Presidential decree authorizes capital increase of Banco da Amazônia

The President of the Republic, Jair Bolsonaro (PL), authorized the capital increase of Banco da Amazônia SA (Basa) in the amount of up to R$ 1 billion, to be transferred by the Union. Official Gazette of the Union (DOU).

The act authorizes the Federal Government to subscribe new registered and book-entry common shares, without par value, in proportion to their participation in the company’s capital stock, after approval of the capital increase by the general shareholders’ meeting.

It also gives guarantees to the Federal Government to subscribe for shares, in proportion to the participation of minority shareholders, in the event that they do not exercise their preemptive right within the period established by the general shareholders’ meeting, which cannot be less than 30 days.

According to the General Secretariat of the Presidency, the authorization for the Union to subscribe shares in the capital stock of Basa “results from the need to ensure the framework of the federal financial institution in the rules of the Basel Accord, in view of the determination of the Court of Auditors of the Union (TCU) for the Bank to return to the Union the amounts received through the issuance of government bonds referring to the execution of an Instrument Eligible for Principal Capital (IECP)”.

According to the decree, the amount of up to R$ 1 billion must be updated by the reference rate of the Special System for Settlement and Custody (Selic) at the time of subscription.

“It is noteworthy that the authorization will not have an impact on the Federal Government’s primary result”, says the General Secretariat.