Centrais Eletricas Brasileiras : Resolution PPI 7 2016 - CELG D

Amending Resolution No. 11 of November 18, 2015, the National Privatization Council to approve the continuation of the privatization process of CELG Distribuição S.A. and to establish the conditions and the minimum price of sale of shares of its shareholding control.

Whereas that CELG Distribution S.A - CELG D was included in the National Privatization Program - PND on May 13, 2015, through Decree No. 8,449, of May 13, 2015, which designated the Ministry of Mines and Energy in charge for the implementation and the monitoring of CELG D privatization process in accordance with art. 6, § 1, of Law 9,491 of September 9, 1997 and the Banco Nacional do Desenvolvimento Econômico e Social - BNDES responsible for hiring the services and provide the necessary technical support for the implementation of the CELG D privatization;

Whereas that the shareholding control of CELG D is owned by Centrais Elétricas Brasileiras

S.A - Eletrobras, which holds approximately 50.93% (fifty point ninety-three percent) of the total share capital and voting of CELG D, and 49.00% (forty nine percent) of the CELG D shares are held by the Companhia Celg de Participações - Celgpar, whose control is held by the State of Goiás, and that the amendment to the concession contract signed on December 30, 2015 extended the concession contract of CELG D until July 7, 2045;

Whereas that the previous bidding procedure to sell the shareholding control of CELG D, referred to in the Auction Notice PND No. 01.12016/CELG-D, it was considered desert on August 16, 2016; and

Whereas that the Ministry of Mines and Energy requested for this Board, through Notice No. 170 of September 1, 2016, and BNDES, through Official Letter No. 414/2016-GM-MME, the continuation of the privatization process of CELG D, including the determination of the conditions of privatization and approval of the minimum price of sale of shares issued relating to the shareholding control owned by Eletrobras, decides:

Art. 1 The Resolution No. 11 of November 18, 2015, of the National Privatization Council, becomes effective with the following amendments:

"Art. 1 .............................................. ..................................................

Sole Paragraph - The minimum sale value of 76.761.267 (seventy-six million, seven hundred and sixty-one thousand, two hundred sixty-seven) common shares belonging to Eletrobras will be R$ 912,678,375.87 (nine hundred and twelve million, six hundred seventy-eight thousand, three hundred seventy-five reais and eighty-seven cents) including the amount related to the offer to employees and retirees of CELG D "(NR)

"Art. 4 ................................................. ...........................

§ 1 The shares belonging to CelgPar, deposited at FND may only be withdrawn in the following cases:

1. - if the auction of CELG D shares not take place until March 31, 2017;

2. - if the auction take place until March 31, 2017, but there is the sale of shares; and

3. - by motivated decision by the Board of Investment Partnerships Program of the Brazilian Republic's Presidency at any time

.................................................. ............................. "(NR)

• Art. 5 The minimum price of each share of CELG D for selling shares purposes by Eletrobras in the auction pursuant to art. 1 will be approximately R$ 11.91 (eleven reais and ninety-one cents) in case of sale of CELG D shares held only by Eletrobras, in which case should be offered 75,355,789 (seventy five million, three hundred and fifty-five thousand, seven hundred and eighty-nine) common shares of CELG D owned by Eletrobras, totalizing R$ 897,611,651.71 (eight hundred ninety-seven million, six hundred and eleven thousand, six hundred fifty-one reais and seventy one cents).

  § 1 In order to permit the transfer of the shareholding control of CELG D, in the occurrence of the event provided for in the caput, will be offered to employees and retirees of CELG D 1,405,478 (one million, four hundred and five thousand, four hundred seventy-eight) common shares issued by CELG D, corresponding to approximately 093% (ninety three percent) of the shares representing the total share capital and voting of CELG D owned by Eletrobras, priced at RS 10.72 (ten reais and seventy two cents) per share, which amounts to the value of R$ 15,066,724.16 (fifteen million, sixty-six thousand, seven hundred and twenty- four reais and sixteen centavos), already included the discount of approximately 10% (ten percent) compared to the minimum price referred to in the heading of this article.

• Art. 6 In the event that Celgpar decide to sell all the shares held jointly with Eletrobras, the minimum price for each CELG D share held by Eletrobras and the Celgpar for auction sale purposes, will to be approximately R$ 11.95 (eleven reais and ninety-five cents), totalizing R$ 1,708,131,367.30 (one billion, seven hundred and eight million, one hundred thirty-one thousand, three hundred and sixty-seven reais and thirty cents).

§ 1 As provide in the caput of this article, the price of each share of CELG D, under the offer to employees and retirees of CELG D, will be R$ 10.76 (ten reais and seventy-six cents), which totalize R$ 82,595,126.52 (eighty-two million five hundred ninety-five thousand, one hundred twenty-six reais and fifty-two cents)., already included the discount of approximately 10% (ten percent) compared to the minimum price referred to in the caput of this article.

.................................................. ................................ "(NR)

"Art. 7 .............................................. .....................

§ 3 The remains of the second offer to employees and retirees of CELG D should be acquired by the (s) winner (s) of the auction for the price equivalent to the value offering to employees and retirees of CELG D within a maximum thirty days from the date of disclosure of these leftovers.

§ 5. In the privatization tender, should be an obligation to repurchase the winner(s) of the event all shares that shareholders who have acquired under the offer to employees and retirees of Celg D, wish divested, pelo. the minimum price of the sale of control, duly updated by the positive variation of the National Index of Consumer Price Index - IPCA, published by the Brazilian Institute. of Geography and Statistics - IBGE, with additional compensation of 8% (eight percent) per year, in the event does not occur the opening of capital of CELG D and the listing of its shares within three years from the signing date of the agreement of purchase and sale of shares.

§ 7 The right to sell as provided for in § 5 is the exclusive prerogative of the originating acquirer of the offer to employees and retirees of CELG D, provided in the Offer Manual for the Employee, not being extended to subsequent purchasers. "(NR )

Art. 2 New public hearing should be held to differ more transparency to the CELG D privatization process in accordance with art. 39 of Law No. 8,666 of June 21, 1993.

Art. 3 This Resolution shall enter into force on the date of its publication.

Art. 4 is repealed the § 4 of art. 7 of Resolution No. 11, of November 2015, of the National Privatization Council.

WELLINGTON MOREIRA FRANCO

Executive Secretary of the Council