Dear Team Member,

We have just taken another important step in our business restructuring program. Odebrecht Latinvest (OLI) has signed an agreement for the sale of the Chaglla hydroelectric plant, the third largest in Peru, to a consortium led by one of the world’s largest power generation companies, China Three Gorges Corporation (CTG).

Apart from CTG, the consortium consists of Hubei Energy Group Co., Ltd. (“Hubei Energy”), Ace Investment Fund II LP (“ACE”) and CNIC Corporation Limited. The concession that manages the Chaglla hydroelectric plant, called Empresa de Generación Huallaga S.A. (EGH), will be acquired by Huallaga Holding Company Limited, a company created by the new consortium as per the laws of the Hong Kong Special Administrative Region and the People’s Republic of China.

The tremendous interest shown by investors in the Chaglla hydroelectric plant shows the international recognition of the quality and technical excellence of Odebrecht’s engineering projects.

The sale value was US$ 1.39 billion. The bulk of this amount (US$ 1.2 billion) will be used to settle the bank loan for the project and to pay the transaction costs. The remaining US$ 190 million will not be remitted to Brazil, but used to settle other commitments generated in Peru, aiming to pay expenses with Team Members, suppliers, insurers, taxes and civil damages, all in compliance with local law, including the Urgency Decree.

The consummation of the transaction is subject to customary closing conditions, including approval from the Peruvian Ministry of Justice. The agreement will also be submitted to Chinese regulatory authorities.

The 456 MW Chaglla power plant is a source of pride for all of us. At over 200 meters high, it is one of the largest concrete-faced rockfill dams in the world. It is also one of the most important engineering works in Peru’s history. It has won several international engineering awards, including one for its assessment of the social and environmental risks during construction and for its commitment to local communities impacted by the project.

I congratulate all the Team members who dedicated themselves to the design, construction and operation of this huge project. I also congratulate the teams that worked on this sale, at this moment of transition that we are going through, and on restructuring our Businesses so that we can start growing once again based on a solid foundation, marked by security and liquidity.

Warm regards,

Luciano Guidolin
Chief Executive Officer | Odebrecht S.A.