Reverse Stock Split FAQ
Oi communicates that the reverse stock split proposal voted on at the Extraordinary Shareholders’ Meeting held on December 01, 2022 has been approved. Why did the Company submit this proposal?
The main purpose of the reverse stock split is to qualify the shares issued by the Company within one of the mandatory listing requirements defined by B3. As an issuer of shares listed and traded on B3, Oi undertakes to comply with the requirements of the Issuer Listing and Admission to Trading of Securities Regulation and the Issuer Manual of B3.
According to item 5.2.f of the Regulation and items 5.1.2 (vi) and 5.2 of the Manual, available on B3’s website (https://www.b3.com.br/pt_br/regulacao/estrutura-normativa/regulamentos-e-manuais/listagem.htm), Oi is expected to maintain the price of its shares above the minimum price defined by B3, undertaking to take the necessary acts to such qualification within the deadline defined by B3.
Any company that wishes to trade shares on a stock exchange is required to keep the price of its shares above R$1.00. If the measure taken is not sufficient for the closing price of Oi’s shares to be equal to or higher than R$1.00 by February 17, 2023, as established by the stock exchange, B3 will request the suspension of trading such shares.
What is the reverse stock split rationale?
The reverse stock split is a technical operation that maintains the Company’s value creation fundamentals unchanged. Nonetheless, it may be based on parameters that help leverage value perception and add value to our transformation process.
The proposal voted on at the ESM held on December 01, 2022 considered a reverse split ratio of 10:1 and was approved by majority of the present shareholders.
What are the next steps until the reverse split process is concluded?
- Approval of the proposal at the Extraordinary Shareholders’ Meeting on second call: December 1, 2022
- Free Adjustment Period: from December 2, 2022 to January 6, 2023
- Trading shares that underwent through the reverse split: as of January 2023
- Auction (or auctions) of the fractions and transfer of results: expected to occur in mid-January and be concluded in February
If the shares are traded again above R$1.00 before the start of trading under the reverse split, would the decision be reversed?
No. The decision made at the ESM is final, and the reverse stock split will be carried out following the schedule above, regardless of the share price in this period.
What will my position be after the reverse split?
You can simulate the result of your position at the end of the reverse split by using the calculator available here.
