FS LUXEMBOURG S.à r.l. COMMENCES MODIFIED DUTCH AUCTION CASH TENDER OFFER FOR UP TO US$100 MILLION AGGREGATE PRINCIPAL AMOUNT OF 10.00% SENIOR SECURED NOTES DUE 2025

SÃO PAULO, Brazil, May 10, 2023 /PRNewswire/ -- FS Luxembourg S.à r.l. (the "Issuer"), a wholly-owned finance subsidiary of FS Indústria de Biocombustíveis Ltda. ("FS Ltda."), announces that it has commenced a cash tender offer (the "Tender Offer") for up to US$100.0 million in aggregate principal amount (subject to increase or decrease by the Issuer, in its sole discretion, the "Maximum Tender Amount") of its 10.00% senior secured notes due 2025 (the "Notes"). The Notes are fully, unconditionally and irrevocably guaranteed by FS Ltda. and FS I Indústria de Etanol S.A. (together with FS Ltda., the "Guarantors").

The Tender Offer is being made upon the terms and subject to the conditions set forth in an offer to purchase, dated May 10, 2023 (the "Offer to Purchase"). Any capitalized term used but not defined in this press release has the respective meaning set forth in the Offer to Purchase.

Certain information regarding the Notes and the terms of the "Modified Dutch Auction" pricing mechanism is summarized in the following table:

The Tender Offer will expire at 5:00 p.m. (New York City time) on June 8, 2023, unless extended by the Issuer (such time and date, as it may be extended, the "Expiration Date"). The deadline for Holders to validly tender (and not validly withdraw) Notes in the Tender Offer and be eligible to receive payment of the Total Consideration, which includes the Early Tender Premium, will be 5:00 p.m. (New York City time) on May 23, 2023, unless extended by the Issuer (such time and date, as it may be extended, the "Early Tender Date").

The Tender Offer is being conducted as a "Modified Dutch Auction" until the Early Tender Date. This means that if Holders elect to participate in the Tender Offer at or prior to the Early Tender Date, they must specify the minimum purchase price (the "Bid Price") they would be willing to receive in exchange for each US$1,000 principal amount of Notes they choose to tender in the Tender Offer. The Bid Price that is specified for each US$1,000 principal amount of Notes must be in increments of US$1.00, and must be within the acceptable bid price range, as set forth in the table above (the "Acceptable Bid Price Range"). If any Bid Price is not specified in a whole increment of US$1.00, such Bid Price will be rounded down to the nearest US$1.00 increment. Each Holder tendering Notes in the Tender Offer at or prior to the Early Tender Date is required to specify a Bid Price. Holders who tender Notes at or prior to the Early Tender Date without specifying a Bid Price, or at a Bid Price below the Acceptable Bid Price Range, will be deemed to have specified the base price as set forth in the table above (the "Base Price") as their Bid Price. Tenders of Notes at or prior to the Early Tender Date at Bid Prices above the Acceptable Bid Price Range will not be accepted and will not be used for purposes of calculating the Clearing Price. Acceptance of tendered Notes may be subject to proration as described below.

Under the "Modified Dutch Auction" procedure, we will accept Notes validly tendered in the Tender Offer (and not validly withdrawn) at or prior to the Early Tender Date in the order of the lowest to the highest Bid Prices specified or deemed to have been specified by tendering Holders, and will select the single lowest Bid Price so specified that will result in an aggregate principal amount equal to the Maximum Tender Amount (or, if the amount of Notes validly tendered in the Tender Offer multiplied by the highest Bid Price so specified by tendering Holders with respect to all Notes so tendered and not validly withdrawn is less than the Maximum Tender Amount, then we will select such highest Bid Price), which we refer to as the "Clearing Price." References to the "Clearing Premium" are to the result of the Clearing Price less the Base Price. The Clearing Price is the same as the Total Consideration.

Holders of Notes that are validly tendered (and not validly withdrawn) prior to or on the Early Tender Date and that are accepted for purchase will receive the total consideration (the "Total Consideration"), which will be equal to the Base Price plus the Clearing Premium. Holders validly tendering Notes in the Tender Offer after the Early Tender Date and at or prior to the Expiration Date will only be eligible to receive payment of the "Tender Offer Consideration," which equals the Total Consideration less the Early Tender Premium, as set forth in the table above. Any Notes validly tendered after the Early Tender Date and at or prior to the Expiration Date will be deemed to have been tendered with a Bid Price equal to the Total Consideration.

In the event that the amount of Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date with a Bid Price equal to or below the Clearing Price would result in an aggregate principal amount that exceeds the Maximum Tender Amount and we elect to have an Early Settlement Date, then, subject to the terms and conditions of the Tender Offer, Notes tendered after the Early Tender Date will not be eligible for purchase, unless the Maximum Tender Amount is increased.

If the purchase of all Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date with a Bid Price equal to or less than the Clearing Price would cause us to accept for purchase an aggregate principal amount of Notes that exceeds the Maximum Tender Amount (taking into account the aggregate principal amount of Notes validly tendered (and not validly withdrawn) given such Clearing Price), then the Tender Offer will be oversubscribed at the Early Tender Date and, assuming satisfaction or waiver of the conditions to the Tender Offer, we will purchase on, at our option, the Early Settlement Date or the Final Settlement Date Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date and accepted for purchase, as follows:

• first, all Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date with a Bid Price less than the Clearing Price; and
• second, all Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date with a Bid Price equal to the Clearing Price, on a prorated basis according to the principal amount of such Notes, such that we purchase an aggregate principal amount of Notes that does not exceed the Maximum Tender Amount.

If the Tender Offer is not oversubscribed at the Early Tender Date and the purchase of all Notes validly tendered after the Early Tender Date but at or prior to the Expiration Date (when combined with all Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date) would cause us to accept for purchase an aggregate principal amount of Notes that exceeds the Maximum Tender Amount, then the Tender Offer will be oversubscribed at the Expiration Date and, assuming satisfaction or waiver of the conditions to the Tender Offer, we will purchase on the Final Settlement Date Notes validly tendered at or prior to the Expiration Date and accepted for purchase, as follows:

• first, to the extent there was no Early Settlement Date, all Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date; and
• second, all Notes validly tendered after the Early Tender Date but at or prior to the Expiration Date, on a prorated basis according to the principal amount of such Notes, such that we purchase an aggregate principal amount of Notes that does not exceed the Maximum Tender Amount.

All tendered Notes not accepted will be promptly credited to the Holder's account with DTC or otherwise returned to the Holder without cost.

The Issuer's obligation to accept for purchase, and to pay for, Notes validly tendered and not validly withdrawn pursuant to the Tender Offer is conditioned upon the satisfaction or, when applicable, waiver of certain conditions set forth in the Offer to Purchase. The Issuer has the right to amend or terminate the Tender Offer at any time and to increase or decrease the Maximum Tender Amount at its sole discretion, subject to applicable law.

Assuming acceptance by the Issuer of Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date, the Issuer intends to make payment in cash of an amount equal to the Total Consideration plus Accrued Interest for such accepted Notes on the Early Settlement Date, which is expected to be three business days after the Early Tender Date or as promptly as practicable thereafter. Assuming acceptance by the Issuer of Notes validly tendered (and not validly withdrawn) after the Early Tender Date, but at or prior to the Expiration Date, the Issuer intends to make payment in cash of an amount equal to the Tender Offer Consideration plus Accrued Interest for such accepted Notes on the Final Settlement Date, which is expected to be two business days after the Expiration Date or as promptly as practicable thereafter.

The Issuer has engaged Banco BTG Pactual S.A. – Cayman Branch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Santander US Capital Markets LLC to act as dealer managers (the "Dealer Managers") in connection with the Tender Offer. In such capacity, the Dealer Managers may contact Holders regarding the Tender Offer and may request brokers, dealers, commercial banks, trust companies and other nominees to forward the Offer to Purchase and related materials to beneficial owners of Notes. The Dealer Managers can be contacted at their telephone numbers set forth on the back cover page of the Offer to Purchase with questions regarding the Tender Offer.

Copies of the Offer to Purchase are available to Holders from D.F. King & Co., Inc., the tender agent and the information agent for the Tender Offer (the "Tender and Information Agent"). Requests for copies of the Offer to Purchase should be directed to D.F. King at +1 (800) 967-5079 (toll-free), +1 (212) 269-5550 (collect) or [email protected].

Neither the Offer to Purchase nor any related documents have been filed with the U.S. Securities and Exchange Commission, nor have any such documents been filed with or reviewed by any federal or state securities commission or regulatory authority of any country. No authority has passed upon the accuracy or adequacy of the Offer to Purchase or any related documents, and it is unlawful and may be a criminal offense to make any representation to the contrary.

Under no circumstances shall this press release constitute an offer to buy or the solicitation of an offer to sell the Notes or any other securities of the Issuer, the Guarantors or any of their affiliates in the United States or in any other jurisdiction. The Tender Offer is not being made to, nor will the Issuer accept tenders of Notes from, Holders in any jurisdiction in which the Tender Offer would not be in compliance with the securities or blue sky laws of such jurisdiction.

Important Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements are information of a non-historical nature or that relate to future events and are subject to risks and uncertainties. No assurance can be given that the transactions described in this press release will be consummated or as to the ultimate terms of any such transactions. Neither the Issuer nor the Guarantors undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.

Disclaimer

This press release must be read in conjunction with the Offer to Purchase. This press release and the Offer to Purchase contain important information that must be read carefully before any decision is made with respect to the Tender Offer. If any Holder is in any doubt as to the action it should take, it is recommended to seek its own legal, tax, accounting and financial advice, including as to any tax consequences, from its attorney, accountant or other independent financial or legal adviser. None of the Issuer, the Guarantors, the Dealer Managers, the Tender and Information Agent or any affiliate of such persons expresses any opinion as to whether the terms of the Tender Offer are fair to any Holder. Holders must make their own decision as to whether to tender any Notes and, if so, the principal amount of Notes to tender and the Bid Price at which to tender.

SOURCE FS Luxembourg S.à r.l.