Presidência do Conselho de Ministros (Presidency of the Council of Ministers)
Resolution
The 5th phase in the privatisation of Portugal Telecom, S. A., was approved by Decree-Law no. 227-A/2000, of 9 September, which foresees that the final and concrete operating7running conditions shall be set by one or more Cabinet resolutions.
Cabinet Resolution no. 148/2000, of 3 November, has already established the generality of the mentioned conditions.
Furthermore, one has to namely, set the number of shares to be transferred within the scope of the public offer of sale, direct sale to institutions and direct sales reference. In terms of the direct sales operations - institutional and reference - the purchasing financial institutions in each of the operations is identified.
Furthermore, in terms of direct sales reference the reference shareholder is identified which will acquire the shares object of the direct sales reference by the purchasing financial institution where the book of specifications is also approved which establishes the terms and conditions to be observed in this sale.
The relation between the public offer of sale and the direct institutional sale shall also be regulated with the prevision of communicability mechanisms of the shares between the two, usually designated regressive communicability - claw-back - and progressive communicability - claw-forward.
Thus:
Under the terms of paragraph g) of article 199 of the Constitution, Cabinet has resolved:
1 - The public offer of sale foreseen in article 3 of Decree-Law no. 227-A/2000, of 9 September, shall have 46,000,000 shares.
2 - The sub-reserve destined for workers of Portugal Telecom, S. A., hereinafter referred to as PT, which is alluded to in point 4 of Cabinet Resolution no. 148/2000, of 3 November, shall have as its object 5,000,000 shares.
3 - The sub-reserve destined for small underwriters and emigrants, referred to in point 4 of Cabinet Resolution no. 148/2000, of 3 November, shall have as its object 25,000,000 shares.
4 - The reserve for holders of PT bonds, foreseen in paragraph b) of point 3 of Cabinet Resolution no. 148/2000, of 3 November, shall have as its object 6,500 shares.
5 - The allotment of shares foreseen in point 5 of Cabinet Resolution no. 148/2000, of 3 November, aimed at the general public, within the scope of the public offer of sale, shall have as its object 12,993,500 shares.
6 - The number of shares referred to in point 1 includes an allotment of 3,000,000 shares to be handed over to PT workers, small underwriters and emigrants who are holders of the shares acquired within the scope of the reserve foreseen in paragraph a) of point 3 of Cabinet Resolution no. 148/2000, of 3 November, for a period of one year as from the day of the special stock exchange session aimed at carrying out the public offer of sale.
7 - The direct institutional sale foreseen in article 5 of Decree-law no. 227-A/2000, of 9 September, shall have as its object an initial number below 23,477,205 shares, which will possibly be increased with a maximum of 10,421,581 shares, as a result of exercising the purchasing option of a supplementary allotment of shares , under the terms of points 3 to 6 of article 6 of the Decree-Law referred to.
8 - The Ministry of Finance or, in the case of delegation, the Secretary of State of the Treasury and Finances, shall set within a six-day period, within the limit set out in the previous point, the exact number of shares to be transferred within the scope of the direct institutional sale.
9 - The group of financial institutions, with which the direct institutional sale foreseen in article 5 of Decree-Law no. 227-A/2000, of 9 September is contracted, is as follows:
Banco Espírito Santo de Investimento, S. A.;
Merrill Lynch International;
Goldman Sachs International;
Caixa - Banco de Investimento, S. A.;
Deutsche Bank AG London;
Salomon Brothers International Limited;
UBS AG, através da UBS Warburg;
Banco Português de Investimento, S. A.;
BCP Investimento - Banco Comercial Português de Investimento, S. A.;
Central - Banco de Investimento, S. A.;
Banco Santander de Negócios Portugal, S. A.;
Cazenove & Co.;
BBV Midas - Sociedade Financeira de Corretagem, S. A.
10 - If the demand verified in the public offer of sale exceeds the shares of which it is object, the allotment destined for direct institutional sale may be reduced by a percentage no higher than 30% of the one destined for the public offer of sale, adding to the latter the number of shares taken from the former.
11 - If, in the process of prior collection of the intention to buy, the demand manifested exceeds the shares which are object of the direct institutional sale, the allotment destined for the latter may be increased by a percentage no higher than 30%, when the allotment destined for the public offer of sale is reduced from the corresponding amount.
12 - The direct sale reference foreseen in article 7 of Decree-Law no. 227-A/2000, of 9 September, shall have as its object an allotment of 31 368 859 shares.
13 - Caixa - Banco de Investimento, S. A. shall be the financial institution with which the direct reference sale referred to in the previous point shall be contracted.
14 - The financial institution which will acquire the shares which are object of the direct sale referred to in point 12 shall be obliged to transmit them, in the amounts indicated, to the following reference shareholder of Portugal Telecom, S. A.:
Caixa Geral de Depósitos, S. A. - 31,368,859 shares, representative of circa 3% of PT's share capital.
15 - The unit price to be in force for the direct reference sale shall be the same as the one which, under the terms of point 38 of Cabinet Resolution no. 148/2000, of 3 November, is set for the direct institutional sale.
16 - The terms and conditions of the direct reference sale mentioned in point 12 arise from the book of specifications approved by the present resolution and published as an annex to it.
17 - The present resolution shall come into effect on the day of its publication, with retroactive effects as to the day of its respective approval.
Presidency of the Cabinet, 23 November 2000. - For the Prime Minister, Jorge Paulo Sacadura Almeida Coelho, the Minister of State.
Book of Specifications for the direct reference sale
Article 1
Object of the sale
1 - The present book of specifications sets the conditions for the direct reference sale of ordinary shares of Portugal Telecom, S. A., hereinafter referred to as PT, foreseen in article 7 of Decree-Law no. 227-A/2000, of 9 September.
2 - The shares object of the direct reference sale shall be transferred by PARPÚBLICA - Participações Públicas (SGPS), S. A., hereinafter referred to as PARPÚBLICA, to the financial institution identified in point 13 of the Cabinet Resolution which approves the present book of specifications, hereinafter referred to as the purchaser.
3 - The direct reference sale is an instrumental operation of the subsequent sale of PT shares to the PT reference shareholder, where the latter must be a financial investor or a telecommunications operator.
Article 2
Obligations of the purchaser
The purchaser shall be obliged to transfer PT shares to the reference shareholder identified in point 14 of the Cabinet Resolution which approves the present book of specifications, in the quantity set in said precept.
Article 3
Direct sale contract
1 - The direct reference sale takes place when both PARPÙBLICA and the purchaser sign the sales contract for the PT shares.
2 - The sales contract referred to in the previous point must foresee the general or specific conditions of the consequent transaction of PT shares from the purchasing financial institution to the to the reference shareholder, that is rules regarding the situations where the reference shareholder may carry out subsequent transactions and the procedures to be observed in these situations.
Article 4
Price
1 - In accordance with the regime referred to in article 10 of Decree-Law no. 227-A/2000, of 9 September, and under the terms of point 15 of the Cabinet Resolution which approves the present book of specifications, the unit price for the sale of PT shares shall be set by despatch of the Ministry of Finances, or where the competency to set said price has been sub-delegated, by despatch of the Secretary of State of the Treasury and Finances.
2 - The sale price of PT shares shall be equal to that set for the direct institutional sale foreseen in article 5 of Decree-Law no. 227-A/2000, of 9 September.
3 - The price owed upon the sale of the shares shall be paid within three days, as from the date on which the contract referred to in article 3 is signed.
4 - The unit price of the sale of PT shares to the reference shareholder by the purchaser shall be equal to the unit price of the direct reference sale regulated by the present book of specifications.
Article 5
Relation between the direct sale contract and the sales contract with the reference shareholder
The sales contract between PARPÚBLICA and the purchasing financial institution shall be realised together with the sales contract between the latter and the reference shareholder.
Article 6
Dissolution of sale
The sales contract between PARPÚBLICA and the purchasing financial institution shall be realised together with the sales contract between the latter and the reference shareholder.
