Stock Exchange Listing

Fibria has the highest standards of Corporate Governance, a condition required for a B3 or NYSE listing, and consequently its shares are listed in the B3 Novo Mercado (New Market) segment and in the Level III ADR program.

Novo Mercado B3

On may 20, 2010, Fibria moved to the Novo Mercado (NEW MARKET), the B3 (formerly BM&FBovespa) listing segment that requires the highest standard of Corporate Governance.

The Novo Mercado listing segment

Implemented in December 2000, the Novo Mercado (New Market) is a special listing segment that were developed with the aim of providing a trading environment that simultaneously stimulates the interest of investors and the appreciation of company value. Companies registered in this segment take on corporate governance commitments that go beyond the requirements of the current legislation.

Those commitments relate to the providing of information that facilitates the monitoring and oversight of the activities of the company's management and controlling shareholders, as well as the adopting of corporate rules that provide a better balance in the rights of all the shareholders, regardless of their status as controlling shareholder or investor. Improving the quality of information provided by the company and the corporate rights reduces the uncertainties in the appraisal and investment processes and, consequently, the risk to investors. 

Comparing the listing segments:

 

NEW MARKET

LEVEL 2 LEVEL 1 BOVESPA MAIS (BOVESPA MORE) TRADITIONAL
Characteristics of the shares issued Only allows common (ON) shares Allows both common (ON) and preferred (PN) stock (the latter granting extra rights) Allows both common (ON) and preferred (PN) stock (according to the prevailing legislation) Only allows common (ON) shares Allows both common (ON) and preferred (PN) stock (according to the prevailing legislation)
Minimum percentage of shares in circulation
(free float)
A minimum 25%  free float 25% free float up to the 7th year of listing No rule
Public share distribution Efforts to spread the share ownership No rule
Blocking of bylaw provisions
(as of May 10, 2011)
Limiting of voting rights for investors holding less than 5% of the share capital, special quorum and entrenched clauses No rule Special quorum and entrenched clauses No rule
Board of Directors membership Minimum of 5 members, of whom at least 20% must be independent, serving a term of up to 2 years Minimum of 3 members (according to the prevailing legislation)
Blocking of the accumulation of posts
(as of May 10, 2011)
Chair of the Board and CEO or managing director held by the same person (3-year grace period, from joining the Board) No rule
Board of Directors obligations
(as of May 10, 2011)
Formal declaration of any public offer to purchase company shares No rule
Financial Statements Translated into English According to the prevailing legislation
Annual public meeting (AGM) and calendar of corporate events Obligatory Optional
Calendar of corporate events Obligatory Optional
Additional disclosure of information
(as of May 10, 2011)
Trading policy for marketable securities and Code of Conduct Policy for trading in marketable securities No rule
Tag Along rights 100% for ON stock 100% for ON and PN stock (as of May 10, 2011) 80% for ON stock (according to the prevailing legislation) 100% for ON stock 80% for ON stock (according to the prevailing legislation)
Public offer for the purchasing of shares for no less than their economic value  Obligatory, in the event of delisting or leaving the segment According to the prevailing legislation Obligatory, in the event of delisting or leaving the segment According to the prevailing legislation
Joining the Market Arbitration Chamber (CAM) Obligatory Optional Obligatory Optional

NYSE Level III ADR Program

The company's shares are listed in the market segment for foreign share issuers that meet the highest standards of corporate governance in the US stock market - the New York Stock Exchange (NYSE) Level III ADR.

In April 2000, an offering was registered of 7,920,000 American Depositary Shares ("ADSs"), each representing 500 preferred shares in Votorantim Celulose e Papel S.A., and the corresponding American Depositary Receipts (ADRs), were listed on the New York Stock Exchange (NYSE) under the ticker symbol VCP. At the same time, 440,000,000 preferred shares were sold in Brazil. Due to the change in the name of Votorantim Celulose e Papel S.A. to Fibria Celulose S.A., followed by the merger of Aracruz Celulose S.A., as of November 2009, the symbol was changed from "VCP" to "FBR".

In March 2012, the company initiated a primary public offering for distribution of common shares (Follow on), including ADSs, represented by ADRs, to take place simultaneously in Brazil, through the non-organized over-the-counter market (Brazilian Offering), and abroad (International Offering) - together referred to as the Global Offering. The ADSs issuance, represented by ADRs, within the context of the International Offering, represented approximately 14% of the total common shares issued by the company.

Types of ADRs

The following table summarizes the types of American Depositary Receipt programs and the associated filings required by the SEC.

Type of Program Description SEC Filing required Capital Raising
Level I ADRs traded on the US OTC market, using existing shares. Company forms contractual relationship with single depositary bank Form F-6 (filed by depositary bank 
and company, 
12g3-2(b) exemption
No
Level II ADRs listed on a recognized US exchange (NYSE or NASDAQ), using existing shares Form F-6, Form 20-F No
Level III ADRs initially placed with US investors and listed on a recognized US exchange (NYSE or NASDAQ) Form F-6, Form 20-F, Form F-1 Yes
Level I ADR program

A Level I ADR program is the simplest way for a company to sponsor an ADR facility.  The ADR program is initiated by the company and involves the filing of a F-6 registration statement, but allows for exemption under Rule 12g3-2(b) from full SEC reporting requirements.  The company has a degree of control over the ADRs issued under a sponsored Level I program, since a deposit agreement is executed between the company and one selected depositary bank.  Level I ADRs can only be traded on the OTC market and not on a US stock exchange.

Level II ADR program

A Level II ADR must comply with the SEC's full registration and reporting requirements.  In addition to filing an F-6 registration statement, the company is also required to file SEC Form 20-F and to comply with the SEC's other disclosure rules, including submission of its annual report which must be prepared in accordance with US Generally Accepted Accounting Principles (US GAAP) or International Financial Reporting Standards (IFRS). Compliance with Sarbanes-Oxley is required, including certifications by management regarding the effectiveness of the company's internal controls over financial reporting and disclosure controls and procedures related to annual reports filed on Form 20-F.

Registration allows the issuer to list its ADRs on a major US stock exchange, namely the New York Stock Exchange (NYSE Euronext) or NASDAQ Stock Market, each of which has further reporting and disclosure requirements.

Level II sponsored programs are initiated by non-US companies to give US investors access to their stock in the US.  As with a Level I program, a depositary agreement is signed between the issuer and a depositary bank.  The agreement defines the responsibilities of the depositary, which usually include extending corporate actions to ADR holders, mailing annual reports and other important material to shareholders and maintaining shareholder records. A Level II allows the company's ADRs to have greater visibility in the US but without raising capital.

Level III ADR program

Level III sponsored ADRs are similar to Level II ADRs in that the issuer initiates the program, deals with one depositary bank, lists on a major US exchange, and fully complies with SEC reporting requirements.  The major difference is that a Level III program allows the issuer to raise capital through a public offering of ADRs in the US and this requires the issuer to submit a Form F-1 registration statement to the SEC.

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