0000950136-01-501420.txt : 20011009
0000950136-01-501420.hdr.sgml : 20011009
ACCESSION NUMBER: 0000950136-01-501420
CONFORMED SUBMISSION TYPE: SC TO-T
PUBLIC DOCUMENT COUNT: 9
FILED AS OF DATE: 20010925
GROUP MEMBERS: AES CHANNON HOLDINGS B.V.
GROUP MEMBERS: AES CORPORATION
GROUP MEMBERS: CORPORACION EDC, C.A.
GROUP MEMBERS: INVERSIONES INEXTEL, C.A.
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: AES CORPORATION
CENTRAL INDEX KEY: 0000874761
STANDARD INDUSTRIAL CLASSIFICATION: COGENERATION SERVICES & SMALL POWER PRODUCERS [4991]
IRS NUMBER: 541163725
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC TO-T
BUSINESS ADDRESS:
STREET 1: 1001 N 19TH ST
STREET 2: STE 2000
CITY: ARLINGTON
STATE: VA
ZIP: 22209
BUSINESS PHONE: 7035221315
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: NATIONAL TELEPHONE CO OF VENEZUELA
CENTRAL INDEX KEY: 0001025862
STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
IRS NUMBER: 000000000
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC TO-T
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-47557
FILM NUMBER: 1744283
BUSINESS ADDRESS:
STREET 1: EDIFICIO CANT PRIMER PISO
STREET 2: AVENIDA LIBERTADOR
CITY: CARACAS VENEZUELA
STATE: X5
BUSINESS PHONE: 5825006800
MAIL ADDRESS:
STREET 1: MILBANK TWEED HADLEY & MCCLOY
STREET 2: 1 CHASE MANHATTAN PLAZA
CITY: NEW YORK
STATE: NY
ZIP: 10005
SC TO-T
1
file001.txt
SCHEDULE TO-T; AMENDMENT NO. 2 TO SCHEDULE 13D
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------
SCHEDULE TO
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION
14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 2)
-------------
COMPANIA ANONIMA NACIONAL TELEFONOS DE VENEZUELA (CANTV)
--------------------------------------------------------------------------------
(Name of Subject Company (Issuer))
NATIONAL TELEPHONE COMPANY OF VENEZUELA (CANTV)
--------------------------------------------------------------------------------
(Translation of Name of Issuer Into English)
AES COMUNICACIONES DE VENEZUELA, C.A.
a company jointly owned by
The AES Corporation
and
Corporacion EDC, C.A.
--------------------------------------------------------------------------------
(Name of Filing Persons (Offerors))
AMERICAN DEPOSITARY SHARES
(EACH REPRESENTING 7 SHARES OF CLASS D COMMON STOCK,
NOMINAL VALUE BS. 36.90182224915 PER SHARE)
--------------------------------------------------------------------------------
(Title of Class of Securities)
204421101 (ADSs)
--------------------------------------------------------------------------------
(CUSIP Number)
Barry J. Sharp, Senior Vice President and Chief Financial Officer,
The AES Corporation, 1001 North 19th Street Arlington,
Virginia 22209; Tel: (703) 522-1315
Copy to:
Michael E. Gizang, Skadden, Arps, Slate, Meagher & Flom LLP,
Four Times Square, New York, NY 10036; Tel: (212) 735-2704
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
CALCULATION OF FILING FEE
--------------------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee
$685,606,656(1) $137,121.33 (2)
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
(1) The transaction value is calculated by multiplying the amount of ADSs
being sought by the offeror, 28,566,944, by the offer price per ADS, $24.00.
(2) The amount of filing fee is calculated by multiplying the transaction
valuation, $685,606,656, by 0.0002 pursuant to Rule 0-11(d) under the Exchange
Act of 1934, as amended.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
---------------- ---------------
Form or Registration No.: N/A Date Filed: N/A
---------------- ---------------
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[X] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
2
--------------------------------------------------------------------------------
CUSIP NO. P3055Q103 (Class D Shares) 13D PAGE 3
204421101 (ADSs)
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
The AES Corporation
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO, AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER Class D Shares: 64,000,524
NUMBER OF ADSs: 1,000
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER Class D Shares: None
OWNED BY ADSs: None
REPORTING -----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER Class D Shares: 64,000,524
ADSs: 1,000
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER Class D Shares: None
ADSs: None
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Class D Shares: 64,000,524
ADSs: 1,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.6% (the 64,000,524 Class D Shares and 1,000 ADSs represent
approximately 14.6% of the total Class D Shares outstanding (including
Class D Shares represented by ADSs)). See Item 5 of Schedule 13-D filed
with the Securities and Exchange Commission on July 3, 2001.
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
HC
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
CUSIP NO.P3055Q103 (Class D Shares) 13D PAGE 4
204421101 (ADSs)
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
AES Channon Holdings B.V.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO, AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
The Netherlands
--------------------------------------------------------------------------------
7 SOLE VOTING POWER Class D Shares: 64,000,524
NUMBER OF ADSs: 1,000
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER Class D Shares: None
OWNED BY ADSs: None
REPORTING -----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER Class D Shares: 64,000,524
ADSs: 1,000
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER Class D Shares: None
ADSs: None
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Class D Shares: 64,000,524
ADSs: 1,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.6% (the 64,000,524 Class D Shares and 1,000 ADSs represent
approximately 14.6% of the total Class D Shares outstanding (including
Class D Shares represented by ADSs)). See Item 5 of Schedule 13-D filed
with the Securities and Exchange Commission on July 3, 2001.
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
CUSIP NO. P3055Q103 (Class D Shares) 13D PAGE 5
204421101 (ADSs)
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Corporacion EDC, C.A.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Venezuela
--------------------------------------------------------------------------------
7 SOLE VOTING POWER Class D Shares: 64,000,524
NUMBER OF ADSs: 1,000
SHARES ------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER Class D Shares: None
OWNED BY ADSs: None
REPORTING ------------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER Class D Shares: 64,000,524
ADSs: 1,000
------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER Class D Shares: None
ADSs: None
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Class D Shares: 64,000,524
ADSs: 1,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.6% (the 64,000,524 Class D Shares and 1,000 ADSs represent
approximately 14.6% of the total Class D Shares outstanding (including
Class D Shares represented by ADSs)). See Item 5 of Schedule 13-D filed
with the Securities and Exchange Commission on July 3, 2001.
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
CUSIP NO.P3055Q103 (Class D Shares) 13D PAGE 6
204421101 (ADSs)
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Inversiones Inextel, C.A.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Venezuela
--------------------------------------------------------------------------------
7 SOLE VOTING POWER Class D Shares: 63,999,524
NUMBER OF ADSs: None
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER Class D Shares: None
OWNED BY ADSs: None
REPORTING -----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER Class D Shares: 63,999,524
ADSs: None
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER Class D Shares: None
ADSs: None
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Class D Shares: 63,999,524
ADSs: None
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.6% (the 63,999,524 Class D Shares represent approximately 14.6% of the
total Class D Shares outstanding (including Class D Shares represented by
ADSs)). See Item 5 of Schedule 13-D filed with the Securities and
Exchange Commission on July 3, 2001.
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
6
--------------------------------------------------------------------------------
CUSIP NO.P3055Q103 (Class D Shares) 13D PAGE 7
204421101 (ADSs)
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
AES Comunicaciones de Venezuela, C.A.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Venezuela
--------------------------------------------------------------------------------
7 SOLE VOTING POWER Class D Shares: 1,000
NUMBER OF ADSs: 1,000
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER Class D Shares: None
OWNED BY ADSs: None
REPORTING -----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER Class D Shares: 1,000
ADSs: 1,000
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER Class D Shares: None
ADSs: None
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Class D Shares: 1,000
ADSs: 1,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 0.1% (the 1,000 Class D Shares and 1,000 ADSs represent less
than 0.1% of the total Class D Shares outstanding (including Class D
Shares represented by ADSs)). See Item 5 of Schedule 13-D filed with the
Securities and Exchange Commission on July 3, 2001.
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
7
THE INFORMATION IN THE U.S. OFFER TO PURCHASE AND THE RELATED ADS LETTER OF
TRANSMITTAL IS INCORPORATED HEREIN BY REFERENCE IN RESPONSE TO ITEMS 1-11 OF
SCHEDULE TO.
ITEM 4. TERMS OF THE TRANSACTION
(a)(1)(x)-(xi) Not applicable.
(a)(2) Not applicable.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Purchaser currently does not have any alternative financing
arrangements or plans to those set forth in the U.S. Offer to Purchase.
ITEM 10. FINANCIAL STATEMENTS
(a) Not applicable.
(b) Not applicable.
ITEM 12. EXHIBITS
(a)(1) A. U.S. Offer to Purchase dated September 25, 2001
B. ADS Letter of Transmittal
C. Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9
D. Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees for ADSs
E. Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees for ADSs
F. Notice of Guaranteed Delivery
G. Text of press release announcing intention to commence the U.S.
and Venezuelan offers, dated August 29, 2001 (incorporated by
reference to Schedule TO filed on August 30, 2001)
H. Summary Advertisement as published in The New York Times on
September 25, 2001
I. Text of press release announcing commencement of U.S. and
Venezuelan offers, dated September 25, 2001
8
(a)(2)-(5) Not applicable.
(b) None
(d) Association Agreement, dated as of August 1, 1991, as amended,
among GTE Corporation, T.I. Telefonica de Espana, S.A., AT&T
International Inc., C.A. La Electricidad de Caracas, S.A.I.C.A.-S.
A.C.A and Consorcio Inversionista Mercantil Cima, C.A., S.A.C.A.,
S.A.I.C.A (incorporated by reference to Schedule 13D filed by AES
on July 3, 2001)
(g)-(h) None
9
SIGNATURES
After due injury and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Date: September 25, 2001 AES Comunicaciones de Venezuela, C.A.
/s/ Paul Hanrahan
----------------------------
Name: Paul Hanrahan
Title: Director
Date: September 25, 2001 The AES Corporation
/s/ Paul Hanrahan
----------------------------
Name: Paul Hanrahan
Title: Executive Vice President
Date: September 25, 2001 Corporacion EDC, C.A.
/s/ Paul Hanrahan
----------------------------
Name: Paul Hanrahan
Title: Director
ADDITIONAL SIGNATURES FOR AMENDMENT TO SCHEDULE 13D
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement as it applies to an
amendment to the Schedule 13D filed with the Securities and Exchange Commission
on July 3, 2001, as amended, is true, complete and correct.
Date: September 25, 2001 AES Channon Holdings B.V.
/s/ Steven P. Clancy
--------------------------------
Name: Steven P. Clancy
Title: Director
Date: September 25, 2001 Inversiones Inextel, C.A.
/s/ Steven P. Clancy
--------------------------------
Name: Steven P. Clancy
Title: Director
EX-99.(A)(1)(A)
3
file002.txt
U.S. OFFER TO PURCHASE
Exhibit (a)(1)(A)
U.S. OFFER TO PURCHASE FOR CASH
28,566,944 AMERICAN DEPOSITARY SHARES
REPRESENTING IN THE AGGREGATE 199,968,608 CLASS D SHARES OF COMMON STOCK
OF
COMPANIA ANONIMA NACIONAL TELEFONOS DE VENEZUELA (CANTV)
FOR
$24.00 PER AMERICAN DEPOSITARY SHARE
(EACH AMERICAN DEPOSITARY SHARE REPRESENTING SEVEN CLASS D SHARES
OF COMMON STOCK OF CANTV)
BY
AES COMUNICACIONES DE VENEZUELA, C.A.,
A COMPANY JOINTLY OWNED BY
THE AES CORPORATION
AND
CORPORACION EDC, C.A.
THE U.S. OFFER, PRORATION PERIOD
AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. NEW YORK
CITY TIME, ON MONDAY, OCTOBER 29, 2001 UNLESS THE U.S. OFFER IS EXTENDED.
THIS OFFER (THE "U.S. OFFER") IS CONDITIONED UPON, AMONG OTHER THINGS, THE
SUM OF (X) THE NUMBER OF SHARES OF CANTV COMMON STOCK (INCLUDING CLASS D SHARES
REPRESENTED BY AMERICAN DEPOSITARY SHARES) HELD DIRECTLY OR INDIRECTLY BY THE
AES CORPORATION (INCLUDING CLASS D SHARES HELD THROUGH CORPORACION EDC, C.A.),
(Y) THE NUMBER OF CLASS D SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES
VALIDLY TENDERED AND NOT WITHDRAWN ON OR PRIOR TO THE EXPIRATION DATE OF, AND
TO BE PURCHASED PURSUANT TO, THE U.S. OFFER AND (Z) THE NUMBER OF CANTV SHARES
VALIDLY TENDERED AND NOT WITHDRAWN ON OR PRIOR TO THE EXPIRATION DATE OF, AND
TO BE PURCHASED PURSUANT TO, THE VENEZUELAN OFFER, REPRESENTING AT LEAST A
MAJORITY OF THE OUTSTANDING SHARES OF CAPITAL STOCK OF CANTV. THE U.S. OFFER IS
SUBJECT TO OTHER CONDITIONS. SEE SECTION 15.
The U.S. Offer is open to all holders of American Depositary Shares
("ADSs") of Compania Anonima Nacional Telefonos de Venezuela (CANTV), a company
(compania anonima) incorporated under the laws of Venezuela ("CANTV"). Tenders
of CANTV shares are not being accepted pursuant to the U.S. Offer. Holders of
Class D Shares (being the only class of CANTV shares underlying the ADSs) may
deposit their Class D Shares with The Bank of New York (the "Depositary") and
receive ADSs for such Class D Shares pursuant to the Amended and Restated
Deposit Agreement, dated September 10, 2000, among CANTV, the Depositary and
holders from time to time of American Depositary Receipts ("ADRs") issued
thereunder (the "Deposit Agreement"). The ADSs may then be tendered pursuant to
the U.S. Offer. As used in this U.S. Offer to Purchase, "Class D Shares" means
the Class D shares of common stock of CANTV.
The U.S. Offer is being made in conjunction with an offer in Venezuela
(the "Venezuelan Offer" and, together with the U.S. Offer, the "Offers") by the
Purchaser to purchase 199,968,608 CANTV shares at $3.4285714 per share (the
price being paid pursuant to the U.S. Offer, taking into account the number of
Class D Shares represented by each ADS). In the event that the price per share
pursuant to the Venezuelan Offer is increased, the Purchaser intends to make a
corresponding increase to the price to be paid per ADS pursuant to the U.S.
Offer, taking into account the number of Class D Shares represented by each
ADS.
------------
THE DEALER MANAGER FOR THE U.S. OFFER IS:
JPMORGAN [logo]
THE FINANCIAL ADVISORS FOR THE U.S. OFFER ARE:
JPMORGAN [Logo] CREDIT SUISSE FIRST BOSTON [Logo] [Logo] BANC OF AMERICA SECURITES
September 25, 2001
IMPORTANT
TENDERS BY HOLDERS OF ADSS
Any holder of ADSs desiring to tender all or any portion of such holder's
ADSs should either (1) complete and sign the ADS Letter of Transmittal (or a
copy thereof) in accordance with the instructions in the ADS Letter of
Transmittal and mail or deliver the ADS Letter of Transmittal, together with
the ADRs representing tendered ADSs and all other required documents to Mellon
Investors Services LLC (the "U.S. Receiving Agent"), or tender such ADSs
pursuant to the procedures for book-entry transfer set forth in Section 3, or
(2) request his or her broker, dealer, commercial bank, trust company or other
nominee to effect the transaction. A holder having ADSs registered in the name
of a broker, dealer, commercial bank, trust company or other nominee must
contact such person if he or she desires to tender such ADSs. Any holder of
ADSs who desires to tender ADSs and whose ADRs representing such ADSs are not
immediately available and cannot deliver such ADRs and all other required
documents to the U.S. Receiving Agent prior to the expiration of the U.S. Offer
or who cannot comply with the procedures for book-entry transfer on a timely
basis must tender such ADSs pursuant to the guaranteed delivery procedure set
forth in Section 3.
PRORATION
The number of ADSs available for tender into the U.S. Offer is subject to
fluctuation, on a daily basis, based on deposits and withdrawals of Class D
Shares with or from the Depositary. Pursuant to the Deposit Agreement, upon a
deposit of Class D Shares the number of outstanding ADSs is increased; upon a
withdrawal of Class D Shares the number of outstanding ADSs is decreased.
Proration in the U.S. Offer may be adversely affected to the extent that
additional Class D Shares are deposited pursuant to the Deposit Agreement and
the ADSs issued on such deposit are tendered in the U.S. Offer. Similarly,
proration in the Venezuelan Offer may be adversely affected to the extent that
Class D Shares are withdrawn from the Depositary pursuant to the Deposit
Agreement and are tendered in the Venezuelan Offer. The number of outstanding
Class D Shares is also subject to increase as a result of the conversion of
other classes of capital stock of CANTV into Class D Shares. See Section 7.
ASSISTANCE
For assistance in connection with the U.S. Offer, please contact D.F. King
& Co., Inc. (the "Information Agent") or J.P. Morgan Securities Inc. (the
"Dealer Manager") at their respective addresses and telephone numbers set forth
on the back cover of this U.S. Offer to Purchase. Additional copies of this
U.S. Offer to Purchase, the ADS Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent, brokers,
dealers, commercial banks, trust companies or other nominees.
TABLE OF CONTENTS
PAGE
-----
SUMMARY TERM SHEET ....................................................................... 1
INTRODUCTION ............................................................................. 9
EXEMPTION REQUESTED FROM THE SECURITIES AND EXCHANGE
COMMISSION .............................................................................. 13
EXPLANATORY NOTES ........................................................................ 14
FORWARD-LOOKING STATEMENTS ............................................................... 14
THE U.S. OFFER ........................................................................... 15
1. Terms of the U.S. Offer; Expiration Date ............................................ 15
2. Acceptance for Payment .............................................................. 17
3. Procedure for Tendering ADSs in the U.S. Offer ...................................... 17
4. Withdrawal Rights ................................................................... 21
5. Certain Tax Considerations .......................................................... 21
6. Price Range of ADSs and Class D Shares; Dividends ................................... 23
7. Information Concerning CANTV ........................................................ 24
8. Information Concerning AES, CEDC and the Purchaser .................................. 31
9. Source and Amount of Funds .......................................................... 36
10. Background to the Offers; Past Contacts, Transactions, Negotiations and Agreements .. 36
11. Purpose of the Offers; Plans for CANTV .............................................. 37
12. Effect of the Offers on the Market for the ADSs and Class D Shares .................. 41
13. Extension of Tender Period; Termination, Amendment .................................. 42
14. Changes in CANTV Capital Structure; Dividends and Distributions ..................... 43
15. Conditions of the U.S. Offer ........................................................ 44
16. Legal Matters; Regulatory Approvals ................................................. 49
17. Fees and Expenses ................................................................... 50
18. Miscellaneous ....................................................................... 51
SCHEDULE I--INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF AES, CEDC AND THE PURCHASER ................................................. S-1
SUMMARY TERM SHEET
AES Comunicaciones de Venezuela, C.A., the purchaser (Purchaser) in this
U.S. offer, is offering to purchase for cash pursuant to this U.S. offer an
aggregate of 28,566,944 American Depositary Shares, or ADSs, of Compania
Anonima Nacional Telefonos de Venezuela (CANTV). The Purchaser is a company
jointly owned by The AES Corporation (AES) and Corporacion EDC, C.A. (CEDC).
AES owns approximately 87% of the outstanding ordinary shares of CEDC. The
Purchaser is also offering pursuant to a contemporaneous offer in Venezuela to
purchase an aggregate of 199,968,608 shares of common stock of CANTV.
The capital stock of CANTV is divided into four classes of shares of
common voting stock: Class A shares, Class B shares, Class C shares and Class D
shares. Class D shares are publicly traded and listed on the Caracas Stock
Exchange and are the only class of shares of CANTV underlying the ADSs. Class A
shares, Class B shares and Class C shares are not publicly traded or listed on
any stock exchange. See Section 7 for a description of the holders of Class A,
Class B and Class C shares. In general, on a transfer of Class A shares, Class
B shares or Class C shares to a person not specified in CANTV's Bylaws as
eligible to hold such shares, the transferred Class A, Class B or Class C
shares automatically convert into Class D shares.
Based on CANTV's report on Form 6-K filed with the Securities and Exchange
Commission, or SEC, on August 22, 2001, the ADSs and CANTV shares sought in
this U.S. offer and the Venezuelan offer, together with the CANTV shares and
ADSs currently owned by AES through CEDC, represent a majority of the
outstanding shares of capital stock of CANTV.
The following are some of the questions that you as a holder of ADSs may
have and answers to those questions. The information in this summary is not
complete and we urge you to read carefully the remainder of this U.S. Offer to
Purchase and the accompanying ADS Letter of Transmittal.
WHO IS OFFERING TO BUY MY ADSs?
The Purchaser is AES Comunicaciones de Venezuela, C.A., formerly
Inversiones D72410 C.A. The Purchaser is a newly formed company (compania
anonima) incorporated under the laws of Venezuela, organized to facilitate this
U.S. offer and the Venezuelan offer and has not carried on any activities other
than in connection with this U.S. offer and the Venezuelan offer. Over
two-thirds of the Purchaser's capital stock is owned by an indirect wholly
owned subsidiary of AES; the remaining capital stock of the Purchaser is owned
indirectly by CEDC. The Purchaser currently owns 1,000 Class D shares and 1,000
ADSs, representing less than 0.1% of the outstanding capital stock of CANTV. In
addition, AES, through CEDC, currently owns Class D shares representing
approximately 6.9% of the outstanding capital stock of CANTV. See Section 8.
AES is a global power company committed to serving the world's needs for
electricity and other services in a socially responsible way. AES participates
primarily in two related lines of business: electricity generation and
distribution. AES operates and owns (entirely or in part) electric power plants
in North America, South America, Europe and Asia, and distribution companies in
the United States, Venezuela, Argentina, Brazil, El Salvador, Dominican
Republic and The Republic of Georgia. AES is using its distribution
infrastructure and knowledge of various markets to develop the ability to
provide wholesale and/or retail telecommunications services. AES continually
considers business development opportunities, including acquisition
opportunities throughout the world. AES's revenues during 2000 were
approximately $7.58 billion and total assets were over $33.08 billion as of
December 31, 2000. Shares of AES trade on the New York Stock Exchange under the
symbol "AES". See Section 8.
CEDC is a Venezuelan company in which AES indirectly holds 87% of the
outstanding ordinary shares. CEDC is the sister company of C.A. La Electricidad
de Caracas, EDC, Venezuela's largest publicly traded power company. CEDC is a
holding company that holds interests in companies dedicated to the production
and distribution of electricity, telecommunications and distribution of natural
gas. CEDC's shares trade on the Caracas Stock Exchange together with the shares
of EDC under the symbol "EDC." See Section 8.
1
AES is subject to the informational requirements of the Securities
Exchange Act of 1934 and files reports and other information with the SEC
relating to its business, financial condition and other matters. CEDC is
subject to the informational requirements of the applicable securities laws in
Venezuela and files reports and other information with the Venezuelan Comision
Nacional de Valores, the CNV, relating to its business, financial condition and
other matters. CEDC also files certain documents with the SEC. See Section 8
for a description of how you can inspect or obtain copies of AES's and CEDC's
reports, statements and other information.
WHAT IS THE PURPOSE OF THE OFFERS?
The purpose of this U.S. offer and the Venezuelan offer is to enable the
Purchaser and its affiliates to acquire control of CANTV. The Purchaser
intends, as soon as practicable after consummation of the offers, to seek
majority representation on CANTV's board of directors. The Purchaser believes
that the offers present a unique opportunity to increase the value of CANTV to
its shareholders and enhance the quality of CANTV's services in order to
benefit its shareholders, customers and the communities it serves. See
"Introduction" and Section 11.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THIS U.S. OFFER?
The Purchaser is seeking to purchase an aggregate of 28,566,944 ADSs. THE
NUMBER OF ADSS AVAILABLE FOR TENDER INTO THIS U.S. OFFER IS SUBJECT TO CHANGE
ON A DAILY BASIS AS A RESULT OF DEPOSITS OF CLASS D SHARES IN THE ADS DEPOSIT
FACILITY IN EXCHANGE FOR ADSS AND WITHDRAWALS OF CLASS D SHARES FROM THE ADS
DEPOSIT FACILITY. See "Introduction" and Section 1.
Only tenders of ADSs will be accepted in this U.S. offer. Tenders of Class
D shares (and shares of other classes of capital stock of CANTV) will not be
accepted in this U.S. offer, but will be accepted in the Venezuelan offer. See
"Introduction."
HOW MUCH ARE YOU OFFERING TO PAY IN THIS U.S. OFFER AND WHAT IS THE FORM OF
PAYMENT?
We are offering to pay $24.00 per ADS, net to each seller in cash less any
withholding taxes and without interest thereon. See "Introduction" and Section
1.
WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
Tendering holders of ADSs will not be obligated to pay transfer taxes on
the sale of their ADSs pursuant to this U.S. offer, except as set forth in
Instruction 6 of the ADS Letter of Transmittal. Holders of ADSs will bear all
costs and expenses associated with any deposit or withdrawal of Class D shares
under the Amended and Restated Deposit Agreement, dated September 10, 2000,
among CANTV, The Bank of New York and holders from time to time of American
Depositary Receipts, or ADRs. If you are the record holder of your ADSs and you
tender your ADSs to us in this U.S. offer, you will not have to pay brokerage
fees or similar expenses. If you own your ADSs through a broker or other
nominee, and your broker or other nominee tenders your ADSs on your behalf,
your broker or nominee may charge you a fee and we will not be responsible for
paying that fee. You should consult your broker or nominee to determine whether
any charges will apply. See "Introduction."
ARE YOU MAKING A CONCURRENT OFFER FOR SHARES OF COMMON STOCK OF CANTV IN THE
VENEZUELAN MARKET?
Yes. Concurrently with this U.S. offer, we are making the Venezuelan offer
to purchase 199,968,608 shares of CANTV. The Venezuelan offer is open to all
holders of CANTV shares. Class D shares are publicly traded and listed on the
Caracas Stock Exchange and are the only class of shares of CANTV underlying the
ADSs. Class A shares, Class B shares and Class C shares are not publicly traded
or listed on any stock exchange. In general, on a transfer of Class A shares,
Class B shares or Class C shares to a person not specified in CANTV's Bylaws as
eligible to hold such shares, the transferred Class A, Class B or Class C
shares automatically convert into Class D shares. See "Introduction."
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HOW MUCH ARE YOU OFFERING TO PAY FOR CANTV SHARES IN THE VENEZUELAN OFFER?
In the Venezuelan offer we are offering to pay $3.4285714 per share in
cash to each seller, payable in U.S. dollars or in Bolivares to tendering
holders that elect to be paid in Bolivares. See "Introduction."
When adjusted to reflect the fact that each ADS represents seven Class D
shares, the price per share payable in the Venezuelan offer is equal to the
price per share payable in this U.S. offer. See "Introduction."
If a holder of CANTV shares tendering into the Venezuelan offer is paid in
Bolivares, the fluctuation of exchange rates could result in the price received
by a tendering holder in the Venezuelan offer for CANTV shares being more or
less than the price paid in this U.S. offer. See "Introduction."
WHY IS THERE A SEPARATE VENEZUELAN OFFER?
U.S. and Venezuelan law each require that tender offers comply with the
rules and regulations of the home country. Because the U.S. and Venezuelan laws
relating to tender offers are different and inconsistent in certain ways, we
are making two separate offers. The terms and conditions of this U.S. offer and
the Venezuelan offer will be substantially similar and generally will differ
only to the extent required by local customary market practice or Venezuelan or
U.S. law See "Introduction."
WHAT ARE THE PRINCIPAL DIFFERENCES IN THE RIGHTS OF HOLDERS OF ADSS AND CANTV
SHARES UNDER THE TWO OFFERS?
The most significant difference is that Venezuelan law provides for tender
offers to be open for between 20 and 30 Venezuelan stock exchange trading days,
with a possible aggregate of 30 Venezuelan stock exchange trading days of
extensions of the offering period after the initial expiration date being
available under various circumstances. U.S. law, on the other hand, may require
under various circumstances that this U.S. offer be kept open longer than the
maximum 60 Venezuelan stock exchange trading days potentially available for the
Venezuelan offer. While we presently intend to make the offer periods for the
Venezuelan offer and this U.S. offer the same, it is possible that, due to
requirements of applicable law or market practice, holders tendering in the
Venezuelan offer will be paid either before or after holders tendering in this
U.S. offer, although the price paid per share in U.S. dollars (after adjusting
for the fact that each ADS represents seven Class D shares) will be the same in
both offers. See "Introduction."
IS IT POSSIBLE TO TENDER CANTV SHARES INTO THIS U.S. OFFER, OR ADSS INTO THE
VENEZUELAN OFFER?
No. Holders of Class D shares (being the only class of CANTV shares
underlying the ADSs) who wish to tender their shares into this U.S. offer may
do so by depositing their shares into the ADS deposit facility. The ADSs
received on such deposit may then be tendered into this U.S. offer. Conversely,
holders of ADSs who wish to tender their ADSs into the Venezuelan offer may do
so by withdrawing the Class D shares underlying such ADSs from the ADS deposit
facility and tendering such Class D shares into the Venezuelan offer. Please
contact the Information Agent at the telephone numbers and address set forth on
the back cover page or the depositary of the ADSs, The Bank of New York, if you
need any assistance in converting your Class D shares into ADSs or your ADSs
into Class D shares. See "Introduction."
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE THE PAYMENTS REQUIRED IN THE
OFFERS?
The Purchaser is pursuing various sources for the funds required to
purchase the CANTV shares and ADSs pursuant to the offers, including limited
recourse financing, internal resources, corporate borrowings, sales of
securities and other sources. In this regard, the Purchaser has held
negotiations with affiliates of its financial advisors relating to a limited
recourse credit facility. In addition, an agreement to which AES and CEDC are
parties contemplates that AES will contribute $500 million in connection with
the offers. The Purchaser believes that the funds required to purchase tendered
CANTV shares and ADSs pursuant to the offers can be obtained on a timely basis.
Neither this U.S. offer nor the Venezuelan offer is conditioned on the
completion of any financing arrangements. See Section 9.
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IS AES's OR CEDC's FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN
THIS U.S. OFFER?
We do not think AES's or CEDC's financial condition is relevant to your
decision whether to tender in this U.S. offer because the form of payment
consists solely of cash and this U.S. offer is not subject to any financing
condition. See Section 9.
DOES CANTV SUPPORT THE OFFERS?
Under Rules 14d-9 and 14e-2 of the Securities Exchange Act of 1934, CANTV
is required to file a statement with the SEC within ten business days of the
commencement date of this U.S. offer, stating whether it supports, rejects or
does not take a position on this U.S. offer. See "Introduction."
Pursuant to Venezuelan law, CANTV is required to file a statement with the
Venezuelan Comision Nacional de Valores within five Venezuelan trading days
from commencement of the Venezuelan offer. In this filing, CANTV must state
whether it supports, rejects or does not take a position on the Venezuelan
offer. See "Introduction."
WILL YOU BUY ALL MY ADSS IF I TENDER THEM?
Upon the terms and subject to the conditions of this U.S. offer, we will
accept up to 28,566,944 ADSs properly tendered in this U.S. offer. If more than
28,566,944 ADSs are properly tendered pursuant to this U.S. offer and at least
199,968,608 CANTV shares are properly tendered pursuant to the Venezuelan
offer, and the other conditions to the offers are satisfied, we will accept the
ADSs properly tendered on a pro rata basis. Therefore, the number of ADSs
properly tendered by you that we will purchase will depend on the total number
of ADSs tendered in this U.S. offer. We will announce the preliminary results
of any proration by press release as promptly as practicable after the
scheduled expiration date. We expect to announce the final results of any
proration approximately seven days after the scheduled expiration date. See
"Introduction" and Section 1.
CAN YOU INCREASE OR DECREASE THE NUMBER OF ADSS AND/OR CANTV SHARES YOU ARE
OFFERING TO PURCHASE UNDER THE OFFERS?
If the ADSs tendered and to be purchased in this U.S. offer and the CANTV
shares tendered and to be purchased in the Venezuelan offer, together with the
Class D shares and ADSs owned directly or indirectly by AES (including those
owned through CEDC), in the aggregate, represent less than a majority of the
outstanding shares of capital stock of CANTV, including shares represented by
ADSs, we may elect, in our sole discretion and subject to applicable law,
including applicable law relating to possible extensions of the expiration of
the offers, to waive the minimum condition, to increase the number of ADSs or
CANTV shares to be purchased pursuant to this U.S. offer or the Venezuelan
offer, to extend this U.S. offer and/or the Venezuelan offer or to terminate
this U.S. offer and the Venezuelan offer without the purchase of any ADSs or
CANTV shares. See Section 1.
If fewer than 28,566,944 ADSs are tendered pursuant to this U.S. offer, we
may elect, in our sole discretion and subject to applicable law, including
applicable law relating to possible extensions of the expiration of the offers,
to decrease the number of ADSs to be purchased pursuant to this U.S. offer and
increase the number of CANTV shares to be purchased pursuant to the Venezuelan
offer, to extend this U.S. offer and/or the Venezuelan offer or to terminate
this U.S. offer and the Venezuelan offer without the purchase of any ADSs or
CANTV shares. See Section 1.
If fewer than 199,968,608 CANTV shares are tendered pursuant to the
Venezuelan offer, we may elect, in our sole discretion and subject to
applicable law, including applicable law relating to possible extensions of the
expiration of the offers and applicable Venezuelan law as described below, to
increase the number of ADSs to be purchased pursuant to this U.S. offer and
decrease the number of CANTV shares to be purchased pursuant to the Venezuelan
offer, to extend this U.S. offer and/or the Venezuelan offer or to terminate
this U.S. offer and the Venezuelan offer without the purchase of any ADSs or
CANTV shares. See Section 1.
Under the Venezuelan tender offer rules, we may, with the prior approval
of the Venezuelan Comision Nacional de Valores, not more than once, within five
days from commencement, reduce the
4
aggregate number of CANTV shares and ADSs sought in the offers, provided that
(x) the reduction may not exceed 25% of the aggregate number of CANTV shares
(including Class D shares represented by ADSs) initially sought in the offers,
and (y) as of the date of the reduction, the number of CANTV shares (including
Class D shares represented by ADSs) tendered does not exceed the original
number of CANTV shares (including Class D shares represented by ADSs) sought in
the offers less the proposed reduction. See Sections 1 and 13.
DO YOU CURRENTLY OWN ANY CANTV SECURITIES?
AES and CEDC beneficially own 64,000,524 Class D shares and 1,000 ADSs,
representing approximately 6.9% of the outstanding capital stock of CANTV. This
includes 63,999,524 Class D shares owned by Inversiones Inextel, C.A., a wholly
owned subsidiary of CEDC, received upon the conversion of substantially all of
Inversiones Inextel's interest in VenWorld Telecom, C.A. (see "Who are CANTV's
other major shareholders?," below), and 1,000 Class D shares and 1,000 ADSs
owned by the Purchaser. In addition, Inversiones Inextel has requested that
VenWorld convert its remaining interest in VenWorld into 476 Class D shares.
See "Introduction" and Section 7.
WHO ARE CANTV' S OTHER MAJOR SHAREHOLDERS?
According to CANTV's report on Form 20-F filed with the SEC on May 25,
2001, VenWorld Telecom, C.A., a Venezuelan company formed in 1991 to acquire
Class A shares of CANTV in connection with the privatization of CANTV by the
Government of Venezuela, owned, as of April 30, 2001, 400,000,000 Class A
shares, representing approximately 43.2% of CANTV's outstanding capital stock.
See Section 7.
Each shareholder of VenWorld has the right to cause VenWorld to convert
all or part of its interest in VenWorld into its proportionate interest in the
Class A shares owned by VenWorld, subject to pro rata rights of the other
shareholders of VenWorld to acquire such Class A shares. Between April 2001 and
July 13, 2001, Inversiones Inextel has, and we understand that a wholly owned
subsidiary of AT&T International Inc. and some other shareholders of VenWorld
have, exercised their conversion rights and received all or some of their
proportionate interest in CANTV held by VenWorld. We do not know if other
shareholders of VenWorld have exercised their conversion rights and received
shares of CANTV common stock since July 13, 2001. See Section 7.
As a result of these conversions and after giving effect to the automatic
conversion of the Class A shares received by Inversiones Inextel and the other
VenWorld shareholders (except AT&T) into Class D shares and assuming no
conversions of Class B shares or Class C shares since June 30, 2001 (being the
date of information set forth in CANTV's report on Form 6-K filed with the SEC
on August 22, 2001), the Purchaser estimates that as of July 13, 2001:
o VenWorld owned 312,086,559 Class A shares, representing approximately
33.7% of CANTV's outstanding capital stock. The principal remaining
shareholders of VenWorld are GTE Venholdings B.V., a wholly-owned
subsidiary of Verizon Communications Inc., whom the Purchaser estimates
owns 74.0% of VenWorld's outstanding capital stock, and Telefonica
Venezuelan Holding B.V., a wholly owned subsidiary of TI Telefonica
Internacional de Espana, S.A., whom the Purchaser estimates owns 20.5% of
VenWorld's outstanding capital stock. In addition, based upon publicly
available information, we understand that Verizon beneficially owns an
additional 32,945,829 Class D shares, representing approximately 3.6% of
the outstanding capital stock of CANTV. AT&T owned 20,000,000 Class A
Shares, representing 2.2% of the outstanding capital stock of CANTV, but
the Purchaser does not know whether AT&T still owns these shares. See
Section 7.
o The government of Venezuela owned all 51,900,000 outstanding Class B
shares, representing approximately 5.6% of the outstanding capital stock
of CANTV. See Section 7.
o Employees, retirees, their successors and related parties (including
trusts for the benefit of employees and retirees) owned approximately
99,318,876 outstanding Class C shares, representing approximately 10.7%
of the outstanding capital stock of CANTV. See Section 7.
5
o There were approximately 442,731,950 Class D shares outstanding
(including Class D shares represented by ADSs and Class D shares
beneficially owned by AES and CEDC), representing approximately 47.8% of
the outstanding capital stock of CANTV. See Section 7.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THIS U.S. OFFER?
We are not obligated to purchase any ADSs which are validly tendered in
this U.S. offer unless:
o The sum of (x) the number of shares of CANTV common stock (including
Class D shares represented by ADSs) held directly or indirectly by AES
(including Class D shares held through CEDC), (y) the number of Class D
shares represented by ADSs validly tendered and not withdrawn on or prior
to the expiration date of, and to be purchased pursuant to, this U.S.
offer and (z) the number of CANTV shares validly tendered and not
withdrawn on or prior to the expiration date of, and to be purchased
pursuant to, the Venezuelan offer, represents at least a majority of the
outstanding shares of capital stock of CANTV. See "Introduction" and
Section 15.
o All regulatory approvals required to consummate this U.S. offer and the
Venezuelan offer, including approval of the Venezuelan National
Telecommunications Commission (Comision Nacional de Telecomunicaciones)
(CONATEL) of the purchase of CANTV shares and ADSs pursuant to the
offers, have been obtained and remain in full force and effect without
the imposition of any condition or restriction that would be materially
adverse to us. See Section 15.
o The Purchaser is reasonably satisfied that the government of Venezuela,
as holder of the Class B shares, has agreed to vote in favor of the
merger of CANTV with and into the Purchaser described below under the
heading "Do you have any plans for CANTV after consummation of the
offers?" See Sections 11 and 15.
o There has not been a material adverse change in CANTV or its business.
See Section 15.
o The conditions to the Venezuelan offer have been satisfied or waived,
and no event upon which the Purchaser may withdraw the Venezuelan Offer
has occurred. See Section 15.
See Section 15 for a description of the other conditions to this U.S.
offer.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE VENEZUELAN OFFER, OR EVENTS
UPON WHICH THE PURCHASER MAY WITHDRAW THE VENEZUELAN OFFER?
We are not obligated to purchase any CANTV shares which are validly
tendered in the Venezuelan offer unless the sum of (x) the number of shares of
CANTV common stock (including Class D shares represented by ADSs) held directly
or indirectly by AES (including Class D shares held through CEDC, (y) the
number of Class D shares represented by ADSs validly tendered and not withdrawn
on or prior to the expiration date of, and to be purchased pursuant to, this
U.S. offer and (z) the number of CANTV shares validly tendered and not
withdrawn on or prior to the expiration date of, and to be purchased pursuant
to, the Venezuelan offer, represents at least a majority of the outstanding
shares of capital stock of CANTV. See "Introduction."
While we can waive some or all of the conditions to this U.S. offer, we
can only waive this minimum tender condition in the Venezuelan offer in
accordance with Venezuelan law. Under Venezuelan law, we may only waive the
minimum tender condition by lowering it to not less than 75% of the original
percentage of CANTV shares, including Class D shares represented by ADSs,
sought in the offers. See "Introduction" and Section 15.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THIS U.S. OFFER?
You will have at least until 5:00 p.m., New York City time, on Monday,
October 29, 2001 to decide whether to tender your ADSs pursuant to this U.S.
offer. If you cannot deliver everything that is required in order to make a
valid tender by that time, you may be able to use a guaranteed delivery
procedure which is described later in this U.S. Offer to Purchase. See Sections
1 and 3.
CAN THIS U.S. OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
We expressly reserve the right, in our sole discretion but subject to
applicable law, to extend the period of time during which this U.S. offer
remains open. However, there can be no assurance that we will exercise our
right to extend this U.S. offer. See Sections 13 and 15.
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HOW WILL I BE NOTIFIED IF THIS U.S. OFFER IS EXTENDED?
If we extend this U.S. offer, we will inform Mellon Investor Services LLC
and D.F. King & Co., Inc. (which are the U.S. Receiving Agent and Information
Agent, respectively, for this U.S. offer) of that fact, and will make a public
announcement of the extension, not later than 9:00 a.m., New York City time, on
the next business day after the day on which this U.S. offer was previously
scheduled to expire. See Section 13.
HOW DO I TENDER MY ADSS INTO THIS U.S. OFFER?
To tender your ADSs, prior to 5:00 p.m., New York City time, on Monday,
October 29, 2001, unless this U.S. offer is extended:
o you must deliver your American Depositary Receipts representing ADSs and
a properly completed and duly executed ADS Letter of Transmittal to the
U.S. Receiving Agent at the address appearing on the back cover page of
this U.S. Offer to Purchase; or
o the U.S. Receiving Agent must receive a confirmation of receipt of your
ADSs by book-entry transfer and an Agent's Message in lieu of the ADS
Letter of Transmittal; or
o you must comply with the guaranteed delivery procedure.
Contact the Information Agent or the Dealer Manager for assistance at
their respective addresses and telephone numbers set forth on the back cover of
this U.S. Offer to Purchase. See Section 3 and the instructions to the ADS
Letter of Transmittal.
I HOLD ADSS IN "STREET" NAME. HOW DO I PARTICIPATE IN THIS U.S. OFFER?
If you hold ADSs in "street" name, instruct your broker or custodian to
arrange, before the expiration date of this U.S. offer, for the book-entry
transfer of your ADSs into the U.S. Receiving Agent's account at The Depository
Trust Company. You will be provided with a form to instruct your broker or
custodian to tender your ADSs. This form will also be available from the
Information Agent. See Section 3.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED ADSS?
You can withdraw previously tendered ADSs at any time until this U.S.
offer has expired and, if we have not agreed to accept your ADSs for payment by
November 23, 2001, you can withdraw them at any time after such date until we
do accept your ADSs for payment. See Section 4.
HOW DO I WITHDRAW PREVIOUSLY TENDERED ADSS?
To withdraw ADSs, you must deliver a written or facsimile notice of
withdrawal with the required information to the U.S. Receiving Agent while you
still have the right to withdraw the ADSs. See Section 4.
WHAT ARE CERTAIN UNITED STATES FEDERAL INCOME AND VENEZUELAN TAX CONSEQUENCES
OF TENDERING ADSS?
The receipt of cash for ADSs pursuant to this U.S. offer will be a taxable
transaction for United States federal income tax purposes. In general, a U.S.
Holder who sells ADSs pursuant to this U.S. offer will recognize gain or loss
for federal income tax purposes equal to the difference, if any, between the
amount of cash received and the holder's adjusted tax basis in the ADSs sold
pursuant to this U.S. offer. Generally, gain on the sale of ADSs realized by a
nonresident of Venezuela will not be subject to Venezuelan income tax. See
Section 5.
DO YOU INTEND TO ACQUIRE ADDITIONAL CAPITAL STOCK OF CANTV FOLLOWING THE
OFFERS?
We do not currently have any plans or proposals following completion of
the offers to acquire additional shares of capital stock of CANTV but reserve
the right to do so in the future. We may decide,
7
directly or indirectly through affiliates, and subject to applicable law
(including Venezuelan tender offer regulations), to purchase additional ADSs or
CANTV shares following completion of the offers, through open market purchases,
privately negotiated transactions, additional tender offers or otherwise, at
prices that may be higher or lower than those paid pursuant to the offers. See
Section 11.
WILL CANTV CONTINUE TO BE TRADED AS A PUBLIC COMPANY?
Yes. Class D shares will continue to be listed and traded on the Caracas
Stock Exchange. We also intend that CANTV would maintain the listing of ADSs on
the New York Stock Exchange. However, it is possible that, due to decreases in
trading volume and the number of ADS holders following the purchase of ADSs
pursuant to this U.S. offer, the ADSs will no longer meet the continued listing
requirements of the New York Stock Exchange. In the event that the ADSs fail to
meet the continued listing requirements, the New York Stock Exchange may
choose, at its discretion, to delist the ADSs. See Section 12.
DO YOU HAVE ANY PLANS FOR CANTV AFTER CONSUMMATION OF THE OFFERS?
Yes. If the Purchaser and its affiliates acquire control of CANTV pursuant
to the offers, the Purchaser intends to conduct a detailed review of CANTV to
consider what, if any, changes would be desirable in light of the circumstances
which then exist. See Section 11.
Following the successful completion of the offers, the Purchaser intends
to cause CANTV to distribute to all CANTV shareholders cash currently held by
CANTV determined to be in excess of CANTV's current or anticipated needs. Prior
to the payment of any dividends, it is expected that CANTV will be merged with
and into the Purchaser, with the Purchaser being the surviving corporation.
Following this merger, the Purchaser would change its name to CANTV and would
continue the business and operations of CANTV. All shareholders of CANTV at the
time of the merger would continue as shareholders of the surviving corporation,
holding the same class of shares as before the merger, and the class D shares
and ADSs of the surviving corporation would be listed on the Caracas and New
York stock exchanges (subject to meeting the applicable listing criteria),
respectively, to the same extent as the ADSs and Class D shares of CANTV. The
merger is intended to be a taxable transaction for U.S. federal income tax
purposes. See Section 11.
The Purchaser also intends following the consummation of the offers to
seek to sell Telecommunicaciones Movilnet, CANTV's wireless business. In this
regard, representatives of the Purchaser have held negotiations with a third
party regarding a possible sale of Movilnet. See Section 11.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFERS AFFECT MY ADSS?
The purchase of ADSs pursuant to this U.S. offer and Class D shares
pursuant to the Venezuelan offer will reduce substantially the number of ADSs
and Class D shares that might otherwise trade and may reduce the number of
holders of both the ADSs and Class D shares. The reduction in publicly traded
ADSs and Class D shares will likely adversely affect the liquidity,
marketability and market value of the ADSs and Class D shares. See Section 12.
DO THE HOLDERS OF ADSS OR CANTV SHARES HAVE APPRAISAL RIGHTS IN CONNECTION WITH
THE OFFERS?
Holders of ADSs or CANTV shares do not have appraisal rights in connection
with this U.S. offer or the Venezuelan offer. See "Introduction".
WHAT IS THE MARKET VALUE OF MY ADSS AS OF A RECENT DATE?
On August 28, 2001, the day before the announcement of the offers, the
closing price of the ADSs reported on the New York Stock Exchange was $19.81
per ADS. On September 24, 2001, the day before the commencement of the offers,
the closing price of the ADSs reported on the New York Stock Exchange was
$23.70 per ADS. You should obtain a recent quotation for the ADSs in deciding
whether to tender your ADSs. See Section 6.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call either D.F. King & Co., Inc., the information agent for this
U.S. offer, or J.P. Morgan Securities Inc., the dealer manager for this U.S.
offer. See the back cover of this U.S. Offer to Purchase for contact telephone
numbers and addresses.
8
To the Holders of
American Depositary Shares of
Compania Anonima Nacional
Telefonos de Venezuela (CANTV):
INTRODUCTION
AES Comunicaciones de Venezuela, C.A., formerly Inversiones D72410, C.A.,
a company (compania anonima) incorporated under the laws of Venezuela (the
"Purchaser"), jointly owned by The AES Corporation, a Delaware corporation
("AES"), and Corporacion EDC, C.A., a company incorporated under the laws of
Venezuela and in which AES owns 87% of the outstanding ordinary shares
("CEDC"), hereby offers to purchase for cash 28,566,944 American Depositary
Shares ("ADSs") representing in the aggregate 199,968,608 Class D Shares (as
defined below) of Compania Anonima Nacional Telefonos de Venezuela (CANTV), a
company (compania anonima) incorporated under the laws of Venezuela ("CANTV"),
for $24.00 per ADS, net to the seller in cash less any withholding taxes and
without interest thereon, upon the terms and subject to the conditions set
forth in this U.S. Offer to Purchase and the related ADS Letter of Transmittal
(the "Letter of Transmittal") and Notice of Guaranteed Delivery (which, as
amended or supplemented from time to time, together, constitute the "U.S.
Offer").
THE NUMBER OF ADSs AVAILABLE FOR TENDER INTO THE U.S. OFFER IS SUBJECT TO
CHANGE ON A DAILY BASIS AS A RESULT OF DEPOSITS OF CLASS D SHARES IN EXCHANGE
FOR ADSS, AND WITHDRAWAL OF CLASS D SHARES, UNDER THE DEPOSIT AGREEMENT (AS
DEFINED BELOW).
Each ADS represents seven Class D Shares. As used in this U.S. Offer to
Purchase, "Class D Share" means one Class D share of common stock of CANTV.
Tendering holders of ADSs will not be obligated to pay transfer taxes on
the sale of their ADSs pursuant to the U.S. Offer, except as set forth in
Instruction 6 of the Letter of Transmittal. Record owners of ADSs who tender
their ADSs pursuant to the U.S. Offer will not have to pay brokerage fees or
similar expenses. If you own your ADSs through a broker or other nominee, and
your broker or other nominee tenders your ADSs on your behalf, your broker or
nominee may charge you a fee and the Purchaser will not be responsible for
paying that fee. You should consult with your broker or nominee to determine
whether any charges will apply. Holders will bear all costs and expenses
associated with any deposit or withdrawal of Class D Shares under the Amended
and Restated Deposit Agreement, dated September 10, 2000, among CANTV, The Bank
of New York (the "Depositary") and holders from time to time of American
Depositary Receipts ("ADRs") issued thereunder (the "Deposit Agreement"). The
Purchaser will pay all charges and expenses of J.P. Morgan Securities Inc. (the
"Dealer Manager"), Mellon Investor Services LLC (the "U.S. Receiving Agent")
and D.F. King & Co., Inc. (the "Information Agent") incurred in connection with
the U.S. Offer. See Section 17.
THE U.S. OFFER IS OPEN TO ALL HOLDERS OF ADSS. TENDERS OF CLASS D SHARES
(AND ANY SHARES OF OTHER CLASSES OF CAPITAL STOCK OF CANTV) ARE NOT BEING
ACCEPTED IN THE U.S. OFFER, BUT ARE BEING ACCEPTED IN THE VENEZUELAN OFFER.
HOLDERS OF CLASS D SHARES (BEING THE ONLY CLASS OF CANTV SHARES UNDERLYING THE
ADSS) MAY DEPOSIT THEIR CLASS D SHARES WITH THE DEPOSITARY AND RECEIVE ADSS FOR
SUCH CLASS D SHARES. THE ADSS MAY THEN BE TENDERED PURSUANT TO THE U.S. OFFER.
THE U.S. OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SUM OF (X) THE
NUMBER OF SHARES OF COMMON STOCK OF CANTV (INCLUDING CLASS D SHARES REPRESENTED
BY ADSS) HELD DIRECTLY OR INDIRECTLY BY AES (INCLUDING CLASS D SHARES HELD
THROUGH CEDC BY ITS WHOLLY OWNED SUBSIDIARY, INVERSIONES INEXTEL, C.A.
("INVERSIONES INEXTEL")), (Y) THE NUMBER OF CLASS D SHARES REPRESENTED BY ADSS
VALIDLY TENDERED AND NOT WITHDRAWN ON OR PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN SECTION 1), AND TO BE PURCHASED PURSUANT TO THE U.S. OFFER AND (Z)
THE NUMBER OF CANTV SHARES VALIDLY TENDERED AND NOT WITHDRAWN ON OR PRIOR TO
THE EXPIRATION DATE OF, AND TO BE PURCHASED PURSUANT TO, THE VENEZUELAN OFFER
(AS DEFINED BELOW), REPRESENTING AT LEAST A MAJORITY OF THE OUTSTANDING SHARES
OF CAPITAL STOCK OF CANTV (THE "MINIMUM TENDER CONDITION").
9
As of the date hereof, AES beneficially owns (through subsidiaries,
including CEDC and the Purchaser), 64,000,524 Class D Shares and 1,000 ADSs,
representing in the aggregate approximately 6.9% of the outstanding capital
stock of CANTV. Of these Class D Shares and ADSs:
o 63,999,524 Class D Shares are shares held by Inversiones Inextel as a
result of the conversion of substantially all of Inversiones Inextel's
interest in VenWorld Telecom, C.A., a Venezuelan corporation and holder
of Class A shares of CANTV. See Section 7.
o The remaining 1,000 Class D Shares and the 1,000 ADSs were acquired by a
subsidiary of CEDC in open market transactions on the Caracas Stock
Exchange and on the New York Stock Exchange, respectively, and are now
held by the Purchaser.
The Purchaser believes that if it purchases 28,566,944 ADSs pursuant to
the U.S. Offer and 199,968,608 CANTV shares pursuant to the Venezuelan Offer,
the Minimum Tender Condition would be satisfied.
CONSUMMATION OF THE U.S. OFFER IS ALSO CONDITIONED UPON OTHER CONDITIONS. SEE
SECTION 15.
Concurrently with the U.S. Offer, the Purchaser is making an offer in
Venezuela (the "Venezuelan Offer" and, together with the U.S. Offer, the
"Offers") to purchase 199,968,608 CANTV shares validly tendered and not
properly withdrawn prior to the expiration of the Venezuelan Offer, each for
$3.4285714 in cash payable in U.S. dollars or in Bolivares to tendering holders
that elect to be paid in Bolivares.
The price payable by the Purchaser in the Venezuelan Offer is equal to the
price the Purchaser is offering for the ADSs in the U.S. Offer, after adjusting
for the fact that each ADS represents seven Class D Shares. However, if a
holder of CANTV shares tendering into the Venezuelan Offer is paid in
Bolivares, the fluctuation of exchange rates could result in the price received
by a tendering holder in the Venezuelan Offer for CANTV shares being more or
less than the price paid in the U.S. Offer.
Consummation of the Venezuelan Offer is conditioned upon, among other
things, the sum of (x) the number of shares of common stock of CANTV (including
Class D Shares represented by ADSs) held directly or indirectly by AES,
(including Class D Shares held through CEDC), (y) the number of Class D Shares
represented by ADSs validly tendered and not withdrawn on or prior to the
Expiration Date (as defined in Section 1), and to be purchased pursuant to the
U.S. Offer and (z) the number of CANTV shares validly tendered and not
withdrawn on or prior to the expiration date of, and to be purchased pursuant
to, the Venezuelan Offer, representing at least a majority of the outstanding
shares of capital stock of CANTV.
Other conditions to the Venezuelan Offer include that: (i) the conditions
to the U.S. Offer must have been satisfied or waived; (ii) all regulatory
approvals required to consummate the U.S. Offer and the Venezuelan Offer,
including the approval of the Venezuelan Comision Nacional de
Telecomunicaciones ("CONATEL") must have been obtained and remain in full force
and effect without the imposition of any condition or restriction that would be
materially adverse to AES, CEDC, the Purchaser, CANTV or their respective
affiliates; and (iii) the holder of the Class B shares must have cast a
favorable vote with respect to the proposed merger of CANTV with and into the
Purchaser described in Section 11.
In the event that any of the conditions to the Venezuelan Offer are not
satisfied on or before the expiration of the Venezuelan Offer, the Purchaser
may withdraw the Venezuelan Offer in accordance with the terms of the
Venezuelan Offer.
While the Purchaser can waive some or all of the conditions to the U.S.
Offer, the Purchaser can only waive the Minimum Tender Condition in accordance
with Venezuelan law. Under Venezuelan law, the Purchaser may only waive the
Minimum Tender Condition by lowering it to not less than 75% of the original
percentage of CANTV shares, including Class D Shares represented by ADSs,
sought in the Offers.
Although the terms and conditions of the U.S. Offer and the Venezuelan
Offer are substantially similar, because of differences in law and market
practice between the United States and Venezuela, the rights of tendering
security holders pursuant to the two offers are not identical. The most
significant
10
difference is that Venezuelan law provides for tender offers to be kept open
for between 20 and 30 Venezuelan stock exchange trading days, with a possible
aggregate of 30 Venezuelan stock exchange trading days of extensions of the
offering period after the initial expiration date being available under certain
circumstances. U.S. law, on the other hand, may require under certain
circumstances that the U.S. Offer be kept open longer than the maximum 60
Venezuelan stock exchange trading days potentially available for the Venezuelan
Offer. While the Purchaser presently intends to make the offer periods for the
Venezuelan Offer and the U.S. Offer the same, it is possible that, due to
requirements of applicable law or market practice, holders tendering in the
Venezuelan Offer will be paid either before or after holders tendering in the
U.S. Offer, although the price paid per share (after adjusting for the fact
that each ADS represents seven Class D Shares) will be the same in both Offers.
Holders of Class D Shares (being the only class of CANTV shares underlying
the ADSs) who wish to tender into the U.S. Offer may do so by depositing their
shares into the ADS deposit facility. The ADSs received on such deposit may
then be tendered into the U.S. Offer. Conversely, holders of ADSs who wish to
tender into the Venezuelan Offer may do so by withdrawing the Class D Shares
underlying such ADSs from the ADS deposit facility and tendering such Class D
Shares into the Venezuelan Offer. Please contact the Information Agent at the
telephone number and address set forth on the back cover page of this U.S.
Offer to Purchase, or the Depositary, if you need any assistance in converting
your Class D Shares into ADSs, or your ADSs into Class D Shares.
Under Rule 14d-9 and Rule 14e-2 of the Securities Exchange Act of 1934,
CANTV is required to file a statement with the Securities and Exchange
Commission ("SEC") within ten business days of the commencement date of the
U.S. Offer, stating whether it supports, rejects or does not take a position on
the U.S. Offer. In addition, pursuant to Venezuelan law, CANTV is required to
file a statement with the Venezuelan Comision Nacional de Valores (the "CNV")
within five Venezuelan trading days from commencement of the Venezuelan Offer.
In this filing, CANTV must state whether it supports, rejects or does not take
a position on the Venezuelan Offer.
The purpose of the Offers is to enable the Purchaser and its affiliates to
acquire control of, and a majority of the equity interests in, CANTV. The
Purchaser believes that the Offers present an opportunity to increase the value
of CANTV to its shareholders and enhance the quality of CANTV's services in
order to benefit its shareholders, customers and the communities it serves. See
Section 11.
The Purchaser currently intends, as soon as practicable after consummation
of the Offers, to seek majority representation on the Board of Directors of
CANTV. Under Venezuelan law and CANTV's Bylaws, the directors of CANTV serve at
the pleasure of shareholders and may be removed and new directors may be
elected by shareholders in a shareholders meeting. Under Venezuelan law and
CANTV's Bylaws, shareholders owning at least 20% of the outstanding shares of
all classes of common stock of CANTV have the right to request the Board of
Directors to call extraordinary meetings of shareholders. Based on Venezuelan
law and CANTV's Bylaws, the Purchaser believes that upon the purchase of ADSs
and CANTV shares pursuant to the Offers, the Purchaser will have the ability to
appoint a majority of the members of the Board of Directors of CANTV at such a
meeting.
The Purchaser intends that its designees to the Board of Directors of
CANTV would be employees of AES or its subsidiaries (including CEDC). However,
depending on the number of directors the Purchaser has the right to elect, the
Purchaser believes that other members could include current members of the
Board of Directors of CANTV and other individuals not affiliated with AES.
Under Venezuelan law a shareholder or group of minority shareholders holding
20% or more of the outstanding shares of capital stock of CANTV is entitled to
elect a number of members of the Board of Directors of CANTV that is
proportional to the share holdings of such shareholders or group of
shareholders (excluding for purposes of such calculation the directors
appointed by Class B and Class C shareholders).
Pursuant to the Bylaws of CANTV and Venezuelan law, subject to the matters
reserved to shareholders, the Board of Directors of CANTV is empowered to
manage the business and affairs of CANTV. Among other things, the Board of
Directors of CANTV has the power to call shareholders' meetings, propose
dividend policies and authorize actions regarding the assets of CANTV.
11
Following the purchase of CANTV shares and ADSs pursuant to the Offers,
the Purchaser intends to cause CANTV to distribute to all holders of CANTV
capital stock (including Class D Shares represented by ADSs) cash currently
held by CANTV determined to be in excess of CANTV's current or anticipated
needs. The distribution of such dividends would be preceded by a merger of
CANTV with and into the Purchaser. The Purchaser also intends to seek to sell
CANTV's wireless business, held through its wholly-owned subsidiary
Telecomunicaciones Movilnet, C.A. See Section 11.
Under Venezuelan law, shareholders of CANTV do not have statutory
appraisal or similar rights in connection with the Offers or in connection with
the proposed merger. The Purchaser currently does not have any plans or
proposals following completion of the Offers to acquire additional shares of
capital stock of CANTV, but reserves the right to do so in the future. Although
the Purchaser has no such plans, following the consummation of the Offers, the
Purchaser may decide, directly or indirectly through affiliates, to purchase,
subject to applicable law (including Venezuelan tender offer regulations),
additional ADSs or Class D Shares through open market purchases, privately
negotiated transactions, additional tender offers or otherwise. There can be no
assurance that the Purchaser or any of its affiliates will effect any such
purchases or as to the prices thereof, which could be higher or lower than or
equal to the price to be paid pursuant to the Offers.
Under no circumstances will interest be paid on the purchase price for the
tendered ADSs, regardless of any delay in making payment thereof or any
extension of the Expiration Date.
THE U.S. OFFER AND THE VENEZUELAN OFFER ARE CURRENTLY SCHEDULED TO EXPIRE
AT 5:00 P.M. (NEW YORK CITY TIME) ON MONDAY, OCTOBER 29, 2001.
THE NUMBER OF ADSS IS SUBJECT TO FLUCTUATION, ON A DAILY BASIS, BASED UPON
DEPOSITS AND WITHDRAWALS OF CLASS D SHARES WITH AND FROM THE DEPOSITARY. AN
INCREASE IN THE NUMBER OF ADSS OUTSTANDING COULD ADVERSELY AFFECT PRORATION IN
THE U.S. OFFER. THE NUMBER OF CLASS D SHARES IS ALSO SUBJECT TO INCREASE AS A
RESULT OF CONVERSION IN CERTAIN CIRCUMSTANCES OF OTHER CLASSES OF CAPITAL STOCK
OF CANTV INTO CLASS D SHARES. SEE SECTION 7.
THIS U.S. OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL AND
NOTICE OF GUARANTEED DELIVERY CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ
IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE U.S. OFFER.
12
EXEMPTION REQUESTED FROM THE SECURITIES AND EXCHANGE COMMISSION
In order to facilitate the making of the Offers, AES has requested that
the SEC grant certain exemptive relief from the provisions of Rule 14d-10(a)(1)
and Rule 14e-5 under the Securities Exchange Act of 1934 (the "Exchange Act"),
and that the staff of the SEC confirm that it will not recommend that the SEC
take any enforcement action pursuant to Rules 14d-4(d), 14d-6(c), 14e-1(b) and
14e-1(c) under the Exchange Act in connection with the Offers.
Rule 14d-10(a)(1) provides that no person shall make a tender offer unless
the offer is open to all security holders of the class of securities subject to
the tender offer. The U.S. Offer is open to all holders of ADSs and excludes
holders of CANTV shares, while the Venezuelan Offer is open to all holders of
CANTV shares and excludes holders of ADSs. Accordingly, in the absence of
exemptive relief, the application of Rule 14d-10(a)(1) could potentially be
construed to prohibit the Purchaser from proceeding with the dual structure of
the Offers. The exemption from Rule 14d-10(a)(1) being requested would permit
the Purchaser to purchase pursuant to the U.S. Offer only ADSs and to purchase
pursuant to the Venezuelan Offer only CANTV shares.
Among other things, Rule 14e-5 generally prohibits a person making a
tender offer for an equity security registered under Section 12 of the Exchange
Act from directly or indirectly purchasing or making any arrangement to
purchase such security or any security convertible into, or exchangeable for,
such security, other than pursuant to the tender offer. This prohibition
applies from the time the offer is publicly announced until its expiration.
Accordingly, in the absence of exemptive relief, Rule 14e-5 could be construed
to prohibit the Purchaser from purchasing CANTV shares in the Venezuelan Offer.
The exemption from Rule 14e-5 being requested would permit the Purchaser: (1)
to purchase CANTV shares pursuant to the Venezuelan Offer during, but outside,
the U.S. Offer; and (2) to enter into such arrangements and agreements and to
take such other steps as may be necessary or advisable to effect the Venezuelan
Offer.
Rule 14d-4(d) and Rule 14d-6(c) require, in the event that a person who
makes an offer makes a material change to the terms or conditions of a tender
offer, that the offeror extend the tender offer (in certain circumstances) and
disseminate the material change to security holders. Under Venezuelan law,
however, any extension of the period during which a tender offer is open is at
the discretion of the CNV. The "no action" position being requested of the
staff of the SEC with respect to enforcement of Rule 14d-4(d) and Rule 14d-6(c)
would allow the Purchaser to make material changes to the Venezuelan Offer and
only make those extensions to the period that the Venezuelan Offer is open as
are authorized by the CNV. Notwithstanding this relief, in the event that the
Purchaser makes material changes to the Venezuelan Offer, the Purchaser intends
to request that the CNV permit an extension of the Venezuelan Offer to the
extent necessary to be consistent with the terms of Rule 14d-4(d) and Rule
14d-6(c).
Rule 14e-1(b) provides, among other things, that a person who makes a
tender offer for an equity security may not increase or decrease the percentage
of the class of securities sought or the consideration offered unless the
tender offer remains open for at least 10 business days from the date that
notice of such increase or decrease is first published or sent or given to
security holders. Under Venezuelan law, however, any extension of the period
during which a tender offer is open is at the discretion of the CNV. The "no
action" position being requested of the staff of the SEC with respect to
enforcement of Rule 14e-1(b) would allow the Purchaser to make such increases
or decreases and only make those extensions to the period that the Venezuelan
Offer is open as are authorized by the CNV. Notwithstanding this relief, in the
event that the Purchaser makes any such increases or decreases pursuant to the
Venezuelan Offer, the Purchaser intends to request that the CNV permit an
extension of the Venezuelan Offer to the extent necessary to be consistent with
the terms of Rule 14e-1(b).
Rule 14e-1(c) provides that a person who makes a tender offer for a class
of equity securities may not fail to pay the consideration offered or return
the securities deposited by or on behalf of the security holders promptly after
the termination or withdrawal of the tender offer. Venezuelan law and practice,
on the other hand, provide that an offeror must pay for securities tendered
into an offer within five Venezuelan stock exchange trading days following the
settlement of the purchase of the securities on the Caracas Stock Exchange.
Such settlement is effected through a special session of the Caracas Stock
13
Exchange and must be made pursuant to the rules and regulations thereof. Such
settlement typically occurs on or before the fifth Venezuelan stock exchange
trading day following the expiration date of an offer. Consequently, Venezuelan
market practice could be in direct conflict with Rule 14e-1(c). The relief
being requested with respect to Rule 14e-1(c) would permit the Purchaser to pay
for securities tendered pursuant to the Venezuelan Offer pursuant to Venezuelan
law and market practice.
In connection with receiving this relief, AES, CEDC and their affiliates,
including the Purchaser, will agree:
o that, prior to the expiration of the U.S. Offer, they will not purchase
ADSs or CANTV shares except: (i) ADSs pursuant to the U.S. Offer, (ii)
CANTV shares pursuant to the Venezuelan Offer, (iii) for the contribution
of Inversiones Inextel's interest in CANTV to the immediate parent of the
Purchaser and (iv) the conversion into CANTV shares of the remaining
interest held by Inversiones Inextel in VenWorld Telecom, C.A. (see
Sections 7 and 8);
o that if the price paid in the Venezuelan Offer for CANTV shares is
increased, a corresponding increase in the price paid for ADSs in the
U.S. Offer will be made; and
o to other customary conditions.
The Purchaser believes the SEC has granted similar relief to other people
in transactions in Venezuela and the United States similar to the Offers.
EXPLANATORY NOTES
Except as otherwise specifically provided, references in this U.S. Offer
to Purchase to amounts in Bolivares, other than the financial information in
Section 7 under the heading "Financial Information," are set forth in nominal
amounts. Nominal Bolivares amounts reflect Bolivares that have not been
adjusted for the effects of inflation. See Section 7.
In this document, references to "U.S." or "United States" are references
to the United States of America, references to "United States dollars", "U.S.
dollars", "US$", "$" or "dollars" are to U.S. currency, references to
"Venezuela" are references to the Republic of Venezuela and references to
"Venezuelan Bolivares", "Bolivares" or "Bs." are to Venezuelan currency.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in the U.S. Offer discuss future
expectations, contain projections of results of operations or financial
conditions or state other "forward-looking" information. Those statements are
subject to known and unknown risks, uncertainties and other factors. Actual
developments could differ significantly from those contemplated in these
forward-looking statements. The forward-looking information is based on various
factors and was derived using numerous assumptions. Forward-looking statements
made by the Purchaser speak only as of the date they are made, and none of the
Purchaser, AES, CEDC nor any other person or entity shall have any obligation
to update or revise them, whether as a result of new information, future events
or otherwise.
14
THE U.S. OFFER
1. TERMS OF THE U.S. OFFER; EXPIRATION DATE
Upon the terms and subject to the conditions of the U.S. Offer, the
Purchaser will accept for payment and pay for an aggregate of 28,566,944 ADSs
validly tendered on or prior to the Expiration Date and not withdrawn (as
provided in Section 4) for $24.00 per ADS, net to each seller in cash less any
withholding taxes and without interest thereon. The term "Expiration Date"
shall mean 5:00 p.m. (New York City time) on Monday, October 29, 2001, unless
the Purchaser shall have extended the period of time for which the U.S. Offer
is open, in which event the term "Expiration Date" shall mean the latest time
and date at which the U.S. Offer, as so extended by the Purchaser, shall
expire.
THE NUMBER OF ADSS AVAILABLE FOR TENDER INTO THE U.S. OFFER IS SUBJECT TO
FLUCTUATION, ON A DAILY BASIS, BASED ON DEPOSITS AND WITHDRAWALS OF CLASS D
SHARES WITH AND FROM THE DEPOSITARY. Pursuant to the Deposit Agreement, upon a
deposit of Class D Shares the number of outstanding ADSs is increased; upon a
withdrawal of Class D Shares the number of outstanding ADSs is decreased.
Proration in the U.S. Offer may be adversely affected to the extent that
additional Class D Shares are deposited pursuant to the Deposit Agreement and
the ADSs issued on such deposit are tendered in the U.S. Offer. Similarly,
proration in the Venezuelan Offer may be adversely affected to the extent that
Class D Shares are withdrawn from the Depositary pursuant to the Deposit
Agreement and are tendered in the Venezuelan Offer. The number of Class D
Shares is also subject to increase, and therefore proration may be affected, as
a result of the conversion in certain circumstances of other classes of capital
stock of CANTV into Class D Shares. See Section 7.
Upon the terms and subject to the conditions of the U.S. Offer, if more
than 28,566,944 ADSs are validly tendered and not withdrawn on or prior to the
Expiration Date, and at least 199,968,608 CANTV shares are validly tendered
pursuant to the Venezuelan Offer, the Purchaser will purchase such ADSs on a
pro rata basis. Similarly, upon the terms and subject to the conditions of the
Venezuelan Offer, if more than 199,968,608 CANTV shares are validly tendered
and not withdrawn on or prior to the expiration date of the Venezuelan Offer,
and at least 28,566,944 ADSs are validly tendered pursuant to the U.S. Offer,
the Purchaser will purchase such CANTV shares on a pro rata basis.
Upon the terms and subject to the conditions of the Offers, if the ADSs
tendered and to be purchased in the U.S. Offer and the CANTV shares tendered
and to be purchased in the Venezuelan Offer, together with the Class D Shares
and ADSs owned directly or indirectly by AES (including those owned through
CEDC), in the aggregate, represent less than a majority of the outstanding
shares of capital stock of CANTV, including Class D Shares represented by ADSs,
the Purchaser may elect, in its sole discretion and subject to applicable law,
including applicable law relating to possible extensions of the expiration of
the Offers, to waive the Minimum Tender Condition, to increase the number of
ADSs or CANTV shares to be purchased pursuant to the U.S. Offer or the
Venezuelan Offer, to extend the U.S. Offer and/or the Venezuelan Offer or to
terminate the U.S. Offer and the Venezuelan Offer without the purchase of any
ADSs or CANTV shares.
Upon the terms and subject to the conditions of the Offers, in the event
that fewer than 28,566,944 ADSs are tendered pursuant to the U.S. Offer, the
Purchaser may elect, in its sole discretion and subject to applicable law,
including applicable law relating to possible extensions of the expiration of
the Offers, to decrease the number of ADSs to be purchased pursuant to the U.S.
Offer and increase the number of CANTV shares to be purchased pursuant to the
Venezuelan Offer, to extend the U.S. Offer and/or the Venezuelan Offer or to
terminate the U.S. Offer and the Venezuelan Offer without the purchase of any
ADSs or CANTV shares.
Upon the terms and subject to the conditions of the Offers, in the event
that fewer than 199,968,608 CANTV shares are tendered pursuant to the
Venezuelan Offer, the Purchaser may elect, in its sole discretion and subject
to applicable law, including applicable law relating to possible extensions of
the expiration of the Offers and applicable Venezuelan law as described below,
to increase the number of ADSs to be purchased pursuant to the U.S. Offer and
decrease the number of CANTV shares to be purchased pursuant to the Venezuelan
Offer, to extend the U.S. Offer and/or the Venezuelan Offer or to terminate the
U.S. Offer and the Venezuelan Offer without the purchase of any ADSs or CANTV
shares.
15
Under the Venezuelan tender offer rules, the Purchaser may, with the prior
approval of the CNV, not more than once, within five days from commencement,
reduce the aggregate number of CANTV shares and ADSs sought in the Offers,
provided that (x) the reduction may not exceed 25% of the aggregate number of
CANTV shares (including Class D Shares represented by ADSs) initially sought,
and (y) as of the date of the reduction, the number of CANTV shares (including
Class D Shares represented by ADSs) tendered does not exceed the original
number of CANTV shares (including Class D Shares represented by ADSs) sought in
the Offers less the proposed reduction.
See Section 13 for the rights of the Purchaser to extend or amend the U.S.
Offer. Venezuelan law currently prohibits the extension of the expiration date
of the Venezuelan Offer to a date later than the 30th Venezuelan stock exchange
trading day after the initial expiration date of the Venezuelan Offer.
If proration of tendered ADSs is required, because of the difficulty of
determining the number of ADSs validly tendered and not withdrawn, the
Purchaser does not expect to be able to announce the final results of such
proration until at least seven business days after the Expiration Date.
Preliminary results of such proration will be announced by press release as
promptly as practicable after the Expiration Date. Holders of ADSs may obtain
preliminary information from the Dealer Manager or the Information Agent and
may be able to obtain such information from their brokers. The Purchaser will
not pay for any ADSs accepted for payment pursuant to the U.S. Offer until the
final proration factor is known.
The U.S. Offer is subject to the conditions set forth in Section 15. If
any condition is not satisfied on or before the Expiration Date, the Purchaser
may (1) terminate the U.S. Offer and return all tendered ADSs to tendering
shareholders, (2) extend the U.S. Offer and, subject to withdrawal rights as
set forth in Section 4, retain all such ADSs until the expiration of the U.S.
Offer as so extended, (3) waive any conditions not satisfied and, subject to
any requirement to extend the period of time during which the U.S. Offer is
open, purchase all ADSs validly tendered on or prior to the Expiration Date and
not withdrawn or (4) delay acceptance for payment or payment for ADSs, subject
to applicable law, until satisfaction or waiver of the conditions to the U.S.
Offer. For a description of the Purchaser's right to extend the period of time
during which the U.S. Offer is open and to amend, delay or terminate the U.S.
Offer, see Sections 13 and 15.
Holders of ADSs or CANTV shares do not have appraisal rights in connection
with the U.S. Offer or the Venezuelan Offer.
The Purchaser is making a request to CANTV pursuant to Rule 14d-5 under
the Exchange Act for the use of securityholder lists and security position
listings for the purpose of disseminating the U.S. Offer to holders of ADSs. In
addition, the Purchaser is delivering this U.S. Offer to Purchase, the Letter
of Transmittal, the Notice of Guaranteed Delivery and other relevant material
(the "U.S. Offer to Purchase Materials") to the Depositary under the Deposit
Agreement and requesting CANTV to make a request to the Depositary to
distribute the U.S. Offer to Purchase Materials to registered holders of ADSs.
The Purchaser is also requesting CANTV to request from the Depositary a list of
all holders of ADSs. Under the Deposit Agreement, the Purchaser believes that
the Depositary has agreed to distribute to holders of ADSs materials as
requested by CANTV and to provide CANTV with a list of holders of ADSs upon
request. The Purchaser intends to use the list of holders of ADSs to transmit
the U.S. Offer to Purchase Materials to holders of ADSs. The Purchaser believes
that CANTV should take such actions under the Deposit Agreement to enable
holders of ADSs to receive directly the U.S. Offer to Purchase Materials. The
U.S. Offer to Purchase Materials are also being distributed to brokers,
dealers, commercial banks, trust companies and similar persons who may be
listed as participants in a clearing agency's security position listings for
subsequent transmittal to the beneficial owners of ADSs. Further, the
Purchaser, as a holder of ADSs, is requesting that the Depositary allow the
Purchaser to inspect its books for the purpose of obtaining the names of ADS
holders.
A request is being made to CANTV to inspect CANTV's shareholder registry
books maintained by Banco Venezolano de Credito S.A.C.A., CANTV's transfer
agent, for the purpose of obtaining the names of the holders of CANTV shares.
Under Venezuelan law, a company is required to permit a holder of its shares to
inspect its shareholders registry books.
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2. ACCEPTANCE FOR PAYMENT
Upon the terms and subject to the conditions of the U.S. Offer, the
Purchaser will accept for payment and pay for ADSs validly tendered and not
withdrawn on or prior to the Expiration Date as soon as practicable after the
later of the Expiration Date and the satisfaction or waiver of the conditions
set forth in Section 15. In addition, the Purchaser reserves the right, in its
sole discretion and subject to applicable law, to delay the acceptance for
payment or payment for ADSs in order to comply in whole or in part with any
applicable law. See Sections 13 and 15 for a description of the Purchaser's
right to extend the period of time during which the U.S. Offer is open, to
amend the U.S. Offer in any respect, to terminate the U.S. Offer and not accept
for payment or pay for ADSs or to delay acceptance for payment or payment for
ADSs.
For purposes of the U.S. Offer, the Purchaser shall be deemed to have
accepted for payment tendered ADSs when, as and if the Purchaser gives oral or
written notice to the U.S. Receiving Agent of its acceptance of the tenders of
such ADSs. Payment for ADSs accepted for payment pursuant to the U.S. Offer
will be made by depositing the purchase price with the U.S. Receiving Agent,
which will act as agent for the tendering ADS holders for the purpose of
receiving payments from the Purchaser and transmitting such payments to
tendering ADS holders. In all cases, payment for ADSs accepted for payment
pursuant to the U.S. Offer will be made only after timely receipt by the U.S.
Receiving Agent of ADRs for such ADSs or of a confirmation of a book-entry
transfer of such ADSs into the U.S. Receiving Agent's account at the Book-Entry
Transfer Facility (as defined in Section 3), a properly completed and duly
executed Letter of Transmittal or an Agent's Message (as defined in Section 3
in the case of a book-entry transfer) and all other required documents. For a
description of the procedure for tendering ADSs pursuant to the U.S. Offer, see
Section 3. Payment for ADSs also may be delayed in the event of proration due
to the difficulty of determining the number of ADSs validly tendered. In
addition, payment may be made to tendering ADS holders at different times if
delivery of the ADSs and other required documents occur at different times.
Under no circumstances will interest be paid on the purchase price offered by
the Purchaser in connection with the Offers, even if there is a delay in making
the purchase and payment.
If the consideration to be paid for CANTV shares pursuant to the
Venezuelan Offer is increased, the Purchaser will make a corresponding increase
to the price to be paid per ADS purchased pursuant to the U.S. Offer, taking
into account the number of Class D Shares represented by each ADS.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates, the right to purchase
ADSs tendered pursuant to the U.S. Offer, but any such transfer or assignment
will not relieve the Purchaser of its obligation under the U.S. Offer or
prejudice the rights of tendering ADS holders to receive payment for ADSs
validly tendered and accepted for payment.
If any tendered ADSs are not purchased pursuant to the U.S. Offer for any
reason, or if ADRs are submitted for more ADSs than are tendered, ADRs for such
unpurchased or untendered ADSs will be returned (or, in the case of ADSs
tendered by book-entry transfer, such ADSs will be credited to an account
maintained at the Book-Entry Transfer Facility), without expense to the
tendering ADS holder, as promptly as practicable following the expiration or
termination of the U.S. Offer.
3. PROCEDURE FOR TENDERING ADSS IN THE U.S. OFFER
VALID TENDER
In order for ADSs to be validly tendered pursuant to the U.S. Offer:
o (1) the Letter of Transmittal properly completed and duly executed,
together with any signature guarantees (or, in the case of book-entry
transfer, an Agent's Message (as defined below) in lieu of the Letter of
Transmittal), and any other documents required by the Letter of
Transmittal must be received by the U.S. Receiving Agent at one of its
addresses set forth on the back cover of this U.S. Offer to Purchase and
(2) the ADRs representing the ADSs being tendered must be
17
received by the U.S. Receiving Agent or such ADRs for the ADSs must be
tendered pursuant to the procedure for book-entry transfer described
below and a book-entry confirmation must be received by the U.S.
Receiving Agent, in each case, prior to the Expiration Date, or
o the tendering ADS holder must comply with the guaranteed delivery
procedures described below.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility (as defined below) to and received by the U.S. Receiving
Agent and forming a part of a book-entry confirmation which states that the
Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the Book-Entry Transfer Facility tendering the ADSs which are
the subject of such book-entry confirmation that such participant has received
and agrees to be bound by the terms of the U.S. Offer and that the Purchaser
may enforce such agreement against such participant.
If you hold ADSs in "street" name, you should instruct your broker or
custodian to arrange, before the Expiration Date, for the book-entry transfer
of your ADSs into the U.S. Receiving Agent's account at Book-Entry Transfer
Facility. You will be provided with a form to instruct your broker or custodian
to tender your ADSs. This form will also be available from the Information
Agent.
BOOK-ENTRY DELIVERY
The U.S. Receiving Agent will establish an account with respect to the
ADSs at The Depository Trust Company (referred to as the "Book-Entry Transfer
Facility") for purposes of the U.S. Offer within two business days after the
date of commencement of the U.S. Offer, and any financial institution that is a
participant in the system of the Book-Entry Transfer Facility may make delivery
of ADSs by causing the Book-Entry Transfer Facility to transfer such ADSs into
the U.S. Receiving Agent's account in accordance with the procedures of the
Book-Entry Transfer Facility. However, although delivery of ADSs may be
effected through book-entry transfer, an Agent's Message in lieu of the Letter
of Transmittal and any other required documents must be received by the U.S.
Receiving Agent at one of its addresses set forth on the back cover of this
U.S. Offer to Purchase on or prior to the Expiration Date, or the guaranteed
delivery procedure described below must be complied with. DELIVERY OF THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE U.S. RECEIVING AGENT.
PARTIAL TENDERS
If fewer than all of the ADSs delivered to the U.S. Receiving Agent are to
be tendered, the holder thereof should so indicate by filling in the number of
ADSs which are to be tendered in the box entitled "Number of ADSs Tendered" in
the Letter of Transmittal. In such case, new ADRs for the untendered ADSs
represented by the old ADRs will be sent to the person(s) signing such Letter
of Transmittal (or delivered as such person properly indicates thereon) as
promptly as practicable following the date the tendered ADSs are purchased. ALL
ADSS DELIVERED TO THE U.S. RECEIVING AGENT WILL BE DEEMED TO HAVE BEEN TENDERED
UNLESS OTHERWISE INDICATED. SEE INSTRUCTION 4 OF THE LETTER OF TRANSMITTAL.
SIGNATURE GUARANTEES
Except as otherwise provided in the next sentence, all signatures on a
Letter of Transmittal must be guaranteed by a financial institution (including
most banks, savings and loan associations and brokerage houses) which is a
participant in a Medallion Signature Guarantee Program (an "Eligible
Institution"). Signatures on a Letter of Transmittal need not be guaranteed (1)
if the Letter of Transmittal is signed by the registered holder of the ADSs
tendered therewith and such holder has not completed the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on
the Letter of Transmittal or (2) if such ADSs are tendered for the account of
an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.
IF THE ADSS ARE REGISTERED IN THE NAME OF A PERSON OTHER THAN THE SIGNER
OF THE LETTER OF TRANSMITTAL, OR IF PAYMENT IS TO BE MADE, OR ADSS NOT TENDERED
OR NOT ACCEPTED FOR PAYMENT ARE TO BE RETURNED, TO A PERSON OTHER THAN THE
REGISTERED HOLDER OF SUCH ADSS, THEN THE TENDERED ADRS MUST BE ENDORSED OR
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ACCOMPANIED BY APPROPRIATE STOCK POWERS, SIGNED EXACTLY AS THE NAME OR NAMES OF
THE REGISTERED HOLDER OR HOLDERS APPEAR ON THE ADRS, WITH THE SIGNATURES ON THE
ADRS OR STOCK POWERS GUARANTEED AS AFORESAID. SEE INSTRUCTIONS 1 AND 5 OF THE
LETTER OF TRANSMITTAL.
GUARANTEED DELIVERY
If an ADS holder desires to tender ADSs pursuant to the U.S. Offer and
cannot deliver such ADSs and all other required documents to the U.S. Receiving
Agent on or prior to the Expiration Date, or such ADS holder cannot complete
the procedure for delivery by book-entry transfer on a timely basis, such ADSs
may nevertheless be tendered if all of the following conditions are met:
o such tender is made by or through an Eligible Institution;
o a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Purchaser is received by the
U.S. Receiving Agent (as provided below) on or prior to the Expiration
Date; and
o the ADRs representing such ADSs (or a confirmation of a book-entry
transfer of such ADSs into the U.S. Receiving Agent's account at the
Book-Entry Transfer Facility), together with a properly completed and
duly executed Letter of Transmittal with any required signature
guarantee, or an Agent's Message in lieu of Letter of Transmittal in the
case of a book-entry transfer, and any other documents required by the
Letter of Transmittal, are received by the U.S. Receiving Agent within
six New York Stock Exchange trading days after the date of execution of
the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the U.S. Receiving Agent
and must include a guarantee by an Eligible Institution in the form set forth
in such Notice.
Notwithstanding any other provisions hereof, payment for ADSs accepted for
payment pursuant to the U.S. Offer will in all cases be made only after timely
receipt by the U.S. Receiving Agent of ADRs representing such ADSs, or of
book-entry confirmation with respect thereto, a properly completed and duly
executed Letter of Transmittal together with any required signature guarantees
(or, in the case of book-entry transfer, an Agent's Message), and any other
documents required by the Letter of Transmittal. Accordingly, payment might not
be made to all tendering holders at the same time and will depend upon when
ADRs representing such ADSs are received by the U.S. Receiving Agent or
book-entry confirmation with respect to such ADSs are received into the U.S.
Receiving Agent's account at the Book-Entry Transfer Facility.
THE METHOD OF DELIVERY OF ADRS REPRESENTING ADSS AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION
AND RISK OF THE TENDERING ADS HOLDER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE U.S. RECEIVING AGENT. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE A TIMELY DELIVERY. IF ADRS REPRESENTING ADSS ARE
SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED.
APPOINTMENT AS PROXY
By executing the Letter of Transmittal as set forth above (including
through delivery of an Agent's Message), the tendering ADS holder will
irrevocably appoint, with respect to the ADSs accepted for payment by the
Purchaser, designees of the Purchaser as such ADS holder's attorneys-in-fact
and proxies in the manner set forth in the Letter of Transmittal, each with
full power of substitution, to the full extent of such ADS holder's rights with
respect to the ADSs tendered by such ADS holder and accepted for payment by the
Purchaser and with respect to any and all non-cash dividends, distributions and
rights, and additional or other ADSs, shares of capital stock, securities and
rights issued or issuable in respect thereof or the Class D Shares underlying
such ADSs (whether pursuant to a stock split, stock dividend or otherwise) on
or after August 29, 2001 (collectively, "Distributions"). Such appointment will
be effective if, as and when, and only to the extent that, the Purchaser
accepts for payment ADSs tendered by such ADS holder as provided herein. All
such powers of attorney and proxies will be irrevocable, will be
19
coupled with an interest and will be deemed granted in consideration of the
acceptance for payment by the Purchaser of ADSs tendered in accordance with the
terms of the U.S. Offer. Upon such appointment, all prior powers of attorney,
proxies and consents given by such ADS holder with respect to such ADSs (and
any and all Distributions) will, without further action, be revoked and no
subsequent powers of attorney, proxies, consents or revocations may be given by
such ADS holder (and, if given, will not be deemed effective). The designees of
the Purchaser will, with respect to the ADSs accepted for payment by the
Purchaser, thereby be empowered to exercise (i) all voting and other rights
with respect to such ADSs (and any and all Distributions), including, without
limitation, in respect of any ordinary or extraordinary meeting of CANTV's
shareholders (and any adjournment or postponement thereof), actions by written
consent in lieu of any such meeting or otherwise and (ii) any and all rights
granted to ADS holders pursuant to the Deposit Agreement, including, without
limitations, the right to surrender ADRs and withdraw deposited Class D Shares,
in each case, as each such attorney-in-fact and proxy or his substitute shall
in his sole discretion deem proper. The Purchaser reserves the right to require
that, in order for ADSs to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such ADSs, the Purchaser must be able to
exercise full voting, consent and other rights with respect to such ADSs (and
any and all Distributions), including voting at any meeting of stockholders.
BACKUP WITHHOLDING
Under the "backup withholding" provisions of U.S. federal income tax law,
unless a tendering ADS holder satisfies the conditions described in Instruction
11 of the Letter of Transmittal or is otherwise exempt, the cash payable as a
result of the U.S. Offer may be subject to U.S. backup withholding tax. To
prevent backup withholding, each holder should complete, sign and deliver the
Substitute Form W-9 provided in the Letter of Transmittal prior to receipt of
any payment or, if such holder is under U.S. federal income tax law a
non-resident alien individual or foreign entity not subject to backup
withholding, such holder should complete, sign and deliver an Internal Revenue
Service Form W-8BEN prior to receipt of any payment. See Instruction 11 of the
Letter of Transmittal.
REPRESENTATIONS BY ADS HOLDER
The tender of ADSs pursuant to any one of the procedures described above
will constitute the tendering ADS holder's acceptance of the terms of the U.S.
Offer, as well as the tendering ADS holder's representation and warranty that:
o such ADS holder owns the ADSs being tendered within the meaning of Rule
14e-4 promulgated under the Exchange Act;
o the tender of such ADSs complies with Rule l4e-4; and
o such ADS holder has the full power and authority to tender and assign
the ADSs tendered, all as specified in the Letter of Transmittal.
MATTERS CONCERNING VALIDITY, ELIGIBILITY AND ACCEPTANCE
All questions as to the form of documents and the validity, eligibility
(including time of receipt) and acceptance for payment of any tender of ADSs
will be determined by the Purchaser, in its sole discretion, which
determination shall be final and binding. The Purchaser reserves the absolute
right to reject any or all tenders of ADSs determined by it not to be in proper
form or the acceptance for payment of or payment for which may, in the opinion
of the Purchaser's counsel, be unlawful. The Purchaser also reserves the
absolute right to waive any defect or irregularity in any tender of ADSs. None
of AES, CEDC, the Purchaser, the Dealer Manager, the U.S. Receiving Agent, the
Information Agent or any other person or entity will be under any duty to give
notification of any defect or irregularity in any tender or incur any liability
for failure to give any such notification.
The Purchaser's acceptance for payment of ADSs tendered pursuant to the
U.S. Offer will constitute a binding agreement between the tendering ADS holder
and the Purchaser upon the terms and subject to the conditions of the U.S.
Offer.
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IF YOU HAVE ANY QUESTIONS ABOUT THE PROCEDURE FOR TENDERING ADSS OR NEED
ADDITIONAL COPIES OF THE U.S. OFFER TO PURCHASE MATERIALS PLEASE CONTACT THE
INFORMATION AGENT AT THE TELEPHONE NUMBER OR ADDRESS SET FORTH ON THE BACK
COVER OF THIS U.S. OFFER TO PURCHASE.
4. WITHDRAWAL RIGHTS
Tenders of ADSs made pursuant to the U.S. Offer may be withdrawn at any
time prior to the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after November 23, 2001 unless theretofore
accepted for payment as provided in this U.S. Offer to Purchase. If the
Purchaser extends the period of time during which the U.S. Offer is open, is
delayed in accepting for payment or paying for ADSs or is unable to accept for
payment or pay for ADSs pursuant to the U.S. Offer for any reason, then,
without prejudice to the Purchaser's rights under the U.S. Offer, the U.S.
Receiving Agent may, on behalf of the Purchaser, retain all ADSs tendered, and
such ADSs may not be withdrawn except as otherwise provided in this Section 4.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the U.S.
Receiving Agent at one of its addresses set forth on the back cover of this
U.S. Offer to Purchase and must specify the name of the person who tendered the
ADSs to be withdrawn, the number of ADSs to be withdrawn and the name of the
registered holder of ADSs, if different from that of the person who tendered
such ADSs. If the ADSs to be withdrawn have been delivered to the U.S.
Receiving Agent, a signed notice of withdrawal with (except in the case of ADSs
tendered by an Eligible Institution) signatures guaranteed by an Eligible
Institution must be submitted prior to the release of such ADSs. In addition,
such notice must specify, in the case of ADSs tendered by delivery of ADRs, the
name of the registered holder (if different from that of the tendering holder)
and the serial numbers shown on the particular ADRs representing the ADSs to be
withdrawn or, in the case of ADSs tendered by book-entry transfer, the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn ADSs. Withdrawals may not be rescinded and ADSs withdrawn will
thereafter be deemed not validly tendered for purposes of the U.S. Offer.
However, withdrawn ADSs may be re-tendered by again following one of the
procedures described in Section 3 at any time prior to the Expiration Date.
ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF
ANY NOTICE OF WITHDRAWAL WILL BE DETERMINED BY THE PURCHASER, IN ITS SOLE
DISCRETION, WHICH DETERMINATION SHALL BE FINAL AND BINDING. NONE OF AES, CEDC,
THE PURCHASER, THE DEALER MANAGER, THE U.S. RECEIVING AGENT, THE INFORMATION
AGENT OR ANY OTHER PERSON OR ENTITY WILL BE UNDER ANY DUTY TO GIVE NOTIFICATION
OF ANY DEFECT OR IRREGULARITY IN ANY NOTICE OF WITHDRAWAL OR INCUR ANY
LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTIFICATION.
5. CERTAIN TAX CONSIDERATIONS
The following describes certain U.S. federal income tax and Venezuelan
income tax consequences of the sale of ADSs pursuant to the U.S. Offer.
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain U.S. federal income tax consequences
of the U.S. Offer to holders of ADSs whose ADSs are tendered and accepted for
payment pursuant to the U.S. Offer. The discussion is for general information
only and does not purport to consider all aspects of U.S. federal income
taxation that might be relevant to holders of ADSs. The discussion is based on
laws, regulations, rulings and decisions now in effect, all of which are
subject to change, possibly with retroactive effect. The discussion applies
only to persons who hold ADSs as capital assets and have the U.S. dollar as
their functional currency. The discussion is not intended to address the U.S.
federal income tax consequences of the U.S. Offer to certain categories of
investors (such as banks, insurance companies, dealers in securities or foreign
currency, tax-exempt organizations, persons holding an ADS as part of a
straddle, hedging or conversion transaction, persons that own (or are deemed to
own for U.S. tax purposes) during the past five years shares or ADSs
representing 10% or more of the voting stock of CANTV and certain expatriates
or former long-term residents of the United States) that may be subject to
special treatment under the U.S. federal income tax laws.
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BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF ADSs SHOULD
CONSULT SUCH HOLDER'S TAX ADVISOR REGARDING THE APPLICABILITY OF THE RULES
DISCUSSED BELOW TO SUCH HOLDER AND THE PARTICULAR TAX EFFECTS TO SUCH HOLDER OF
THE U.S. OFFER, INCLUDING THE APPLICATION AND EFFECT OF THE ALTERNATIVE MINIMUM
TAX, STATE, LOCAL AND FOREIGN TAX LAWS AND SUCH HOLDER'S ABILITY TO CLAIM
FOREIGN TAX CREDITS, IF ANY.
Taxation of U.S. Holders
The following paragraphs describe the material U.S. federal income tax
consequences to a U.S. Holder of the sale of ADSs pursuant to the U.S. Offer.
As used in this U.S. Offer to Purchase, the term "U.S. Holder" means a
beneficial owner of ADSs that is:
o a U.S. resident or citizen for U.S. federal income tax purposes;
o a corporation (including an entity that is treated as a corporation for
U.S. federal income tax purposes) organized or created under the laws of
the United States or any political subdivision thereof;
o a trust, if a court within the United States is able to exercise primary
jurisdiction over its administration and one or more U.S. persons have
the authority to control all of its substantial decisions; or
o an estate, the income of which is subject to U.S. federal income
taxation regardless of its source.
A "non U.S. Holder" is a holder of ADSs that is not a U.S. Holder.
The tax treatment of persons who hold their ADSs through a partnership
(including an entity treated as a partnership for U.S. federal income tax
purposes) will generally depend on the status of the partner. Partners in a
partnership holding ADSs should consult their tax advisors.
U.S. Holders will recognize gain or loss upon the sale of ADSs for cash
pursuant to the U.S. Offer. Such gain or loss will generally be equal to the
difference between the amount of cash received by the U.S. Holder in the U.S.
Offer and the U.S. Holder's tax basis in the ADSs exchanged therefor. Any gain
or loss recognized upon the sale of ADSs pursuant to the U.S. Offer will
generally be treated as long-term capital gain or loss if the ADSs (or Class D
shares underlying the ADSs) have been held by the holder for more than one year
and otherwise as short-term capital gain or loss. Any gain or loss recognized
by a U.S. Holder generally will be treated as U.S. source.
U.S. Holders of ADSs should consult their tax advisors with respect to
determining their gain, loss, amount realized, tax basis and holding period in
connection with ADSs tendered and accepted for payment pursuant to the U.S.
Offer.
Taxation of Non-U.S. Holders
Subject to the discussion of backup withholding (see Section 3), a
non-U.S. Holder will generally not be subject to United States federal income
tax on gain realized on the sale of ADSs pursuant to the U.S. Offer unless:
o such gain is effectively connected with such non-U.S. Holder's conduct
of a trade or business within the U.S. (or, in the case of a country
which has a tax treaty with the United States, such gain is attributable
to a permanent establishment or fixed place of business in the United
States); or
o such gain is realized by an individual non-U.S. Holder who is present in
the United States for at least 183 days in the taxable year of the sale
and certain other conditions are met.
For a discussion of backup withholding consequences to U.S. Holders and
non-U.S. Holders, see Section 3 under the caption "Backup Withholding." For a
discussion of certain anticipated U.S. federal income tax consequences of the
proposed merger of CANTV with and into the Purchaser and subsequent cash
distributions made by the Purchaser following such merger, see Section 11.
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VENEZUELAN TAX CONSEQUENCES
The following is a summary of certain Venezuelan tax consequences of the
U.S. Offer to holders of ADSs whose ADSs are tendered and accepted for payment
pursuant to the U.S. Offer. The discussion is based on the domestic tax laws of
Venezuela, including applicable regulations, and published and non-binding
opinion letters of Venezuelan authorities available on or before the date of
this U.S. Offer to Purchase, or as in effect on the date of this U.S. Offer to
Purchase, which are subject to change, possibly with retroactive effect.
THIS SUMMARY IS NOT INTENDED AS TAX ADVICE TO ANY PARTICULAR HOLDER, WHICH
CAN BE RENDERED ONLY IN LIGHT OF THAT HOLDER'S PARTICULAR TAX SITUATION.
ACCORDINGLY, EACH HOLDER OF ADSS IS URGED TO CONSULT SUCH HOLDER'S TAX ADVISOR
WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE U.S. OFFER TO SUCH HOLDER,
INCLUDING THE APPLICATION AND AVAILABILITY OF ANY TAX TREATY TO SUCH HOLDER.
As used in this U.S. Offer to Purchase, the term "Resident of Venezuela"
generally refers to a natural person who is physically present in Venezuela for
a period aggregating more than 180 days during the calendar year or the
previous calendar year or a legal entity that either is organized under
Venezuelan law or maintains a registered branch or a permanent establishment in
Venezuela. The term "Non-Resident of Venezuela" generally refers to a natural
person who is not physically present in Venezuela for a period or periods
aggregating more than 180 days during the calendar year or the previous
calendar year or a legal entity that neither is organized under Venezuelan law
nor maintains a registered branch or a permanent establishment in Venezuela.
As used in this U.S. Offer to Purchase, the term "Convention" means the
Convention Between the Government of the United States of America and the
Government of the Republic of Venezuela for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with Respect to Taxes on Income and
Capital that became effective on December 30, 1999.
Those U.S. Holders which are Non-Residents of Venezuela will be entitled
to benefits under the Convention, discussed below, provided they can satisfy
the terms of Articles 4 (Residence) and 17 (Limitation on Benefits) of the
Convention. U.S. Holders who believe they may be entitled to the benefits of
the Convention should consult their tax advisor.
Gains from the sale of ADSs pursuant to the U.S. Offer recognized by a
U.S. Holder who is entitled to the benefits of the Convention will not be
subject to Venezuelan income tax. The treatment given to U.S. Holders on the
sale of ADSs pursuant to the U.S. Offer may also be available to Non-Residents
of Venezuela who are entitled to the benefits of similar treaties to prevent
double taxation currently in effect between Venezuela and Italy, France,
Portugal, Germany, the Czech Republic, Trinidad & Tobago, The Netherlands,
Switzerland, the United Kingdom, Norway, Sweden and Belgium.
Venezuelan counsel to the Purchaser is of the opinion that gain from the
sale of ADSs pursuant to the U.S. Offer recognized by a holder who is a
Non-Resident of Venezuela and not entitled to the benefits of the Convention or
a similar treaty to prevent double taxation discussed above will not be subject
to Venezuelan income tax.
Gains from the sale of ADSs pursuant to the U.S. Offer recognized by a
Resident of Venezuela will be subject to Venezuelan income tax at a maximum
rate of 34%.
6. PRICE RANGE OF ADSS AND CLASS D SHARES; DIVIDENDS
Each ADS represents seven Class D Shares and trades on the New York Stock
Exchange. The ADSs are represented by ADRs and CANTV's trading symbol on the
New York Stock Exchange is "VNT." Class D Shares are traded on the Caracas
Stock Exchange under the symbol "TDV.D."
23
The following table sets forth, for the periods indicated, (1) the high
and low closing sales prices of Class D Shares, in Bolivares, as reported on
the Caracas Stock Exchange and (2) the high and low closing sales prices of
ADSs, in U.S. dollars, on the New York Stock Exchange, as disclosed in CANTV's
public filings and for the second and third quarters of 2001, as published by
the Dow Jones Interactive Quotes & Market Data.
CARACAS STOCK
EXCHANGE
PER CLASS D SHARE NYSE PER ADS
----------------- -------------------------
BS. $
LOW HIGH LOW HIGH
------- ------- ----------- -----------
1999
First Quarter ...................... 1,200 1,600 14-3/4 18-1/5
Second Quarter ..................... 1,400 2,640 17 31
Third Quarter ...................... 1,700 2,505 19-15/16 28
Fourth Quarter ..................... 1,935 2,501 21-3/4 27-3/16
2000
First Quarter ...................... 2,260 3,620 24-3/16 39
Second Quarter ..................... 2,260 3,100 23-1/4 32-1/2
Third Quarter ...................... 2,050 2,750 20-3/4 28-5/16
Fourth Quarter ..................... 1,571 2,485 15-9/16 25-1/4
2001
First Quarter ...................... 1,925 2,700 18-7/8 26-11/16
Second Quarter ..................... 2,160 2,900 18-1/4 28-5/32
Third Quarter (through September 24,
2001) ............................. 2,060 2,703 19-19/32 26-21/32
On August 28, 2001, the last full day of trading on the New York Stock
Exchange prior to the announcement by the Purchaser and its affiliates of the
intent to commence the Offers, the reported closing sales price of the ADSs on
the New York Stock Exchange and the Class D Shares on the Caracas Stock
Exchange were $19.81 per ADS and Bs.2080 per Class D Share, respectively.
On September 24, 2001, the last trading day before the commencement of the
Offers, the reported closing sales price of the ADSs on the New York Stock
Exchange and the Class D Shares on the Caracas Stock Exchange were $23.70 per
ADS and Bs. 2,467 per Class D Share, respectively.
Holders of ADSs are urged to obtain current market quotations.
The table below sets forth the amounts of annual dividends, on a per share
and per ADS basis in constant Bolivares and U.S. dollars, for each of the
calendar years indicated, as reported in CANTV's public filings.
PER SHARE PER ADS
---------------- ----------------
(Bs.) ($) (Bs.) ($)
1999 ......... 55.33 0.09 387.31 0.63
2000 ......... 60.00 0.09 420.00 0.60
On March 27, 2001, an ordinary meeting of CANTV shareholders declared a
cash dividend of Bs.63.00 per share to shareholders of record as of April 6,
2001. This dividend was paid on April 24, 2001.
7. INFORMATION CONCERNING CANTV
The following information is taken from publicly available reports and
documents concerning CANTV filed with the SEC. Such reports and documents may
be examined and copies may be obtained at the places and in the manner set
forth under "Available Information" at the end of this Section 7. Although none
of the Purchaser, AES or CEDC has any knowledge that would indicate that any
24
statements contained in this Section 7, or financial information set forth
below under the caption "Financial Information" which is based upon such
reports and documents, are untrue, none of the Purchaser, AES or CEDC takes any
responsibility for the accuracy or completeness of the information contained in
such reports and other documents or for any failure by CANTV to disclose events
that may have occurred and may affect the significance or accuracy of any such
information but that are unknown to the Purchaser, AES or CEDC.
GENERAL
CANTV is the primary provider of fixed telecommunications services in
Venezuela. CANTV provides substantially all of its services within Venezuela
and substantially all of its operating income is derived from Venezuelan
domiciled customers and from settlements with foreign carriers for calls
completed in Venezuela. CANTV is the proprietor of the only basic
telecommunications network with nationwide coverage in Venezuela. Through this
network, CANTV provides local, national and international telecommunications
services. In addition, CANTV provides private network, data, public telephone,
rural telephone and telex services. Through its subsidiaries, CANTV provides
other telecommunications-related services including wireless communications,
Internet access and telephone directories.
CANTV operates under a concession agreement (the "Concession") granted by
the Venezuelan Government in October 1991. Under the Concession, CANTV was the
exclusive provider of switched, fixed, local, domestic and international
telephone services in Venezuela until November 27, 2000. On that date, CANTV's
switched, fixed, local and domestic and international long distance services
were opened to competition. The Concession provides that, without prior
authorization of CONATEL, CANTV may not transfer or assign, in whole or in
part, the Concession or the obligation to fulfill the Concession. It also
provides that the control of CANTV may not be assigned or transferred without
the approval of CONATEL.
CANTV has its principal executive offices at Avenida Libertador, Centro
Nacional de Telecomunicaciones, Nuevo Edificio Administrativo, Piso. 1,
Apartado Postal 1226 Caracas, Venezuela 1010 (telephone number
58-212-500-6800).
CAPITAL STOCK OF CANTV
According to CANTV's report on Form 6-K filed with the SEC on August 22,
2001 (the "Form 6-K"), as of June 30, 2001, CANTV had 926,037,385 shares of
capital stock outstanding. The capital stock of CANTV is divided into four
classes of shares of common voting stock: Class A shares, Class B shares, Class
C shares and Class D Shares. A brief description of these different classes
follows.
Class A Shares
According to CANTV's report on Form 20-F filed with the SEC on May 25,
2001 (the "Form 20-F"), VenWorld Telecom, C.A. ("VenWorld"), a Venezuelan
company formed in 1991 by GTE Corporation (now Verizon Communications Inc.
("Verizon")), TI Telefonica Internacional de Espana, S.A., ("Telefonica"), C.A.
La Electricidad de Caracas, AT&T International Inc. ("AT&T") and Consorcio
Inversionista Mercantil Cima, C.A. to acquire Class A shares in connection with
the privatization of CANTV by the Government of Venezuela, owned, as of April
30, 2001, 400,000,000 Class A shares representing all of the Class A shares and
approximately 43.2% of CANTV's outstanding capital stock. As of such date, the
shareholders of VenWorld also included certain other minority shareholders.
According to CANTV's Bylaws, any transfer of Class A shares to any person other
than VenWorld, the original consortium participants of VenWorld or their
controlled affiliates will cause such transferred shares to be automatically
converted into an equal number of Class D Shares.
The shareholders of VenWorld are parties to an association agreement,
dated as of August 1, 1991, as amended (the "Association Agreement"). Under the
terms of the Association Agreement, any shareholder of VenWorld may require
that VenWorld convert all or part of the VenWorld shares held by
25
such shareholder into its pro rata interest in the Class A shares held by
VenWorld, provided that the Class A shares so converted must first be
irrevocably offered for sale to the other shareholders of VenWorld at a price
per share equal to 95% of the average market price of the ADSs during a period
specified in the Association Agreement.
The Association Agreement also provides that any shareholder of VenWorld
who wishes to sell, transfer or assign any shares of VenWorld must first offer
the shares it wishes to transfer to the other VenWorld shareholders at a price
per share specified by the offering shareholder and in accordance with a
procedure set forth in the Association Agreement.
Between April 2001 and July 13, 2001, the Purchaser believes that the
following conversions of VenWorld shares occurred:
o Inversiones Inextel converted substantially all of its interest in
VenWorld into 63,999,524 Class A shares held by VenWorld, representing
approximately 6.9% of the outstanding capital stock of CANTV. The
Purchaser believes that on receipt, such Class A shares automatically
converted into an equal number of Class D Shares. However, to date, CANTV
has been unwilling to reflect such conversion in accordance with the
provisions of CANTV's Bylaws on the CANTV shareholder records. In
addition, in August 2001, Inversiones Inextel requested that VenWorld
convert its remaining interest in VenWorld into 476 Class A shares (or
Class D Shares on their receipt by Inversiones Inextel).
o A wholly owned subsidiary of AT&T converted all of its interest in
VenWorld into 20,000,000 Class A shares held by VenWorld, representing
2.2% of the outstanding capital stock of CANTV. The Purchaser does not
know whether AT&T still owns these shares.
o Other minority shareholders of VenWorld converted their interests in
VenWorld into 3,913,917 Class A shares. The Purchaser believes that on
receipt, such Class A shares automatically converted into an equal number
of Class D Shares.
As a result of these conversions and after giving effect to the automatic
conversion of the Class A shares received by Inversiones Inextel and other
converting VenWorld shareholders (except AT&T) into Class D Shares in
accordance with the By-laws of CANTV, the Purchaser estimates that as of July
13, 2001, there were approximately 332,086,559 Class A shares outstanding,
representing approximately 35.9% of the outstanding capital stock of CANTV. The
Purchaser does not know if other shareholders of VenWorld have exercised their
conversion rights and received shares of CANTV common stock since July 13,
2001.
Based on the information set forth in the Form 20-F and the Form 6-K, and
after giving effect to the conversion and assumptions described above, of these
332,086,559 Class A shares, the Purchaser believes that VenWorld owns
312,086,559 Class A shares representing approximately 33.7% of CANTV's
outstanding capital stock. The principal remaining shareholders of VenWorld are
GTE Venholdings B.V., a wholly owned subsidiary of Verizon whom the Purchaser
estimates beneficially owns 74.0% of VenWorld's outstanding capital stock, and
Telefonica, whom the Purchaser estimates beneficially owns 20.5% of VenWorld's
outstanding capital stock.
Class B Shares
Based on the Form 6-K, and assuming there have been no changes in the
number of outstanding Class B shares since the date of the information set
forth in the Form 6-K, there are 51,900,000 Class B shares outstanding,
representing approximately 5.6% of the capital stock of CANTV. Class B shares
may be owned only by the government of Venezuela and other Venezuelan public
sector entities. The transfer of Class B shares to an individual or a
non-public sector entity will cause such transferred shares to be automatically
converted into an equal number of Class D Shares, except that transfers to
employees, retirees and certain other employee-related vehicles of CANTV causes
such transferred shares to be automatically converted into an equal number of
Class C shares.
26
Class C Shares
Based on the Form 6-K and other publicly available information, and
assuming there have been no changes in the number of outstanding Class C shares
since the date of the information set forth in the Form 6-K, there are
approximately 99,318,876 Class C shares outstanding, representing approximately
10.7% of the capital stock of CANTV.
Class C shares may only be owned by: (i) current employees of CANTV; (ii)
retirees of CANTV; (iii) companies whose capital is 100% owned by current and
retired CANTV employees and whose sole corporate purpose is the acquisition and
ownership of the shares of CANTV; (iv) trust and benefit plans established for
the benefit of the employees or retirees of CANTV; (v) former employees of
CANTV who have retained Class C shares; (vi) successors of Class C shareholders
who have received their shares by inheritance or legacy; (vii) ex-spouses of
Class C shareholders that are holders of such shares by reason of distribution
of marital property; and (viii) current employees and retirees of subsidiaries
of CANTV.
The transfer of any Class C shares to any person or entity, other than the
persons and entities listed above, will cause such transferred shares to be
automatically converted into an equal number of Class D Shares.
According to the Bylaws of CANTV, any of the following persons or entities
who wish to transfer any Class C shares must first give notice to CANTV of
their intention to transfer their Class C shares: (i) active employees or
retirees; (ii) employees of CANTV's subsidiaries; (iii) former employees of
CANTV; (iv) holders of the Class C shares as a result of inheritance; and (v)
holders of Class C shares as a result of liquidation of marital property.
Other active employees and retirees, as well as benefit plans and workers
companies, hold a preferential right to acquire any or all of such Class C
shares offered for transfer pursuant to certain procedures. Under these
procedures, twice a month, the persons or entities listed above who wish to
transfer their Class C shares can provide written notice to CANTV indicating
the number of Class C shares sought to be sold and the lowest price at which
the shares may be sold. The maximum price at which the shares will be sold is
then determined and CANTV is required to publish advertisements in internal
publications giving notice to all employees, retirees, benefit plans and
workers companies of the offers to sell Class C shares. Employees, retirees,
benefit plans and workers companies may exercise their preferential right by
stating the number of Class C shares they intend to purchase and the price they
intend to pay. The Class C shares are sold in the order in which offers are
received. If offered shares are not purchased within the designated period, the
holder of the Class C shares can transfer such shares to employees, retirees,
workers companies, benefit plans or to any third parties. The Bylaws of CANTV
provide that upon such transfer of such shares, any debt that such holder may
have with a governmental entity called BANDES (previously the Fondo de
Inversiones de Venezuela or Venezuelan Investment fund) must be repaid.
The procedures described in the immediately preceding paragraph may be
modified by the board of directors of CANTV. The Purchaser understands that
holders of Class C shares have requested changes to these procedures so that
they can participate on the same basis as holders of other classes of CANTV
shares in tenders pursuant to tender offers and in sales in the public market.
Class D Shares
Based upon the Form 20-F, Form 6-K and other publicly available
information, and after giving effect to the conversions of interests in
VenWorld and the assumptions described above in this Section 7 under the
heading "Class A Shares", and assuming no conversions of Class B shares or
Class C Shares since June 30, 2001 (being the date of the information set forth
in the Form 6-K) it is estimated that there are 442,731,950 Class D Shares
outstanding (including Class D Shares represented by ADSs), representing
approximately 47.8% of the outstanding capital stock of CANTV. This includes
the 64,000,524 Class D Shares and 1,000 ADSs beneficially owned by AES and
CEDC. In addition, based on publicly available information, the Purchaser
understands that Verizon beneficially owns, in addition to its interest in
VenWorld, 32,945,829 Class D Shares, representing approximately 3.6% of the
outstanding capital stock of CANTV.
27
Class D Shares are listed on the Caracas Stock Exchange. Class D Shares
are the only class of stock of CANTV underlying the ADSs. The ADSs are listed
on the New York Stock Exchange.
DIRECTORS OF CANTV
CANTV's Bylaws provide that CANTV's directors, other than the directors to
be elected by the holders of Class B shares or Class C shares voting as
separate classes, are appointed by a majority of the votes cast in a
shareholders meeting where directors are being elected. Holders of Class B
shares have the right to elect one principal director and his/her alternate,
regardless of the number of Class B shares outstanding. Holders of Class C
shares have the right to elect two principal directors and their alternates so
long as all Class C shares outstanding represent at least 8% of the outstanding
shares of CANTV, and one principal director and his/her alternate so long as
all Class C shares outstanding represent between 3% and 8% of the outstanding
stock of CANTV.
Pursuant to Venezuelan Capital Markets Law, a shareholder or group of
minority shareholders holding 20% or more of the outstanding shares of CANTV is
entitled to elect a number of members of the board of directors of CANTV that
is proportional to the holding of such shareholders or group of shareholders
(excluding for purposes of such calculation the directors appointed by Class B
and Class C shareholders).
The Association Agreement contains provisions providing for the election
of directors of VenWorld and CANTV. Pursuant to these provisions,
representatives of CEDC currently serve as a director and such director's
alternate on the Board of Directors of CANTV.
FINANCIAL INFORMATION
The following selected consolidated financial information relating to
CANTV and its subsidiaries has been taken or derived from the audited
consolidated financial statements contained in the Form 20-F. Additional
financial information is available in documents which have been filed by CANTV
with the SEC. The financial statements of CANTV are prepared in accordance with
generally accepted accounting principles in Venezuela, which differ in certain
important respects from generally accepted accounting principles in the United
States. The financial information of CANTV as of December 31, 2000 and December
31, 1999 is presented in constant Bolivares currency based upon the Bolivar's
purchasing power as of December 31, 2000. The financial information of CANTV as
of December 31, 2000 is also presented in U.S. dollars translated from constant
Bolivares as of December 31, 2000, at an exchange rate of Bs. 700 to $1.00.
28
CANTV SELECTED CONSOLIDATED FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 2000 AND 1999
(ADJUSTED FOR INFLATION AND EXPRESSED IN MILLIONS OF CONSTANT BOLIVARES
AS OF DECEMBER 31, 2000, AND MILLIONS OF U.S. DOLLARS)
2000 2000 1999
U.S.$ Bs. Bs.
------- ------------ ------------
ASSETS
CURRENT ASSETS:
Cash and temporary investments ........................... 827 578,657 366,478
Accounts receivable, net ................................. 496 347,496 460,833
Accounts receivable from Venezuelan
Government entities .................................... 147 102,775 137,483
Inventories and supplies, net ............................ 48 33,302 49,229
Other current assets ..................................... 19 13,981 14,062
--- ------- -------
Total current assets ............................... 1,537 1,076,211 1,028,085
Property, plant and equipment, net ....................... 4,648 3,253,902 3,535,274
Cellular concession, net ................................. 136 95,333 98,367
Other assets ............................................. 311 216,637 255,120
----- --------- ---------
Total assets ....................................... 6,632 4,642,083 4,916,846
===== ========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Short-term debt .......................................... 79 55,490 60,709
Accounts payable ......................................... 394 275,447 296,423
Employee severance benefits, net ......................... 13 8,850 10,040
Accrued employee benefits ................................ 220 154,129 38,200
Other current liabilities ................................ 409 286,143 211,534
----- --------- ---------
Total current liabilities .......................... 1,115 780,059 616,906
LONG-TERM LIABILITIES:
Long-term debt ........................................... 488 341,370 387,476
Pension and postretirement benefit obligations ........... 494 345,886 371,293
----- --------- ---------
Total liabilities .................................. 2,097 1,467,315 1,375,675
STOCKHOLDERS' EQUITY 4,535 3,174,768 3,541,171
---------
Total liabilities and stockholders' equity ......... 6,632 4,642,083 4,916,846
===== ========= =========
29
CANTV CONSOLIDATED INCOME STATEMENT
AS AT DECEMBER 31, 2000 AND 1999
(ADJUSTED FOR INFLATION AND EXPRESSED IN MILLIONS OF CONSTANT BOLIVARES AS
OF DECEMBER 31, 2000, AND MILLIONS OF U.S. DOLLARS, EXCEPT PER SHARE AND PER
ADS AMOUNTS)
2000 2000 1999
U.S.$ Bs. Bs.
----------- ------------ ------------
OPERATING REVENUES:
Local and domestic long distance usage ...................... 884 618,917 614,502
Basic rent .................................................. 452 316,152 362,673
Public telephones ........................................... 155 108,655 119,680
---- ------- -------
Local and domestic long distance .......................... 1,491 1,043,724 1,096,855
International long distance ................................. 142 99,107 151,027
Net settlements ............................................. 42 29,373 31,780
------ --------- ---------
International long distance ............................... 184 128,480 182,807
Other wireline-related services ............................. 199 139,749 162,450
------ --------- ---------
Total wireline services ................................... 1,874 1,311,953 1,442,112
Wireless services ........................................... 667 466,993 460,714
Other telecommunications-related Services ................... 66 46,186 43,856
------ --------- ---------
Total operation revenues .................................... 2,607 1,825,132 1,946,682
------ --------- ---------
OPERATING EXPENSES:
Operations, maintenance, repairs and Administration ......... 1,340 938,074 977,142
Depreciation and amortization ............................... 881 616,714 666,635
Concession and other taxes .................................. 197 138,394 140,193
Special charge .............................................. 158 110,390 --
Nonrecurring charges ........................................ 1 632 4,085
------ --------- ---------
Total operating expenses .................................... 2,577 1,804,204 1,788,055
------ --------- ---------
Operating income ............................................ 30 20,928 158,627
------ --------- ---------
OTHER (EXPENSE) INCOME, NET:
Financing cost, net ......................................... (45) (31,348) (48,281)
Other income (expense), net ................................. (5) (3,827) 6,331
-------- --------- ---------
Total other expense, net .................................... (50) (35,175) (41,950)
------- --------- ---------
Income (loss) before income tax effect of account
change, netof tax ......................................... (20) (14,247) 116,677
INCOME TAX: 51 35,428 15,487
Income (loss) before cumulative effect of accounting
change, net of tax ........................................ (71) (49,675) 101,190
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX: (58) (40,518) --
Net income (loss) ........................................... (129) (90,193) 101,190
======= ========= =========
Earnings (loss) per share beforecumulative effect, net of
tax ....................................................... (0.08) (52) 101
Cumulative effect of accountingchange, net of tax per
share ..................................................... (0.06) (43) --
------- --------- ---------
Earnings (loss) per share ................................... (0.14) (95) 101
------- --------- ---------
Earnings (loss) per ADS (based on
7 shares per ADS) ......................................... (0.95) (663) 709
======= ========= =========
Average shares outstanding (in millions) .................... 952 952 999
======= ========= =========
30
EXCHANGE RATES
The following table sets forth information relating to the Bolivar:
US$ exchange rates for the periods indicated.
HIGH(1) LOW(1) END OF PERIOD (2)
YEAR --------- -------- ------------------
(BOLIVAR PER US$)
1995 .......................... 290.00 167.00 290.00
1996 .......................... 499.50 290.00 472.50
1997 .......................... 504.80 468.60 504.80
1998 .......................... 589.25 503.63 565.00
1999 .......................... 649.25 565.51 649.25
2000 .......................... 700.50 649.75 700.50
2001 (through August 29, 2001) 738.01 698.75 737.00
----------
(1) The highest and lowest of exchange rates as reported by the Federal
Reserve in the relevant period.
(2) The exchange rate as reported by the Federal Reserve on the last day of
each relevant period.
From 1989 until June 1994, the Bolivar was permitted to trade freely with
respect to the U.S. dollar. On June 27, 1994, the Venezuelan Government imposed
controls on foreign exchange transactions and fixed the official exchange rate.
The rate was originally fixed at Bs.170.00 per U.S. dollar, and was adjusted to
Bs.290.00 per U.S. dollar in December 1995. These controls were removed on
April 22, 1996. The Venezuelan Central Bank, in order to keep the exchange rate
within certain limits, currently intervenes to maintain the exchange rate
between 7.5% above and 7.5% below a reference rate set by the Venezuelan
Central Bank.
AVAILABLE INFORMATION
The ADSs are registered under the Exchange Act. Accordingly, CANTV is
subject to the informational requirements of the Exchange Act applicable to
foreign private issuers and, in accordance with such requirements, files
reports and other information with the SEC relating to its business, financial
condition and other matters. Such reports, statements and other information may
be inspected at the public reference facilities maintained by the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the regional office of the
SEC in Chicago (Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661). Copies of such materials should be obtainable by mail, upon
payment of the SEC's customary charges, by writing to the SEC's principal
office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of such materials may also be available for inspection at the library of
the NYSE, 20 Broad Street, New York, New York 10005, on which the ADSs are
traded. CANTV's SEC filings are also available to the public through commercial
document retrieval services and, in the case of documents filed electronically,
at the web site maintained by the SEC at http://www.sec.gov.
CANTV is also subject to Venezuelan reporting requirements and, in
accordance therewith, files reports and other information with the CNV, in
Spanish. Such reports and other information may be inspected and copies may be
obtained at the offices of the CNV at Avenida Francisco Solano Lopez entre
Calles San Geronimo y Los Jabillos, Edificio LepaDirectosn P.B., Sabana Grande,
Caracas, Venezuela.
8. INFORMATION CONCERNING AES, CEDC AND THE PURCHASER
AES
AES is a global power company committed to serving the world's needs for
electricity and other services in a socially responsible way. AES participates
primarily in two related lines of business: electricity generation and
distribution. AES's electricity generation business is characterized by sales
from its power plants to nonaffiliated wholesale customers (generally electric
utilities, regional electric companies, electricity marketers and traders or
wholesale commodity markets known as "power pools") for further resale to end
users. AES's distribution business is characterized by sales of electricity
directly to end users such as commercial, industrial, governmental and
residential customers.
31
In its generation business, AES now controls a diverse portfolio of
electric power plants with a total capacity (as of December 31, 2000) of 42,133
megawatts (MW) distributed throughout North America, South America, Europe and
Asia.
AES has majority ownership in three distribution companies in Argentina
and individual distribution companies in the United States, Brazil, El
Salvador, Venezuela, Dominican Republic, and The Republic of Georgia. AES also
has assumed management control of a heat and electricity distribution business
in Kazakhstan. In addition, AES has less than majority ownership in three
additional distribution companies in Brazil. These distribution companies serve
a total of over 18 million customers with annual sales exceeding 126,000
gigawatt hours. AES also serves retail customers in those states of the United
States that have introduced a competitive market for the sale of electricity.
AES is using its distribution infrastructure and knowledge of various
markets to develop the ability to provide wholesale and/or retail
telecommunications services. AES continually considers business development
opportunities, including significant acquisition opportunities throughout the
world. AES has been actively involved in the acquisition and operation of
electricity assets in countries that are restructuring and deregulating the
electricity industry.
AES is organized under the laws of the State of Delaware and has its
principal executive offices at 1001 North 19th Street, Arlington, Virginia,
22209 (telephone no.: (703) 522-1315). Shares of AES trade on the New York
Stock Exchange under the symbol "AES."
AES is subject to the informational requirements of the Exchange Act and,
in accordance with such requirements, files reports and other information with
the SEC relating to its business, financial condition and other matters. Such
reports, statements and other information may be inspected at the public
reference facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional office of the SEC in Chicago
(Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661). Copies of such materials should be obtainable by mail, upon payment of
the SEC's customary charges, by writing to the SEC's principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
materials should also be available for inspection at the library of the NYSE,
20 Broad Street, New York, New York 10005. AES's SEC filings are also available
to the public through commercial document retrieval services and, in the case
of documents filed electronically, at the web site maintained by the SEC at
http://www.sec.gov.
CEDC
CEDC is a Venezuelan company in which AES indirectly holds 87% of the
outstanding ordinary shares. CEDC is the sister company of C.A. La Electricidad
de Caracas ("EDC"), Venezuela's largest publicly traded power company. CEDC is
a holding company of non-Venezuelan investments and for Venezuelan investments
other than in regulated electricity activities. CEDC holds interests in
companies dedicated to the production and distribution of electricity,
telecommunications and distribution of natural gas.
Other investments CEDC holds include interests in electric utilities
located in El Salvador and Venezuela and a 60% interest in Phoenix
Internacional, C.A., a company that provides services to the Venezuelan oil
industry. CEDC also holds an interest in S.A. Venezolana Domestica de Gas,
which is engaged in the distribution of natural gas for domestic use in
southeastern Caracas.
CEDC is organized under the laws of Venezuela and its principal executive
offices are located at Edificio La Electricidad de Caracas, Av. Vollmer,
Urbanizacion San Bernardino (telephone no.: 011-58-212-502-2111). Shares of
CEDC trade on the Caracas Stock Exchange together with the shares of EDC under
the symbol "EDC."
CEDC is subject to Venezuelan reporting requirements and, in accordance
therewith, files reports and other information with the CNV, in Spanish,
relating to its business, financial condition and other matters. Such reports
and other information may be inspected and copies may be obtained at the
offices of the CNV at Avenida Francisco Solano Lopez entre Calles San Geronimo
y Los Jabillos, Edificio Lepan P.B., Sabana Grande, Caracas, Venezuela.
32
In connection with the establishment of its American Depositary Shares,
which are not registered under the Exchange Act, CEDC has established
exemptions from the reporting requirements of Section 12(g) of the Exchange
Act. Pursuant to the exemption obtained by CEDC under Rule 12g3-2(b) of the
Exchange Act which exempts the American Depositary Shares of CEDC from
registration under Section 12 of the Exchange Act, CEDC has agreed to furnish
the SEC materials that CEDC has made or is required to make public pursuant to
Venezuelan law, has filed or is required to file with the Caracas Stock
Exchange and which were made public by such exchange or has distributed or is
required to distribute to its security holders. Such reports, statements and
other information may be inspected at the public reference facilities
maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional office of the SEC located at 500 West Madison
Street, Suite 1400, Chicago, IL 60661. Copies of such materials should be
obtainable by mail, upon payment of the SEC's customary charges, by writing to
the SEC's principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
THE PURCHASER
The Purchaser is a recently formed company (compania anonima) incorporated
under the laws of Venezuela, and organized to facilitate the U.S. Offer and the
Venezuelan Offer. The Purchaser has not carried on any activities or business
other than in connection with the U.S. Offer and the Venezuelan Offer. The
Purchaser owns 1,000 Class D Shares and 1,000 ADSs, representing less than 0.1%
of the outstanding capital stock of CANTV. These shares and ADSs were
transferred to the Purchaser prior to the announcement of the intention to make
the Offers by a CEDC subsidiary.
The Purchaser is a wholly-owned subsidiary of TelCom 2, B.V., a Dutch
corporation ("TelCom 2") Over two thirds of the equity interest in TelCom 2 is
currently owned indirectly by AES; the remainder is owned indirectly by CEDC.
Pursuant to an agreement dated August 29, 2001 among AES, CEDC and TelCom 2,
entered into prior to the announcement of the intention to make the Offers, on
or before December 1, 2001, AES must contribute, or cause an affiliate to
contribute, to TelCom 2 as an equity contribution $500 million or such greater
amount as AES shall determine. Contemporaneously with AES's contribution, CEDC
must contribute, or cause Inversiones Inextel to contribute, to TelCom 2 as an
equity contribution, the Class D Shares held by Inversiones Inextel and such
additional amounts in cash as the parties shall determine. The Class D Shares
contributed to TelCom 2 will be valued at a price per Class D Share equal to
the purchase price per Class D Share in the Venezuelan Offer.
SELECTED HISTORICAL FINANCIAL INFORMATION
Set forth below is certain selected consolidated financial information
with respect to AES and its subsidiaries (including CEDC) excerpted or derived
from the restated audited financial statements of AES contained in AES's Form
8-K filed with the SEC on June 5, 2001 pursuant to the Exchange Act. More
comprehensive financial information and other information is included in such
report and in other documents filed by AES with the SEC. The following summary
is qualified in its entirety by reference to such report and other documents
and all of the financial information and related notes contained therein. Such
report, documents and financial information may be inspected and copies may be
obtained from the SEC in the manner set forth above.
33
THE AES CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 2000 AND 1999
2000 1999
----------- -----------
(AMOUNTS IN MILLIONS,
EXCEPT SHARES AND PAR
VALUE)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................................... $ 950 $ 693
Short-term investments ................................................. 1,297 339
Accounts receivable--net of reserves of $203--2000; $105--1999 ......... 1,564 986
Inventory .............................................................. 571 408
Receivable from affiliates ............................................. 27 2
Deferred income taxes .................................................. 167 185
Prepaid expenses and other current assets .............................. 1,208 337
-------- --------
Total Current Assets ................................................. 5,784 2,950
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Land ................................................................... 657 256
Electric generation and distribution assets ............................ 18,627 15,530
Accumulated depreciation and amortization .............................. (2,651) (2,078)
Construction in progress ............................................. 2,874 1,558
-------- --------
Property, plant and equipment--net ................................... 19,507 15,266
-------- --------
OTHER ASSETS:
Deferred financing costs--net .......................................... 381 243
Project development costs .............................................. 114 53
Investments in and advances to affiliates .............................. 3,122 1,575
Debt service reserves and other deposits ............................... 517 328
Excess of cost over net assets acquired--net ........................... 2,307 1,851
Other assets ........................................................... 1,306 956
-------- --------
Total Other Assets ................................................... 7,747 5,006
-------- --------
Total Assets ........................................................ $ 33,038 $ 23,222
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ....................................................... $ 833 $ 479
Accrued interest ....................................................... 417 233
Accrued and other liabilities .......................................... 1,318 763
Recourse debt--current portion ......................................... -- 335
Non-recourse debt--current portion ..................................... 2,471 991
-------- --------
Total current liabilities ............................................ 5,039 2,801
-------- --------
LONG-TERM LIABILITIES:
Non-recourse debt ...................................................... 12,863 9,521
Recourse debt .......................................................... 3,458 2,167
Deferred income taxes .................................................. 1,863 2,139
Other long-term liabilities ............................................ 1,603 754
-------- --------
Total long-term liabilities .......................................... 19,787 14,581
-------- --------
MINORITY INTEREST ....................................................... 1,442 1,207
COMMITMENTS AND CONTINGENCIES ........................................... -- --
COMPANY-OBLIGATED CONVERTIBLE MANDATORILY REDEEMABLE PREFERRED
SECURITIES OF SUBSIDIARY TRUSTS HOLDING SOLELY JUNIOR SUBORDINATED
DEBENTURES OF AES ...................................................... 1,228 1,318
34
2000 1999
----------- -----------
(AMOUNTS IN MILLIONS,
EXCEPT SHARES AND PAR
VALUE)
STOCKHOLDERS' EQUITY:
Preferred stock, no par value--50 million shares authorized; none issued -- --
Common stock, $.01 par value--1,200 million shares and 1,000 million
shares authorized for 2000 and 1999, respectively, 535 million issued
and 522 million outstanding in 2000, 468 million issued and
453 million in 1999 ................................................. 5 4
Additional paid-in capital ............................................ 5,172 3,052
Retained earnings ..................................................... 2,551 1,811
Accumulated other comprehensive loss .................................. (1,679) (995)
Treasury Stock, at cost: 2000--13 million shares, 1999--15 million
shares .............................................................. (507) (557)
------ -----
Total stockholders' equity .......................................... 5,542 3,315
------ -----
Total Liabilities and Stockholders Equity .......................... $ 33,038 $23,222
======== =======
CONSOLIDATED STATEMENT OF OPERATIONS
AS AT DECEMBER 31, 2000 AND 1999
2000 1999
----------- -----------
(AMOUNTS IN MILLIONS,
EXCEPT PER SHARE AMOUNTS)
REVENUES: $ 7,582 $ 4,124
Cost of Sales ....................................................... (5,615) (2,858)
Selling, General and Administrative Expenses ........................ (85) (71)
Severance and Transaction Costs ..................................... (84) --
Interest Expense .................................................... (1,356) (705)
Interest and Other Income ........................................... 249 88
Gain on Contract Buyout/Termination and Sale of Assets .............. 31 91
Gain on Sale of Available for Sale Securities ....................... 112 --
Impairment Loss ..................................................... -- (62)
Environmental Fine .................................................. (17) --
Equity in pre-tax Earnings of Affiliates ............................ 475 21
-------- --------
INCOME BEFORE INCOME TAXES, MINORITY INTEREST, AND EXTRAORDINARY
ITEMS: 1,292 628
Income Taxes ........................................................ 366 190
Minority Interest ................................................... 119 64
-------- --------
INCOME BEFORE EXTRAORDINARY ITEMS: 807 374
Extraordinary items--(loss) gain on early extinguishment of debt--net
of applicable income tax ........................................... (11) (17)
NET INCOME .......................................................... $ 796 $ 357
======== ========
BASIC EARNINGS PER SHARE:
Before extraordinary items ......................................... $ 1.67 $ 0.88
Extraordinary items ................................................ (0.02) (0.04)
-------- --------
BASIC EARNINGS PER SHARE ............................................ $ 1.65 $ 0.84
======== ========
DILUTED EARNINGS PER SHARE:
Before extraordinary items ......................................... $ 1.61 $ 0.86
Extraordinary items ................................................ (0.02) (0.04)
-------- --------
DILUTED EARNINGS PER SHARE .......................................... $ 1.59 $ (0.82)
======== ========
35
9. SOURCE AND AMOUNT OF FUNDS
The Purchaser estimates that the total amount of funds required to
purchase the CANTV shares and ADSs pursuant to the Offers and to pay the
related costs and expenses will be approximately $1.422 billion. The Purchaser
is pursuing various sources for the funds for the Offers, and to pay the
related costs and expenses, including limited recourse financing, internal
resources, corporate borrowings, sales of securities and other sources. In this
regard, the Purchaser has held negotiations with affiliates of its financial
advisors relating to a limited recourse credit facility. In addition, the
agreement among AES, CEDC and TelCom 2 contemplates that AES will contribute
$500 million in connection with the Offers. See Section 8. The Purchaser
believes that the funds required to purchase tendered CANTV shares and ADSs
pursuant to the Offers can be obtained on a timely basis. Neither the U.S.
Offer nor the Venezuelan Offer is conditioned on the completion of any
financing arrangements.
10. BACKGROUND TO THE OFFERS; PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND
AGREEMENTS
In May 2001, CEDC, through its wholly owned subsidiary, Inversiones
Inextel, delivered a written notice to VenWorld requesting the conversion of
substantially all of Inversiones Inextel's interest in VenWorld into its pro
rata interest in CANTV held by VenWorld.
On May 28, 2001, the CNV issued an order to the effect that acquisitions
of shares of CANTV pursuant to the conversion provisions of the Association
Agreement are subject to Venezuelan tender offer regulations. Among other
things, these regulations specify that acquisitions of 10% or more of the
capital of a listed company in Venezuela (such as CANTV) must be made through a
public tender offer and that a controlling shareholder of a listed company in
Venezuela may only acquire additional shares of such company pursuant to a
public tender for at least 75% of the capital of such company.
On June 4, 2001, Verizon appealed this order of the CNV to the Venezuelan
First Court on Administrative Matters (Corte Primera de la Contencioso
Administrativo) and requested the issuance of a preliminary injunction to
suspend all conversions pending under the Association Agreement. On June 6,
2001, this preliminary injunction request was rejected by the Venezuelan First
Court on Administrative Matters.
Also on June 4, 2001, Verizon commenced an arbitration against, among
others, EDC and Telefonica under the Association Agreement alleging, among
other things, breaches by EDC of its obligations under the Association
Agreement, including breaches relating to Inversiones Inextel's conversion of
substantially all of its interest in VenWorld. On June 5, 2001, Verizon
petitioned the U.S. District Court for the Southern District of Florida for a
temporary restraining order and preliminary injunction to enjoin EDC,
Telefonica, AT&T and others from (a) exercising any rights of first refusal to
buy Class A shares in CANTV received or to be received as a result of
conversions of shares by other shareholders in VenWorld, (b) converting or
closing on the conversion of their own shares of VenWorld into Class A shares
in CANTV and (c) disposing of any CANTV shares they have received or may
receive from VenWorld, pending resolution of the arbitration. On June 7, 2001,
this petition was denied by the U.S District Court for the Southern District of
Florida.
In early June 2001, a holder of Class C shares filed an extraordinary
constitutional action (an amparo) with the Venezuelan First Court on
Administrative Matters requesting the nullity and suspension of the CNV order,
alleging violation of constitutional rights. The Venezuelan First Court on
Administrative Matters denied this amparo.
On June 21, 2001, Inversiones Inextel received 63,999,524 Class A shares
previously held by VenWorld in exchange for the shares in VenWorld converted by
Inversiones Inextel. The Purchaser believes that, in accordance with the Bylaws
of CANTV, on receipt, such Class A shares automatically converted into an equal
number of Class D Shares. However, to date, CANTV has been unwilling to reflect
such conversion in accordance with the provisions of the CANTV Bylaws on the
CANTV shareholder records. In August 2001, Inversiones Inextel requested that
VenWorld convert its remaining interest in VenWorld into 476 shares of CANTV.
36
On August 29, 2001, the Purchaser announced its intention to make the U.S.
Offer and the Venezuelan Offer. On September 25, 2001, the Purchaser commenced
the Offers.
Except as described in this U.S. Offer to Purchase:
o none of the Purchaser, AES, or CEDC, nor, to the best of their
knowledge, any of the persons listed in Schedule I to this U.S. Offer to
Purchase or any associate or majority-owned subsidiary of the Purchaser,
AES, or CEDC beneficially owns or has any right to acquire, directly or
indirectly, any shares of common stock of CANTV or ADSs, and
o none of the Purchaser, AES, or CEDC, nor, to the best of their
knowledge, any of the persons or entities referred to above nor any
director, executive officer or subsidiary of any of the foregoing has
effected any transaction in any shares of common stock of CANTV or ADSs
during the past 60 days.
Except as set forth in this U.S. Offer to Purchase, since September 1,
1999:
o there have been no transactions between the Purchaser, AES, or CEDC,
nor, to the best of their knowledge, any of the persons listed in
Schedule I hereto, on the one hand, and CANTV or any of its executive
officers, directors, or affiliates, on the other hand, that would be
required to be reported under the rules and regulations of the SEC
applicable to a tender offer in the U.S., and
o there have been no negotiations, transactions or material contacts
between the Purchaser, CEDC, AES or any of their respective subsidiaries
or, to the best knowledge of the Purchaser, AES and CEDC, any of the
persons listed in Schedule I to the U.S. Offer to Purchase, on the one
hand, and CANTV or its affiliates, on the other hand, concerning any
merger, consolidation or acquisition, tender offer or other acquisition
of securities, an election of directors or a sale or other transfer of a
material amount of assets of CANTV.
11. PURPOSE OF THE OFFERS; PLANS FOR CANTV.
The purpose of the Offers is to enable the Purchaser and its affiliates to
acquire control of, and a majority of the equity interest in, CANTV. The ADSs
and CANTV shares the Purchaser seeks to acquire pursuant to the Offers would,
together with the Class D Shares and ADSs currently owned by it and its
affiliates, represent a majority of the outstanding shares of capital stock of
CANTV.
The Purchaser intends, as soon as practicable after consummation of the
Offers, to seek majority representation on CANTV's board of directors.
According to Venezuelan law and CANTV's Bylaws, the Purchaser believes that if
the Purchaser and its affiliates beneficially own a majority of the shares of
capital stock of CANTV, the Purchaser and its affiliates would have the power
to cause the existing board of directors of CANTV to call a special meeting of
shareholders at which the Purchaser would intend to elect designees of the
Purchaser as a majority of the CANTV board of directors.
The Purchaser intends that its designees to the board of directors of
CANTV would be employees of AES or its subsidiaries (including CEDC). However,
depending on the number of directors the Purchaser has the right to elect, the
Purchaser believes that other members could include current members of the
board of directors of CANTV and other individuals not affiliated with AES.
Under Venezuelan law, a shareholder or group of minority shareholders holding
20% or more of the outstanding shares of capital stock of CANTV is entitled to
elect a number of members of the board of directors of CANTV that is
proportional to the share holdings of such shareholder or group of shareholders
(excluding for purposes of such calculation the directors appointed by Class B
and Class C shareholders). See Section 7.
Pursuant to Venezuelan law and CANTV's Bylaws, subject to the matters
reserved to CANTV's shareholders described below, CANTV's board of directors is
empowered to manage the business and affairs of CANTV. Among others things,
CANTV's board of directors has the power to call shareholders' meetings,
propose dividend policies and authorize actions regarding the assets of CANTV,
all subject to the limitations set forth in CANTV's Bylaws.
37
Under Venezuelan law, if the Purchaser and its affiliates beneficially own
more than a majority of CANTV's outstanding shares, including Class D Shares
represented by ADSs, the Purchaser and its affiliates would be able to make
certain fundamental changes regarding CANTV without the vote of other
shareholders. More specifically, CANTV's Bylaws provide that if the Purchaser
and its affiliates beneficially own a majority of CANTV's outstanding shares,
the Purchaser and its affiliates would in general be able to adopt decisions
relating to most corporate matters except the following, for which the
favorable vote of the holders of a majority of Class B shares is required: (i)
the dissolution of CANTV, (ii) a merger with another company, (iii) any other
extraordinary transaction involving CANTV, (iv) a decrease in the capital of
CANTV, (v) the authorization of the transfer of all or substantially all of
CANTV's assets and (vi) the amendment of certain provisions of the Bylaws.
In connection with the Offers, the Purchaser has reviewed, and will
continue to review, on the basis of available information relating to CANTV,
various possible business strategies that the Purchaser might consider in the
event that the Purchaser and its affiliates acquire control of CANTV pursuant
to the Offers or otherwise. If the Purchaser and its affiliates acquire control
of CANTV pursuant to the Offers or otherwise, the Purchaser intends to manage
CANTV in a manner consistent with AES's corporate values of social
responsibility, fun, fairness and integrity and in a manner consistent with
other AES owned and operated businesses and facilities. Among other things, the
Purchaser intends to seek to increase the value of CANTV to its shareholders
and enhance the quality of service in order to benefit shareholders, customers
and the communities CANTV serves.
If and to the extent that the Purchaser and its affiliates acquire control
of CANTV pursuant to the Offers or otherwise, the Purchaser intends to conduct
a detailed review of CANTV and its assets, corporate structure, dividend
policy, capitalization, operations, properties, policies, management and
personnel and, subject to applicable law, to consider and determine what, if
any, changes would be desirable in light of the circumstances which then exist.
Among other things, the Purchaser currently believes changes could be made to
the existing capital structure of CANTV, including refinancings and the
incurrence of additional debt, which could permit the payment of additional
dividends to shareholders and optimize CANTV's capital structure. Subject to
the matters set forth in this Section 11, the Purchaser currently intends to
effect such matters.
Following the successful completion of the Offers, the Purchaser intends
to cause CANTV to distribute to all shareholders of CANTV cash currently held
by CANTV determined to be in excess of CANTV's current or anticipated needs.
Based upon its review to date of publicly available information with respect to
CANTV, the Purchaser believes CANTV is in a position to distribute additional
dividends to holders of its capital stock. The Purchaser believes any such
dividends would benefit all shareholders of CANTV without adversely affecting
CANTV's operations or investment requirements.
The actual amounts to be distributed to shareholders of CANTV will be
determined by, among other things, applicable legal requirements, the results
of the Purchaser's review of CANTV, the financial condition of CANTV, the
availability of sufficient retained earnings and funds to effect such
distributions and requirements under loan and other agreements to which CANTV
is a party which restrict CANTV's ability to pay dividends. Based upon its
review to date of the loan and other agreements to which CANTV is a party which
are publicly available, the Purchaser believes CANTV is in a position to
distribute additional dividends without any third party consents. To the extent
the Purchaser determines that third party consents under such agreements are
required, the Purchaser intends to seek any such consents. However, the
Purchaser believes that certain of CANTV's debt instruments would, in the
future, beyond certain amounts restrict the payment of dividends by CANTV. The
Purchaser intends to cause CANTV to seek to obtain consents from the lenders
and/or refinance such indebtedness which would prevent the payment of such
dividends. At this time, the Purchaser is unable to determine the actual
amounts that may be in excess of CANTV's current or future needs and that could
be distributed or the timing thereof and would not expect to be in a position
to make any determination with respect thereto until the completion of the
Purchaser's review described above.
Following consummation of the Offers, the Purchaser intends to seek to
sell CANTV's wireless business, currently held by its wholly-owned subsidiary
Telecomunicaciones Movilnet, C.A. ("Movilnet").
38
The Purchaser is considering a variety of mechanisms for effecting such a sale,
including a negotiated transaction with a third party and/or a public offering
of Movilnet shares through a capital markets transaction. In this regard,
representatives of the Purchaser have held negotiations with a third party
regarding a possible sale of Movilnet. The Purchaser believes that Movilnet
would be a very attractive asset for international telecommunications operators
and that the sale of Movilnet would create proceeds which could be distributed
to all holders of CANTV's capital stock while increasing competition in the
Venezuela telecommunications market. A sale of Movilnet would reduce the
consolidated assets of CANTV in an amount equal to the value of Movilnet's
assets sold. However, such a sale would also increase the consolidated assets
of CANTV in an amount equal to the cash or the market value of any other asset
which CANTV receives as proceeds of such a sale. As a result of a sale of
Movilnet, CANTV would cease to render mobile phone services through Movilnet.
The Purchaser contemplates that the proceeds derived from a sale of Movilnet
would result in funds that could be distributed to all holders of CANTV shares
in proportion to their share ownership in CANTV.
There can be no assurance that a sale of Movilnet could be effected, the
price thereof or the amount, if any, that could be distributed to shareholders
as a result of any such sale. Any sale of Movilnet would need to be approved by
CONATEL. In addition, following the merger described below, the Purchaser
intends to transfer some of the assets of CANTV to a wholly owned subsidiary of
CANTV.
The Purchaser intends as promptly as practicable following consummation of
the Offers, and prior to the payment of any dividends, to consummate a merger
between the Purchaser and CANTV in which the Purchaser would be the surviving
corporation. Prior to the consummation of this merger, the Purchaser would
transfer to TelCom 2, the Purchaser's parent corporation, all the CANTV shares
and ADSs owned by the Purchaser (including the CANTV shares and ADSs purchased
pursuant to the Offers). Upon the merger, all shareholders of CANTV other than
TelCom 2 would receive shares of the Purchaser in exchange for their shares in
CANTV, which would change its name to CANTV and would continue all of the
business and operations of CANTV. As a result of the merger, the Purchaser
(also referred to as the surviving corporation) would have as shareholders all
those who were shareholders of CANTV prior to the merger (including TelCom 2),
who would hold the same interest in the surviving corporation and the same
rights granted by the class of shares they held in CANTV immediately prior to
the merger.
Under CANTV's Bylaws and Venezuelan law, the merger would require the
approval of the holders of a majority of CANTV's outstanding capital stock
present at a meeting at which there was a properly constituted quorum, and the
holders of a majority of CANTV's Class B Shares. In the event the Purchaser
purchases ADSs and CANTV shares pursuant to the Offers, the Purchaser and its
affiliates would be able to approve the merger without the vote of any other
holders of CANTV's capital stock, other than the Venezuelan government, the
holder of the Class B shares. The Purchaser is requesting that the Venezuelan
government approve the merger, and the U.S. Offer is conditioned upon, among
other things, the Purchaser being reasonably satisfied that the Venezuelan
government has agreed to vote in favor of the merger. See Section 15. The
Purchaser believes that the merger is also subject to the approval of CONATEL.
Under Venezuelan law, the merger could not be consummated until the
expiration of a three month period following CANTV shareholder approval and
publication of notice of the merger, unless the merger was approved by all
creditors of CANTV. If after the expiration of such three month period, no
CANTV creditor has opposed the merger or if any CANTV creditor who has opposed
the merger has withdrawn such objection, the merger could be consummated. If
any creditor opposes the merger during such three month period, the merger
could not be consummated until such opposition was withdrawn or until a
Venezuelan court ruled that the merger could proceed.
As a result of the merger, the surviving corporation will have the same
general capital structure, financial condition and operations and will have the
same tangible or intangible assets, rights and obligations that CANTV had
before the merger. Following the merger, shareholders of CANTV will continue as
shareholders of the surviving corporation, holding the same class of shares
held in CANTV prior to the merger, and the Bylaws and capital structure of the
surviving corporation will be amended to
39
be consistent with the Bylaws and capital structure of CANTV, including with
regard to the rights of the holders of Class B and Class C shares. The shares
of the surviving corporation will be registered in accordance with applicable
law and, subject to the matters set forth in Section 12 and applicable listing
requirements, the Class D shares of the surviving corporation will be listed on
the Caracas Stock Exchange and the American Depositary Shares representing the
surviving corporation's Class D shares will trade on the New York Stock
Exchange. Based upon its review of public information to date, the Purchaser is
not aware of any third party consents under CANTV's contracts, other than under
a loan agreement, that would be required to effect the merger. The Purchaser
currently intends to either obtain the consent of the lender under this loan
agreement or refinance this loan. In addition, to the extent any additional
consents were required, the Purchaser currently intends to seek to obtain such
consents.
Under Venezuelan law, shareholders of CANTV do not have statutory
appraisal or similar rights in connection with the merger.
Pursuant to Venezuelan law, the proposed merger would have to be notified
to the CNV thirty days prior to the shareholders meeting that will consider the
merger, so that the CNV may exercise its oversight and control powers on the
capital markets and the entities subject to its control to protect investors,
including minority shareholders.
Certain Anticipated U.S. Federal Income Tax Considerations Related to the
Proposed Merger and Subsequent Cash Distributions by the Purchaser. The
following is a general summary of certain anticipated U.S. federal income tax
considerations applicable to U.S. Holders of ADSs related to the proposed
merger of CANTV with and into the Purchaser (the "Merger") and subsequent cash
distributions by the Purchaser as described above. The summary is for general
information only, does not discuss all aspects of U.S. federal income taxation
that might be relevant to U.S. Holders of ADSs or their affiliates, and is
subject to the actual facts and circumstances related to the proposed Merger
and subsequent cash distributions, which facts and circumstances are currently
subject to significant uncertainty. The summary is based on current law which
is subject to change, possibly with retroactive effect. The summary is not
intended to address the anticipated U.S. federal income tax consequences of the
proposed Merger and subsequent cash distributions to U.S. Holders that may be
subject to special treatment under the U.S. federal income tax laws (as
described above in Section 5) and applies only to U.S. Holders who hold ADSs as
capital assets and have the U.S. dollar as their functional currency.
No ruling has been or will be requested from the U.S. Internal Revenue
Service (the "Service") with respect to the U.S. federal income tax treatment
of the Merger or any subsequent cash distributions. Accordingly, no assurance
can be given that the Service will not assert, or a court in the U.S. will not
sustain, positions or conclusions contrary to those discussed below.
U.S. HOLDERS OF ADSS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE
ACTUAL U.S. FEDERAL INCOME TAX AND OTHER TAX CONSEQUENCES OF THE PROPOSED
MERGER AND SUBSEQUENT CASH DISTRIBUTIONS.
Anticipated U.S. Federal Income Treatment of the Merger. The Merger is
intended to be a taxable transaction for U.S. federal income tax purposes.
Consequently, a U.S. Holder of ADSs who receives the surviving corporation's
American Depositary Shares in exchange for ADSs pursuant to the Merger should
recognize gain or loss equal to the difference between the fair market value of
the surviving corporation's American Depositary Shares received and the
adjusted tax basis in the ADSs surrendered. Generally, such gain or loss should
be long-term capital gain or loss if such holder's ADSs (or Class D Shares
underlying the ADSs) were held by the holder for more than one year. For U.S.
Holders that own, directly or indirectly, shares representing 10% or more of
CANTV's total combined voting power, it is possible that all or a portion of
any gain recognized by such U.S. Holder will be taxable as a dividend, subject
to ordinary income tax rates.
U.S. Shareholders in a Controlled Foreign Corporation. After completion of
the Offers, CANTV should be a "controlled foreign corporation" ("CFC") for U.S.
federal income tax purposes as a result of the purchase of CANTV shares and
ADSs pursuant to the Offers. It is possible that, as a result of the Merger,
CANTV will recognize a significant amount of "subpart F income" under the CFC
rules. A pro rata share of such subpart F income should be treated as a
dividend received by U.S. Holders that own
40
directly or indirectly shares representing 10% or more of CANTV's total
combined voting power. In general, the tax basis of such U.S. Holder's stock in
CANTV should increase by the amount of any subpart F income included in taxable
income and should decrease by amounts actually distributed that constitute
previously taxed earnings. Such basis increase may impact the amount of any
gain or loss recognized by such U.S. Holder as a result of the exchange of ADSs
for the surviving corporation's American Depositary Shares in the Merger.
Post Merger Dividend Distributions. As discussed above, following the
Merger, the Purchaser intends to make cash distributions to its shareholders.
The Purchaser believes that, as a result of the Merger, the cash distributions
to a U.S. Holder should, for the most part, be treated as tax-free returns of
capital to the extent of the U.S. Holder's tax basis in the surviving
corporation's American Depositary Shares. Any such cash distributions in excess
of the U.S. Holder's tax basis in the surviving corporation's American
Depositary Shares should result in the U.S. Holder recognizing capital gain.
THE ABOVE IS A GENERAL SUMMARY AND IS NOT INTENDED TO ADDRESS ALL OF THE
TAX CONSEQUENCES OF THE MERGER AND SUBSEQUENT CASH DISTRIBUTIONS THAT MAY BE
RELEVANT TO A HOLDER OF ADSS. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS
REGARDING THE UNITED STATES FEDERAL INCOME AND OTHER TAX CONSEQUENCES OF THE
MERGER AND SUBSEQUENT CASH DISTRIBUTIONS.
The Purchaser, AES and CEDC currently do not have any plans or proposals
following completion of the Offers to acquire additional shares of capital
stock of CANTV, but reserve the right to do so in the future. Although the
Purchaser, AES and CEDC have no such plans, following the consummation of the
Offers, AES, CEDC or the Purchaser may decide, directly or indirectly through
affiliates, and subject to applicable law (including Venezuelan tender offer
regulations), to purchase additional Class D Shares or ADSs through open market
purchases, privately negotiated transactions, additional tender offers or
otherwise. There can be no assurance that AES, CEDC, the Purchaser or any of
its affiliates will effect any such purchases or as to the prices thereof which
could be higher or lower than or equal to the price to be paid pursuant to the
Offers.
Except as otherwise disclosed in this U.S. Offer to Purchase, the
Purchaser does not have any present plans or proposals that relate to or would
result in any extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving CANTV or any of its subsidiaries, a
sale or transfer of a material amount of assets of CANTV or any of its
subsidiaries or any material changes in CANTV's capitalization or dividend
policy or any other material changes in CANTV's corporate structure or
business.
12. EFFECT OF THE OFFERS ON THE MARKET FOR THE ADSS AND CLASS D SHARES
According to Venezuelan securities law, the CNV has the authority to adopt
measures necessary to safeguard the interest of investors in securities subject
to the Venezuelan Capital Markets Law, or suspend or cancel, for duly justified
cause, the authorization to make public offerings of securities.
The CNV, as well as the Caracas Stock Exchange, has the authority to order
the temporary suspension of public trading of a share when it deems that
circumstances exist that are contrary to an "orderly market" or when "serious
circumstances exist." In addition, the Caracas Stock Exchange has the power to
suspend dealings with any listed security if the current price of the security
varies by more than 20% from the daily opening price of such security in order
to determine the reasons for such price variance and to make inquiries with the
issuer of the security involved. If after trading is resumed, the price varies
from the reopening price (or successive reopening prices) by 20% or more, then
trading may be suspended again as necessary.
The purchase of ADSs pursuant to the U.S. Offer will reduce substantially
the number of ADSs that might otherwise trade publicly and may reduce the
number of holders of ADSs. In view of the number of ADSs and Class D Shares
that would remain outstanding after completion of the U.S. Offer and the
Venezuelan Offer and of the number of Class D Shares that would be available
for deposit following the completion of the Venezuelan Offer, the Purchaser
believes that there will continue to be a market for the ADSs. The Purchaser
has no present intention to cause the ADSs to cease to be traded publicly.
However, the reduction in the number of publicly traded ADSs will likely
adversely affect the liquidity, marketability and market value of the ADSs.
41
The ADSs are currently listed on the New York Stock Exchange. The
Purchaser intends to cause CANTV to seek to maintain (subject to applicable
listing requirements) the listing of ADSs on the New York Stock Exchange
following the purchase of ADSs pursuant to the U.S. Offer, and the listing of
the ADSs of the surviving corporation in the merger of CANTV and the Purchaser
on the New York Stock Exchange to the same extent as the ADSs of CANTV.
However, it is possible that, due to decreases in the number of ADS holders,
trading volume and the potential reduction of the market value of the ADSs
following the exchange of ADSs pursuant to the U.S. Offer, the ADSs will no
longer meet the continued listing requirements of the New York Stock Exchange.
In the event that the ADSs fail to meet its continued listing requirements, the
New York Stock Exchange may choose, at its discretion, to delist the ADSs.
The ADSs are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System, Federal Reserve Board, which
has the effect, among other things, of allowing brokers to extend credit on the
collateral of such securities. If the New York Stock Exchange listing for the
ADSs is terminated following the purchase of ADSs pursuant to the U.S. Offer,
the ADSs will no longer constitute margin securities for the purposes of the
Federal Reserve Board's margin regulations and, therefore, could no longer be
used as collateral for loans made by brokers.
The ADSs are currently registered under the Exchange Act. Although the
Purchaser has no current plans to deregister the ADSs, such registration may be
terminated upon application of CANTV to the SEC if the ADSs are not listed on a
national securities exchange and there are fewer than 300 record holders of the
ADSs resident in the United States. Termination of the registration of the ADSs
under the Exchange Act would substantially reduce the information required to
be furnished by CANTV to holders of ADSs and to the SEC and would make certain
of the provisions of the Exchange Act, such as the requirements of Rules 13e-3
and 13e-4 under the Exchange Act with respect to "going private" transactions,
no longer applicable to the ADSs. Furthermore, "affiliates" of CANTV and
persons holding restricted securities of CANTV may be deprived of the ability
to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act.
The purchase of Class D Shares pursuant to the Venezuelan Offer will
reduce substantially the number of Class D Shares that might otherwise trade
publicly and may also reduce the number of holders of Class D Shares. In view
of the number of Class D Shares that would remain outstanding after completion
of the U.S. Offer and the Venezuelan Offer, the Purchaser believes that there
will continue to be a market for the Class D Shares. However, the reduction in
publicly traded Class D Shares will likely adversely affect the liquidity,
marketability and market value of the Class D Shares.
The Class D Shares are currently traded on the Caracas Stock Exchange. The
Purchaser recognizes that the existence of a trading market for the Class D
Shares in Venezuela is important to the holders of Class D Shares and intends
to maintain (subject to applicable listing requirements) the listing of the
Class D Shares on the Caracas Stock Exchange after consummation of the Offers,
and the listing of the class D shares of the surviving corporation of the
merger of CANTV and the Purchaser on the Caracas Stock Exchange to the same
extent as the Class D Shares of CANTV.
13. EXTENSION OF TENDER PERIOD; TERMINATION, AMENDMENT
The Purchaser reserves the right, at any time or from time to time, in its
sole discretion and regardless of whether or not any of the conditions
specified in Section 15 shall have been satisfied, to extend for any reason the
period of time during which the U.S. Offer and/or the Venezuelan Offer remains
open, subject, in the case of any extensions of the Venezuelan Offer after its
initial expiration date, to the approval of the CNV, and to amend the U.S.
Offer in any respect by giving oral or written notice of such extension or
amendment to the U.S. Receiving Agent followed as promptly as practicable by
public announcement thereof. There can be no assurance that the Purchaser will
exercise its right to extend or amend the U.S. Offer or the Venezuelan Offer.
Under the Venezuelan tender offer rules, the Purchaser may, with the prior
approval of the CNV, not more than once, within five days from commencement,
reduce the aggregate number of CANTV shares and ADSs sought in the Offers,
provided that (x) the reduction may not exceed 25% of the aggregate
42
number of CANTV shares (including CANTV shares represented by ADSs) initially
sought, and (y) as of the date of the reduction, the number of CANTV shares
(including Class D Shares represented by ADSs) tendered does not exceed the
original number of CANTV shares (including Class D Shares represented by ADSs)
sought in the Offers less the proposed reduction.
If the Purchaser increases or decreases by more than 2% the amount of ADSs
being sought in the U.S. Offer, or increases or decreases the consideration to
be paid for ADSs pursuant to the U.S. Offer, or the dealer's soliciting fee,
and the U.S. Offer is scheduled to expire at any time before the expiration of
a period of 10 business days from, and including, the date that notice of such
increase or decrease is first published, sent or given in the manner specified
below, the U.S. Offer will be extended until the expiration of such period of
10 business days. If the Purchaser makes a material change in the terms of the
U.S. Offer (other than a change in price or percentage of securities sought or
the dealer's soliciting fee) or in the information concerning the U.S. Offer,
or waives a material condition of the U.S. Offer, the Purchaser will, if
necessary, extend the U.S. Offer for a period sufficient to allow ADS holders
to consider the amended terms of the U.S. Offer.
The Purchaser reserves the right, exercisable at any time and in its sole
discretion, in the event any of the conditions set forth in Section 15 shall
not have been satisfied and so long as the ADSs have not theretofore been
accepted for payment, to delay (except as otherwise required by applicable law)
acceptance for payment of or payment for ADSs or to terminate the U.S. Offer
and not accept for payment or pay for ADSs.
If the Purchaser extends the period of time during which the U.S. Offer is
open, is delayed in accepting for payment or paying for ADSs or is unable to
accept for payment or pay for ADSs pursuant to the U.S. Offer for any reason,
then, without prejudice to the Purchaser's rights under the U.S. Offer, the
U.S. Receiving Agent may, on behalf of the Purchaser, retain all ADSs tendered,
and such ADSs may not be withdrawn except as otherwise provided in Section 4.
The reservation by the Purchaser of the right to delay acceptance for payment
of or payment for ADSs is subject to applicable law, which requires that the
Purchaser pay the consideration offered or return the ADSs deposited by or on
behalf of ADS holders promptly after the termination or withdrawal of the U.S.
Offer.
The Purchaser will inform the U.S. Receiving Agent and Information Agent
respectively of any extension, termination or amendment of the U.S. Offer, and
any such extension, termination or amendment will also be followed as promptly
as practicable by a public announcement thereof. Without limiting the manner in
which the Purchaser may choose to make any public announcement, the Purchaser
will have no obligation (except as otherwise required by applicable law) to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service. In the case of an
extension of the U.S. Offer, the Purchaser will make a public announcement of
such extension no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date.
In the event of an extension of the U.S. Offer, the Purchaser will seek to
extend the Venezuelan Offer. Any such extension of the Venezuelan Offer is
subject, however, to the prior approval of the CNV. It is possible, therefore,
that the Venezuelan Offer may terminate before the U.S. Offer and that CANTV
shares tendered under the Venezuelan Offer may be purchased by the Purchaser
prior to the purchase of ADSs in the U.S. Offer.
14. CHANGES IN CANTV CAPITAL STRUCTURE; DIVIDENDS AND DISTRIBUTIONS
If, on or after August 29, 2001, CANTV should (i) split, combine or
otherwise change any class of shares of its capital stock (including Class D
Shares or the ADSs) or its capitalization, (ii) issue or sell any additional
securities of CANTV or otherwise cause an increase in the number of outstanding
securities of CANTV or (iii) acquire currently outstanding shares of its
capital stock (including Class D Shares or ADSs) or otherwise cause a reduction
in the number of outstanding shares of its capital stock (including Class D
Shares or ADSs), then, without prejudice to the Purchaser's rights under
Sections 1 and 15, the Purchaser, in its sole discretion, may make such
adjustments as it deems appropriate in the purchase price and other terms of
the U.S. Offer, including, without limitation, the amount of ADSs to be
purchased.
43
If, on or after August 29, 2001, CANTV should declare or pay any dividend
on the CANTV shares or make any Distribution with respect to CANTV shares, that
is payable or distributable to holders of record of CANTV shares (including
holders of record of Class D Shares represented by ADSs) on a date prior to the
transfer of the ADSs or CANTV shares on the stock transfer records to the name
of the Purchaser or its nominee or transferee of the CANTV shares and ADSs
purchased pursuant to the Offers, then, without prejudice to the Purchaser's
rights under Sections 1 and 15, (a) the purchase price per ADS may, in the sole
discretion of the Purchaser, be reduced by the per ADS amount of any such cash
dividend or cash distribution and (b) the whole of any Distributions to be
received by the tendering ADS holders will (i) be received and held by the
tendering ADS holders for the account of the Purchaser and will be required to
be promptly remitted and transferred by each tendering ADS holder to the U.S.
Receiving Agent for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (ii) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance
and subject to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such Distributions or proceeds thereof and may
withhold the entire offer price or deduct from the offer price the amount or
value thereof, as determined by the Purchaser in its sole discretion.
15. CONDITIONS OF THE U.S. OFFER
Notwithstanding any other provisions of the U.S. Offer, the Purchaser
shall not be required to accept for payment and, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange
Act (relating to the Purchaser's obligation to pay for or return tendered
securities promptly after termination or withdrawal of the U.S. Offer), the
Purchaser shall not be required to pay for, any ADSs, may postpone the
acceptance for payment of, or payment for, tendered ADSs, and may, in its sole
judgment, extend, terminate or amend the U.S. Offer as to any ADSs not then
accepted for payment if in the sole judgment of the Purchaser any of the
following conditions have not been satisfied or waived by the Purchaser on or
before the Expiration Date and prior to the acceptance for payment of the ADSs.
MINIMUM TENDER CONDITION
The Minimum Tender Condition shall have been satisfied.
SATISFACTION OF CONDITIONS TO THE VENEZUELAN OFFER CONDITION
The conditions to the Venezuelan Offer shall have been satisfied or waived
by the Purchaser, and no event upon which the Purchaser may withdraw the
Venezuelan Offer in accordance with the terms the Venezuelan Offer shall have
occurred.
APPROVAL OF MERGER CONDITION
The Purchaser shall be reasonably satisfied that the holder of the Class B
shares has agreed to vote in favor of the merger of CANTV with and into the
Purchaser described in Section 11.
REGULATORY APPROVAL CONDITION
All regulatory approvals, actions, waivers or consents required to
consummate the Offers, including the authorization and approval by CONATEL of
the purchase of CANTV shares and ADSs pursuant to the Offers, shall have been
obtained and remain in full force and effect, without the imposition of any
condition or restriction that would be adverse to AES, CEDC, the Purchaser,
CANTV or any of their respective affiliates.
GOVERNMENTAL ACTION AND LITIGATION CONDITION
There shall not have been threatened, instituted or pending any action,
proceeding, application or claim before any court, governmental, regulatory or
administrative agency or commission, authority or
44
tribunal, domestic, foreign or supranational, or by any government,
governmental authority or other regulatory or administrative agency or
commission, domestic, foreign or supranational, or by any other person,
domestic or foreign, whether brought by CANTV, an affiliate of CANTV or any
other person, which:
o challenges or seeks to challenge the acquisition by the Purchaser or any
of its affiliates of the ADSs or CANTV shares;
o restrains, delays or prohibits or seeks to restrain, delay or prohibit
the Purchaser or any of its affiliates from making the U.S. Offer or the
Venezuelan Offer;
o prohibits the performance by AES, CEDC, the Purchaser, CANTV or any of
their respective affiliates, or anyone else, of any contracts or
arrangements entered into or proposed to be entered into by AES, CEDC,
the Purchaser, CANTV or any of their respective affiliates in connection
with the U.S. Offer or the Venezuelan Offer;
o obtains or seeks to obtain any material damages or otherwise adversely
affects the transactions contemplated by the U.S. Offer or the Venezuelan
Offer;
o prohibits or limits or seeks to prohibit or limit AES's, CEDC's, the
Purchaser's, or any of their affiliates', ownership or operation of all
or any portion of their or CANTV's businesses or assets, compels or seeks
to compel AES, CEDC, the Purchaser or any of their affiliates to dispose
of or hold separate all or any portion of their own businesses or assets
or CANTV's businesses or assets, or imposes or seeks to impose any
limitation on the ability of AES, CEDC, the Purchaser or any of their
affiliates to conduct their own business or own their assets as a result
of the transactions contemplated by the U.S. Offer or the Venezuelan
Offer;
o makes or seeks to make the acceptance for payment, purchase of, or
payment for, some or all of the ADSs or CANTV shares pursuant to the U.S.
Offer or the Venezuelan Offer, illegal or delays or restricts the
Purchaser or its ability to accept for payment, purchase of or payment
for, some or all of the ADSs or CANTV shares pursuant to the U.S. Offer
or the Venezuelan Offer;
o imposes or seeks to impose limitations on the Purchaser's ability or the
ability of any affiliate of the Purchaser effectively to acquire or hold
or to exercise full rights of ownership of the ADSs or the CANTV shares,
including, without limitation, the right to vote the CANTV shares
(including Class D Shares represented by ADSs) purchased by the Purchaser
on an equal basis with all other CANTV shares (including Class D Shares
represented by ADSs) on all matters properly presented to the
shareholders of CANTV;
o adversely affects CANTV or its subsidiaries or affiliates or the
Purchaser or the Purchaser's affiliates or subsidiaries or might result
in a diminution in the value of the ADSs or CANTV shares or of the
benefits expected to be derived by AES, CEDC, the Purchaser or any of
their affiliates as a result of the transactions contemplated by the U.S.
Offer or the Venezuelan Offer; or
o imposes or seeks to impose any material condition which makes the U.S.
Offer or the Venezuelan Offer, more onerous, burdensome or
disadvantageous to the Purchaser or any of its affiliates.
VENEZUELAN ANTITRUST AUTHORITY CONDITION
The Venezuelan Antitrust Authority shall not have objected to the purchase
of CANTV shares and ADSs by the Purchaser or any of its affiliates pursuant to
the Offers or imposed conditions or restrictions for the consummation of the
Offers.
CHANGE OF LAW CONDITION
There shall not have been any action taken, or any statute, rule,
regulation, order, decree or injunction sought, proposed, enacted, promulgated,
entered, enforced or deemed or become applicable to the Offers, or any other
action taken, proposed or threatened, by any government, governmental
45
authority or other regulatory or administrative agency, commission, authority,
tribunal or court, domestic, foreign or supranational, that might result in any
of the consequences referred to in the Governmental Action and Litigation
Condition.
CANTV ADVERSE CHANGE CONDITION
No change, or any condition, event or development involving a prospective
change, shall have occurred or been threatened in the business, properties,
assets, liabilities, capitalization, shareholders' equity, financial or other
condition, operations, licenses, franchises, permits, permit applications,
tariffs or tariff structure, results of operations or prospects of CANTV or any
of its subsidiaries which is or may be materially adverse to CANTV or any of
its subsidiaries, and the Purchaser shall not have become aware of any fact
which has or may have adverse significance with respect to either the value of
CANTV or any of its subsidiaries or the value to AES, CEDC, the Purchaser or
any of their affiliates of the CANTV shares or the ADSs.
The Purchaser shall not have become aware:
o that any material contractual right of CANTV or any of its subsidiaries
shall be impaired or otherwise adversely affected or that any material
amount of indebtedness of CANTV or any of its subsidiaries shall become
accelerated or otherwise become due prior to its stated due date, in
either case with or without notice or the lapse of time or both, as a
result of the transactions contemplated by the U.S. Offer or the
Venezuelan Offer;
o of any covenant, term or condition in any of CANTV's or any of its
subsidiaries' instruments or agreements that is or may be materially
adverse to the value of the CANTV shares or ADSs in the hands of AES,
CEDC, the Purchaser or any of their affiliates, or may adversely affect
the consummation of the transactions contemplated by the Offers, or
o of any material fact not previously disclosed publicly by CANTV that
might adversely affect CANTV or any of its respective subsidiaries or
AES, CEDC, the Purchaser or any of their affiliates or that might result
in a diminution in the value of the ADSs or CANTV shares or of the
benefits expected to be derived by AES, CEDC, the Purchaser or any of
their affiliates as a result of the transactions contemplated by the U.S.
Offer or the Venezuelan Offer.
ADVERSE MARKET AND NATIONAL AND INTERNATIONAL CHANGES CONDITION
There shall not have occurred:
o any general suspension of trading in, or limitation on prices for,
securities on any United States national securities exchange, Venezuelan
securities exchange or the United States Over-the-Counter market;
o a declaration of a banking moratorium or any suspension of payment in
respect of banks in the United States or Venezuela, whether mandatory or
not mandatory;
o any limitation, whether or not mandatory, by any United States or
Venezuelan governmental authority or agency on, or other event which
might affect the extension of credit by banks or other lending
institutions;
o commencement of a war, armed hostilities or other national or
international crisis directly or indirectly involving Venezuela or the
United States;
o a change or development involving a prospective change in the valuation
of the Bolivar relative to the U.S. dollar, or the imposition of exchange
controls, currency exchange rates or any suspension of, or limitation on,
the markets for currency;
o any change in taxation, including any stock transfer duty or withholding
affecting the ADSs or CANTV shares or stock exchange registration rights
or any other fees or duties payable as a result of the purchase of CANTV
shares or ADSs pursuant to the Offers;
46
o any change or development in foreign investment regulation in Venezuela,
the effect of which change or development is to make it impracticable to
proceed with the U.S. Offer or the Venezuelan Offer on the terms and in
the manner contemplated, or make the Venezuelan Offer or the U.S. Offer
more onerous, burdensome or disadvantageous (including limitations on the
repatriation of capital, dividends or other distributions);
o any extraordinary or material adverse change in the financial markets or
major stock exchange indices in the United States or Venezuela or in the
market prices of the ADSs or the Class D Shares; any adverse change in
the general political, market, economic, regulatory or financial
conditions in Venezuela that could have a material adverse effect on
CANTV's businesses, operations, prospects, trading in the ADSs or Class D
Shares or the value of the ADSs or CANTV shares; or
o a material acceleration or worsening of any of the economic, political
or other national or international conditions existing in the United
States or Venezuela at the time of the commencement of the U.S. Offer or
the Venezuelan Offer.
CHANGES IN CANTV CAPITAL STOCK CONDITION
CANTV or any subsidiary of CANTV shall not have, at any time after the
announcement of the U.S. Offer or the Venezuelan Offer:
o issued, distributed, pledged, sold or authorized, proposed or announced
the issuance of or sale, distribution or pledge to any person of:
o any shares of its capital stock;
o the capital stock of any of its subsidiaries;
o securities convertible into any such capital stock;
o any rights, warrants or options to acquire any such securities or any
other securities of CANTV or its subsidiaries; or
o any other securities in respect of, in lieu of, or in substitution
for, CANTV shares outstanding on August 29, 2001;
o declared, paid, announced or proposed to declare or pay any dividend or
distribution on any CANTV shares, or on any other security, except for
dividends or distributions declared before August 29, 2001;
o issued, authorized, recommended or proposed the issuance or payment of
any other distribution in respect of any CANTV shares, whether payable in
cash, securities or other property;
o altered or proposed to alter any material term of any outstanding
security or issued, sold, or authorized the issuance of any new security
or any right to acquire any such security;
o incurred or announced its intention to incur any debt other than in the
ordinary course of business and consistent with past practice or any debt
containing covenants which are unusual for CANTV or more onerous,
burdensome or disadvantageous than those customarily agreed to by CANTV;
o purchased, acquired or otherwise caused a reduction in the number of, or
proposed or offered to purchase, acquire or otherwise reduce the number
of any outstanding ADSs, CANTV shares or other securities;
o split, combined or otherwise changed, or authorized or proposed the
split, combination or other change of any shares of CANTV or its
capitalization;
o authorized, recommended or proposed, entered into or publicly announced
its intent to enter into any merger, consolidation, liquidation,
dissolution, business combination, joint venture, strategic alliance or
similar arrangement, acquisition or disposition of a material amount of
assets or securities, any material change in its capitalization, any
waiver, release or relinquishment of any
47
material contract or comparable rights of CANTV or any of its
subsidiaries or affiliates or any agreement contemplating any of the
foregoing or any comparable event not in the ordinary course of business,
or taken any action to implement any such transaction previously
authorized, recommended, proposed or publicly announced;
o taken, announced or proposed any action to fund (or transfer into escrow
any amounts in cash, securities or other assets required to fund), enter
into, amend, terminate, or increase benefits under, any employment,
severance, employee benefit or similar agreement, arrangement or plan
(other than in the ordinary course of business and consistent with past
practice) so as to provide for increased benefits to the employees as a
result of or in connection with the transactions contemplated by the
Offers or either of them or any other change of control of CANTV;
o amended or proposed or authorized any amendment to CANTV's Bylaws or
similar organizational documents;
o agreed in writing or otherwise, or called, proposed or held a
shareholders meeting, to take any of the foregoing actions or the
Purchaser shall have learned about any such action which has not
previously been publicly disclosed by CANTV; or
o authorized, recommended, proposed or entered into any other transaction
that in the sole judgment of the Purchaser could individually or in the
aggregate adversely affect the value of the ADSs or CANTV shares to the
Purchaser, AES, CEDC or any of their affiliates.
ALTERNATIVE PROPOSAL CONDITION
There shall not have been publicly proposed to be made nor shall the
Purchaser have learned that any other person or entity (including CANTV or any
of its subsidiaries or affiliates) or "group," within the meaning of Section
13(d)(3) of the Exchange Act, has made or intends to make a tender offer or
exchange offer for CANTV shares or ADSs.
MAJORITY OF MEMBERS OF BOARD OF DIRECTORS CONDITION
The purchase of more than 50% of the outstanding capital stock of CANTV
shall provide the Purchaser with the ability to appoint a majority of the
members of the Board of Directors of CANTV.
AGREEMENT WITH CANTV CONDITION
None of AES, CEDC or the Purchaser shall have:
o reached an agreement or understanding with CANTV that the U.S. Offer or
the Venezuelan Offer shall be terminated or amended; or
o entered into an agreement or an agreement in principle with CANTV
relating to a business combination or joint venture, strategic alliance
or similar arrangement or a purchase of shares, ADSs or assets of CANTV;
which the Board of Directors of CANTV approves because it deems such agreement
or understanding to be in the best interests of the shareholders.
TERMINATION OF THE VENEZUELAN OFFER CONDITION
The Venezuelan Offer shall not have been terminated.
OTHER
Because the acceptance of CANTV shares under the Venezuelan Offer is a
condition to the U.S. Offer, the conditions to the Venezuelan Offer, the rights
of the Purchaser to withdraw the Venezuelan Offer, and the termination rights
of the Purchaser under the Venezuelan Offer may also be deemed to be conditions
to the U.S. Offer, rights to withdraw the U.S. Offer and/or termination rights
to the U.S. Offer.
48
The foregoing conditions are for the sole benefit of the Purchaser and may
be asserted by the Purchaser in its sole judgment regardless of the
circumstances (including any action or omission by AES, CEDC, the Purchaser or
any of their affiliates) giving rise to any such conditions or may be waived by
the Purchaser in its sole discretion in whole or in part at any time and from
time to time. Notwithstanding the foregoing, under Venezuelan law, the
Purchaser may only waive the Minimum Tender Condition by lowering it to not
less than 75% of the original percentage of CANTV shares, including Class D
Shares represented by ADSs, sought in the Offers.
The failure by the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by the Purchaser concerning any condition or event
described in this Section 15 shall be final and binding upon all parties,
including all tendering CANTV shareholders.
16. LEGAL MATTERS; REGULATORY APPROVALS
GENERAL
Based on its examination of publicly available information filed by CANTV
with the SEC and other publicly available information concerning CANTV, except
as set forth in this U.S. Offer to Purchase, the Purchaser is not aware of:
(1) any governmental license or regulatory permit that appears to be
material to CANTV's business that might be adversely affected by the
Purchaser's purchase of ADSs or CANTV shares as contemplated in the
Offers,
(2) any approval or other action by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign,
that would be required for the acquisition or ownership of ADSs or
CANTV shares by the Purchaser as contemplated in the Offers, or
(3) any approval or other action by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign,
or any consent, waiver or other approval, that would be required as a
result of or in connection with the Offers, including, but not limited
to, any consents or other approvals under any licenses, concessions,
permits and agreements to which CANTV or the Purchaser or any of their
respective subsidiaries or affiliates is a party.
Should any such approval or other action be required, the Purchaser will
determine in its sole discretion whether such approval or other action will be
sought. Any such approval may delay the acceptance for payment of or payment
for ADSs tendered pursuant to the U.S. Offer. There can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that if such approvals were not
obtained or such other actions were not taken adverse consequences might not
result to CANTV's business or certain parts of CANTV's business might not have
to be disposed of, any of which could cause the Purchaser to elect to terminate
the U.S. Offer without the purchase of ADSs thereunder. The Purchaser's
obligation under the U.S. Offer to accept for payment and pay for ADSs is
subject to certain conditions. See Section 15.
HART-SCOTT-RODINO
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act"), and the rules that have been promulgated thereunder, some acquisitions
may not be consummated unless information has been furnished to the Antitrust
Division of the Department of Justice and the Federal Trade Commission and the
applicable waiting period requirements have been satisfied. The acquisition of
ADSs and CANTV shares pursuant to the Offers is not subject to the HSR Act.
VENEZUELAN TENDER OFFER REGULATIONS
Under the Venezuelan tender offer regulations, any person or group of
persons intending to take control of a publicly traded Venezuelan company must
file with the CNV a report describing the offer. On September 3, 2001 the
Purchaser filed such report.
49
In accordance with the Venezuelan tender offer regulations, the Purchaser
must report the results of the Offers to the CNV, the Caracas Stock Exchange
and the general public within two days following the closing of each of the
U.S. Offer and the Venezuelan Offer through a notice published in two
newspapers with a nationwide circulation.
CONATEL APPROVAL
According to the Concession and the Telecommunications Law of Venezuela, a
change of control of CANTV must be previously authorized by CONATEL. The
Purchaser notified CONATEL of the Offers and requested the necessary
authorization on September 10, 2001.
VENEZUELAN ANTITRUST AND COMPETITION LAW
The Purchaser is not required under Venezuelan law to notify the
Venezuelan Antitrust Authority, the Superintendencia para la Promocion y
Proteccion de la Libre Competencia (the "Superintendencia") of the Offers. The
Superintendencia does, however, have broad authority to investigate any
intended transaction that the Superintendencia determines is likely to cause an
adverse effect on, or lessen, competition. In addition, before CONATEL can
approve the purchase of CANTV shares and ADSs pursuant to the Offers, CONATEL
must obtain Superintendencia's favorable opinion. The Purchaser cannot give any
assurance that the Superintendencia will not determine that the U.S. Offer and
the Venezuelan Offer are anticompetitive.
17. FEES AND EXPENSES
Except as set forth below, the Purchaser will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
ADSs pursuant to the U.S. Offer.
J.P. Morgan Securities Inc. ("JP Morgan"), Banc of America Securities LLC
and Credit Suisse First Boston Corporation are acting as financial advisors
(the "Financial Advisors") to the Purchaser in connection with the Offers. JP
Morgan is acting as Dealer Manager in connection with the U.S. Offer. The
Dealer Manager and the Financial Advisors will receive customary fees for
acting as such. Such fees will not exceed $13 million in the aggregate. In
addition, the Purchaser has agreed to reimburse the Dealer Manager and the
Financial Advisors for certain reasonable out-of-pocket expenses incurred in
connection with their engagement (including the reasonable fees and
disbursements of outside counsel) and the Purchaser has agreed to indemnify the
Dealer Manager and the Financial Advisors against certain liabilities and
expenses in connection with their engagement, including certain liabilities
under the U.S. federal securities laws.
In the ordinary course of business, the Dealer Manager, the Financial
Advisors and their affiliates engage in securities trading, market-making and
brokerage activities and may, at any time, hold long or short positions and may
trade or otherwise effect transactions in securities of CANTV.
The Purchaser has retained Mellon Investor Services LLC to act as the U.S.
Receiving Agent in connection with the U.S. Offer. The U.S. Receiving Agent has
not been retained to make solicitations or recommendations in its role as
receiving agent. The U.S. Receiving Agent will receive reasonable and customary
compensation for its services, will be reimbursed for certain reasonable
out-of-pocket expenses and will be indemnified against certain liabilities in
connection therewith, including certain liabilities under the U.S. federal
securities laws.
The Purchaser has retained D.F. King & Co., Inc. to act as the Information
Agent in connection with the U.S. Offer. The Information Agent may contact
holders of ADSs by mail, telephone, telex, telegraph and personal interviews
and may request brokers, dealers and other nominee shareholders to forward
materials relating to the U.S. Offer to beneficial owners of ADSs. The
Information Agent will receive reasonable and customary compensation for its
services, will be reimbursed for certain reasonable out-of-pocket expenses and
will be indemnified against certain liabilities in connection therewith,
including certain liabilities under the U.S. federal securities laws.
50
18. MISCELLANEOUS
The U.S. Offer is not being made to, nor will tenders be accepted from or
on behalf of, holders of ADSs in any jurisdiction in which the making of the
U.S. Offer or acceptance for payment of ADSs would not be in compliance with
the laws of such jurisdiction. However, the Purchaser may, at its discretion,
take such action as it may deem necessary to make the U.S. Offer in any such
jurisdiction and extend the U.S. Offer to holders of ADSs in any such
jurisdiction. In any jurisdiction where securities, blue sky or other laws
require the U.S. Offer to be made by a licensed broker or dealer, the U.S.
Offer shall be deemed to be made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED IN THIS U.S. OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL OR NOTICE OF GUARANTEED DELIVERY AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED.
AES Comunicaciones de Venezuela, C.A.
51
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF AES, CEDC AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF AES
The name, business address, business telephone number, present principal
occupation or employment and five-year employment history of each director and
executive officer of AES and certain other information are set forth below. The
principal business address and business telephone number of AES and, unless
otherwise indicated, the business address and business telephone number of each
person identified below is 1001 North 19th Street, Arlington, Virginia, 22209,
telephone number: (703) 522-1315. Where no date is shown, the individual has
occupied the position indicated for the past five years. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with AES. All directors and executive officers listed below are
United States citizens. Directors are identified by an asterisk.
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Michael N. Armstrong Vice President of AES since January 2001. He has served as the Group
Manager for AES Electric since 1999. Mr. Armstrong leads the group
responsible for AES businesses and development activities in England,
Spain, Italy and other countries in Western Europe. Prior to assuming
the group manager's position, Mr. Armstrong was a project director and
business leader in England and Europe. Prior to joining AES in 1990,
Mr. Armstrong was a metallurgist and engineer for BOC plc.
Richard A. Bulger Vice President of AES since January 2001. He has served as the
President of EDC and CEDC since June 2000. Prior to his appointment
he served as President of AES Sul from October 1998 to June 2000. Mr.
Bulger joined AES in December of 1997 and before that he was a
director with Price Waterhouse LLP. Mr. Bulger is a certified public
accountant. Mr. Bulger also serves as a director with CANTV since
January 2001.
Dennis W. Bakke* Co-founder of AES with Roger Sant in 1981 and director of AES since
1986. He has been President of AES since 1987 and Chief Executive
Officer since January 1994. He is a trustee of Rivendell School and a
member of the Board of Directors of Macrosonix Corporation in
Richmond, Virginia.
Alice F. Emerson* Director of AES since 1993. She is a Senior Advisor at The Andrew W.
Mellon Foundation (a charitable foundation). She is a member of the
Boards of Directors of the World Resources Institute, the FleetBoston
Financial Corporation, Champion International Corporation, Eastman
Kodak Company, Salzburg Seminar, and the MGH Institute of Health
Professions.
Mark S. Fitzpatrick Appointed Executive Vice President of AES in February 2000, was
Senior Vice President of AES until February 2000, and was appointed
Vice President of AES in 1987. Mr. Fitzpatrick became Managing
Director of Applied Energy Services Electric Limited for the United
Kingdom and Western Europe operations in 1990.
S-1
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Paul T. Hanrahan Executive Vice President of AES since January 2001 and, prior to that,
Senior Vice President of AES since 1997. He was appointed Vice
President of AES effective January 1994. Since May 1, 1998, Mr.
Hanrahan has been Managing Director of AES Americas, a business
group within AES responsible for all of AES's activities in South
America. From February 1995 until 1998 he was President and Chief
Executive Officer of AES Chigen, where he served as Executive Vice
President, Chief Operating Officer and Secretary from December 1993
until February 1995.
Robert F. Hemphill, Jr.* Director of AES since June 1996. He served as Executive Vice President
of AES from 1982 to June 1996. He currently is the Managing Director
of Toucan Capital Corporation (an international venture capital firm).
He also serves on the Boards of the National Museum of American
History and the Pacific International Center for High Technology
Research, and is a member of the Advisory Board of Venture House, an
internet investment company.
Frank Jungers* Director of AES since 1983. He has been consultant to various
companies since before to 1994. Mr. Jungers is the retired Chairman of
the Board and Chief Executive Officer of the Arabian American Oil
Company. He currently serves on the Boards of Directors of Thermo
Electron Corporation, Esco Corporation and Statia Terminals. He is
also Chairman of the Advisory Board of Common Sense Partners, L.P.
He is also Trustee of the Board of Trustees of the American University
in Cairo and serves as a Trustee to the High Desert Museum and Oregon
Health Sciences University Foundation.
Phillip Lader* Director of AES since 2001. Mr. Lader served as U.S. Ambassador to
the United Kingdom of Great Britain and Northern Ireland from 1997
to January 2001 and has also served in several senior White House and
Cabinet-level posts. Prior to entering government service, Ambassador
Lader was President of Sea Pines Company, Executive Vice President of
the late Sir James Goldsmith's U.S. holding company and president of
universities in South Carolina and Australia. Founder of Renaissance
Weekends, Ambassador Lader currently serves as Chairman of WPP
plc, the world's largest advertising and communications services company
and a senior advisor to Morgan Stanley International.
Lenny M. Lee Vice President of AES since February 2000 and is President of AES
Great Plains. As Great Plains President, he is responsible for AES's
businesses in the US Midwest, including the AES CILCO and AES
IPALCO businesses. He has also served as Managing Director of AES
Transpower Private LTD, Singapore, where he was responsible for AES'
businesses in Korea, Southeast Asia, Australia, New Zealand, and
Hawaii. Prior to AES Transpower, he was the General Manager of
Central Termica San Nicolas, a 650 MW power plant in Argentina and
spent five years doing business development for AES from Arlington,
VA. Mr. Lee began his career at AES in 1988 and was involved in
numerous project development assignments. Prior to joining AES, he
spent 8 years with the Exxon Corporation in the U.S.A.
S-2
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Garry K. Levesley Vice President of AES since January 2001. He has served as President
of AES Silk Road since May 1999. Mr. Levesley leads the AES group
responsible for all of AES business, including project development and
plant operations, in all the countries of the former Soviet bloc, Central
Asia and Israel. Prior to his appointment as leader of this group he
worked as a leader in the Medway Power plant in the UK before moving
to lead AES businesses in Hungary and the former Altaienergo Utility
in Eastern Kazakhstan. Prior to joining AES in 1994, Mr. Levesley was
the Utilities Manager at a large Chemical complex in Northern England.
William R. Luraschi Vice President of AES since January 1998, Secretary since February 1996
and General Counsel of AES since January 1994. Prior to that, Mr.
Luraschi was an attorney with the law firm of Chadbourne & Parke
L.L.P.
John H. McArthur* Director of AES since January 1997. He is the retired Dean of the
Harvard Business School, and has been a private business consultant
and active investor in various companies since before 1994. He serves as
Senior Advisor to the President of the World Bank Group. He is also a
member of the Boards of Directors of BCE Inc., Cabot Corporation, the
Columbia/HCA Healthcare Corporation, Glaxo Wellcome plc, Rohm &
Haas Corporation, Springs Industries, Inc., and KOC Holdings, A.S.
Istanbul. He also serves in various capacities with non-profit health,
government, and education organizations in America, Canada, Europe
and Asia.
Ann D. Murtlow Vice President of AES since January 2001. She has served as Managing
Director of AES Horizons since May 1999. Ms. Murtlow leads the AES
group responsible for all of AES's business, including project
development and plant operations, in Ireland, Wales, and most of
Northern, Central and Eastern Europe. Prior to her appointment, Ms.
Murtlow served as project director for projects elsewhere in the region
and in the U.S. Prior to joining AES in 1987, Ms. Murtlow was with
Bechtel Power Corporation.
Roger F. Naill Senior Vice President of AES since February 2001. He has been Vice
President for Planning at AES since 1981. Prior to joining AES, Dr.
Naill was Director of the Office of Analytical Services at the Department
of Energy.
Hazel R. O'Leary* Director of AES since April 1997. Mrs. O'Leary was the seventh
Secretary of the United States Department of Energy from 1993 to 1997.
She is a consultant and an attorney to a diverse group of domestic and
international energy and sustainable development firms. She also serves
on the Board of the Kaiser Group International and UAL Corporation,
the parent company of United Airlines. In addition, Mrs. O'Leary serves
on the non-profit Boards of Morehouse College, the Andrew Young
Center of International Development, the World Wildlife Fund and the
Keystone Center.
S-3
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Shahazad S. Qasim Vice President of AES since February 2000 and has served as Managing
Director of AES Oasis since April 1998. As Managing Director of AES
Oasis, Mr. Qasim leads the AES group responsible for all of AES's
business, including project development and plant operations, in Pakistan,
India, portions of South Asia and the Middle East. Prior to his
appointment, Mr. Qasim had been developing various projects within
the same geographical region for AES. Mr. Qasim has been with AES
since November 1992.
Dan Rothaupt Vice President of AES since January 2001. He has served as President
of AES Endeavor since May 1999. Mr. Rothaupt leads the AES group
responsible for all of AES business, including project development,
power marketing and plant operations, in New York, New England and
Eastern Canada. Prior to his appointment, Mr. Rothaupt served as Plant
Manager of AES Hawaii and AES Thames facilities. Prior to joining
AES in 1988, Mr. Rothaupt was employed by Pfizer Inc and the US
Coast Guard in a variety of engineering positions.
William Ruccius Vice President of AES since February 2000. He has served as Managing
Director of AES Orient since June 1998. As Managing Director of AES
Orient, Mr. Ruccius leads the AES group responsible for all of AES's
business, including project development and plant operations, in
Northern China and most of North and East Asia including the
Philippines. From June 1996 until his appointment as Managing Director,
he was President and CEO of AES Lal Pir and AES Pak Gen, AES's
dual Pakistani generating facilities. Prior to that Mr. Ruccius was Plant
Manager at AES Hawaii from April 1995 to June 1996 and worked at
AES Deepwater from June 1993 to April 1995.
John Ruggirello Executive Vice President of AES since February 2000, was Senior Vice
President until February 2000 and was appointed Vice President in
January 1997. Mr. Ruggirello heads an AES group responsible for
project development, construction and plant operations in much of the
United States and Canada. He served as President of AES Beaver
Valley from 1990 to 1996.
J. Stuart Ryan Executive Vice President of AES since February 2000, was Senior Vice
President until February 2000 and is Managing Director of the AES
Pacific group which is responsible for AES's business in the western
United States. Between 1994 and 1998, Mr. Ryan led the AES
Transpower group responsible for AES's activities in Asia (excluding
China). From 1994 through 1997, he served as Vice President of AES.
Roger W. Sant* Co-founder of AES with Dennis Bakke in 1981. He has been Chairman
of the Board and a director of AES since its inception, and he held the
office of Chief Executive Officer through December 31, 1993. He
currently is Chairman of the Boards of Directors of The Summit
Foundation and The World Wildlife Fund U.S., and serves on the
Boards of Directors of The World Resources Institute, the World Wide
Fund for Nature and Marriott International, Inc.
S-4
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Barry J. Sharp Executive Vice President of AES since February 2001. Mr. Sharp was
appointed Senior Vice President and Chief Financial Officer effective
January 1998 and had been Vice President and Chief Financial Officer
since 1987. He also served as Secretary of AES until February 1996.
From 1986 to 1987, he served as the AES Director of Finance and
Administration. Mr. Sharp is a certified public accountant.
Sarah Slusser Vice President of AES since January 1999, was appointed President of
AES Aurora, Inc., effective April 1997. AES Aurora is a wholly owned
subsidiary of AES and a group of AES which is responsible for business
development, construction and operations of facilities and projects in
Mexico, Central America, the Caribbean and the Gulf States in the
United States. Prior to that, Ms. Slusser served as Project Director for
various AES projects in the same region from 1993 to 1997.
Paul D. Stinson Vice President of AES since January 1998. After returning from a
personal leave of absence in June of 2001, Mr. Stinson has been assigned
to the AES Endeavor Group to support both operations and business
development. From July 1999 until January, 2001, Mr. Stinson was
President of AES Great Plains, Ltd., a wholly owned subsidiary of AES,
which is a group of AES responsible for business development,
construction and operations of facilities and projects in the U.S.
Mid-West. From April 1997 to July 1999, Mr. Stinson served as
Managing Director of AES Silk Road, Ltd. Mr. Stinson served as
Managing Director of Medway Power Ltd. from 1994 until 1997 and was
Plant Manager of the Medway Power Station owned by Medway Power
Ltd. from 1992 to 1997.
David Luis Travesso Vice President of AES since February 2000. He has served as Group
Manager of AES Sao Paolo since February 2000. Prior to this
appointment, Mr. Travesso served as Chairman of Light-Servicos de
Electricade S.A.
Thomas A. Tribone Executive Vice President of AES since January 1998, and Senior Vice
President of AES from 1990 to January 1998. Mr. Tribone leads AES
Think, a group involved in energy, telecom and internet businesses in
South America and the U.S.
Thomas I. Unterberg* Director of AES since 1984. He has been a Managing Director of C.E.
Unterberg, Towbin (an investment banking firm) since 1989. He currently
serves on the Boards of Directors of Electronics for Imaging, Inc.,
Systems and Computer Technology Corporation, ECCS, Inc., Centrax
Corporation, Inc. and Club One, LLC. During 1999, Unterberg Harris,
an affiliate of C.E. Unterberg, Towbin, the investment banking firm in
which Mr. Unterberg is a Managing Director, acted as a co-managing
underwriter for a financial offering of AES which included the October 7,
1999 offering of 14 million shares of Common Stock, par value $0.01 per
share.
S-5
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Robert H. Waterman, Jr.* Director of AES since 1985. He is the founder and has been the Chief
Executive Officer of The Waterman Group, Inc. (a business consulting
firm) since 1985. His business includes research and writing, consulting
and venture management. He currently is Chairman of the Board of
University ProNet, Inc. and serves on the boards of several non-profit
organizations including the World Wildlife Fund and the Restless Legs
Syndrome Foundation.
Kenneth R. Woodcock Senior Vice President of AES since 1987. Mr. Woodcock is responsible
for coordinating AES's relationships with the investment community,
and he provides support for AES's business development activities
worldwide.
2. DIRECTORS AND EXECUTIVE OFFICERS OF CEDC
The name, business address, business telephone number, present principal
occupation or employment and five-year employment history of each director and
executive officer of CEDC and certain other information are set forth below.
The principal business address and business telephone number of CEDC and,
unless otherwise indicated, the business address and business telephone number
of each person identified below, other than those employed by AES, is Av.
Vollmer, San Bernadino, Edificio La Electricidad de Caracas, Torre Central,
Caracas, Venezuela (telephone number: 011-58-212-502-2111). The business
address and business telephone number of each person identified below who is
employed by AES is the business address and telephone number of AES set forth
above. Where no date is shown, the individual has occupied the position
indicated for the past five years. Unless otherwise indicated, each occupation
set forth opposite an individual's name refers to employment with CEDC. All
directors and executive officers listed below are United States citizens,
except as specified below. Directors are identified by an asterisk.
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Dennis W. Bakke* Director of CEDC since 2000. Co-founder of AES with Roger Sant in
1981 and director of AES since 1986. He has been President of AES
since 1987 and Chief Executive Officer since January 1994. He is a
trustee of Rivendell School and a member of the Board of Directors of
Macrosonix Corporation in Richmond, Virginia.
Richard A. Bulger* Director of CEDC since 2000 and President of CEDC since 2000. Vice
President of AES since January 2001. He has served as the President of
EDC and CEDC since June 2000. Prior to his appointment he served as
President of AES Sul from October 1998 to June 2000. Mr. Bulger
joined AES in December of 1997 and before that he was a director with
Price Waterhouse LLP. Mr. Bulger is a certified public accountant. Mr.
Bulger also serves as a director with CANTV since January 2001.
Michele Goguikian* Director of CEDC since 2000. Mr. Goguikian has been Executive
President of Banco de Venezuela Grupo Santander Central Hispano (a
Venezuelan bank) since 1997. Mr. Goguikian joined Grupo Santander
Central Hispano in 1992 as Managing Director for Santander
Investments. Before then, Mr. Goguikian worked for Citibank for 12
years as International Executive. Mr. Goguikian is a Venezuelan citizen.
S-6
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Paul T. Hanrahan* Director of CEDC since 2000. Executive Vice President of AES since
January 2001 and, prior to that, Senior Vice President of AES since
1997. He was appointed Vice President of AES effective January 1994.
Since May 1, 1998, Mr. Hanrahan has been Managing Director of AES
Americas, a business group within AES responsible for all of AES's
activities in South America. From February 1995 until 1998 he was
President and Chief Executive Officer of AES Chigen, where he served
as Executive Vice President, Chief Operating Officer and Secretary
from December 1993 until February 1995.
Lorenzo Mendoza* Director of CEDC since 2000. Mr. Mendoza has been a Principal
Director of Cerveceria Polar, C.A. (a food and beverage company) since
1993. Member of the Executive Committee of Cerveceria Polar, C.A.
since 1990. CEO of Empresas Polar (a food and beverage company)
since 1999. Principal Director of the Board of Banco Provincial, S.A.
Banco Universal since 1997. Principal Director of the Board of Directors
of Snack America Latina since 1998. Mr. Mendoza is a Venezuelan
citizen.
Mr. Mendoza owns 42,066 Class D Shares, which represent less than
0.1% of the outstanding Class D Shares (including Class D Shares
represented by ADSs), and less than 0.1% of the total number of
outstanding shares of capital stock of CANTV.
Julian Jose Nebreda Marquez Legal Counsel and Secretary of the Board of Directors of CEDC and
EDC since 2000. Mr. Nebreda joined CEDC's Legal Department in
1999. He is a Member of the Board of Directors of the Caracas Chamber
of Commerce and SERDECO and he is also Alternate Director of Caja
de Valores de Venezuela. Between 1993 and 1999 Mr. Nebreda was
Counsel to the Executive Director for Panama and Venezuela at the
Inter-American Development Bank in Washington D.C. Mr. Nebreda is
a Venezuelan citizen.
Cira Romero* Director of CEDC since 2000. President of Estrategias Empresariales (a
consulting firm) since 1987. Ms. Romero is a Member of the Board of
Directors of the Caracas Chamber of Commerce and the Instituto de
Estudios Superiores de Administracion (IESA). Ms. Romero is a
Venezuelan citizen.
J. Stuart Ryan* Director of CEDC since 2000. Executive Vice President of AES since
February 2000, was Senior Vice President until February 2000 and is
Managing Director of the AES Pacific group which is responsible for
AES's business in the western United States. Between 1994 and 1998,
Mr. Ryan led the AES Transpower group responsible for AES's
activities in Asia (excluding China). From 1994 through 1997, he served
as Vice President of AES.
S-7
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Roger W. Sant* Director of CEDC since 2000, and Chairman of the Board of Directors
since 2000. Co-founder of AES with Dennis Bakke in 1981. He has been
Chairman of the Board and a director of AES since its inception, and he
held the office of Chief Executive Officer through December 31, 1993.
He currently is Chairman of the Boards of Directors of The Summit
Foundation and The World Wildlife Fund U.S., and serves on the
Boards of Directors of The World Resources Institute, the World Wide
Fund for Nature and Marriott International, Inc.
Gustavo Julio Vollmer* Director of CEDC since 2000. President of Corporacion Palmar, S.A.
since 1984. Mr. Vollmer is Director of Mercantil Servicos Financieros,
Banco Mercantil, C.A. and Siderurgica de Venezuela, S.A. He is also a
member of the Advisory Council of the New York Stock Exchange for
Latin America. Mr. Vollmer is a Venezuelan citizen.
3. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The name, business address, business telephone number, present principal
occupation or employment and five-year employment history of each executive
officer and of each director of Purchaser and certain other information are set
forth below. The principal business address and business telephone number of
the Purchaser is that of CEDC and, unless otherwise indicated, the business
address and business telephone number of each person identified below is that
of AES. Where no date is shown, except in the case of positions with the
Purchaser, the individual has occupied the position indicated for the past five
years. All directors and executive officers listed below are United States
citizens, except as specified below. Directors are identified by an asterisk.
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Paul T. Hanrahan* Director of the Purchaser since August 2001. Executive Vice President
of AES since January 2001 and, prior to that, Senior Vice President of
AES since 1997. He was appointed Vice President of AES effective
January 1994. Since May 1, 1998, Mr. Hanrahan has been Managing
Director of AES Americas, a business group within AES responsible for
all of AES's activities in South America. From February 1995 until 1998
he was President and Chief Executive Officer of AES Chigen, where he
served as Executive Vice President, Chief Operating Officer and
Secretary from December 1993 until February 1995.
Jeffrey A. Safford* Director of the Purchaser since August 2001. Vice President and Chief
Financial Officer of AES Americas, a business group within AES
responsible for all of AES's activities in South America. From April 1994
until Mr. Safford's appointment to such offices in September 1998, he
served as Vice President and Chief Financial Officer and Secretary of
AES China Generating Co., Ltd., and performed the function of
principal accounting officer. He is a Certified Public Accountant.
S-8
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------------------
Julian Jose Nebreda Marquez* Director of the Purchaser since August 2001. Legal Counsel and
Secretary of the Board of Directors of CEDC and EDC since 2000. Mr.
Nebreda joined CEDC's Legal Department in 1999. He is a Member of
the Board of Directors of the Caracas Chamber of Commerce and
SERDECO and he is also an Alternate Director of Caja de Valores de
Venezuela. Between 1993 and 1999 Mr. Nebreda was Counsel to the
Executive Director for Panama and Venezuela at the Inter-American
Development Bank in Washington D.C. Mr. Nebreda is a Venezuelan
citizen. The principal business address and phone number of Mr.
Nebreda is the address and phone number of CEDC.
During the past five years, none of AES, CEDC nor the Purchaser, nor to
the best of their knowledge, any of the persons listed on this Schedule I, (1)
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (2) has been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining such
person or entity from future violations of, or prohibiting activities subject
to, United States federal or state securities laws or a finding of any
violation with respect to such laws.
S-9
Copies of the ADS Letter of Transmittal, properly completed and duly
executed, will be accepted. The ADS Letter of Transmittal, ADRs and any other
required documents should be sent or delivered by each ADS holder of CANTV or
such ADS holder's broker, dealer, commercial bank, trust company or other
nominee to the U.S. Receiving Agent, at one of the addresses set forth below:
THE U.S. RECEIVING AGENT FOR THE U.S. OFFER IS:
MELLON INVESTOR SERVICES LLC
By Mail: By Hand: By Overnight Delivery:
Reorganization Department Reorganization Department Reorganization Department
PO Box 3301 120 Broadway 85 Challenger Road
South Hackensack, NJ 07606 13th Floor Mail Stop - Reorg
New York, NY 10271 Ridgefield Park, NJ 07660
Alternative Hand Delivery (If 120 Broadway is Not Available):
Reorganization Department
C/O STARS
100 William Street, Galleria
New York, NY 10038
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
Any questions or requests for assistance or additional copies of this U.S.
Offer to Purchase, the ADS Letter of Transmittal, the Notice of Guaranteed
Delivery and the Guidelines for Certification of Taxpayer Identification on
Substitute Form W-9 may be directed to the Information Agent at the address and
telephone numbers set forth below. ADS holders may also contact their broker,
dealer, commercial bank or trust company for assistance concerning the U.S.
Offer.
The Information Agent for the U.S. Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, NY 10005
Toll Free: (800) 549-6746
Collect outside the U.S.: +1 (212) 269-5550
The Dealer Manager for the U.S. Offer is:
J.P. Morgan Securities Inc.
277 Park Avenue
New York, NY 10172
Toll Free: (800) 648-5544
Collect: (212) 648-0888
JPMORGAN [Logo]
EX-99.(A)(1)(B)
4
file003.txt
ADS LETTER OF TRANSMITTAL
Exhibit (a)(1)(B)
ADS LETTER OF TRANSMITTAL
U.S. OFFER TO PURCHASE FOR CASH 28,566,944 AMERICAN DEPOSITARY SHARES ("ADSS")
(EACH ADS REPRESENTING 7 CLASS D SHARES OF COMMON STOCK)
OF
COMPANIA ANONIMA NACIONAL TELEFONOS
DE VENEZUELA (CANTV)
FOR
$24.00 PER ADS
BY
AES COMUNICACIONES DE VENEZUELA, C.A.
A COMPANY JOINTLY OWNED BY
THE AES CORPORATION
AND
CORPORACION EDC, C.A.
THE U.S. OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, OCTOBER 29, 2001, UNLESS THE U.S. OFFER IS
EXTENDED.
THE RECEIVING AGENT FOR THE U.S. OFFER IS:
MELLON INVESTOR SERVICES LLC
By First-Class Mail: By Hand: By Overnight Delivery:
Reorganization Department Reorganization Department Reorganization Department
PO Box 3301 120 Broadway 85 Challenger Road
South Hackensack, NJ 07606 13th Floor Mail Stop - Reorg
New York, NY 10271 Ridgefield Park, NJ 07660
Alternate Hand Delivery (If 120 Broadway is Not Available):
Reorganization Department
C/O STARS
100 William Street, Galleria
New York, NY 10038
DELIVERY OF THIS ADS LETTER OF TRANSMITTAL ("LETTER OF TRANSMITTAL") TO AN
ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE VALID DELIVERY TO THE
RECEIVING AGENT. YOU MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW
AND COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
THIS LETTER OF TRANSMITTAL IS TO BE USED ONLY FOR TENDERING AMERICAN
DEPOSITORY RECEIPTS ("ADRS") REPRESENTING ADSs.
Shares of common stock ("Shares") of Compania Anonima Nacional Telefonos
De Venezuela (CANTV) ("CANTV"), except insofar as they are represented by ADSs,
cannot be tendered by means of this Letter of Transmittal. Shares beneficially
owned or held of record by persons cannot be tendered pursuant to the U.S.
offer (the "U.S. Offer") and can only be tendered pursuant to the concurrent
offer in Venezuela (the "Venezuelan Offer") by AES Comunicaciones de Venezuela,
C.A. to purchase 199,968,608 Shares at $3.4285714 per Share (the price being
paid pursuant to the U.S. Offer taking into account the number of Class D
Shares represented by ADSs). Additional information on the Venezuelan Offer may
be obtained from the Information Agent at its address and telephone number set
forth on the back cover of this Letter of Transmittal. Documentation on the
Venezuelan Offer will be available in English.
All Letters of Transmittal, ADRs representing ADSs and other required
documents delivered to the Receiving Agent by holders of ADSs will be deemed to
constitute acknowledgment by such holders that they understand and will comply
with the terms and conditions of the U.S. Offer with respect to such ADSs as
set forth in the U.S. Offer to Purchase dated September 25, 2001, any
supplements or amendments thereto (the "Offer to Purchase"), and this Letter of
Transmittal.
Holders of ADSs accepted for payment in the U.S. Offer will receive $24.00
per ADS, net to the seller in cash, less any withholding taxes and without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase.
This Letter of Transmittal is to be used if ADRs representing ADSs are to
be forwarded herewith. An Agent's Message (as defined in Instruction 2 below)
must be utilized if delivery of ADSs is to be made by book-entry transfer to an
account maintained by the Receiving Agent at the Book-Entry Transfer Facility
(as defined in the Offer to Purchase) and pursuant to the procedures for
book-entry transfer set forth under the section "THE U.S. OFFER--Procedure for
Tendering ADSs in the U.S. Offer" in the Offer to Purchase. ADS holders who
deliver ADSs by book-entry transfer are referred to herein as "Book-Entry ADS
Holders".
In the event of an inconsistency between the terms and procedures in this
Letter of Transmittal and the Offer to Purchase, the terms and procedures in
the Offer to Purchase shall govern. Please contact the Information Agent to
discuss any inconsistency.
Holders of ADSs whose ADRs are not immediately available or who cannot
deliver their ADRs and all other documents required by this Letter of
Transmittal to the Receiving Agent, or cannot complete the procedures for
book-entry transfer by the expiration of the U.S. Offer may tender their ADSs
by following the Guaranteed Delivery Procedures set forth under the section
"THE U.S. OFFER--Procedure for Tendering ADSs in the U.S. Offer" in the Offer
to Purchase. See Instruction 2 of this Letter of Transmittal.
2
-------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ADSs TENDERED
-------------------------------------------------------------------------------------------------------------------
NAMES(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ADRS ENCLOSED AND ADSs TENDERED
ON ADR(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
-------------------------------------------------------------------------------------------------------------------
Total Number of
ADR Serial ADSs represented Number of ADSs
Number(s)(1) by ADRs(1) Tendered(2)
----------------------------------------------------------
----------------------------------------------------------
Total ADSs
-------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry ADS Holders.
(2) Unless otherwise indicated, it will be assumed that all ADSs represented by ADRs delivered to the
Receiving Agent are tendered hereby. See Instructions 4.
[ ] CHECK HERE IF ANY OF THE ADRs REPRESENTING ADSs THAT YOU OWN HAVE BEEN
LOST, DESTROYED OR STOLEN. SEE INSTRUCTION 10.
Number of ADSs represented by lost, destroyed or stolen
ADRs:
--------------------------
YOU MUST CONTACT THE DEPOSITARY DIRECTLY TO REPLACE ANY LOST, DESTROYED
OR STOLEN ADRs REPRESENTING ADSs YOU INTEND TO TENDER.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
[ ] CHECK HERE IF TENDERED ADSs ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE RECEIVING AGENT'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
--------------------------------------------
DTC Account Number:
------------------------------------------------------
Transaction Code Number:
-------------------------------------------------
[ ] CHECK BOX IF TENDERED ADSs ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE RECEIVING AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Owner(s):
------------------------------------------
Window Ticket Number (if any) or DTC Participant Number:
-----------------
Date of Execution of Notice of Guaranteed Delivery:
----------------------
Name of Institution that Guaranteed Delivery:
----------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
3
Ladies and Gentlemen:
The undersigned hereby delivers to the Receiving Agent for tender and
instructs the Receiving Agent to tender to AES Comunicaciones de Venezuela,
C.A., a company incorporated under the laws of Venezuela (the "Purchaser"),
jointly owned by The AES Corporation, a Delaware corporation ("AES") and
Corporacion EDC, C.A. ("CEDC"), a company incorporated under the laws of
Venezuela and in which AES owns 87% of the outstanding ordinary shares
("CEDC"), the above described ADSs in accordance with the terms and conditions
of the U.S. Offer set forth in the U.S. Offer to Purchase dated September 25,
2001 (the "Offer to Purchase") and in this Letter of Transmittal, including the
rights of withdrawal set forth in the section captioned "THE U.S.
OFFER--Withdrawal Rights" in the Offer to Purchase.
The undersigned understands that the Purchaser's acceptance of the ADSs
tendered pursuant hereto into the U.S. Offer by the undersigned will constitute
a binding agreement between the undersigned and the Purchaser upon the terms
and subject to the conditions of the U.S. Offer set forth in the Offer to
Purchase and in this Letter of Transmittal. Without limiting the foregoing, if
the price to be paid in the U.S. Offer is amended in accordance with the U.S.
Offer, the price to be paid to the undersigned will be the amended price
notwithstanding the fact that a different price is stated in this Letter of
Transmittal. The undersigned recognizes that under certain circumstances set
forth in the Offer to Purchase, the Purchaser may not be required to accept for
payment any of the ADSs tendered hereby.
The undersigned understands that the Purchaser reserves the right to
transfer or assign, in whole or from time to time in part, to one or more of
its affiliates, the right to purchase ADSs tendered pursuant to the U.S. Offer,
but any such transfer or assignment will not relieve the Purchaser of its
obligation under the U.S. Offer or prejudice the rights of tendering ADS
holders to receive payment for ADSs validly tendered and accepted for payment.
Upon the terms and conditions of the U.S. Offer set forth in the Offer to
Purchase and in this Letter of Transmittal (including, if the U.S. Offer is
extended or amended, the terms and conditions of any such extensions or
amendments), the undersigned hereby:
(i) sells, assigns and transfers to, or upon the order of, the Purchaser
all right, title and interest in and to all the ADSs being tendered hereby
and any and all non-cash dividends, distributions and rights, and any and
all additional or other ADSs, shares of capital stock, securities and
rights issued or issuable in respect thereof or the Class D shares
underlying such ADSs (whether pursuant to a stock split, stock dividend or
otherwise) on or after August 29, 2001 (collectively, "Distributions"); and
(ii) constitutes and appoints the Receiving Agent as the true and lawful
agent and attorney-in-fact of the undersigned with respect to such ADSs
(and any and all Distributions), with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver ADRs representing ADSs (and any and all
Distributions) or transfer the ownership of such ADSs (and any and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to the Purchaser, (b) present such ADSs (and any
and all Distributions) for transfer on the books of the depositary with
respect to ADSs (currently being The Bank of New York pursuant to the
Amended and Restated Deposit Agreement (the "Deposit Agreement") dated
September 10, 2000 among CANTV, The Bank of New York and all holders from
time to time of ADRs), and (c) receive all benefits and otherwise exercise
all rights of beneficial ownership of such ADSs (and any and all
Distributions), all in accordance with the terms and the conditions of the
U.S. Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Paul T. Hanrahan, Jeffrey A. Safford and Julian Jose Nebreda Marquez
in their respective capacities as directors of the Purchaser, and any
individual who shall thereafter succeed to any such office of the Purchaser,
and each of them, and any other designees of the Purchaser, as
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to the full extent of the undersigned's rights with respect to
the ADSs tendered hereunder and accepted for payment by the Purchaser and with
respect to any and all Distributions. Such appointment will be effective if, as
and when, and only to the extent that the Purchaser accepts for payment (see
the section captioned "THE U.S. OFFER--Acceptance for Payment" in the Offer to
Purchase) the ADSs tendered
4
hereunder. Such attorneys-in-fact and proxies, or his substitutes, will, with
respect to the ADSs accepted for payment by the Purchaser, be empowered to
exercise (i) all voting and other rights with respect to such ADSs (and any and
all Distributions), including, without limitation, in respect of any ordinary
or extraordinary meeting of CANTV's shareholders (and any adjournment or
postponement thereof), actions by written consent in lieu of any such meeting
or otherwise and (ii) any and all rights granted to ADS holders pursuant to the
Deposit Agreement, including, without limitation, the right to surrender ADRs
and withdraw deposited Class D Shares, in each case, as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper. This power of attorney and proxy are irrevocable, coupled with an
interest and are granted in consideration of the acceptance for payment of such
ADSs in accordance with the terms of the U.S. Offer. Such acceptance for
payment shall, without further action, revoke any prior powers of attorney,
proxies and consents granted by the undersigned at any time with respect to
such ADSs (including Class D Shares underlying such ADSs) (and any and all
Distributions), and no subsequent power or attorney, proxies, consents or
revocations may be given by the undersigned with respect thereto (and, if
given, will not be deemed effective). The Purchaser reserves the right to
require that, in order for ADSs to be deemed validly tendered immediately upon
the Purchaser's acceptance for payment of such ADSs, the Purchaser must be able
to exercise full voting, consent and other rights with respect to such ADSs
(and any and all Distributions), including voting at any meeting of CANTV's
shareholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the ADSs tendered
hereby (and any and all Distributions), that the undersigned owns the ADSs
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, that the tender of the tendered
ADSs complies with Rule 14e-4 under the Exchange Act and that when the same are
accepted by the Purchaser pursuant to the terms and conditions of the U.S.
Offer, the Purchaser will acquire good, marketable and unencumbered title
thereto (and to any and all Distributions), free and clear of all liens,
restrictions, charges and encumbrances, together with all rights now or
hereafter attaching to them, including voting rights and rights to all
dividends, other distributions and payments hereafter declared, made or paid,
and the same will not be subject to any adverse claims. The undersigned will,
upon request, execute and deliver any additional documents deemed by the
Receiving Agent or by the Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of the ADSs (and any and all Distributions)
tendered hereby. In addition, the undersigned shall promptly remit and transfer
to the Receiving Agent for the Purchaser's account any and all Distributions in
respect of such ADSs tendered hereby, accompanied by appropriate documentation
of transfer and, pending such remittance and transfer or appropriate assurance
thereof, the Purchaser shall be entitled to all rights and privileges as owner
of each such Distribution and may withhold the entire purchase price of the
ADSs tendered hereby or deduct from such purchase price, the amount or value of
such Distribution as determined by the Purchaser in its sole discretion.
The undersigned agrees to ratify each and every act or thing which may be
done or effected by any director of, or other person nominated by, the
Purchaser or its respective agents, as the case may be, in the exercise of any
of their powers and/or authorities hereunder.
The undersigned undertakes, represents and warrants that if any provision
of this Letter of Transmittal shall be unenforceable or invalid or shall not
operate so as to afford the Purchaser or the Receiving Agent or their
respective agents the benefit of the authority expressed to be given in this
Letter of Transmittal, the undersigned shall, with all practicable speed, do
all such acts and things and execute all such documents as may be required to
enable the Purchaser or the Receiving Agent to secure the full benefits of this
Letter of Transmittal.
All authority herein conferred or agreed to be conferred and all
undertakings, representations and warranties given pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
Unless otherwise indicated herein in the box entitled "Special Delivery
Instruction," the undersigned hereby instructs the Purchaser to issue, or cause
to be issued, any ADRs representing ADSs not tendered or accepted, in the
name(s) of the registered holder(s) appearing herein in the box entitled
"Description of ADSs
5
Tendered." Similarly, unless otherwise indicated herein in the box entitled
"Special Delivery Instructions," the undersigned hereby instructs the Purchaser
to return, or cause to be returned, any ADRs representing ADSs not tendered or
accepted (and accompanying documents, as appropriate), to the address(es) of
the registered holder(s) appearing herein in the box entitled "Description of
ADSs Tendered." In the event that both the "Special Delivery Instructions" and
the "Special Payment Instructions" are completed, the undersigned hereby
instructs the Purchaser to (i) issue, or cause to be issued, any ADRs
representing ADSs not tendered or accepted in the name(s) of the person or
persons so indicated, and (ii) return, or cause to be returned, any ADRs
representing any ADSs not tendered or accepted (and accompanying documents, as
appropriate) to the address(es) of the person or persons so indicated.
In the case of a book-entry delivery of ADSs, the undersigned hereby
instructs the Purchaser to credit the undersigned's account maintained at the
Book-Entry Transfer Facility with any ADSs not accepted. The undersigned
recognizes that the Purchaser will not transfer any ADSs from the name of the
registered holder thereof if the Purchaser does not accept any of the ADSs so
tendered. The undersigned recognizes that the Purchaser has no obligation to
transfer any ADSs from the name of the registered holder thereof if the
Purchaser does not accept any of the ADSs so tendered.
The terms and conditions of the Offer to Purchase, as from time to time
supplemented or amended, shall be deemed to be incorporated in, and form part
of, this Letter of Transmittal, which shall be read and construed accordingly.
THIS LETTER OF TRANSMITTAL SHALL NOT BE CONSIDERED COMPLETE AND VALID, AND
DELIVERY OF THE CONSIDERATION PURSUANT TO THE U.S. OFFER SHALL NOT BE MADE,
UNTIL THE ADSS BEING TENDERED AND ALL OTHER REQUIRED DOCUMENTATION HAVE BEEN
RECEIVED BY THE RECEIVING AGENT AS PROVIDED IN THE OFFER TO PURCHASE AND THIS
LETTER OF TRANSMITTAL.
Unless you complete the "Special Delivery Instructions" box, the address
of the holder inserted in the box entitled "Description of ADSs Tendered" is
the address to which your consideration will be sent. Please also state a
daytime telephone number where you may be contacted in the event of any query.
6
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
Fill in ONLY if check is to be issued Fill in ONLY if check is to be
in a name other than the undersigned. delivered, or if any ADRs representing
ADSs not tendered or not purchased
are to be delivered, to someone other
Deliver check to: than the
undersigned or to the undersigned at
an address other than that shown
under "Description of ADSs Tendered."
Name
--------------------------------
(Please Type or Print) Deliver check and/or certificates to:
Address
-----------------------------
Name --------------------------------
----------------------------- (Please Type or Print)
-----------------------------
(Include Zip Code) Address
-----------------------------
-----------------------------
-----------------------------
(Include Zip Code)
--------------------------------------- --------------------------------------
(Tax Identification Number or (Tax Identification Number or
Social Security Number) Social Security Number)
(See Substitute Form W-9 (See Substitute Form W-9
on Reverse Side) on Reverse Side)
7
IMPORTANT
ADS HOLDERS SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(Signature(s) of ADS Holders)
Dated: ____________________ , 2001
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
ADR(s) representing the ADS(s) or by person(s) to whom ADR(s) surrendered have
been assigned and transferred, as evidenced by endorsement, stock powers and
other documents transmitted herewith. If signature is by any trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation
or others acting in a fiduciary or representative capacity, please set forth
the following and see Instruction 5.)
Name(s) ______________________________________________________________________
_______________________________________________________________________________
(Please Print)
Capacity (full title) ________________________________________________________
(See Instruction 5)
Address ______________________________________________________________________
_______________________________________________________________________________
(Including Zip Code)
Area Code and Telephone Number ________________________________________________
Tax Identification or Social Security Number __________________________________
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5 IF REQUIRED)
FOR USE BY ELIGIBLE INSTITUTIONS ONLY,
PLACE MEDALLION GUARANTEE IN SPACE BELOW
Authorized Signature __________________________________________________________
Name __________________________________________________________________________
(Please Print)
Title _________________________________________________________________________
(Please Print)
Name of Firm __________________________________________________________________
Address _______________________________________________________________________
_______________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number ________________________________________________
Dated _________________________________________________________________________
8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE U.S. OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided in the next
sentence, all signatures on this Letter of Transmittal must be guaranteed by a
financial institution (including most banks, savings and loan associations and
brokerage houses) which is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Program or the Stock
Exchange Medallion Program (an "Eligible Institution"). Signatures on this
Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal
is signed by the registered holder(s) of the ADSs (which term, for purposes of
this document, shall include any participant in the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of an
ADS tendered herewith) and such holder(s) have not completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on this Letter of Transmittal or (b) if such ADSs are tendered
for the account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND ADRS; GUARANTEED DELIVERY
PROCEDURE. This Letter of Transmittal is to be completed by ADS holders if ADRs
are to be forwarded herewith. An Agent's Message must be utilized if delivery
of ADSs is to be made by book-entry transfer to an account maintained by the
Receiving Agent at the Book-Entry Transfer Facility pursuant to the procedures
for book-entry transfer set forth in the section captioned "THE U.S.
OFFER--Procedure for Tendering ADSs in the U.S. Offer" in the Offer to
Purchase. ADRs representing ADSs or confirmation of any book-entry transfer
into the Receiving Agent's account at the Book-Entry Transfer Facility of ADSs
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal or, in the case of a book-entry transfer, an Agent's
Message in lieu of this Letter of Transmittal, and any other documents required
by this Letter of Transmittal, must be delivered to the Receiving Agent at one
of its addresses set forth herein by the Expiration Date (as defined in the
Offer to Purchase) or the tendering ADS holder must comply with the Guaranteed
Delivery Procedures set forth below and as provided in the section captioned
"THE U.S. OFFER--Procedure for Tendering ADSs in the U.S. Offer" in the Offer
to Purchase. If ADRs are forwarded to the Receiving Agent in multiple
deliveries, a properly completed and duly executed Letter of Transmittal must
accompany each such delivery.
ADS holders whose ADRs are not immediately available or who cannot deliver
their ADRs and all other required documents to the Receiving Agent or complete
the procedures for book-entry transfer by the Expiration Date, as the case may
be, may tender their ADSs by properly completing and duly executing the Notice
of Guaranteed Delivery pursuant to the Guaranteed Delivery Procedures set forth
in the section captioned "THE U.S. OFFER--Procedure for Tendering ADSs in the
U.S. Offer" in the Offer to Purchase. Pursuant to the Guaranteed Delivery
Procedures, (a) such tender must be made by or through an Eligible Institution,
(b) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Purchaser must be received by the
Receiving Agent by the Expiration Date and (c) ADRs representing all tendered
ADSs together with a properly completed and duly executed Letter of Transmittal
with any required signature guarantees or, in the case of ADSs held in
book-entry form, a timely confirmation of the book-entry transfer of such ADSs
into the Receiving Agent's account at the Book-Entry Transfer Facility together
with an Agent's Message (as defined below), and any other required documents
must be received by the Receiving Agent within six New York Stock Exchange
trading days after the date of execution of such Notice of Guaranteed Delivery.
The term "Agent's Message" means a message transmitted by means of the
Book-Entry Transfer Facility to, and received by, the Receiving Agent and
forming a part of a book-entry confirmation that states that such Book-Entry
Transfer Facility has received an express acknowledgment from the participant
in such Book-Entry Transfer Facility tendering the ADSs that such participant
has received and agrees to be bound by the terms of this Letter of Transmittal
and the Offer to Purchase and the Purchaser may enforce such agreement against
the participant.
THE METHOD OF DELIVERY OF ADRS AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING
DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE SOLE OPTION AND
RISK OF THE TENDERING HOLDERS OF ADSS. ADRS WILL BE DEEMED DELIVERED ONLY WHEN
ACTUALLY RECEIVED BY THE RECEIVING AGENT. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. By
executing this Letter of Transmittal all tendering ADS holders waive any right
to receive any notice of the acceptance of their ADSs for payment.
9
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
serial number of the ADRs, the total number of ADSs represented by such ADRs
and the number of ADSs tendered should be listed on a separate schedule
attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO ADS HOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the ADSs evidenced by ADRs delivered to the
Receiving Agent are to be tendered, fill in the number of ADSs which are to be
tendered in the box entitled "Number of ADSs Tendered." In such case, a new ADR
for the untendered ADSs represented by the old ADR will be sent to the
person(s) signing this Letter of Transmittal, unless otherwise provided in the
appropriate box entitled "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the date such ADSs are accepted for
payment. All ADSs evidenced by ADRs delivered to the Receiving Agent will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the ADSs
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the ADR certificates without alteration, enlargement or any
change whatsoever. DO NOT SIGN THE BACK OF THE ADRs.
If any of the ADSs tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the ADSs tendered in the U.S. Offer are registered in different
names on several ADRs, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
ADSs.
If this Letter of Transmittal or any ADRs or stock powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to us
of their authority to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
ADSs listed and tendered hereby, no endorsements of ADRs or separate stock
powers are required unless ADSs (evidenced by ADRs) and/or delivery of ADRs for
ADSs not tendered or accepted are to be issued to a person other than the
registered holder(s). Signatures on such ADRs or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the ADSs listed, the ADRs must be endorsed or
accompanied by appropriate stock powers signed exactly as the name(s) of the
registered holder(s) appear(s) on the ADRs representing such ADSs. Signatures
on such ADRs or stock powers must be guaranteed by an Eligible Institution.
6. TRANSFER TAXES. Except as otherwise provided in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of ADSs pursuant to the U.S. Offer. If, however, delivery
of the consideration in respect of the U.S. Offer is to be made to, or (in
circumstances where permitted hereby) if ADSs not tendered or not accepted are
to be registered in the name of, any persons other than the registered
holder(s) or if tendered ADSs are registered in the name of any person other
than the person(s) signing this Letter of Transmittal, the amount of any share
transfer taxes (whether imposed on the registered holder(s) or such other
person) payable on account of the transfer to such other person will be
deducted from the overall consideration paid unless evidence of the payment of
such taxes, or exemption therefrom, is submitted. Except as provided in this
Instruction 6, it will not be necessary for transfer tax stamps to be affixed
to the certificates listed in this Letter of Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of and/or ADRs for ADSs not tendered or accepted for payment are to
be issued or returned to a person other than the signer of this Letter of
Transmittal or to an address other than that indicated in the box entitled
"Description of ADSs Tendered," the appropriate "Special Delivery Instructions"
box and/or "Special Payment Instructions" box on this Letter of Transmittal
should be completed. Holders of ADSs tendering by book-entry transfer may
request that the ADSs not accepted pursuant to the U.S. Offer be credited to
such account maintained at the Book-Entry Transfer Facility as such holder may
designate hereon. If no such instructions are given, any ADRs not accepted will
be returned by crediting the account at the Book-Entry Transfer Facility
designated herein.
10
8. WAIVER OF CONDITIONS. In accordance with the terms of the U.S. Offer,
the Purchaser has reserved the right to waive or vary all or any of the
conditions of the U.S. Offer, in whole or in part. See the section captioned,
"THE U.S. OFFER--Conditions of the U.S. Offer" in the Offer to Purchase.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal or the Notice of Guaranteed Delivery may be directed to the Dealer
Manager or to the Information Agent at their respective addresses and telephone
numbers set forth at the end of this Letter of Transmittal or from your broker,
dealer, commercial bank or trust company.
10. LOST, DESTROYED OR STOLEN ADRS. If any ADR(s) representing ADS(s) have
been lost, destroyed or stolen, the ADS holder should promptly notify the
Receiving Agent by checking the appropriate box and indicate the number of ADSs
represented by the lost, destroyed or stolen ADRs. The ADS holder will then be
instructed as to the steps that must be taken in order to replace the ADR(s).
This Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost or destroyed ADRs have been complied with.
11. BACKUP WITHHOLDING. Under U.S. federal income tax law, payments of
cash that are made to an ADS holder with respect to ADSs accepted for payment
pursuant to the U.S. Offer may be subject to U.S. backup withholding tax unless
the ADS holder establishes entitlement to an exemption in the manner described
below. In order to avoid such backup withholding, each ADS holder delivering
ADRs representing ADSs to the Receiving Agent should complete and sign the
Substitute Form W-9 included with this Letter of Transmittal and either (a)
provide its taxpayer identification number ("TIN") and certify, under penalties
of perjury, that (i) the TIN so provided is correct, (ii) the holder has not
been notified by the Internal Revenue Service (the "IRS") that the holder is
subject to backup withholding as a result of failure to report all interest or
dividends or the IRS has notified the holder that the holder is no longer
subject to backup withholding and (iii) the holder is a U.S. person (including
a U.S. resident alient) or (b) provide an adequate basis for exemption. In
general, if a holder is an individual, the TIN is the individual's Social
Security number. If the Purchaser or the Receiving Agent are not provided with
the correct TIN, the holder may be subject to a $50 penalty imposed by the IRS.
The box in Part 3 of Substitute Form W-9 may be checked if the ADS holder
has not been issued a TIN and has applied for a TIN or intends to apply for a
TIN in the near future. If the box in Part 3 is checked, the ADS holder must
also complete the Certificate of Awaiting Taxpayer Identification Number in
order to avoid backup withholding. If the box in Part 3 is checked, the
Purchaser (or the Receiving Agent) or a broker or custodian may still withhold
tax on any cash payments made on account of a payment pursuant to the U.S.
Offer until the holder furnishes the Purchaser or the Receiving Agent, broker
or custodian with its TIN. For further information concerning backup
withholding and instructions for completing the Substitute Form W-9, consult
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9."
Certain exempt recipients (including, among others, all corporations and
non-U.S. individuals) are not subject to these backup withholding requirements.
In order for a non-U.S. holder to qualify as an exempt recipient, that holder
must submit an IRS Form W-8BEN, signed under penalties of perjury, attesting to
its exempt status. An IRS Form W-8BEN may be obtained from the Receiving Agent.
Failure to complete the Substitute Form W-9 or IRS Form W-8BEN will not,
by itself, cause the ADSs to be deemed invalidly tendered, but may require the
Purchaser, the Receiving Agent, a broker or custodian to withhold tax on all
cash payments. Backup withholding is not an additional U.S. federal income tax.
Rather, the U.S. federal income tax liability of persons subject to backup
withholding will be reduced by the amount of such tax withheld. If backup
withholding results in an overpayment of taxes, a refund may be obtained from
the IRS.
IMPORTANT: THIS LETTER OF TRANSMITTAL (TOGETHER WITH ADR CERTIFICATES OR
CONFIRMATION BY BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR THE
NOTICE OF GUARANTEED DELIVERY (OR A FACSIMILE COPY OF THE NOTICE OF GUARANTEED
DELIVERY) MUST BE RECEIVED BY THE RECEIVING AGENT ON OR PRIOR TO THE EXPIRATION
DATE.
11
TO BE COMPLETED BY ALL TENDERING ADS HOLDERS
(SEE INSTRUCTION 11)
PAYER'S NAME:
--------------------------------------------------------------------------------
SUBSTITUTE
FORM W-9
Department of
the Treasury
Internal Revenue
Service
PAYER'S REQUEST FOR
TAXPAYER
IDENTIFICATION
NUMBER ("TIN")
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT
AND CERTIFY BY SIGNING AND DATING BELOW
-------------------------------------------
Social Security Number
(If awaiting TIN write
"Applied For")
OR
-------------------------------------------
Employer Identification Number
(If awaiting TIN write
"Applied For")
--------------------------------------------------------------------------------
PART 2--CERTIFICATE--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued for me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
(the "IRS") that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
(3) I am U.S. a U.S. person (including a U.S. resident alien).
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of under-reporting interest or dividends on your tax
returns. However, if after being notified by the IRS that you are subject to
backup withholding, you receive another notification from the IRS that you
are no longer subject to backup withholding, do not cross out such item (2).
SIGNATURE ------------------------------ DATE ---------------------------------
--------------------------------------------------------------------------------
PART 3-- Awaiting TIN [ ]
SIGNATURE ------------------------------ DATE ---------------------------------
--------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLD-
ING TAX ON ANY CASH PAYMENTS MADE TO YOU PURSUANT TO THE U.S. OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand
that if I do not provide a Taxpayer Identification Number by the time of
payment, a tax on all reportable cash payments made to me thereafter may be
withheld, but that such amounts may be refunded to me if I then provide a
Taxpayer Identification Number within 60 days.
Signature ____________________________________ Date __________________________
Name (Please Print) ___________________________________________________________
12
Questions and requests for assistance or additional copies of the U.S.
Offer to Purchase, this ADS Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or the Dealer Manager at
their respective telephone numbers and locations listed below.
The Information Agent for the U.S. offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Toll Free: (800) 549-6746
Collect from outside the U.S.: +1 (212) 269-5550
The Dealer Manager for the U.S. offer is:
J.P. Morgan Securities Inc.
277 Park Avenue
New York, NY 10172
Toll Free: (800) 648-5544
Collect: (212) 648-0888
JPMORGAN [Logo]
EX-99.(A)(1)(C)
5
file004.txt
GUIDELINES FOR CERTIFICATION ON FORM W-9
Exhibit (a)(1)(C)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
GIVE THE
TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
--------------------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
representative or trustee
combined funds, the first
individual on the account1
3. Husband and wife The actual owner of
(joint account) the account or, if joint
funds, either person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the
minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent(3)
designated ward, minor, or
incompetent person(3)
7. a. The usual revocable savings The grantor-trustee(1)
trust account (grantor is also
trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
GIVE THE
TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
--------------------------------------------------------------------------------
9. A valid trust, estate or pension The legal entity (Do not
trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity itself
is not designated in the
account title.)5
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in The partnership
the name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
--------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number or employer identification number.
(4) Show your individual name. You may also enter your business name. You may
use your social security number or employer identification number.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), or an individual retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
o An international organization or any agency or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a) of the Code.
o An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of 1940.
o A foreign central bank of issue.
o A futures commission merchant registered with the Commodity Futures Trading
Commission.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
o Payments to nonresident aliens subject to withholding under section 1441 of
the Code.
o Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid in
money.
o Payments made by certain foreign organizations.
o Payments made to an appropriate nominee.
o Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends under
section 852 of the Code).
o Payments described in section 6049(b)(5) of the Code to nonresident aliens.
o Payments on tax-free covenant bonds under section 1451 of the Code.
o Payments made by certain foreign organizations.
o Payments of mortgage interest to you.
o Payments made to an appropriate nominee.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8BEN (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend,
interest, or other payments to give correct taxpayer identification numbers to
payers who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file a tax return. Payers must generally withhold on
taxable interest, dividend, and certain other payments to a payee who does not
furnish a correct taxpayer identification number to a payer. Certain penalties
may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 20% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you
make a false statement with no reasonable basis that results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
EX-99.(A)(1)(D)
6
file005.txt
FORM OF LETTER TO BROKERS, DEALERS
Exhibit (a)(1)(D)
J.P. Morgan Securities Inc.
277 Park Avenue
New York, NY 10172
Toll Free: (800) 648-5544
Collect: (212) 648-0888
[GRAPHIC OMITTED] JPMORGAN
U.S. OFFER TO PURCHASE FOR CASH 28,566,944 AMERICAN DEPOSITARY SHARES ("ADSs")
(EACH ADS REPRESENTING 7 CLASS D SHARES OF COMMON STOCK)
OF
COMPANIA ANONIMA NACIONAL TELEFONOS
DE VENEZUELA (CANTV)
FOR
$24.00 PER ADS
BY
AES COMUNICACIONES DE VENEZUELA, C.A.
A COMPANY JOINTLY OWNED BY
THE AES CORPORATION
AND
CORPORACION EDC, C.A.
THE U.S. OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, OCTOBER 29, 2001, UNLESS THE U.S. OFFER IS
EXTENDED.
September 25, 2001
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by AES Comunicaciones de Venezuela, C.A., the
purchaser in this U.S. offer and a company incorporated under the laws of
Venezuela (the "Purchaser"), jointly owned by The AES Corporation, a Delaware
corporation ("AES") and Corporacion EDC, C.A., a company incorporated under the
laws of Venezuela and in which AES owns 87% of the outstanding ordinary shares
("CEDC"), to act as Dealer Manager in the United States in connection with the
Purchaser's offer to purchase 28,566,944 ADSs of Compania Anonima Nacional
Telefonos de Venezuela (CANTV) ("CANTV"), a publicly traded stock corporation
organized under the laws of Venezuela, for $24.00 per ADS, net to the seller in
cash, less any withholding taxes and without interest thereon, upon the terms
and subject to the conditions set forth in the U.S. Offer to Purchase dated
September 25, 2001 (the "Offer to Purchase," which together with the related
ADS Letter of Transmittal ("Letter of Transmittal") and Notice of Guaranteed
Delivery constitute the "U.S. offer"). Please furnish copies of the enclosed
materials to those of your clients for whose accounts you hold ADSs in your
name or in the name of your nominee.
The U.S. offer is being made in conjunction with an offer in Venezuela
(the "Venezuelan offer") by the Purchaser to purchase 199,968,608 CANTV shares
at $3.4285714 per share (the same price being paid pursuant to
the U.S. offer, taking into account the number of Class D shares represented by
each ADS). In the event that the price per share pursuant to the Venezuelan
offer is increased, the Purchaser intends to make a corresponding increase to
the price to be paid per ADS pursuant to the U.S. offer, taking into account
the number of Class D shares represented by each ADS.
Tenders of CANTV shares are not being accepted pursuant to the U.S. offer.
Holders of Class D shares (being the only class of CANTV shares underlying the
ADSs) may deposit their Class D shares with The Bank of New York (the
"Depositary") and receive ADSs for such Class D shares pursuant to the Amended
and Restated Deposit Agreement dated September 10, 2000, among CANTV, the
Depositary and holders from time to time of American Depositary Receipts
("ADRs") issued thereunder (the "Deposit Agreement"). The ADSs may then be
tendered pursuant to the U.S. offer.
The Purchaser expressly reserves the right to (i) extend, amend or modify
the terms of the U.S. offer in any manner and (ii) withdraw or terminate the
U.S. offer and not accept for payment any ADSs if any of the conditions to the
U.S. offer are not satisfied.
For your information and for forwarding to those of your clients for whom
you hold ADSs registered in your name or in the name of your nominee(s), we are
enclosing the following documents:
1. The U.S. Offer to Purchase, dated September 25, 2001;
2. A printed form of letter that may be sent to your clients for whose
account you hold ADSs registered in your name or in the name of a
nominee(s), with space provided for obtaining such clients' instructions
with regard to the U.S. offer;
3. The ADS Letter of Transmittal (together with accompanying Substitute
Form W-9) to be used by holders of ADSs in tendering ADSs;
4. The Notice of Guaranteed Delivery to be used to tender ADSs into the
U.S. offer if ADRs evidencing ADSs and all other required documents are
not immediately available or cannot be delivered to the Receiving Agent by
the expiration date of the U.S. offer or if, in the case of book-entry
delivery of ADSs, the procedures for book-entry transfer set forth under
the section "THE U.S. OFFER--Procedure for Tendering ADSs in the U.S.
Offer" of the Offer to Purchase cannot be completed by the expiration date
of the U.S. offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9. ADS holders who fail to complete and sign the
Substitute Form W-9 may be subject to a federal backup withholding tax;
and
6. A return envelope addressed to Mellon Investor Services LLC (the
"Receiving Agent") for your use only.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person (other than the fees of the Dealer Manager and the
Information Agent as described in the Offer to Purchase) in connection with the
solicitation of tenders of ADSs. The Purchaser will, however, upon request,
reimburse you for customary mailing and handling expenses incurred by you in
forwarding the enclosed materials to your clients. The Purchaser will pay or
cause to be paid any transfer taxes with respect to the transfer and sale of
ADSs to it or its order pursuant to the U.S. offer, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Shares of common stock of CANTV, except insofar as they are represented by
ADSs, cannot be tendered by means of the Letter of Transmittal. Shares of CANTV
beneficially owned or held of record by persons cannot be tendered pursuant to
the U.S. offer and can only be tendered pursuant to the Venezuelan offer.
Additional information on the Venezuelan Offer may be obtained from the Dealer
Manager or the Information Agent for the U.S. Offer. Documentation on the
Venezuelan Offer will be available in English.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE U.S. OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 5.00 P.M. NEW YORK CITY TIME ON MONDAY, OCTOBER 29 2001, UNLESS
THE U.S. OFFER IS EXTENDED.
YOUR ATTENTION IS INVITED TO THE FOLLOWING:
1. The consideration per ADS is $24.00 in cash, less any withholding taxes
and without interest thereon. THE U.S. OFFER IS OPEN TO ALL HOLDERS OF
ADSs.
2. The U.S. offer is being made for 28,566,944 ADSs.
2
3. Tendering ADS holders will not be obligated to pay transfer taxes,
except as set forth in Instruction 6 of the Letter of Transmittal, on the
transfer of ADSs pursuant to the U.S. offer. However, U.S. federal income
tax backup withholding may be required, unless the required taxpayer
identification information is provided. See Instruction 11 of the Letter
of Transmittal.
4. The U.S. offer, proration period and withdrawal rights will expire at
5:00 p.m., New York City time, on Monday, October 29, 2001, unless the
U.S. offer is extended.
5. As of the date hereof, the Board of Directors of CANTV has not reviewed
the U.S. offer and has not taken a position with respect to the U.S.
offer.
6. Notwithstanding any other provision of the U.S. offer, payment of $24.00
in cash for each ADS accepted for payment pursuant to the U.S. offer will,
in all cases, be made only after timely receipt by the Receiving Agent of
(a) ADRs evidencing ADSs pursuant to the procedures set forth under the
section "THE U.S. OFFER--Procedure for Tendering ADSs in the U.S. Offer"
of the Offer to Purchase, or a timely book-entry confirmation with respect
to such ADSs, (b) the Letter of Transmittal properly completed and duly
executed, with any required signature guarantees or an Agent's Message (as
defined in the Offer to Purchase) in lieu of the Letter of Transmittal in
connection with a book-entry transfer, and (c) any other documents
required by the Letter of Transmittal.
7. The U.S. offer is conditioned upon, among other things, (i) the sum of
(x) the number of shares of CANTV common stock (including Class D shares
represented by ADSs) held directly or indirectly by AES (including Class D
shares held through CEDC), (y) the number of CANTV shares represented by
ADSs validly tendered and not withdrawn on or prior to the expiration date
of, and to be purchased pursuant to, the U.S. offer and (z) the number of
CANTV shares validly tendered and not withdrawn on or prior to the
expiration date of, and to be purchased pursuant to, the Venezuelan offer,
representing at least a majority of the outstanding shares of capital
stock of CANTV, and (ii) other conditions described under the section "THE
U.S. OFFER--Conditions of the U.S. Offer" of the Offer to Purchase.
In order to tender ADSs into the U.S. offer: (i) a duly executed and
properly completed Letter of Transmittal and any required signature guarantee,
or an Agent's Message (as defined in the Offer to Purchase) in lieu of the
Letter of Transmittal, and other required documents should be sent to the
Receiving Agent; and (ii) ADRs representing the tendered ADSs or a timely
book-entry confirmation should be delivered to the Receiving Agent, in each
case in accordance with the instructions set forth in the Letter of Transmittal
and the Offer to Purchase.
If holders of ADSs wish to tender, but it is impracticable for them to
forward their ADRs or other required documents or complete the procedures for
book-entry transfer prior to the expiration date of the U.S. offer, a tender
may be effected by following the Guaranteed Delivery Procedures specified under
the section "THE U.S. OFFER--Procedure for Tendering ADSs in the U.S. Offer" of
the Offer to Purchase.
Any inquiries you may have with respect to the U.S. offer should be
addressed to J.P. Morgan Securities Inc., the Dealer Manager for the U.S.
offer, or to D.F. King & Co., Inc., the Information Agent for the U.S. offer,
at their respective addresses and telephone numbers set forth on the back cover
of the Offer to Purchase.
Requests for additional copies of the enclosed materials may also be
directed to the Dealer Manager or to the Information Agent.
JPMORGAN [Logo]
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, AES, CEDC, THE DEALER MANAGER,
THE RECEIVING AGENT, THE INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE U.S. OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
EX-99.(A)(1)(E)
7
file006.txt
FORM OF LETTER TO CLIENTS FOR USE BY BROKERS
Exhibit (a)(1)(E)
U.S. OFFER TO PURCHASE FOR CASH 28,566,944 AMERICAN DEPOSITARY SHARES ("ADSs")
(EACH ADS REPRESENTING 7 CLASS D SHARES OF COMMON STOCK)
OF
COMPANIA ANONIMA NACIONAL TELEFONOS DE
VENEZUELA (CANTV)
FOR
$24.00 PER ADS
BY
AES COMUNICACIONES DE VENEZUELA, C.A.
A COMPANY JOINTLY OWNED BY
THE AES CORPORATION
AND
CORPORACION EDC, C.A.
THE U.S. OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, OCTOBER 29, 2001, UNLESS THE U.S. OFFER IS
EXTENDED.
September 25, 2001
To Our Clients:
Enclosed for your consideration are the U.S. Offer to Purchase, dated
September 25, 2001 (the "Offer to Purchase"), and the related ADS Letter of
Transmittal and Notice of Guaranteed Delivery (which together with any
amendments or supplements thereto constitute the "U.S. offer") relating to the
offer by AES Comunicaciones de Venezuela, C.A., the purchaser in the U.S. offer
and a company incorporated under the laws of Venezuela (the "Purchaser"),
jointly owned by The AES Corporation, a Delaware corporation ("AES") and
Corporacion EDC, C.A., a company incorporated under the laws of Venezuela and
in which AES owns 87% of the outstanding ordinary shares ("CEDC"), to purchase
28,566,944 American Depositary Shares, or ADSs, of Compania Anonima Nacional
Telefonos de Venezuela (CANTV) ("CANTV"), a corporation organized under the
laws of Venezuela, for $24.00 in cash per ADS, net to the seller, less any
withholding taxes and without interest thereon, upon the terms and subject to
the conditions set forth in the U.S. offer.
THIS MATERIAL IS BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF ADSs
HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE (DIRECTLY
OR INDIRECTLY) THE HOLDER OF RECORD OF ADSS HELD BY US FOR YOUR ACCOUNT. A
TENDER OF SUCH ADSS CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT
TO YOUR INSTRUCTIONS. THE ADS LETTER OF TRANSMITTAL ("LETTER OF TRANSMITTAL")
IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO
TENDER YOUR ADSS HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instruction as to whether you wish to have us
tender on your behalf any or all of the ADSs held by us for your account
pursuant to the terms and conditions of the U.S. offer set forth in the Offer
to Purchase and the Letter of Transmittal.
SHARES OF COMMON STOCK OF CANTV, EXCEPT INSOFAR AS THEY ARE REPRESENTED BY
ADSs, CANNOT BE TENDERED BY MEANS OF THE LETTER OF TRANSMITTAL, CANNOT BE
TENDERED PURSUANT TO THIS U.S. OFFER AND CAN ONLY BE TENDERED PURSUANT
TO THE PURCHASER'S CONCURRENT VENEZUELAN OFFER. ADDITIONAL INFORMATION ON THE
VENEZUELAN OFFER MAY BE OBTAINED FROM J.P. MORGAN SECURITIES INC., THE DEALER
MANAGER FOR THE U.S. OFFER OR D.F. KING & CO., INC., THE INFORMATION AGENT FOR
THE U.S. OFFER. DOCUMENTATION ON THE VENEZUELAN OFFER WILL BE AVAILABLE IN
ENGLISH.
Please note the following
1. The consideration per ADS is $24.00 in cash, less any withholding taxes
and without interest thereon. THIS U.S. OFFER IS OPEN TO ALL HOLDERS OF
ADSs.
2. The U.S. offer is being made for 28,566,944 ADSs.
3. Tendering ADS holders will not be obligated to pay transfer taxes,
except as set forth in Instruction 6 of the Letter of Transmittal, on the
transfer of ADSs pursuant to the U.S. offer. However, U.S. federal income
tax backup withholding may be required, unless the required taxpayer
identification information is provided. See Instruction 11 of the Letter
of Transmittal.
4. The U.S. offer, proration period and withdrawal rights will expire at
5:00 p.m., New York City time, on Monday, October 29, 2001, unless the
U.S. offer is extended.
5. As of the date hereof, the Board of Directors of CANTV has not reviewed
or taken a position with respect to the U.S. offer.
6. Notwithstanding any other provision of the U.S. offer, the payment of
$24.00 in cash for each ADS accepted for payment pursuant to the U.S.
offer will, in all cases, be made only after timely receipt by the
Receiving Agent of (a) ADRs evidencing ADSs, pursuant to the procedures
set forth in the section "THE U.S. OFFER--Procedure for Tendering ADSs in
the U.S. Offer" of the Offer to Purchase, or a timely book-entry
confirmation with respect to such ADSs, (b) the Letter of Transmittal
properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined in the Offer to Purchase) in
connection with a book-entry transfer in lieu of such Letter of
Transmittal, and (c) any other documents required by the Letter of
Transmittal.
7. The U.S. offer is conditioned upon, among other things, (i) the sum of
(x) the number of shares of CANTV common stock (including Class D shares
represented by ADSs) held directly or indirectly by AES (including Class
D shares held through CEDC), (y) the number of Class D shares represented
by ADSs validly tendered and not withdrawn on or prior to the expiration
date of, and to be purchased pursuant to, the U.S. offer and (z) the
number of CANTV shares validly tendered and not withdrawn on or prior to
the expiration date of, and to be purchased pursuant to, the Venezuelan
offer, representing at least a majority of the outstanding shares of
capital stock of CANTV, and (ii) other conditions described under the
section "THE U.S. OFFER--Conditions of the U.S. Offer" of the Offer to
Purchase.
The U.S. offer is made solely by the Offer to Purchase, and the related
Letter of Transmittal and Notice of Guaranteed Delivery. The Purchaser is not
aware of any jurisdiction where the making of the U.S. offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If the
Purchaser becomes aware of any valid state statute prohibiting the making of
the U.S. offer or the acceptance of ADSs pursuant thereto, the Purchaser will
make a good faith effort to comply with such state statute. If, after such good
faith effort, the Purchaser cannot comply with such state statute, the U.S.
offer will not be made to, nor will tenders be accepted from or on behalf of,
the holders of ADSs in such state. In any jurisdiction where the securities,
blue sky or other laws require the Purchaser's U.S. offer to be made by a
licensed broker or dealer, the U.S. offer shall be deemed to be made on the
Purchaser's behalf by J.P. Morgan Securities Inc., the Dealer Manager in the
U.S. offer, or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
If you wish to have us tender any or all of the ADSs held by us for your
account, please so instruct us by completing, executing, detaching and
returning to us the instruction form set forth herein. If you authorize the
tender of your ADSs, all such ADSs will be tendered unless otherwise specified
below. An envelope to return your instructions to us is enclosed. YOUR
INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A
TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE OF THE U.S. OFFER.
2
INSTRUCTIONS WITH RESPECT TO THE
U.S. OFFER TO PURCHASE FOR CASH 28,566,944 AMERICAN DEPOSITARY SHARES ("ADSS")
(EACH ADS REPRESENTING 7 CLASS D SHARES OF COMMON STOCK)
OF
COMPANIA ANONIMA NACIONAL TELEFONOS
DE VENEZUELA (CANTV)
The undersigned acknowledge(s) receipt of your letter and the U.S. Offer
to Purchase dated September 25, 2001 (the "Offer to Purchase"), and the related
ADS Letter of Transmittal, and Notice of Guaranteed Delivery in connection with
the U.S. offer by AES Comunicaciones de Venezuela, C.A. to purchase 28,566,944
ADSs of Compania Anonima Nacional Telefonos de Venezuela (CANTV), each for
$24.00 in cash, less any withholding taxes and without interest thereon,
pursuant to the terms and subject to the conditions set forth in the Offer to
Purchase, ADS Letter of Transmittal and Notice of Guaranteed Delivery.
This will instruct you to tender the number of ADSs indicated below (or if
no number is indicated below, all ADSs) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer to Purchase and the related ADS Letter of Transmittal and Notice of
Guaranteed Delivery.
Dated: , 2001
Number of ADSs to be tendered:*
---------------------- ADSs --------------------------
--------------------------
Signature(s)
---------------------------
Print Name(s)
---------------------------
Address(es)
Dated: ---------------------- ---------------------------
Area Code and Telephone #
---------------------------
Tax ID or Social Security #
* Unless otherwise indicated, it will be assumed that all ADSs held
by us for your account are to be tendered.
3
EX-99.(A)(1)(F)
8
file007.txt
NOTICE OF GUARANTEED DELIVERY
Exhibit (a)(1)(F)
NOTICE OF GUARANTEED DELIVERY
U.S. OFFER TO PURCHASE FOR CASH 28,566,944 AMERICAN DEPOSITARY SHARES ("ADSS")
(EACH ADS REPRESENTING 7 CLASS D SHARES OF COMMON STOCK)
OF
COMPANIA ANONIMA NACIONAL TELEFONOS
DE VENEZUELA (CANTV)
FOR
$24.00 PER ADS
BY
AES COMUNICACIONES DE VENEZUELA, C.A.
A COMPANY JOINTLY OWNED BY
THE AES CORPORATION
AND
CORPORACION EDC, C.A.
THE U.S. OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON MONDAY, OCTOBER 29, 2001, UNLESS
THE U.S. OFFER IS EXTENDED.
As set forth under the section "THE U.S. OFFER--Procedure for Tendering
ADSs in the U.S. Offer" in the U.S. Offer to Purchase dated September 25, 2001
(the "Offer to Purchase"), this Notice of Guaranteed Delivery or one
substantially equivalent hereto (this "Form") must be used to tender ADSs
pursuant to the U.S. Offer if the American Depositary Receipts ("ADRs")
representing such ADSs are not immediately available or if the procedures for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Receiving Agent prior to the
expiration date of the U.S. Offer. This Form, properly completed and duly
executed (including the signature guarantee by an Eligible Institution in the
form set forth hereinafter) may be delivered by hand or mail to the Receiving
Agent. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Offer to Purchase.
THE RECEIVING AGENT FOR THE U.S. OFFER IS:
MELLON INVESTOR SERVICES LLC
By Mail: By Hand: By Overnight Delivery:
Reorganization Department Reorganization Department Reorganization Department
PO Box 3301 120 Broadway 85 Challenger Road
South Hackensack, NJ 07606 13th Floor Mail Stop - Reorg
New York, NY 10271 Ridgefield Park, NJ 07660
Alternative Hand Delivery (If 120 Broadway is Not Available):
Reorganization Department
C/O STARS
100 William Street, Galleria
New York, NY 10038
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
DELIVERY OF THIS FORM TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY. ADSS MAY NOT BE TENDERED BY MEANS OF THIS FORM.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON AN
ADS LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE
INSTITUTION UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST
APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON SUCH ADS LETTER
OF TRANSMITTAL.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
Ladies and Gentlemen:
The undersigned hereby tenders to AES Comunicaciones de Venezuela, C.A., a
company incorporated under the laws of Venezuela (the "Purchaser"), jointly
owned by The AES Corporation, a Delaware corporation ("AES") and Corporacion
EDC, C.A., a company incorporated under the laws of Venezuela and in which AES
owns 87% of the outstanding ordinary shares ("CEDC"), upon the terms and
subject to the conditions set forth in the Offer to Purchase and the related
ADS Letter of Transmittal, receipt of which is hereby acknowledged, the number
of ADSs specified below pursuant to the Guaranteed Delivery Procedures
described in the Offer to Purchase under the section "THE U.S. OFFER--Procedure
for Tendering ADSs in the U.S. Offer".
Number of ADSs: -------------------------
ADR No.(s) (if available): --------------
--------------
--------------
Account Number: -------------------------
If ADSs will be tendered by book-entry transfer,
check this box [ ]:
Name of Tendering Institution: -----------
Account Number: --------------------
Dated: -----------------------------
Name of Record Holder(s): ------------
Address(es): -------------------------
-------------------------
-------------------------
Area Code and Tel. No: ---------------
Signature(s): ------------------------
------------------------
------------------------
Dated: -------------------------------
GUARANTEE
(NOT TO BE USED TO GUARANTEE SIGNATURES)
The undersigned, a financial institution which is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Program or the Stock Exchange Medallion Program, hereby (a)
guarantees the above named person(s) "own(s)" the ADSs tendered hereby within
the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as
amended, (b) represents that such tender complies with Rule 14e-4 and (c)
guarantees that it will deliver to the Receiving Agent, at one of its addresses
set forth above, the ADRs representing the ADSs tendered hereby, in proper form
for transfer, or confirmation of the book-entry transfer of such ADSs into the
Receiving Agent's account at the Book-Entry Transfer Facility, together with a
properly completed and duly executed ADS Letter of Transmittal or, in the case
of a book-entry transfer, an Agent's Message (as defined in the Offer to
Purchase) in lieu of an ADS Letter of Transmittal, with any required signature
guarantees and any other required documents, all within six New York Stock
Exchange trading days after the date of execution of this Notice of Guaranteed
Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Receiving Agent and must deliver the ADS Letter of Transmittal
and ADRs representing the ADSs to the Receiving Agent, or complete the
book-entry transfer procedures, within the time period set forth herein.
Failure to do so could result in financial loss to such Eligible Institution.
Name of Firm: -----------------------
Address: ----------------------------
----------------------------
Zip Code
Area Code and Tel. No.: -------------
Authorized Signature: ---------------
Name: -------------------------------
Please Print
Title: -------------- Dated: -------
DO NOT SEND ADRS REPRESENTING ADSS WITH THIS NOTICE OF GUARANTEED DELIVERY;
ADRS SHOULD BE SENT WITH
AN ADS LETTER OF TRANSMITTAL
2
EX-99.(A)(1)(H)
9
file008.txt
SUMMARY ADVERTISEMENT
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell any securities. The U.S. Offer is made solely by the U.S. Offer
to Purchase, dated September 25, 2001 and the related ADS Letter of Transmittal
and Notice of Guaranteed Delivery. The Venezuelan Offer is made solely by the
Venezuelan Offer to Purchase, dated September 25, 2001 and the related Share
Letter of Transmittal. The Offers are not being made to, nor will tenders be
accepted from or on behalf of, holders of ADSs or Shares in any jurisdiction
in which the making of the Offers or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. In any jurisdiction where the
securities, blue sky or other laws require the Offers to be made by a licensed
broker or dealer, the Offers shall be deemed to be made on behalf of AES
Comunicaciones de Venezuela, C.A. by J.P. Morgan Securities Inc. (in the case
of the U.S. Offer only) or one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction (in the case of both Offers).
NOTICE OF U.S. OFFER TO PURCHASE FOR CASH
28,566,944 AMERICAN DEPOSITARY SHARES
(EACH AMERICAN DEPOSITARY SHARE REPRESENTING SEVEN CLASS D SHARES
OF COMMON STOCK)
OF
COMPANIA ANONIMA NACIONAL TELEFONOS
DE VENEZUELA (CANTV)
FOR
$24.00 PER AMERICAN DEPOSITARY SHARE
AND
NOTICE OF VENEZUELAN OFFER TO PURCHASE FOR CASH
199,968,608 SHARES OF COMMON STOCK
OF
COMPANIA ANONIMA NACIONAL TELEFONOS
DE VENEZUELA (CANTV)
FOR
$3.4285714 PER SHARE
BY
AES COMUNICACIONES DE VENEZUELA, C.A.
A COMPANY JOINTLY OWNED BY
THE AES CORPORATION
AND
CORPORACION EDC, C.A.
AES Comunicaciones de Venezuela, C.A. (the "Purchaser"), a company organized
under the laws of Venezuela and jointly owned by The AES Corporation ("AES") and
AES's 87% owned subsidiary, Corporacion EDC, C.A. ("CEDC"), is offering, upon
the terms and subject to the conditions set forth in the U.S. Offer to Purchase,
dated September 25, 2001 (the "U.S. Offer to Purchase"), and the related ADS
Letter of Transmittal and Notice of Guaranteed Delivery (which together
constitute the "U.S. Offer"), to acquire for $24.00 per ADS, net to each seller
in cash, less any withholding taxes and without interest thereon, an aggregate
of 28,566,944 American Depositary Shares ("ADSs"), each ADS representing seven
Class D Shares of common stock, of Compania Anonima Nacional Telefonos de
Venezuela (CANTV), a company organized under the laws of Venezuela ("CANTV"),
properly tendered and not withdrawn prior to the expiration date of the U.S.
Offer. The U.S. Offer is open to all holders of ADSs.
The Purchaser is also making a contemporaneous offer in Venezuela to
purchase an aggregate of 199,968,608 shares of common stock of CANTV ("Shares"),
properly tendered and not withdrawn prior to the expiration of the Venezuelan
Offer (as defined below) for $3.4285714 per Share, net to each seller in cash,
less any withholding taxes and without interest thereon, upon the terms and
subject to the conditions set forth in the Venezuelan Offer to Purchase, dated
September 25, 2001 (the "Venezuelan Offer to Purchase") and the related Share
Letter of Transmittal (which together constitute the "Venezuelan Offer" and,
together with the U.S. Offer, are referred to as the "Offers"). The Venezuelan
Offer is open to all holders of Shares.
Tenders of Shares are not being accepted in the U.S. Offer. Holders of Class
D Shares (being the only class of Shares underlying the ADSs) may deposit their
Class D Shares with The Bank of New York (the "Depositary") and receive ADSs for
such Class D Shares pursuant to the Amended and Restated Deposit Agreement dated
September 10, 2000, among CANTV, the Depositary and all holders from time to
time of American Depositary Receipts ("ADRs") issued thereunder (the "Deposit
Agreement"). Such ADSs may then be tendered in the U.S. Offer. Tenders of ADSs
are not being accepted in the Venezuelan Offer. Holders of ADSs may withdraw the
underlying Class D Shares from the Depositary and receive Class D Shares
pursuant to the Deposit Agreement. Such Class D Shares may then be tendered in
the Venezuelan Offer.
The price per ADS payable in the U.S. Offer will be the same as the price
per Share payable in the Venezuelan Offer when adjusted to reflect the fact that
each ADS represents seven Class D Shares . If the price per Share in the
Venezuelan Offer is increased, the Purchaser intends to make a corresponding
increase to the price to be paid per ADS in the U.S. Offer, taking into account
the number of Class D Shares represented by each ADS. If the price per ADS in
the U.S. Offer is increased, the Purchaser intends to make a corresponding
increase to the price to be paid per Share in the Venezuelan Offer, taking into
account the number of Class D Shares represented by each ADS. The purchase price
for each ADS pursuant to the U.S. Offer is payable in U.S. dollars. The purchase
price for each Share pursuant to the Venezuelan Offer is payable in U.S. dollars
or, in accordance with, and subject to, the conditions set forth in the
Venezuelan Offer to Purchase, at the option of each holder of Shares, in
Venezuelan Bolivars. Under no circumstances will interest be paid on the
purchase price for the tendered ADSs or Shares, regardless of any delay in
making payment thereof or any extension of the expiration date.
--------------------------------------------------------------------------------
THE U.S. OFFER, VENEZUELAN OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY (6:00 P.M., CARACAS TIME), ON MONDAY
OCTOBER 29, 2001, UNLESS EXTENDED.
--------------------------------------------------------------------------------
The purpose of the U.S. Offer and the Venezuelan Offer is to enable the
Purchaser and its affiliates to acquire control of, and a majority of the equity
interest in, CANTV. The Purchaser intends, as soon as practicable after
consummation of the Offers, to seek majority representation on CANTV's board of
directors.
The Purchaser's obligation to accept ADSs and Shares for purchase under the
Offers is conditioned upon, among other things, the sum of (x) the number of
shares of CANTV common stock (including Class D Shares represented by ADSs) held
directly or indirectly by AES (including Class D Shares held through CEDC), (y)
the number of Class D Shares represented by ADSs validly tendered and not
withdrawn on or prior to the expiration date of, and to be purchased pursuant
to, the U.S. Offer and (z) the number of Shares validly tendered and not
withdrawn on or prior to the expiration date of, and to be purchased pursuant
to, the Venezuelan Offer, representing at least a majority of the outstanding
shares of capital stock of CANTV. Each Offer is also subject to other conditions
set forth in the U.S. Offer to Purchase and the Venezuelan Offer to Purchase.
Tendering holders of ADSs or Shares who are the record holders of such
securities and who tender such securities in the Offers will not have to pay
brokerage fees or similar expenses. If tendering holders own their ADSs or
Shares through a broker or other nominee, their broker or nominee may charge
them a fee for tendering such securities, and the Purchaser will not be
responsible for paying that fee. Holders of ADSs and Class D Shares will bear
all costs and expenses associated with any deposit or withdrawal of Class D
Shares under the Deposit Agreement.
The term "expiration date" means with respect to each Offer 5:00 P.M., New
York City time (6:00 P.M., Caracas time), on Monday, October 29, 2001, unless
the Purchaser extends the period of time for which each of the Offers is open,
in which case the term "expiration date" means with respect to each Offer the
latest time and date on which such Offer, as so extended, expires.
Upon the terms and subject to the conditions of the Offers, if (i) more than
28,566,944 ADSs are validly tendered and not withdrawn on or prior to the
expiration date of the U.S. Offer, and at least 199,968,608 Shares are validly
tendered pursuant to the Venezuelan Offer or (ii) more than 199,968,608 Shares
are validly tendered and not withdrawn on or prior to the expiration date of the
Venezuelan Offer, and at least 28,566,944 ADSs are validly tendered pursuant to
the U.S. Offer, the Purchaser will purchase such ADSs or Shares, as the case may
be, on a pro rata basis. If proration of tendered ADSs is required, because of
the difficulty of determining the number of ADSs validly tendered and not
withdrawn, the Purchaser does not expect to be able to announce the final
results of such proration until at least seven business days after the
expiration date of the U.S. Offer. Preliminary results of such proration will be
announced by press release as promptly as practicable after the expiration date
of the U.S. Offer.
The number of ADSs available for tender into the U.S. Offer and the number
of Class D Shares available for tender into the Venezuelan Offer is subject to
fluctuation, on a daily basis, based on deposits and withdrawals of Class D
Shares and ADSs with the Depositary. Upon a deposit of Class D Shares the number
of outstanding ADSs is increased; upon a withdrawal of Class D Shares the number
of outstanding ADSs is decreased. Proration in the U.S. Offer may be adversely
affected to the extent that additional Class D Shares are deposited pursuant to
the Deposit Agreement and the ADSs issued on such deposit are tendered in the
U.S. Offer. Proration in the Venezuelan Offer may be adversely affected to the
extent that Class D Shares are withdrawn pursuant to the Deposit Agreement and
such Class D Shares are tendered in the Venezuelan Offer.
In order for ADSs to be validly tendered pursuant to the U.S. Offer (a) (1)
the ADS Letter of Transmittal, properly completed and duly executed, together
with any signature guarantees (or, in the case of book-entry transfer, an
Agent's Message in lieu of the ADS Letter of Transmittal), and any other
documents required by the ADS Letter of Transmittal must be received by the U.S.
Receiving Agent at its address set forth on the back cover of the U.S. Offer to
Purchase and (2) the ADRs representing the ADSs being tendered must be received
by the U.S. Receiving Agent or such ADRs for the ADSs must be tendered pursuant
to the procedure for book-entry transfer and book-entry confirmation must be
received by the U.S. Receiving Agent, in each case, prior to the expiration
date, or (b) the tendering ADS holder must comply with the guaranteed delivery
procedures. In order for Shares to be validly tendered pursuant to the
Venezuelan Offer the Share Letter of Transmittal, properly completed and duly
executed, together with any other documents required by the Share Letter of
Transmittal must be received by the Venezuelan Receiving Agent at its address
set forth in the Venezuelan Offer to Purchase. Holders of Class C Shares must
also follow the procedures described in the Venezuelan Offer to Purchase.
Upon the terms and subject to the conditions of the U.S. Offer and the
Venezuelan Offer, as the case may be, the Purchaser will accept for payment and
pay for ADSs and Shares validly tendered and not withdrawn by the expiration
date of the U.S. Offer and the Venezuelan Offer, as the case may be, (i) with
respect to the U.S. Offer, as soon as practicable after the later of (a) the
expiration date of the U.S. Offer and (b) the satisfaction or waiver of all the
conditions to the U.S. Offer, and (ii) with respect to the Venezuelan Offer,
upon satisfaction or waiver of all the conditions to the Venezuelan Offer,
within five Venezuelan stock exchange trading days following the settlement of
the purchase of the Shares on the Caracas Stock Exchange. In addition, the
Purchaser reserves the right, in its sole discretion and subject to applicable
law, to delay the acceptance for payment of or the payment for ADSs or Shares in
order to comply in whole or in part with any applicable law.
In all cases, payment for ADSs accepted for payment pursuant to the U.S.
Offer will be made only after timely receipt by the U.S. Receiving Agent of ADRs
for such ADSs (or of a confirmation of a book-entry transfer of such ADSs into
the U.S. Receiving Agent's account at the Book-Entry Transfer Facility), a
properly completed and duly executed ADS Letter of Transmittal or an Agent's
Message in lieu of ADS Letter of Transmittal and all other required documents.
In all cases, payment for Shares accepted for payment pursuant to the Venezuelan
Offer will be made only after timely receipt by the Venezuelan Receiving Agent
of Shares and a properly completed and duly executed Share Letter of Transmittal
and all other required documents. If proration is required, the Purchaser will
not pay for any ADSs accepted for payment pursuant to the U.S. Offer until the
final proration factor is known. Accordingly, payment for ADSs may be delayed in
the event of proration due to the difficulty of determining the number of ADSs
validly tendered. Payment may be made to tendering ADS holders and holders of
Shares at different times if delivery of the ADSs and Shares and other required
documents occur at different times.
The Purchaser shall be deemed to have accepted for payment tendered ADSs and
Shares when, as and if the Purchaser shall give oral or written notice to the
U.S. Receiving Agent or Venezuelan Receiving Agent, as the case may be, of its
acceptance of the tender of such ADSs and Shares. Payment for ADSs accepted for
payment pursuant to the U.S. Offer will be made by depositing the purchase price
with the U.S. Receiving Agent, which will act as agent for the tendering ADS
holders for the purpose of receiving payments from the Purchaser and
transmitting such payments to tendering ADS holders. Payment for Shares accepted
for payment pursuant to the Venezuelan Offer will be made by depositing the
purchase price with the Venezuelan Paying Agent, which will act as agent for the
tendering Share holders for the purpose of receiving payments from the Purchaser
and transmitting such payments to tendering Share holders.
Tenders of ADSs and Shares made pursuant to the Offers may be withdrawn at
any time prior to the expiration date of the U.S. Offer and the Venezuelan
Offer, respectively. Thereafter, tenders of ADSs and Shares are irrevocable,
except that ADSs may be withdrawn after Friday, November 23, 2001 unless
theretofore accepted for payment as provided in the U.S. Offer to Purchase, and
Shares may only be withdrawn if the Venezuelan Offer is extended. If the
Purchaser extends the period of time during which the U.S. Offer or the
Venezuelan Offer are open, is delayed in accepting for payment or paying for the
ADSs or the Shares or is unable to accept for payment or pay for the ADSs or the
Shares
3
pursuant to the U.S. Offer or the Venezuelan Offer, respectively, for any
reason, then, without prejudice to its rights under the U.S. Offer or the
Venezuelan Offer, the U.S. Receiving Agent or the Coordinator for the Venezuelan
Offer may, as the case may be, on the Purchaser's behalf, retain all ADSs or
Shares tendered and such ADSs or Shares may not be withdrawn except as otherwise
provided in the section of the U.S. Offer to Purchase captioned "The U.S.
Offer--Withdrawal Rights" or in the Section of the Venezuelan Offer to Purchase
captioned "Place and manner of acceptance notice," as the case may be.
For a withdrawal of ADSs tendered in the U.S. Offer to be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal must
be timely received by the U.S. Receiving Agent at its address set forth on the
back cover of the U.S. Offer to Purchase and must specify the name of the person
who tendered the ADSs to be withdrawn, the number of ADSs to be withdrawn and
the name of the registered holder of ADSs, if different from that of the person
who tendered such ADSs. If the ADSs to be withdrawn have been delivered to the
U.S. Receiving Agent, a signed notice of withdrawal with (except in the case of
ADSs tendered by an Eligible Institution (as defined in the U.S. Offer to
Purchase)) signatures guaranteed by an Eligible Institution must be submitted
prior to the release of such ADSs. In addition, such notice must specify, in the
case of ADSs tendered by delivery of ADRs, the name of the registered holder (if
different from that of the tendering holder) and the serial numbers shown on the
particular ADRs representing the ADSs to be withdrawn or, in the case of ADSs
tendered by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility (as defined in the Offer to Purchase) to be
credited with the withdrawn ADSs. For a withdrawal of Shares tendered under the
Venezuelan Offer to be effective a written notice of withdrawal must be timely
received by the Venezuelan Receiving Agent at its address set forth in the
Venezuelan Offer to Purchase and must specify, among other things, the name of
the person who tendered the Shares to be withdrawn and the number of Shares to
be withdrawn. Withdrawals may not be rescinded, and ADSs and Shares withdrawn
will thereafter be deemed not validly tendered for purposes of the Offers.
However, withdrawn ADSs and Shares may be retendered by again following one of
the procedures described in the section of the U.S. Offer to Purchase captioned
"The U.S. Offer--Procedure for Tendering ADSs in the U.S. Offer" or in the
section of the Venezuelan Offer to Purchase captioned "Place and manner of the
acceptance notice" at any time prior to the expiration date of the U.S. Offer or
the Venezuelan Offer, as the case may be.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. None of AES, CEDC,
the Purchaser, the Dealer Manager, the U.S. Receiving Agent, the Venezuelan
Receiving Agent, the Venezuelan Paying Agent, the Information Agent, the
Coordinator for the Venezuelan Offer nor any other person will be under any duty
to give notification of any defect or irregularity in any notice of withdrawal
or incur any liability for failure to give any such notification.
Subject to applicable law (and with respect to the Venezuelan Offer, subject
to any applicable approval by the Venezuelan Comision Nacional de Valores), the
Purchaser reserves the right, at any time or from time to time, in its sole
discretion: (a) regardless of whether or not any of the conditions to the U.S.
Offer or the Venezuelan Offer shall have been satisfied, to extend for any
reason the period of time during which each of the U.S. Offer or the Venezuelan
Offer remains open, and to amend the U.S. Offer or the Venezuelan Offer in any
respect by giving oral or written notice of such extension or amendment to the
U.S. Receiving Agent or the Venezuelan Receiving Agent followed as promptly as
practicable by public announcement thereof, (b) in the event any of the
conditions to the U.S. Offer or the Venezuelan Offer shall not have been
satisfied and so long as the ADSs have not theretofore been accepted for
payment, to delay acceptance for payment of or payment for ADSs or Shares or to
terminate the U.S. Offer and not accept for payment or pay for ADSs or to
terminate the Venezuelan Offer and not accept for payment or pay for Shares and
(c) to waive any condition to the U.S. Offer or the Venezuelan Offer. There can
be no assurance that the Purchaser will exercise its right to extend or amend
the U.S. Offer or the Venezuelan Offer. The reservation by the Purchaser of the
right to delay acceptance for payment of or payment for ADSs or the Shares is
subject to applicable law, which requires that the Purchaser pay the
consideration offered or return the ADSs or the Shares deposited by or on behalf
of ADSs holders or Share holders promptly after the termination or withdrawal of
the U.S. Offer or the Venezuelan Offer.
Any extension, termination or amendment of the Offers will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which the Purchaser may choose to make any public announcement, the
Purchaser will have no obligation (except as otherwise required by applicable
law) to publish, advertise or otherwise communicate any such public announcement
other than by making a release to the Dow Jones News Service (in the case of the
U.S. Offer) and Dow Jones News Service and press release in Venezuela (in the
case of the Venezuelan Offer). In the case of an extension of the Offers, the
Purchaser will make a public announcement of such extension no later than 9:00
A.M., New York City time, on the next business day after the previously
scheduled expiration date.
If any tendered ADSs or Shares are not purchased pursuant to the Offers for
any reason, or if ADSs are submitted for more than are tendered, such
unpurchased or untendered ADSs or Shares will be returned (or, in the case of
ADSs tendered by book-entry transfer, such ADSs will be credited to an account
maintained at the Book-Entry Transfer Facility), without expense to the
tendering holder, as promptly as practicable following the expiration or
termination of the U.S. Offer or the Venezuelan Offer, as the case may be.
The receipt of cash for ADSs pursuant to the U.S. Offer, and the receipt of
cash for Shares pursuant to the Venezuelan Offer by a U.S. holder, will be a
taxable transaction for United States federal income tax purposes and possibly
for state, local and foreign income tax purposes. In addition, with respect to
the Venezuelan Offer, the Caracas Stock Exchange will withhold tax at a rate of
1% on the gross amount of the payments made to shareholders whose tendered
Shares are purchased in the Venezuelan Offer, except in limited circumstances.
Certain U.S. persons may be entitled to relief from such withholding under an
applicable treaty. A holder of ADSs or Shares should consult with its tax
advisors as to the particular tax consequences of the Offers to it, including
the applicability and effect of any state, local, federal or Venezuelan or other
foreign income and other tax law consequences of the Offers.
The information required to be disclosed by paragraph (d)(1) of Rule 14d-6
under the Securities Exchange Act of 1934, as amended, and set forth in the U.S.
Offer to Purchase and the Venezuelan Offer to Purchase is incorporated herein by
reference.
The Purchaser is making a request to CANTV for the use of securityholder
lists and security position listings under the Securities Exchange Act of 1934,
as amended, for the purpose of disseminating the U.S. Offer to holders of ADSs.
In addition, the Purchaser is delivering the U.S. Offer to Purchase, the ADS
Letter of Transmittal, the Notice of Guaranteed Delivery and other relevant
material (the "U.S. Offer to Purchase Materials") to the Depositary under the
Deposit Agreement and requesting CANTV to make a request to the Depositary to
distribute the U.S. Offer to Purchase Materials to registered holders of ADSs
and requesting CANTV to request from the Depositary a list of all holders of
ADSs. The Purchaser intends to use the list of holders of ADSs to transmit the
U.S. Offer to Purchase Materials to holders of ADSs. The U.S. Offer to Purchase
Materials will be mailed to record holders of ADSs and will be furnished to
brokers, dealers, banks, trust companies and similar persons who may be listed
as participants in a clearing agency's security position listings for subsequent
transmittal to the beneficial owners of ADSs. Further, the Purchaser, as a
holder of ADSs, is requesting that the Depositary allow the Purchaser to inspect
its books for the purpose of obtaining the names of ADS holders. A request is
being made to CANTV to inspect CANTV's shareholder registry books maintained by
Banco Venezolano de Credito, S.A.C.A., CANTV's transfer agent, for the purpose
of obtaining the names of the holders of Shares. Under Venezuelan law, a company
is required to permit a holder of its shares to inspect its shareholders
registry books. The Venezuelan Offer to Purchase, the Share
4
Letter of Transmittal and other relevant material will be made available to
record holders of Shares and will be furnished to brokers, dealers, banks, trust
companies and similar persons who may be listed as holders for subsequent
transmittal to the beneficial owners of Shares.
THE U.S. OFFER TO PURCHASE AND THE ADS LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE U.S. OFFER. THE VENEZUELAN OFFER TO PURCHASE AND THE SHARE LETTER
OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE VENEZUELAN OFFER.
Questions and requests for assistance, or for copies of the U.S. Offer to
Purchase, the ADS Letter of Transmittal, the Notice of Guaranteed Delivery and
other U.S. Offer documents may be directed to the Information Agent or the
Dealer Manager at their respective telephone numbers and addresses listed below.
Questions and requests for assistance, or copies of the Venezuelan Offer to
Purchase, the Share Letter of Transmittal and other related documents may be
directed to the Coordinator for the Venezuelan Offer at its telephone number and
address listed below. Holders of ADSs or Shares may also contact their brokers,
dealers, commercial banks and trust companies or other nominees for assistance
concerning the U.S. Offer or the Venezuelan Offer. Copies of the foregoing will
be furnished at the Purchaser's expense. No fees or commissions will be payable
to brokers, dealers or other persons other than the Dealer Manager and the
Information Agent for soliciting tenders of ADSs pursuant to the U.S. Offer.
The Information Agent for the U.S. Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
+1 (800) 549-6746 (TOLL-FREE IN THE U.S.)
+1 (212) 269-5550 (COLLECT OUTSIDE THE U.S.)
The Dealer Manager for the U.S. Offer is:
J.P. MORGAN SECURITIES INC.
277 Park Avenue
New York, New York 10172
Call Toll-Free (800) 648-5544
Call Collect (212) 648-0888
JPMORGAN [Logo]
The Coordinator for the Venezuelan Offer is:
Activalores Sociedad
de Corretaje [LOGO]
Calle Los Chaguaramos
Centro Gerencial Mohedano PH-A
La Castellana
Caracas, Venezuela
011-58 (212) 201-7511
consult@activalores.com
SEPTEMBER 25, 2001
5
EX-99.(A)(1)(I)
10
file009.txt
PRESS RELEASE
Exhibit (a)(1)(I)
FOR IMMEDIATE RELEASE
THE AES CORPORATION AND CORPORACION EDC, C.A.
COMMENCE JOINT U.S. AND VENEZUELAN CASH OFFERS FOR
AMERICAN DEPOSITARY SHARES AND SHARES OF CANTV
AES AND CEDC COMMENCE OFFERS FOR CANTV
--------------------------------------------------------------------------------
ARLINGTON, VIRGINIA AND CARACAS, VENEZUELA - SEPTEMBER 25, 2001 - The AES
Corporation (NYSE:AES), the world's largest independent global power company,
together with its 87% owned subsidiary, Corporacion EDC, C.A., announced today
that they have commenced cash tender offers in the United States and Venezuela
to acquire American Depositary Shares and shares of Compania Anonima Nacional
Telefonos de Venezuela (CANTV), the national telephone company of Venezuela,
which represent approximately 43.2% of the outstanding CANTV shares. The offers
will expire at 5:00 pm New York City time (6:00 pm Caracas time), on Monday
October 29, 2001 unless extended.
Tender Details
The U.S. offer is for 28,566,944 American Depositary Shares of CANTV at U.S.
$24.00 per ADS in cash. The Venezuelan offer is for 199,968,608 shares of CANTV
at U.S. $3.4285714 per share in cash. The price per ADS and per share in the
U.S. and Venezuelan offers will be equal based upon the seven shares represented
by each ADS.
Through Corporacion EDC, AES currently owns 64,007,524 CANTV shares representing
approximately 6.9% of the outstanding capital stock of CANTV. When added to the
CANTV shares currently owned by Corporacion EDC, the ADSs and shares sought in
the tender offers would represent a majority of CANTV's outstanding shares.
Based on the number of ADSs and shares sought in the U.S. and Venezuelan offers,
the aggregate consideration to be paid pursuant to the two offers is
approximately U.S. $1.371 billion.
If more than 28,566,944 ADSs are tendered in the U.S. offer or more than
199,968,608 shares are tendered in the Venezuelan offer and all other conditions
to the offers are met, ADSs and shares would each be purchased in each offer on
a pro rata basis.
AES's Commitment to Venezuela
Mr. Paul T. Hanrahan, President of AES Americas, said "We are pleased that we
are in a position to present our offers and increase our investment in
Venezuela."
The offers are conditioned on, among other things, that the ADSs and shares
tendered and not withdrawn pursuant to the offers, together with the CANTV
shares and ADSs currently owned by Corporacion EDC, represent at least a
majority of the outstanding capital stock of CANTV. The offers are also
conditioned on the receipt of the approval of the Venezuelan National
Telecommunications Commission (Comision Nacional de Telecomunicaciones -
CONATEL) and other required regulatory approvals.
J.P. Morgan Securities, Inc., Credit Suisse First Boston and Banc of America
Securities LLC are acting as financial advisors in connection with the offers.
J.P. Morgan Securities, Inc. is acting as the dealer manager.
The complete details of the offer for CANTV ADSs and shares are set forth in the
U.S. Offer to Purchase and related documents and in the Venezuelan Offer to
Purchase and related documents as filed with the Securities and Exchange
Commission and the Venezuelan CNV, respectively.
About AES
AES is a leading global power company comprised of competitive generation,
distribution and retail supply businesses in Argentina, Australia, Bangladesh,
Brazil, Cameroon, Canada, Chile, China, Colombia, Czech Republic, Dominican
Republic, El Salvador, Georgia, Germany, Hungary, India, Italy, Kazakhstan, the
Netherlands, Nigeria, Mexico, Oman, Pakistan, Panama, Sri Lanka, Ukraine, the
United Kingdom, the United States and Venezuela.
The Company's generating assets include interests in one hundred and eighty one
facilities totaling over 60 gigawatts of capacity. AES's electricity
distribution network has over 920,000 km of conductor and associated rights of
way and sells over 126,000 gigawatt hours per year to over 18 million end-use
customers. In addition, through its various retail electricity supply
businesses, AES sells electricity to over 154,000 end-use customers.
AES is dedicated to providing electricity worldwide in a socially responsible
way.
WHERE YOU CAN FIND ADDITIONAL INFORMATION:
AES filed a Tender Offer Statement with the Securities and Exchange Commission
today. We urge investors and security holders of CANTV to read carefully the
U.S. offer to purchase regarding the proposed transaction because it will
contain important information about the transaction. Investors and security
holders may
obtain a free copy of the U.S. offer to purchase and other documents filed by
AES with the Securities and Exchange Commission at the Securities and Exchange
Commission's Web site at www.sec.gov. The U.S. exchange offer and these other
documents may also be obtained for free from D.F. King & Co., Inc., the
Information Agent, by calling 1-800-549-6746.
* * * * *
For more general information visit our web site at www.aesc.com or contact
investor relations at investing@aesc.com. The list aes-pr-announce is an
automated mailing list and can be found on the investing page of our website.
Those who subscribe to this list will receive updates when AES issues a press
release.
* * * * *
This press release is for informational purposes only. The solicitation of
offers to buy CANTV ADSs and shares will only be made pursuant to the offer to
purchase and related materials that AES has filed and is sending to CANTV
shareholders. This communication shall not constitute a solicitation of an offer
to purchase in any state in which such offer, solicitation or sale would be
unlawful.
* * * * *
This press release contains forward looking statements concerning the financial
condition, results of operations and business of AES following the consummation
of its proposed acquisition of CANTV and the anticipated financial and other
benefits of such proposed acquisition. In some cases, you can identify forward
looking statements by the words "will", "believes", "plans", "would" or similar
expressions. These forward looking statements are not guarantees of future
performance and are subject to risks and uncertainties and other important
factors, including those that could cause actual results to differ materially
from expectations based on forward looking statements made in this press release
or elsewhere. For a description of certain of these risks please refer to AES's
and CANTV's filings with the SEC.
* * * * *