accounts subject to disclosure. The IGA entered into force on 10
August 2016 and, through Decree-Law no. 64/2016, of 11 October 2016, amended by Law no. 98/2017,
of 24 August, and by Law no. 17/2019, of 14 February, and Ministerial Order (Portaria) no. 302-A/2016,
of 2 December, as amended by Ministerial Order (Portaria) no. 169/2017, of 25 May, the Portuguese
Government approved the complementary regulation required to comply with FATCA. Under this
legislation, the Issuer is required to obtain information regarding certain accountholders and to report
such information to the Portuguese tax authorities, which, in turn, will report the information to the
IRS.
Noteholders should consult their own tax advisers regarding how these rules may apply to their
investment in the Notes.
The proposed financial transaction tax (“FTT”)
On 14 February 2013, the European Commission published a proposal (the “Commission’s Proposal”)
for a Directive on a common financial transaction tax (“FTT”) in Belgium, Germany, Estonia, Greece,
Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the “participating Member States”).
However, Estonia has since stated that it will not participate.
The Commission’s Proposal has a very broad scope and could, if introduced, apply to certain dealings
in financial instruments (including secondary market transactions) under certain circumstances.
99
Under the Commission’s Proposal, the FTT could apply in certain circumstances to persons both within
and outside the participating Member States. Generally, it would apply to certain dealings in Notes
where at least one party is a financial institution, and at least one party is established in a participating
Member State. A financial institution may be, or be deemed to be, “established” in a participating
Member State in a broad range of circumstances, including (a) by transacting with a person established
in a participating Member State, or (b) where the financial instrument subject to the dealings is issued
in a participating Member State.
However, the FTT proposal remains subject to negotiation between participating Member States. It
may therefore be altered prior to any implementation, the timing of which remains unclear. Additional
European Union Member States may also decide to participate.
Prospective holders of the Notes are advised to seek their own professional advice in relation to the
FTT.
100
SECTION XI
THIRD PARTY INFORMATION, STATEMENT BY EXPERTS AND DECLARATIONS OF INTEREST
No statement or report attributed to an expert is included in the Information Memorandum. No
statement or report attributed to a third party is included in the Information Memorandum.
101
SECTION XII
DOCUMENTS INCORPORATED BY REFERENCE
The following documents shall be deemed to be incorporated by reference in, and to form part of, this
Information Memorandum:
• The by-laws of the Issuer are available at the Commercial Registry Office of Oporto (Portugal); and
• The audited consolidated financial statements (including the auditor’s report thereon and notes
thereto) of the Issuer in respect of the years ended 31 December 2017 and 31 December 2018,
which are included in the Annex of this Information Memorandum.
For the life of this Information Memorandum, copies of the documents incorporated in it by reference
and the Information Memorandum itself will be available for inspection during normal business hours
at the registered office of the Issuer (without charge) and may also be obtained from the websites of
the Issuer (www.efacec.pt) and of the Alternative Fixed Income Market (www.bmerf.es).
For the avoidance of doubt, the content of the Issuer’s website or of any other website referred to in
this Information Memorandum does not form a part of the Information Memorandum, except the
content of the list of documents incorporated by reference.
In Lisbon, on 19 of July, 2019
For and on behalf of:
EFACEC POWER SOLUTIONS, SGPS S.A.
____________________________________
Name: Francisco José Meira Silva Nunes
Capacity: Director
102
ANNEX
AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE ISSUER FOR THE FINANCIAL YEARS ENDED ON 31 DECEMBER 2017 AND 31 DECEMBER 2018
Collective Person Identification Number: 513180966 Submission of Consolidated AccountsYear: 2017 1st SubmissionFirm: EFACEC POWER SOLUTIONS, SGPS S.A. Date of Receipt: 2018-07-13
tl3Særaårio da Sæicdadeefacec
Power Solutions SGPS SA
EXTRACTO DE ACTA DA ASSEMBLEIA GERAL
ÂDEODATO ALEX,{NDRE FREiRE VALENTE LOPES PINTO, que também usa o
nome profissional de ADEODATO FREIRE PINTO, na qualidade de Secretário da
Sociedade da EFACEC POWER SOLUTIONS, SGPS, S.4., sociedade com sede no Lugar
da Arroteia, 4465-587 Leça do Balio, freguesia de Custóias,Leça do Balio e Guifões, concelho
de Matosinhos, Pessoa Colectiva número 513 180 966, matticulada na Conservatória do
Registo Comercial sob o mesmo número, entidade com os documentos integralmente
depositados em suporte eletrónico, com o capital social de EUR 374.235.160,00
("Sociedade"), CERTIFICA, nos teffnos e ao abrþo do disposto no artigo 446."-B ðo
Código das Sociedades Comerciais, que exffaiu, de forma parcial, da acta relativa à reunião da
Assembleia Geral da Sociedade realtzadano dia vinte e quafto de Abril de dois mil e dezoito,
exarada no livro de actas de Assembleia Geral da Sociedade o seguinte:
"(...) PONTO PRIMEIRO:Deliberar sobre o relatódo de gestãô, balanço e contas,
individuais e consolidadas, relativos ao exercício findo em 31 de Dezemb rc de 2017; -PONTO SEGLINDO:Deliberar sobre a proposta de aplicação de resultados relativos
ao exetcício findo em 31 de Dezemb to de 2017.
Declarada aberta a sessão, entrou-se, de imediato, na análise e discussão do Ponto Pdmeiro
da ordem de trabalhos, tendo o Presidente da Mesa referido aos presentes ter sido informado
pelo Conselho de ,{dministração que o relatório de gestão, balanço e contas, individuais e
consolidadas, a certific ação legal de contas e o parecer do conselho fiscal referentes ao
exercício findo em 37 de Dezembro de 2017 ,bemcomo os demais documentos previstos no
Page I of 3SEDE / HEAD OFFICE: Lugar da Arroteia - Leça do Batio, 44ó5-587 À"latosinhos - Portugat
Tet: +351 229 562 300 - Fax: +351 229 518 933 - www.efacec.ptCapitat Sociat /Share Capitat: € 314.235.1ó0,00 NIPC / VAT: 513 180 96ó
,80çiod.4
efacecPower Solutions SGPS SA
arttgo 289." do Código das Sociedades Comerciais, estiveram à disposição dos acionistas, nos
telrnos e prazos legais, pelo que se dispensou a sua leitura
O Presidente da Mesa questionou os presentes se pÍetendiam que o Conselho de
Administração prestasse esclarecimentos sobre o Relatório de Gestâo e as Contas do
Exercício.
Não tendo sido solicitados quaisquer esclarecimentos, !m^ vez que os documentos eram já,
do conhecimento de todos, o Presidente da Mesa colocou à votação o relatório de gestão, o
balanço e contas, individuais e consolidadas referentes ao exercício de2017, dos quais resulta
um resultado individual fquido no montante de € 3.040.21,2,73 (três milhões quarenta mil
duzentos e doze euros e treze cêntimos) e um resultado consolidado no montante de€7 .545.937
(sete milhões quinhentos e quarenta e cinco mil novecentos e trinta e sete euros). Tendo os
presentes prescindido da votação nominal dos documentos de prestação de contas, foi
deliberado, por unanimidade, aprovar o relatório de gestão, balanço e contas refetentes ao
exercício findo em 31 de Dezembrc de 2077 .
Seguidamente, entrou-se no âmbito do Ponto Segundo da ordem de trabalhos, tendo sido
deliberado, por unanimidade, aprovar a proposta de apücação dos resultados do exercício
findo em 31 de Dezembro de 2077 apresentada pelo Conselho de,A.dministação pelo que o
resultado líquido do exercício de 2077, apurado nas demonstrações financeiras individuais, no
valor de € 3.040.21,2,13 (três milhões quârenta mil duzentos e doze euros e treze cêntimos)
terá a seguinte aplicação
-ParaReservaLegal:€152.011,00(centoecinquentaedoismi]eonzeeufoS);e-
Page 2 of 3
SEDE / HEAD OFFICE: Lugar da Arroteiã - Leça do Batio, 44ó5-587 Matosinhos - PortugalTet: +351 729 562 300 - Fax: +351 229 518 933 - www.efacec.pt
Capital Social /Share Capital: € 314.235.1ó0,00 NIPC / VAT: 513 180 966
zl3Socicdadc
&8ørc(*
+efacecPower Solutions SGPS SA
-Para Reservas Livres: €2.888.201,13 (dois milhões oitocentos e oitenta e oito mil duzentos
e um euros e treze cêntimos). (...)"
Certifico que o presente extracto de acta relativo aos Pontos Primeiro e Segundo da ordem de
trabalhos da reunião de Assembleia Geral da Sociedade rcabzada no dia vinte e quatro de Abril
de dois mil e dezoito, está em conformidade com a respectiva acta da qual foi extraído.-
O restante conteúdo da acta rela¡,va à referida reunião da Assembleia Geral da Sociedade não
limita, altera ou prejudica a deliberação relativa à parte dos Pontos Primeiro e Segundo da
ordem de trabalhos ora reoroduzida e obiecto do oresente extrato.
Matosinhos,T2 deJulho de 2018.
O Secretário da Sociedade da EFACEC Power Solutions, SGPS, S.A.
(,{.deodato Freire Pinto)
Sæntário da Socida&
3t)Ø
Page 3 of 3SEDE / HEAD OFFICE: Lugar da Arroteia - Leça do Batio, 44ó5-587 Matosinhos - Portugat
Tet: +351 ZZ9 562 300 - Fax: +351 229 518 933 - www.efacec.otCapital Social /Share Capitat: € 314.235.1ó0,00 NIPC / VAT: 513 180 966
Collective Person Identification Number: 513180966 Submission of Consolidated AccountsYear: 2018 1st SubmissionFirm: EFACEC POWER SOLUTIONS, SGPS S.A. Date of Receipt: 2019-06-28
103
ISSUER
EFACEC Power Solutions, SGPS, S.A.
Lugar da Arroteia
4465-587 Leça do Balio
Portugal
GUARANTORS
EFACEC Energia – Máquinas e Equipamentos
Eléctricos, S.A.
Lugar da Arroteia
4465-587-Leça do Balio
Portugal
EFACEC Electric Mobility, S.A.
Rua Engenheiro Frederico Ulrich, Guardeiras
4470-605 Maia
Portugal
EFACEC Engenharia e Sistemas, S.A.
Rua Engenheiro Frederico Ulrich, Guardeiras
4470-605 Maia
Portugal
COORDINATORS
Beka Finance, Sociedad de Valores, S.A.
Calle Marqués de Villamagna, 3
4ª planta
28001 Madrid
Spain
Optimal Investments, S.A.
Av. Eng. Duarte Pacheco, Torre 2, 17º Piso
1070-102 Lisboa
Portugal
CO-DEALER
Banco Finantia, S.A.
Rua General Firmino Miguel, n.º 5
1600-100 Lisboa
Portugal
REGISTERED ADVISOR
VGM Advisory Partners, S.L.U.
Calle Serrano 68, 2º Derecha
28001 Madrid
Spain
COMMON REPRESENTATIVE
Bondholders, S.L.
Avda. de Francia, 17, A
46023 Valencia
Spain
PAYING AGENT
Banco Comercial Português, S.A.
Praça D. João I, no. 28
4000-295 Porto
Portugal
104
LEGAL ADVISOR
Vieira de Almeida & Associados, Sociedade de Advogados, S.P., R.L.
Rua D. Luís I, n.º 28
1200-151 Lisboa
Portugal