NOTE 43 — BUSINESS COMBINATION
Chuí Holding S/A
On December 28, 2017, the subsidiary Eletrosul concluded the capitalization of the amount of R$ 207,124 in Chuí Holding S/A referring to the contribution an advance for future capital increase. The shareholding increased from 49% to 86.57%, due to the dilution of other parties equity interest. On the same date, the Company transferred the amount of 50,228,188 (equivalent to R$ 93,305) common shares to shareholder Brave Winds Geradora III S/A, on effectively transferred to R$ 306,134, and, after the assignment, holds the control with 78% of the capital of Chuí Holding S/A. The measurement of the value of the minority interest was due to the proportion of participation in the Company’s fair value. The fair value of the business acquired was estimated based upon an appraisal report prepared by an external expert hired by the Company. Which is approximated of the book value
|
|
|
12/28/2017 |
|
|
Estimated fair value of prior interest before business combination |
|
192,315 |
|
|
(+) Advances for capital increase |
|
207,124 |
|
|
(+) Share swap |
|
(93,305 |
) |
|
Estimated fair value at the time of acquisition (78%) |
|
306,134 |
|
|
|
|
|
|
|
Minority interest (22%) |
|
86,345 |
|
|
|
|
|
|
|
|
|
|
|
|
Total amount of the investment |
|
392,479 |
|
|
|
|
|
|
|
Recgonzied amounts of identifiable assets acquired and liabilities assumed |
|
|
|
|
Cash and cash equivalents |
|
61,103 |
|
|
Accounts receivables |
|
10,892 |
|
|
Other accounts receivables |
|
595 |
|
|
Tied Funds |
|
255 |
|
|
Intangible assets |
|
17,062 |
|
|
PP&E |
|
664,997 |
|
|
Loans and Financing |
|
17,380 |
|
|
Accounts payable to suppliers |
|
(327,528 |
) |
|
Tax Obligations |
|
(1,946 |
) |
|
Other accoutns payable |
|
(2,868 |
) |
|
Other |
|
(47,463 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total idenfiable net assets |
|
392,479 |
|
|
|
|
|
|
|
|
|
|
|
The allocation of the estimates used in the business combination accounting is temporary as the Company will make the final allocation of the FVs on the acquisition and adjustments, if any, within one year after the completion of the transaction, under the requirement of IFRS 3 - Business Combinations.
Santa Vitória do Palmar Holding S/A
On December 28, 2017, the subsidiary Eletrosul concluded the capitalization of the amount of R$ 192,443 in Santa Vitória do Palmar Holding S/A, referring to the capital contribution of prior advances for future capital increase. With the capitalization, the shareholding increased from 49% to 53.63%, due to dilution of other partners’ capital. On the same date, the Company received in exchange from Acionista Brave Winds Geradora S/A, the amount of 101,925,081 (equivalent to R$ 182,079) common shares, adjusting the consideration effectively transferred to R$ 374,522, holding the control with 78% of the capital of Santa Vitória do Palmar Holding S/A.
The increase in Eletrosul’s interest is a consequence of the Investment Equity Fund - FIP (Fundo de Investimento em Participações — in Portuguese) not contributing the resources needed to complete the wind farms capitalization needs. The stock exchange seeks to standardize the shareholders’ holdings and preserve the rights agreed between the shareholders.
The measurement of the value of the minority interest was due to the proportion of participation in the Company’s fair value. The fair value of the business acquisition was estimated based upon an appraisal report prepared by an external expert hired by the Company. Which is approximated of the book value.
|
|
|
12/28/2017 |
|
|
Estimated fair value of prior interest before business combination |
|
167,045 |
|
|
(+) Advances for capital increase |
|
192,443 |
|
|
(+) Share swap |
|
182,079 |
|
|
(+) Advantageous purchase |
|
33,335 |
|
|
Estimated fair value at the time of acquisition (78%) |
|
574,902 |
|
|
|
|
|
|
|
Minority interest (22%) |
|
162,152 |
|
|
|
|
|
|
|
Total amount of the investment |
|
737,054 |
|
|
|
|
|
|
|
Recgonzied amounts of identifiable assets acquired and liabilities assumed |
|
|
|
|
Cash and cash equivalents |
|
145,618 |
|
|
Accounts receivables |
|
31,515 |
|
|
Recoverable taxes |
|
1,780 |
|
|
Other accounts receivables |
|
954 |
|
|
Tied Funds |
|
61,634 |
|
|
Intangible assets |
|
51,970 |
|
|
PP&E |
|
1,662,943 |
|
|
Loans and Financing |
|
(943,751 |
) |
|
Accounts payable to suppliers |
|
(35,708 |
) |
|
Debentures |
|
(114,928 |
) |
|
Tax Obligations |
|
(8,043 |
) |
|
Other accoutns payable |
|
(116,931 |
) |
|
|
|
|
|
|
Total idenfiable net assets |
|
737,053 |
|
|
|
|
|
|
The allocation of the estimates used in the business combination accounting is temporary as the Company will make the final allocation of the FVs on the acquisition and adjustments, if any, within one year after the completion of the transaction, under the requirement of IFRS 3 - Business Combinations.
Livramento Holding S/A
On December 28, 2017, the subsidiary Eletrosul concluded the capitalization in Livramento Holding S/A of the amount of R$ 6,126, contributed as an advance for future capital increase. With this capitalization, the equity interest increased from 59% to 73.84%, due to dilution of other parties’ capital. On the same date, as a result of the shareholders’ agreement, the Company received in exchange from the shareholder Brasil Energia Renovável — Fundo de Investimento em Participação (FIP), the amount of 20,481,425 (equivalent to R$ 1,717) common shares, adjusting the consideration effectively transferred to R$ 32,197, holding the control with 78% of Livramento Holding S/A.
The increase in Eletrosul’s stake is a consequence of the FIP and ELOS not having contributed the resources needed to complete the wind farms capitalization needs. The stock exchange seeks to standardize the shareholders’ holdings and preserve the rights agreed between the shareholders. The measurement of the amount of the minority interest was due to the proportion of participation in the Company’s fair value.
The fair value of the business acquired was estimated based on an appraisal report prepared by an external expert hired by the Company. Which is approximate of the book value.
|
|
|
12/28/2017 |
|
|
Estimated fair value of prior interest before business combination |
|
24,355 |
|
|
(+) Advances for capital increase |
|
6,126 |
|
|
(+) Share swap |
|
1,717 |
|
|
Estimated fair value at the time of acquisition (78%) |
|
32,197 |
|
|
|
|
|
|
|
Minority interest (22%) |
|
9,081 |
|
|
|
|
|
|
|
Total amount of the investment |
|
41,279 |
|
|
|
|
|
|
|
Recgonzied amounts of identifiable assets acquired and liabilities assumed |
|
|
|
|
Cash and cash equivalents |
|
4,319 |
|
|
Accounts receivables |
|
1,809 |
|
|
Recoverable taxes |
|
2,974 |
|
|
Other accounts receivables |
|
80 |
|
|
Tied Funds |
|
3,028 |
|
|
PP&E |
|
151,221 |
|
|
Loans and Financing |
|
(42,059 |
) |
|
Accounts payable to suppliers |
|
(7,233 |
) |
|
Tax Obligations |
|
(2,923 |
) |
|
Other accoutns payable |
|
(69,937 |
) |
|
|
|
|
|
|
Total idenfiable net assets |
|
41,279 |
|
|
|
|
|
|
The allocation of the estimates used in the business combination accounting is temporary as the Company will make the final allocation of the FVs on the acquisition and adjustments, if any, within of year after the completion of the transaction, under the requirement of IFRS 3 - Business Combinations.