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sale proceeds, IFC would purchase, for U.S. dollars outside of
Brazil, MOIL's share holding in MRC equal to MOIL's remittance
interest, up to $12.5 million. This guaranty would be reduced by
any earlier sale or disposition of any part of the shares and would
apply only during the convertibility period (the 18-month period
beginning on the 12th anniversary of the PCC purchase).
(Petitioner's blocked deposits at the Central Bank had no such
guaranty.)
Following the debt-equity transaction, IKPC held 70.842
percent of PCC's voting capital, and MRC and Balmoral each held
14.361 percent. The three parties entered into a Shareholders
Agreement on April 30, 1987, whereby IKPC and Balmoral had a right
of first refusal with respect to the sale of petitioner's PCC
stock.
Due to the manner in which petitioner arranged the
transaction, it could sell its investment indirectly, through the
sale of MOIL, at any time and without restriction, for U.S. dollars
outside Brazil. The buyer would have to maintain the invested
funds in Brazil for whatever portion of the 12-year waiting period
remained, but it would be free to dispose of the investment
indirectly, in the same manner as petitioner. Moreover, petitioner
could dispose of the investment by causing MOIL to sell the stock
of MRC, without restriction, to a buyer in Brazil for cruzados.
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