BHG Announces Stock Increase

USA - English

• Latin America - español

SAO PAULO, Feb. 8, 2011 /PRNewswire/ -- BHG S.A. – Brazil Hospitality Group ((BM&FBOVESPA: BHGR3) announced an increase of the company's capital stock from its current R$ 640,774,770.16, to R$ 725,774,759.16. The R$ 84,999,989.00 increase is within the limit of the authorized capital, which is up to R$ 1,500,000,000.00 (one billion five hundred million reais), and was approved at a Board of Directors meeting held on February 4, 2011.

The stock increase will be carried out through the issue of 4,594,594 new common shares, nominative and without face value, at a price of R$18.50 per share, based on the average closing price of the last 10 trading sessions of the BM&FBOVESPA (Bolsa de Valores, Mercadorias e Futuros de Sao Paulo) securities exchange, including a premium of 0.2%, pursuant to the terms of section III of paragraph 1 of Article 170 of Law no. 6.404, dated December 15, 1976 ("Corporation Law").

BHG has released a Notice to the Shareholders with the required information for any current shareholders who may be interested in exercising their right to subscribe to new shares. Shareholders have 30 (thirty) days, starting from February 9, 2011, to exercise a preemptive right to purchase shares on the conditions set forth in the aforementioned notice. Moreover, the allocation of any unsubscribed shares will be allowed for investors exercising a preemptive right to subscribe to new shares. Shares purchased after February 7, 2011, will no longer be subject to the preemptive right to subscribe to new shares. Each share of the Company stock will entitle the holder to 0.129215922 of preemptive rights.  

BHG and its shareholders Latin America Hotels LLC, Euroamerican Finance S.A., Euroamerican Finance S.A. – Bradesco S.A. CTVM and GPCP4 – Fundo de Investimento em Participacoes (the "Assigning Shareholders") entered into a subscription agreements on February 2 and 3, 2011, with vehicle companies and/or funds managed by the groups Leblon Equities Gestao de Recursos Ltda., Rreef America L.L.C. and Manulife Asset Management (U.S.) LLC (the "Investors"). The Investors will acquire an interest in the company through the stock increase and issue of new shares, being guaranteed the right to subscribe to 59.70% of the shares in the stock increase, granted to the Investors by the Assigning Shareholders. Moreover, the Investors agree in their subscription agreements to subscribe to additional shares in addition to those guaranteed by the assignment of preemptive rights through the reserve of unsubscribed shares, in the event that there are remaining unsubscribed shares. Thus, the Investors are committed to subscribing to 75% of the stock increase.  

"This operation is strategic for the growth of BHG. We have a number of opportunities for purchasing and developing hotels, and the resources of this operation will finance the expansion of our network.  Furthermore, the caliber of investors who are contributing resources to the company shows that we are on the right path," notes Pieter J. F. van Voorst Vader, CEO of BHG S.A. – Brazil Hospitality Group.

The Investors will not become part of the controlling shareholders of the Company by subscribing to the shares that will be issued, considering that there is no shareholders' agreement or other voting agreement or stock transfer agreement between the current controlling shareholders and the Investors.  

Who We Are:

BHG S.A. – Brazil Hospitality Group is one of the leading hotel companies in Brazil, and the hotels it owns and manages are divided into categories of 3, 4 and 5 stars.  The company is responsible for the Golden Tulip brand in South America.  

BHG is a public company, with its shares traded on the Bovespa's Novo Mercado.

SOURCE BHG S.A. - Brazil Hospitality Group

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