Companhia de Saneamento Básico do Estado de São Paulo Board of Directors

   

 

COMPANHIA DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO - SABESP

Corporate Taxpayer’s ID (CNPJ) No. 43.776.517/0001-80

State Registry (NIRE) 35.3000.1683-1

EXCERPT OF THE MINUTES OF THE EIGHT-HUNDRED AND SIXTY-FIFTH MEETING OF THE
BOARD OF DIRECTORS

On June 21, 2018, at 9 a.m., convened by the Chairman of the Board of Directors, Mario Engler Pinto Junior, ordinarily, as provided for in the head provision and Paragraph Six of Article 13 of the Bylaws, at the meeting room at the headquarter of the Company, located at Rua Costa Carvalho n° 300, São Paulo, the undernamed and undersigned members of the Board of Directors of Companhia de Saneamento Básico do Estado de São Paulo – SABESP gathered together.

Opening the meeting, the Chairman of the Board, Mario Engler, justified the absence of the Board Member Reinaldo Guerreiro. (...)

After, the Chairman of the Board, Dr. Mario Engler, gave the word to the Chief Financial Officer and Investor Relations Officer, Rui de Britto Álvares Affonso, and to the Head of Capital Markets and Investor Relations, Mario Azevedo de Arruda Sampaio, who started to present item 5 of the agenda, “Approval of the general conditions for the 23rd issue of debentures, in an amount of up to R$750 millions” (time: 20’), based on the Resolution 00159/2018 of the Executive Board, of June 13, 2018, in the FI Internal Notice 35/2018, of June 6, 2018, and in the power point presentation, documents filed in the electronic folder of meetings.(...). After the matter was discussed and voted on, the Board of Directors unanimously approved, based on Items XIX and XXII of Article 14 of the Bylaws, the General Conditions Applicable to the 23^rd Issue of simple Debentures, not convertible into shares, unsecured, in up to three (3) series, for public distribution (23^rd Issue), as set forth in CVM Instruction No. 476, of January 16, 2009, as amended, under the following terms detailed:

1. Amount of the issue: up to seven hundred and fifty million reais (R$750 million), with a minimum of five hundred million reais (R$500 million).

2. Number of Series: up to three (3) series.

3. Guarantee: no guarantees, collateral or personal.

4. Type, Method, Convertibility and Issue of Certificates: the debentures will be issued with the possibility of goodwill or negative goodwill, registered, book-entry, simple and not convertible into shares, without the issue of safeguards or certificates.

5. Type: unsecured.

6. Number of Debentures: up to seven hundred and fifty thousand (750,000) Debentures will be issued.

7. Amortization Term:

a. 1^st series: term of three (3) years, with 100% (one hundred per cent) amortization of the Unit Par Value on the due maturity date.

Companhia de Saneamento Básico do Estado de São Paulo Board of Directors

   

 

b. 2^nd series: a term of five (5) years, with 50.00% (fifty per cent) of the Unit Par Value in the 4^th year after the issue date and amortization of the balance of the Unit Par Value on the due maturity date.

c. 3^rd series: a term of seven (7) years, with 50.00% (fifty per cent) of the Unit Par Value in the 6^th year after the issue date and amortization of the balance of the Unit Par Value on the due maturity date.

8. Remuneration: The maximum rates of compensation for the 1^st, 2^nd and 3^rd series will be:

a. 1^st  series: DI Rate + 0.50% p.a.

b. 2^nd series: DI Rate + 0.75% p.a.

c. 3^rd series: compensation of NTNB 2024 + 0.90% p.a.

The final rates will be established after the conclusion of the Bookbuilding procedure.

9.  Distribution: the Debentures will be distributed through a public offer with restricted efforts, pursuant to CVM Instruction 476.

10. Placement System:

(i) firm guarantee, for R$500 million, for the 1^st and 2^nd series.

(ii) best efforts, for R$250 million, for any of the series.

11. Frequency of payment of the compensation: 1^st and 2^nd series half-yearly and 3^rd series annually.

12. Use of proceeds: refinancing the financial commitments due in 2018 and reinforcing the cash.

13. Financial Covenants:

a. Net Debt/Adjusted EBITDA ≤ 3.50.

b. Adjusted EBITDA/Financial Expenses ≥ 1,5.

14. Early Redemption:

a. 1^st series: will be allowed, partially or in full, at any time, as of the 18^th (eighteenth) month (including this date) after the issue date, with partial redemption premium of 0.20% p.a. on the debt balance on the actual date of the early redemption.

b. 2^nd and 3^rd series: will not be allowed.

15.  Unit Par Value: One thousand reais (R$1,000.00).

16.  Inflation Adjustment of the Unit Par Value: There will be no inflation adjustment of the Unit Par Value.

17.  Allocation: The allocation between the series will be carried out through the “Communicating Vessels” system and will be established after the Bookbuilding procedure.

18.  Means of Subscription and Payment: The Debentures will be subscribed and paid, in the primary market, for their Unit Par Value. (“First Payment Date” and “Payment Price”). If the Debentures are not subscribed and paid in full on the First Payment Date due to operational reasons, the Payment Price of the Debentures paid after the First Payment Date will be the Unit Par Value, plus the due compensation.

19.  Other Characteristics: The other characteristics of the debentures and the issue will be described in the deed and in other due documents.

Companhia de Saneamento Básico do Estado de São Paulo Board of Directors

   

 

In addition, the Board of Directors authorizes the members of the Company’s Executive Board, subject to legal and statutory provisions, to carry out any and all measures related to the 23^rd Issue, including negotiating the other terms and conditions of the documents related to the issue.

(...)

The minutes, once approved, will be signed by the Members of the Board of Directors: Mario Engler Pinto Junior, Ernesto Rubens Gelbcke, Francisco Luiz Sibut Gomide, Francisco Vidal Luna, Jerônimo Antunes, Karla Bertocco Trindade, Luís Eduardo Alves de Assis, Lucas Navarro Prado and Rogério Ceron de Oliveira.

This is a free English translation of the original minutes drawn up in the Book of Minutes of the Meetings of the Company’s Board of Directors.

São Paulo, June 21, 2018.