August 18, 2022
Folha do Futebol, initially with R$50m, CT and debt: Botafogo answers consultants' doubts over SAF sale

Folha do Futebol, initially with R$50m, CT and debt: Botafogo answers consultants’ doubts over SAF sale

President Dorchesio Milo And the investor John Textor And I signed, in the early hours of Monday (10) noon, a binding agreement for the transformation Botafogo via pure. As governed by the statute, the contract moves to the discussion of the club’s powers at the session of the Council of Deliberations, on January 13, and at the General Assembly, on the 14th.

A dynamic was introduced to the deliberation board to clarify the doubts of the group that participated in the negotiations. Plants are held since Monday (10), on scheduled dates, through video conferences. Here are the “Questions and Answers” for everyone to know.

Transaction duration
Last update: 01/11/2022 – 21:27

Question 1. Does the club have a preemptive right?
There will be certain conditions in the final documents under which the club may acquire shares from the investor, in the event of a sale. However, the details of these terms are protected by contractual confidentiality. The full content of the points subject to the confidentiality clauses has been the subject of extensive discussion with the club’s financial board.

Question 2. Is there a locking mechanism?
There will be certain conditions in the final documents under which the investor may not sell part of his shares. However, the details of these terms are protected by contractual confidentiality. The full content of the points subject to the confidentiality clauses has been the subject of extensive discussion with the club’s financial board.

Question 3. Is there a mechanism that ensures BFR control in selecting potential new partners if it has any initiative to transfer share ownership through Eagle Holdings?
The final documents will provide for certain restrictions applicable to the case of the transfer of control of the shares to the SAF by the investor, but the details of these terms are protected by contractual confidentiality. The full content of the points subject to the confidentiality clauses has been the subject of extensive discussion with the club’s financial board.

legal opinion
Last update: no questions about the topic

negative
Last update: 01/11/2022 – 21:27

Question 4. Does the appropriation of 50% of the profits received to pay off debts refer to the dividends received by the largest shareholder or the amount received by the club?
denotes 50% of the dividends received by the club, as a shareholder of the SAF, as provided in Section 10 of the SAF Act.

Question 5. After 6 years, will the SAF be responsible for debts incurred by the SAF and remaining after this period?
As stipulated in Section 15, 2 of the SAF Act, if the club proves that at least 60% of its original civil and labor obligations have been paid, at the end of 6 years, an extension of the period for an additional 4 years will be permitted. After 6 years without a discharge of at least 60%, or after an additional 4 years without a full discharge, the SAF will be subsidiary responsible for civil and labor obligations.

Question 6. Is there a clause in the contract guaranteeing that all club debts must be guaranteed by SAF?
The final documents will provide for certain restrictions applicable to the case of the transfer of control of the shares to the SAF by the investor, but the details of these terms are protected by contractual confidentiality. The full content of the points subject to the confidentiality clauses has been the subject of extensive discussion with the club’s financial board.

Question 7: What is a debt settlement plan? Will they bring in other parties to restructure the debt, or will it be handled by Club/Eagle Holdings?
There is a clause in this binding offer that states that the parties shall jointly, and always by affirmative vote necessary for Botafogo, adopt any type of restructuring not planned at this time. Any other structure that may be contemplated shall be discussed in a joint agreement between Botafogo and the investor.

Question 8: Will Cia’s debts be settled? Botafogo via SAF? What is the legal status of the Nelton Santos Stadium concession?
Yes, Dion Cia. Botafogo was considered part of the total obligations to be processed and resolved within the scope of this process, and the specific format will still need to be processed in the final documents. Regarding the Nelton Santos Stadium concession, we still do not have the details of the structure, as it includes an area of ​​common law and negotiations with the City Council, but a structure must be found in which the SAF will have the right to use the Nilton Stadium Saints.

Investments
Last update: no questions about the topic

Brand Standard
Last update: 01/11/2022 – 21:27

Question 9. Is Futsal a part of the assignment for the investor?
Not yet detailed. It will be explored in the final agreement discussions.

Question 10. What are the contractually stipulated penalties for non-compliance with the trademark standard?
The rules applicable to the use of the mark will remain under discussion within the scope of the final documentation.

Governance Structure
Last update: 01/11/2022 – 21:27

Question 11. Can partners supervise the work of the Sudanese Armed Forces?
As stipulated in the governance structure that will be detailed in the final documents, the club as a shareholder in the SAF is entitled to have one active member and one alternate member of the Board of Directors and one effective member and one alternate member of the Saudi Finance Board. In addition, the documentation will ensure other inspection rights and access to information shared by minority shareholders in operations of this type, in line with best corporate governance practices.

The twelfth question: Are the so-called “political rights” expressly included in the contract so as not to raise doubts in the future?
They are already set at the required level of binding offer and will be further defined in future documents to be produced and signed, such as the Shareholders’ Agreement and the Investment Agreement.

Asset Transfer
Last update: 01/11/2022 – 21:27

Question 13. Will the CT only be assigned or will it be permanently transferred?
This point still depends on a specific format that is organized into the final documents. In any scenario, the right of use will be granted to the SAF.

proceeds
Last update: 01/11/2022 – 21:27

Question 14. What are the royalties to be paid monthly to Botafogo?
For the purpose of paying the club’s current liabilities, the SAF will have an obligation to transfer (i) 20% of its current monthly income and (ii) the amount needed to pay monthly taxes, social security obligations and BACEN. Not necessarily through an ownership structure.

performance and minimum budget
Last update: 01/11/2022 – 21:27

Question 15. What are the investment assumptions for professional football (eg, average Series A paper)? What happens after the seventh year?
Botafogo’s Professional Football Investment Assumptions are a business strategy and are therefore subject to a confidentiality clause. What we can say is that it’s a leaf that puts us on an interesting level. In business negotiations with the investor, it was possible to reach an agreement on fixing the readjustment ratios in this seven-year period. After this period, the SAF is expected to have an annual budget and paper in line with Serie A best practices for the national championship.

mutual rules
Last update: 01/11/2022 – 21:27

Question 16. For what will the 50 million Brazilian riyals loan be used?
Upon approval of the general meeting, a transition committee with representation from Botafogo and Eagle Holdings will be formed. This group will be responsible for determining the best destination for these resources. Part of this amount will be used to pay the club’s current expenses.

Question 17. If the transaction is not concluded, the loan expires immediately. How will the value be returned?
The club is obligated to repay the loan. As a guarantee of eventual non-payment, the investor will have the option of acquiring players from the club, taking into account the valuation value determined by an independent appraisal company.

Question 18. About a 50 million R$ loan: From what I understand it is a convertible loan, where Eagle Holdings will loan 50 million R$ to BFR and, confirming the assumptions in due diligence, convertible to 10% of the SAF, plus 80% Other than the contribution of the remaining 350 million riyals, correct?
shout out. Upon completion of the transaction, the loan will be settled against 10% of the SAF and 350 million R$ will be contributed against 80% of the fund, resulting in 90% for the investor and 10% for Botafogo.

mitigation rules
Last update: no questions about the topic