UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN ISSUER
PURSUANT
TO RULE 13a-16 OR 15b-16 OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the month of October 2017
Commission
File Number 001-35591
GRAÑA Y MONTERO S.A.A.
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(Exact name of registrant as specified in its charter)
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GRAÑA Y MONTERO GROUP
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(Translation of registrant’s name into English)
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Republic of Peru
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(Jurisdiction of incorporation or organization)
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Avenida Paseo de la República 4667, Lima 34,
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Surquillo, Lima
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Peru
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(Address of principal executive offices)
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Indicate by
check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F
__X__ Form 40-F ______
Indicate by
check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by
check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by
check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934.
Yes
______ No __X__
If "Yes" is
marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): Not applicable.
October 25, 2017
Messrs.,
Superintendencia del Mercado de Valores – SMV
Present.
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Reference: Official Letter No. 7086-2017-SMV/11.1
Dear Sirs:
Hereby, we answer the Official Letter of the reference (the Official
Letter) by which we are requested more precisions regarding the Relevant
Information Communication of October 11, 2017 with respect to the
existence of an agreement adopted by the shareholders of GSP, which
among others things, made it possible to sign the document of delivery
of the concession assets to the Ministry of Energy and Mines.
In that sense, we then proceed to answer your questions in the same
order in which they were formulated:
1.
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Specify the positions taken by each of the parties that have
signed the Delivery Agreement in relation to the regime applicable
to the termination of the concession, indicating in a clear and
detailed manner the differences between the parties, which are
referred to in the Relevant Information Communication of October
11, 2017.
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Regarding the discrepancy with the Government mentioned in the
aforementioned Relevant Information Communication, GSP's position is
that upon termination of the Concession, clause 20 of the Concession
Agreement is applicable. This clause regulates the procedure for the
valuation of assets of the concession, as well as the payment of said
value to the concessionaire (GSP) and other steps that must be adopted
when the Concession Termination occurs.
GSP maintains this position; however, the Government has stated that,
according to its understanding, clause 20 does not apply to this case of
Termination of the Concession, without specifying under what terms it
would be regulated.
In this sense, the signing of the delivery document has taken place,
making a record of this discrepancy, which, if it persists, will have to
be determined in an arbitration process. In fact, the second clause of
the delivery agreement signed with the Ministry of Energy and Mines
expressly states that the parties hold different positions with respect
to the regime applicable to the Termination of the Concession and that
the signing of the document does not imply that the parties in any way
renounce to their position or recognition of the position of the other
party.
What the parties express in the second clause of the Delivery Agreement
is an express statement that GSP has not succumbed into the position of
the Government, since it is stated that each party maintains its
position. The news published in the Newspaper “Gestión” on October 13,
2017, which are alluded to in the Official Letter are inaccurate.
2.
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Clarify if the information presented in the Relevant
Information Communication of January 24 and 27, 2017 regarding the
recovery of the commitments assumed in the GSP PROJECT, estimated
by GRAÑA Y MONTERO, remain in force or have undergone some
modification. In this regard, indicate expressly whether it is
still estimated to recover the following:
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a.
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The amount of USD 220 million from the USD 241 million
corresponding to equity investments made in the GSP PROJECT.
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b.
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The total amount of US $ 52.5 million corresponding to the
performance guarantee to the Government assumed by GRAÑA Y MONTERO.
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c.
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The total amount of USD 129 MM corresponding to the corporate
guarantee, assumed by GRAÑA Y MONTERO in favor of the syndicate of
banks that granted the bridge loan of the GSP PROJECT.
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As we indicated in the Relevant Information Communication of January 24
and 27, 2017, the recovery projections were made with the information
available to us at that time. In that sense, it is clear that the
Government's position on the application of clause 20 of the Concession
Contract referred to in our response to question 1 of the Official
Letter, constitutes information with which we did not count on the dates
in which we communicated the Relevant Information Communications
indicated.
Indeed, we firmly believe in the legal arguments supporting the
application of clause 20 for the Termination of the Concession on which
the Company has made its projections, but taking into account what the
Government has stated and in the context of a potential controversy, it
is foreseeable that the time for recovery of the investment, and
eventually the amount of the investment, should be corrected, which
could have an impact on the financial statements of the Company. The
company has initiated a legal, financial and accounting analysis to
determine, based on the different positions, the best estimates within
the multiple scenarios of settlement of this controversy. When the
complex analysis concludes, which we estimate will be in the first two
weeks of December of the current year, the result will be communicated
to the market through a Relevant Information Communication.
Notwithstanding the foregoing, it should be noted that the agreement
signed between the shareholders of GSP (the Agreement) does not alter
the estimate of recovery of the indicated concepts. The foregoing is
based on the fact that the Agreement states that the Odebrecht group
will have the right to collect, as a GSP creditor, the amounts that it
has paid, on behalf of GSP as of January 24, 2017, to the bridge loan
banks and to Chubb Insurance Company (issuer of the performance
guarantee in favor of the Government under the Concession Agreement) at
the same opportunity as the other shareholders. To the extent that these
amounts constituted debt of GSP (and therefore had to be paid before
returning the investment to its shareholders), the granting of such
right has a neutral effect in the analysis of the recovery of the
investment made by Graña and Montero in GSP with respect to the concepts
indicated in sections b) and c) of question 2) of the Official Letter.
This Agreement is limited to the indicated credit owed, so it does not
include, among others, the accounts receivable that the Odebrecht Group
has as a shareholder of GSP (credit owed that remains subordinated).
Consequently, the Agreement does not affect the estimates of recovery of
the equity contributions indicated in section a) of question 2) of the
Official Letter.
3.
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Indicate if GRAÑA Y MONTERO still estimates that the impacts of
the cancellation of the GSP PROJECT amount to a total of USD 38 MM
after taxes under the scenario of the minimum payment of 72.25% of
the VCN.
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Knowing the position of the Government in the sense of not applying
clause 20, we are currently focused on determining the impacts that the
cancellation of the GSP PROJECT will have on the financial statements of
Graña y Montero S.A.A. in GSP as indicated in the answer to question 2
of the Official Letter.
Without prejudice to this, in the next Board of Directors of the
Company, which will take place on October 30, 2017, we will present an
evaluation of the unaudited financial statements as of December 31,
2016. Once the Board of Directors has pronounced on these financial
statements, we will proceed to inform according to law.
4.
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Explain, in detail, the agreement that allows Odebrecht to
recover the amount that it effectively pays to GSP's financial
creditors, under the same conditions as the other shareholders.
Likewise, clarify if said agreement is in accordance with what was
informed by its representative in the Relevant Information
Communication of January 27, 2017, in which GRAÑA Y MONTERO
informed that it signed and adopted agreements with the other
shareholders of GSP in which it was established certain priority
of payments with respect to certain credits of the shareholders of
the company, which would benefit, among others, GRAÑA Y MONTERO.
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As stated in response 2 above, the Agreement enables the Odebrecht group
to recover the payments mad on behalf of GSP to the banks that granted
the bridge loan to GSP and Chubb Insurance Company under the same
conditions as the other shareholders. This agreement has a neutral
effect on the recovery of the same concepts by the Graña and Montero
Group, as they were payments that GSP had to make to the aforementioned
financial creditors. On the other hand, as already indicated, the
Agreement does not alter the preferential recovery that Graña y Montero
Group will have with respect to the Odebrecht group in relation to the
equity investment.
In conclusion, although the Agreement allows Odebrecht to recover at the
same time as the other shareholders the payments made to the indicated
creditors, the Agreement does not affect the analysis of the final
recovery referred to in the Relevant Information Communications of the
24 and 27 January 2017.
Sincerely,
____________________
/s/ Claudia Drago Morante
Stock Market
Representative
Graña y Montero S.A.A.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GRAÑA Y MONTERO S.A.A.
By: /s/ CLAUDIA DRAGO MORANTE
Name: Claudia Drago Morante
Title:
Stock Market Representative
Date: October 25, 2017
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