SÃO PAULO, Aug. 29, 2017 /PRNewswire/ -- Companhia de Saneamento Básico do Estado de São Paulo – Sabesp ("Company" or "Sabesp"), pursuant to the provisions of Article 157, Paragraph 4 of Law 6404/76 and the provisions of CVM Instruction No. 358/02, hereby announces to its shareholders and to the market in general, that following the Notice to the Market disclosed on April 10, 2017, which deals with the Protocol of Intentions signed by the city of Guarulhos, the Autonomous Service of Water and Sewage of Guarulhos ("SAAE" - Serviço Autônomo de Água e Esgoto de Guarulhos) and Sabesp, decided to move forward with the development: (i) of a judicial agreement for SAAE to pay the debt owed to Sabesp in installments; and (ii) an interdependence agreement to rule the water supply on a wholesale basis by Sabesp.
The terms of the agreements will be based on the discussions that took place within the scope of the aforementioned Protocol of Intentions, as well as in the terms submitted by SAAE to Sabesp through Official Letter no. 259/2017-SUP, dated August 14, 2017, regarding the Proposal for a Debt Negotiation Agreement, of which the main highlights are:
- Interdependence agreement to rule the supply of water on a wholesale basis by Sabesp:
- Judicial agreement for SAAE to pay the debt owed to Sabesp in installments:
a) Establishment of a guarantee, in favor of Sabesp, through the fiduciary assignment of SAAE's receivables, with automatic segregation of amounts owed to Sabesp by the bank that centralizes SAAE's collection; and
b) As a result of the establishment of the guarantee and the automatic payment , there will be a 20% discount on the monthly amount billed for the services of water supply on a wholesale basis.
a) Payment of the debt in 480 monthly installments, bearing interest of 0.5% per month and correction by the IPCA index; and
b) 30% discount on the city debt of R$2.9 billion owed to Sabesp, linked to the payment during the instalment period.
It should also be noted that the implementation of the agreements described above depends on the prior approval of Sabesp's Board of Directors, as well as other approvals to be established by each party and granted before signing any binding document.
The full Proposal for the Agreement to Negotiate the Debt is available at www.sabesp.com.br/investidores.
The company will keep the market informed of any developments related to the subject matter of this Material Fact.
SOURCE Companhia de Saneamento Basico do Estado de Sao Paulo - SABESP