EFACEC Power Solutions, SGPS S.A. · 2019. 7. 23. · Matosinhos, district of Oporto, in Portugal,...

EFACEC Power Solutions, SGPS S.A. Head Office: Lugar da Arroteia, 4465-587 – Leça do Balio, Matosinhos

Registration and tax number: 513 180 966 Share capital: €308,949,250.00

(Incorporated as a limited liability company under Portuguese law)

“EFACEC FIXED RATE NOTES 2019-2024”

€58,000,000 fixed rate notes 4.5% interest maturing in 2024 (the “Notes”)

INFORMATION MEMORANDUM (DOCUMENTO INFORMATIVO DE INCORPORACIÓN) ON THE ADMISSION (INCORPORACIÓN) TO TRADING OF €58,000,000 FIXED RATE NOTES DUE

2024, GUARANTEED BY EFACEC ENERGIA – MÁQUINAS E EQUIPAMENTOS ELÉCTRICOS, S.A., EFACEC – ENGENHARIA E SISTEMAS, S.A. AND EFACEC ELECTRIC MOBILITY, S.A., ON

THE ALTERNATIVE FIXED-INCOME MARKET (“MARF”)

EFACEC Power Solutions, SGPS S.A. (“EFACEC” or the “Issuer”), a limited liability company incorporated

under Portuguese law as a holding company (Sociedade Gestora de Participações Sociais sob a forma

de Sociedade Anónima), with registered office at Lugar da Arroteia, 4465-587 – Leça do Balio,

Matosinhos, district of Oporto, in Portugal, with a share capital of €308,949,250.00, registered at the

Commercial Registry Office of Oporto under registration and tax number 513 180 966 and LEI Code

549300CXEW4WALC4V197 (together with its subsidiaries, the “EPS Group” or the “Group”), has

requested admission to trading of the Notes (incorporación de valores) on the Alternative Fixed-

Income Market (Mercado Alternativo de Renta Fija) (“MARF”) under the provisions of this information

memorandum (Documento Informativo de Incorporación) (the “Information Memorandum”).

MARF is a multilateral trading facility (MTF) and is not a regulated market in accordance with the

provisions of Directive 2004/39/EC and Royal Decree Law 21/2017 of December 29, 2017, on urgent

measures to adapt Spanish law to the European Union securities market legislation (“RDL 21/2017”).

There is no guarantee that the price of the Notes on MARF will be maintained. There is also no

assurance that the Notes will be widely distributed and actively traded on the market. Nor is it possible

to ensure the development or liquidity of trading markets for the Notes.

The Notes entail certain obligations for the Issuer (covenants), as detailed in section VIII of the

Information Memorandum (Documento Informativo de Incorporación).

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The Notes will be represented in dematerialised book-entry form (“forma escritural”) registered by

and held through Interbolsa, according to the provisions of section VIII of this Information

Memorandum.

An investment in the Notes involves certain risks.

Read section III of the Information Memorandum on risk factors.

This Information Memorandum (Documento Informativo de Incorporación) is not a prospectus

(folleto informativo) and has not been registered with the Spanish National Securities Market

Commission (“CNMV”). The offering of the Notes does not constitute a public offering in accordance

with the provisions of Article 35 of Royal Legislative Decree 4/2015, of 23 October, by which a recast

text of the Securities Market Law (“RLD 4/2015”) was approved, and, therefore, there is no

obligation to approve, register and publish a prospectus (folleto informativo) with the CNMV. The

issue of the Notes is intended exclusively for professional clients and eligible counterparties, in

accordance with the provisions of Article 205 of the RLD 4/2015 and Article 39 of Royal Decree

1310/2005, of 4 November, which partially develops Law 24/1988, of 28 July, on the Securities

Market, with respect to the admission of securities to trading on official secondary markets, public

offerings or subscriptions and the prospectus required for this purpose (“Royal Decree 1310/2005”)

and, regarding investors resident in Portugal, Decree-Law no. 486/99, of 13 November, as amended

from time to time (the “Portuguese Securities Code”).

No action has been taken in any jurisdiction to permit a public offering of the Notes, or the

possession or distribution of the Information Memorandum (Documento Informativo de

Incorporación) or of any other offering material, in any country or jurisdiction where such action is

required for said purpose.

The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended

(the “Securities Act”), or any U.S. state securities laws and may not be offered or sold in the United

States or to, or for the account or benefit of, U.S. persons as defined in Regulation S under the

Securities Act, unless an exemption from the registration requirements of the Securities Act is

available, and in accordance with all applicable securities laws of any state of the United States and

of any other jurisdiction.

This Information Memorandum (Documento Informativo de Incorporación) is the one required by

MARF’s Circular 2/2018, of 4 December, on the inclusion and exclusion of securities on the

Alternative Fixed-Income Market (“Circular 2/2018”). MARF has not made any verification or check

in respect of this Information Memorandum (Documento Informativo de Incorporación) or over the

rest of the documentation and information provided by the Issuer in compliance with said Circular

2/2018.

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COORDINATORS

BEKA FINANCE, SOCIEDAD DE VALORES, S.A.

OPTIMAL INVESTMENTS, S.A.

DEALER

BEKA FINANCE, SOCIEDAD DE VALORES, S.A.

CO-DEALER

BANCO FINANTIA, S.A.

REGISTERED ADVISOR

VGM ADVISORY PARTNERS, S.L.U.

The date of this Information Memorandum (Documento Informativo de Incorporación) is 23 July 2019.

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TABLE OF CONTENTS

SECTION I IMPORTANT INFORMATION ...................................................................................... 5

SECTION II SUMMARY ............................................................................................................ 9

SECTION III RISK FACTORS ..................................................................................................... 27

SECTION IV DECLARATION OF LIABILITY ................................................................................... 42

SECTION V FUNCTIONS OF THE REGISTERED ADVISOR OF MARF .................................................. 43

SECTION VI INFORMATION ON THE ISSUER, THE GUARANTORS AND THE GROUP .......................... 46

SECTION VII INDEPENDENT AUDITOR ...................................................................................... 60

SECTION VIII TERMS AND CONDITIONS OF THE NOTES ............................................................... 61

SECTION IX ADMISSION (INCORPORACIÓN) OF THE SECURITIES .................................................. 87

SECTION X TAXATION ........................................................................................................... 89

SECTION XI THIRD PARTY INFORMATION, STATEMENT BY EXPERTS AND DECLARATIONS OF INTEREST100

SECTION XII DOCUMENTS INCORPORATED BY REFERENCE ........................................................ 101

ANNEX ............................................................................................................................. 102

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SECTION I

IMPORTANT INFORMATION

Neither the Issuer, nor Beka Finance, Sociedad de Valores, S.A. (“Beka Finance”), as Dealer, Optimal

Investments, S.A. (“Optimal Investments”) (together the “Coordinators”), nor Banco Finantia, S.A.,

(the “Co-Dealer”) have authorised anyone to provide information to potential investors different from

the information contained in this Information Memorandum and other publicly available information.

Potential investors should not base their investment decision on information other than that contained

in this Information Memorandum and alternative sources of public information.

The Coordinators, the Dealer and the Co-Dealer assume no liability for the content of the Information

Memorandum. The Coordinators, the Dealer and the Co-Dealer have signed a contract with the Issuer,

but neither the Coordinators, the Dealer the Co-Dealer nor any other entity has made any commitment

to underwrite the issue, without prejudice to the ability of the Coordinators, the Dealer and the Co-

Dealer to acquire part of the Notes on their own behalf.

Investors in the Notes should rely only on the information contained in this Information Memorandum.

No person is or has been authorised by the Issuer to give any information or to make any

representation not contained in or not consistent with this Information Memorandum, any other

information supplied in connection with the Notes, or any information supplied by the Issuer or such

other information as is in the public domain and, if given or made, such information or representation

must not be relied upon as having been authorised by the Issuer, the Coordinators, the Dealer or the

Co-Dealer.

Neither the delivery of this Information Memorandum nor the offering, sale or delivery of any Note

shall, in any circumstances, create any implication that the information contained in this Information

Memorandum is true, correct, complete and updated after the date hereof or the date on which this

Information Memorandum has been most recently amended or supplemented, or that there has been

any adverse change, or any event reasonably likely to involve any adverse change, in the prospects or

the financial or trading position of the Issuer since the date hereof or, if later, the date on which this

Information Memorandum has been most recently amended or supplemented, or that any other

information supplied in connection with the Notes is true, correct, complete and updated at any time

after the date on which it is supplied or, if different, the date indicated in the document containing the

same.

Neither this Information Memorandum, nor any other information supplied in connection with the

Notes (a) is intended to provide the basis of any credit or other evaluation, or (b) should be considered

as a recommendation by the Issuer, the Coordinators, the Dealer or the Co-Dealer that any recipient

of this Information Memorandum or of any other information supplied in connection with the Notes

should purchase any Notes. Each investor contemplating the purchase of any Notes should make its

own independent investigation of the financial condition and affairs, and its own appraisal of the

creditworthiness, of the Issuer. Neither this Information Memorandum, nor any other information

supplied in connection with the offering of the Notes, constitutes an offer or invitation by or on behalf

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of the Issuer, the Coordinators, the Dealer or the Co-Dealer to any person to subscribe for or purchase

any Notes.

The distribution of this Information Memorandum and the offering, sale and delivery of the Notes

in certain jurisdictions may be restricted by law. Persons into whose possession this Information

Memorandum comes are required by the Issuer, the Coordinators, the Dealer and the Co-Dealer to

inform themselves about and to observe any such restrictions. This Information Memorandum may

not be used for or in connection with any offer to, or solicitation by, anyone in any jurisdiction in

which such offer or solicitation is not authorised or to any person to whom it is unlawful to make

such offer or solicitation.

The Issuer, the Coordinators, the Dealer and the Co-Dealer do not make any representation to any

investor in the Notes regarding the legality of this investment under any applicable laws. Any investor

in the Notes should be able to bear the economic risk of an investment in the Notes for an indefinite

period of time. No comment is made or advice is given by the Issuer, the Coordinators, the Dealer and

the Co-Dealer in respect of taxation matters relating to the Notes and each investor is advised to

consult its own professional advisor.

Neither the delivery of this Information Memorandum, nor the offering, sale or delivery of any Notes,

shall in any circumstances imply that the information contained in the Information Memorandum

concerning the Issuer is correct at any time subsequent to its date or that any other information

supplied in connection with the Notes is correct as of any time subsequent to the date indicated in the

document containing the same. The Coordinators, the Dealer and the Co-Dealer expressly do not

undertake to review the financial condition or affairs of the Issuer during the life of the Notes, or to

advise any investor in the Notes of any information coming to their attention.

This Information Memorandum is not a prospectus (folleto informativo) and has not been registered

with the CNMV. The offering of the Notes does not constitute a public offering in accordance with the

provisions of Article 35 of the RLD 4/2015 and, therefore, there is no obligation to approve, register

and publish a prospectus (folleto informativo) with the CNMV.

Admission (incorporación) to MARF has been requested. MARF is a multilateral trading facility (MTF)

and not a regulated market in accordance with the provisions of Directive 2004/39/EC and RDL

21/2017 of 29 December. This Information Memorandum includes the information required by

Circular 2/2018. MARF has not made any verification or check with respect to this Information

Memorandum or over the rest of the documentation and information provided by the Issuer in

compliance with said Circular 2/2018. There is no guarantee that the price of the Notes on MARF will

be maintained. There is also no assurance that the Notes will be widely distributed and actively traded

on the market because at this time there is no active trading market, it being currently under

development. Nor is it possible to ensure the development or liquidity of trading markets for the issue.

The Notes will be represented in dematerialised book-entry form (“forma escritural”) registered by

and held through Interbolsa, according to the provisions of section VIII of this Information

Memorandum.

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NO PRIIPS REGULATION KID

No KID under the PRIIPs Regulation has been prepared by the Issuer, the Coordinators, the Dealer or

the Co-Dealer.

MIFID II PRODUCT GOVERNANCE / PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET

Exclusively for the purposes of the product approval process to be carried out by each producer,

following the assessment of the market for the Notes, it has been concluded that: (i) the market to

which the Notes are intended to be issued is solely “eligible counterparties” and “professional clients”

as each of these terms is defined in Directive 2014/65/EU of the European Parliament and of the

Council, of 15 May 2014, on markets in financial instruments, amending Directives 2002/92/EC and

2011/61/EC (“MiFID II”) and their implementing legislation; and (ii) all channels of distribution of the

Notes to eligible counterparties and professional clients are adequate.

Any person who, after the initial placement of the Notes, offers, sells or makes the Notes available (the

“Supplier”) shall take into account the assessment of the producer's target market. However, any

Supplier subject to MiFID II shall be responsible for carrying out its own assessment of the target

market with respect to the Notes and for identifying the most appropriate distribution channel.

PROHIBITION OF SALES TO EEA RETAIL INVESTORS

The Notes are not intended for offer, sale or any other form of supply, nor should they be offered, sold

or made available to retail investors in the European Economic Area (“EEA”). For these purposes,

“retail investor” means a person who meets either or both of the following definitions: (i) ‘retail

customer’ in the sense of paragraph (11) of Article 4(1) of MiFID II; or (ii) ‘client’ within the meaning of

Article 4(1) of MiFID II. As a result, there was no need to prepare any of the key information documents

required by Regulation (EU) no. 1286/2014 of the European Parliament and of the Council, of 26

November 2014, on the key information documents relating to packaged retail investment and

insurance-based products (“Regulation 1286/2014”) for the purposes of offering or selling the Notes,

or making them available, to retail investors in EEA. Therefore, any such activity could be illegal under

Regulation 1286/2014.

SELLING RESTRICTIONS

No action has been taken in any jurisdiction to permit a public offering of the Notes or the possession

or distribution of the Information Memorandum or of any other offering material in any country or

jurisdiction where such action is required for said purpose.

In particular:

European Union

This private placement is only directed to eligible counterparties, according to the provisions in Article

2.1.e) of Directive 2003/71/EC. Therefore, neither the issue nor this Information Memorandum have

been registered with any competent authority of any Member State.

Spain

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This Information Memorandum has not been registered with the CNMV. The issue of the Notes does

not constitute a public offering in accordance with the provisions of Article 35 of RLD 4/2015. This issue

is intended exclusively for professional and eligible counterparties, in accordance with the provisions

of Article 205 of RLD 4/2015 and Article 39 of Royal Decree 1310/2005.

Portugal

Neither the issue of the Notes nor this Information Memorandum have been registered with the

Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários) and no

action has been undertaken that would be considered a public offer of the Notes in Portugal. According

to the above, the Notes may not be offered, sold or distributed in Portugal except in accordance with

the provisions of Articles 109, 110 and 111 of the Portuguese Securities Code (Código dos Valores

Mobiliários).

United States

This Information Memorandum must not be distributed, directly or indirectly, in (or sent to) the United

States of America (according to the definitions of the “Securities Act” of 1933 of the United States of

America. This Information Memorandum does not constitute an offer to sell securities or the

solicitation of an offer to buy any securities, or any offer of securities in any jurisdiction in which such

offer or sale is considered contrary to law. The Notes have not been (nor will be) registered in the

United States for the purposes of the U.S. Securities Act and may not be offered or sold in the United

States without registration or an application for registration exemption under the U.S. Securities Act.

There will not be a public offering of the Notes in the United States or in any other jurisdiction.

9

SECTION II

SUMMARY

A. DESCRIPTION OF THE ISSUER AND OF THE GUARANTORS

A.1. The Issuer

Legal and commercial name of the Issuer

The legal name of the Issuer is EFACEC Power Solutions, SGPS, S.A. and the most frequent commercial

name is EFACEC.

Registration and legal person number of the Issuer

EFACEC is a limited liability company (sociedade aberta de responsabilidade limitada) with head office

at Lugar da Arroteia, 4465-587 – Leça do Balio, Matosinhos, district of Oporto, Portugal, registered

with the Commercial Registry Office, entity with all documents deposit in electronic format, under the

registration and tax number 513 180 966, and with a fully subscribed and paid-up share capital in the

amount of €308,949,250.00.

Incorporation of the Issuer

EFACEC was incorporated on 14 August 2014 for an unlimited period of time.

Head office, legal form and legislation that governs the Issuer’s activity

EFACEC has its head office at Lugar da Arroteia, 4465-587 – Leça do Balio,, located in the parish of

Custóias, Leça do Balio e Guifões, municipality of Matosinhos, district of Oporto and its telephone

number is (+351) 22 956 23 00.

EFACEC is a holding company under the legal form of a limited company, incorporated and operating

under the laws of the Portuguese Republic and, under article 2 of its by-laws, its corporate purpose is

the “management of holdings in other companies as an indirect way of carrying out economic

activities, also being able to provide technical and management services pursuant to law”.

Article 4 of its by-laws further provide that EFACEC may “acquire and dispose of holdings in national

or foreign law companies, with the same or a different corporate purpose to that referred to in the

second article, in companies governed by special laws and in unlimited liability companies” and

“associate with other legal entities, in particular to form new companies, including European limited

liability companies, complementary company groupings, European economic interest groupings,

consortia and joint ventures”.

EFACEC is governed by the Portuguese laws applicable to holding companies, particularly by the

Portuguese Commercial Companies Code, the Portuguese Securities Code and Decree-Law no. 495/88,

dated 30 December 1988, and by its by-laws.

As of 31 December 2018, EFACEC’s capital is €308,949,250.00, represented by 61,789,850 ordinary

shares with a nominal value of five euros each, and is fully subscribed and paid-up.

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A.2. The Guarantors

Efacec Energia – Máquinas e Equipamentos Eléctricos, S.A.

EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A., a limited liability company incorporated

and validly existing under Portuguese law, with head office at Lugar da Arroteia, 4465-587 – Leça do

Balio, Matosinhos, district of Oporto, Portugal, is registered with the Commercial Registry Office of

Oporto under registration and tax number 504 040 847.

EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A. is a wholly owned subsidiary of the Issuer.

EFACEC Engenharia e Sistemas, S.A.

EFACEC Engenharia e Sistemas, S.A., a limited liability company incorporated and validly existing under

Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-605 – Maia,

district of Oporto, Portugal, is registered with the Commercial Registry Office, entity with all

documents deposit in electronic format, under registration and tax number 502 533 447.

EFACEC Engenharia e Sistemas, S.A. is a wholly owned subsidiary of the Issuer.

EFACEC Electric Mobility, S.A.

EFACEC Electric Mobility, S.A., a limited liability company incorporated and validly existing under

Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, Oporto, is registered

with the Commercial Registry Office of Oporto under registration and tax number 510 893 376.

EFACEC Electric Mobility, S.A. is a wholly owned subsidiary of the Issuer.

B. BACKGROUND AND DEVELOPMENT OF THE ISSUER

EFACEC is a Portuguese company with a strong export profile and international presence in over 65

countries. A brand with 70 years of history, made by great people. Its origins go back to 1905, with the

establishment of a new company “A Moderna”, Sociedade de Serração Mecânica. In 1921, “A

Moderna” gives rise to the Electro-Moderna, Lda., a company with operations in the field of electrics

(motors, generators, transformers and electric accessories). Electro-Moderna had, at that time, the

necessary skills to support the major future development of what would come to be “EFACEC”.

On 12 August 1948, EFME – Empresa Fabril de Máquinas Eléctricas, SARL was founded. That was the

starting point of the Efacec project and the birth of the Efacec brand. The company’s equity capital

was, at that time, shared by Electro-Moderna (20%), ACEC – Ateliers de Constructions Électriques de

Charleroi (20%) and CUF – Companhia União Fabril (45%). The remaining 15% were distributed among

other shareholders. After several equity capital changes, namely due to the exit of CUF, ACEC became

the majority shareholder. As a result, the name EFACEC – Empresa Fabril de Máquinas Eléctricas, SARL

emerged in 1962, and a period of remarkable growth began that same year.

About 25 years later, in the context of Portugal’s integration in the EEC and the sale, by ACEC, of its

65% stake in EFACEC – Empresa Fabril de Máquinas Eléctricas, SARL, there was another period of strong

growth, namely in the international markets, along with important technological developments in

various fields, which endured until the global financial crisis of the first decade of twenty-first century.

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In response to the global economic and financial crisis, Efacec launched a restructuring process, namely

in the international markets structures, as well as a simplification of the company’s portfolio.

Alongside, the company sold some assets and business considered non-core. In 2014, EFACEC Power

Solutions, SGPS S.A. was incorporated to be the new holding company of the Group with a new

business perimeter, reinforcing its core businesses. The constitution of EFACEC in 2014 and the

replacement of EFACEC Capital, SGPS, S.A.’s (currently named MGI Capital, SGPS, S.A.) as the holding

company of the EPS Group was part of this restructuring process aimed at aligning the corporate

structure of the EPS Group with the market segments and target geographies addressed.

In October 2015, Winterfell 2 Limited acquired a majority stake in EFACEC Power Solutions SGPS, S.A.

and such of the EPS Group. EFACEC’s previous shareholders (José de Mello Group and Textil Manuel

Gonçalves) became minority shareholders (organized under MGI Capital, SGPS, S.A.) and a new

management was appointed to the Group.

Currently, facing the future head-on and prepared for new and important challenges, Efacec is

recognised as a prestigious brand and one of the largest industries in the country, based on its

resilience and flexibility but, above all, based on its continuous ability to innovate.

Following the corporate reorganisation, the EPS Group’s corporate structure stands as follows:

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C. PRINCIPAL ACTIVITIES

EFACEC activities are focused on energy sectors by developing its activity within three segments, organized in eight Business Units:

a. Products Segment (4 business units legally organized under EFACEC Energia, Máquinas e Equipamentos, S.A.) i. Transformers

EFACEC is a worldwide recognized manufacturer of Power Transformers, either of Shell and Core type, as well as Mobile Substations and Distribution Transformers.

ii. Automation EFACEC develops and sell energy management systems, distribution dispatch systems, command & controls systems (SCADA), PV Stations and Storage Solutions for Utilities, Electrical Power Grids, Transportation, Cities and Industries.

iii. Switchgear EFACEC is a manufacturer of switchgear, namely of primary and secondary distribution, compact substations and high and medium voltage switchgear for Eletrical Power Grids, Electric Distribution Systems and Industry and Infrastructure Systems.

iv. Service EFACEC provides vertically integrated services of maintenance, refurbishment and revamping of its own and third-parties equipment for industrial facilities, hydroelectric and thermoelectric power plants, cogeneration, wind farms, substations and transformer stations.

b. Systems Segment (3 Business Units legally organized under EFACEC Engenharia e Sistemas, S.A.) i. Energy

Within this Business Unit EFACEC design and develops complete turnkey solutions for solar photovoltaic plants (or hybrid), substations, hydro & thermal power generation plants (either of combined cycle or conventional plants) including the supply of its own distributed control systems and an integrated offer of maintenance and technical assistance.

ii. Environment EFACEC offers integrated solutions from design and planning to implementation, service and operation of systems for water and wastewater treatment, water supply, irrigation and solid waste treatment.

13

iii. Transportation EFACEC is an EPC turnkey provider for railway, light rails and roadways with integrated electrical and automation solutions, providing mainly energy, signaling, fleet management, passengers information, cross-level, tunnel and central management solutions. The core capabilities of this business unit are also able to be used and provided for telecom.

c. Electric Mobility (one business unit legally organized under EFACEC Electric Mobility, S.A.) EFACEC is a very relevant player in the electric mobility market, where it positions itself as one of the world leaders in rapid and ultra-rapid segment for charging stations for electric vehicles. It has a full range of charging solutions to Electric Vehicles (private chargers / public chargers / quick charging / buses charging). It also provides integration solutions of cars, motorcycles and buses in management systems for an efficient use of the electric grid infrastructure.

INFORMATION ON THE ISSUE

This summary of the issue contains basic information, does not purport to be complete and may

be subject to limitations and exceptions detailed later in this Information Memorandum. All

information concerning the issue is outlined in section VIII (Terms and Conditions of the Notes).

Name of the issue EFACEC Fixed Rate Notes 2019-2024.

Issuer EFACEC Power Solutions, SGPS, S.A.

Currency Euro (€).

Debt issued €58,000,000 in nominal value, corresponding

to 580 Notes with a face value of €100,000

each, grouped in a single class and series.

ISIN Code PTEFWAOM0001.

Pricing date 19 July 2019.

Issue/Closing date 23 July 2019.

Maturity date 23 July 2024.

Economic rights for the holder The interest rate shall be a fixed interest rate

equal to 4.5% per year.

The interest on the Notes will accrue daily on

an Actual/Actual ICMA basis.

See “Interest” in section VIII.

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Order of priority The Notes are direct, senior, unconditional,

unsecured and unsubordinated obligations of

the Issuer, guaranteed by the Guarantors.

The Noteholders’ rights against the Issuer,

arising from the Issue of the Notes, will have

at least the same priority in ranking,

preferences or privileges, without any

preference among themselves (and save for

certain obligations required to be preferred

by law), as the rights arising from the senior

debt of other present or future creditors of

the Issuer, and a higher priority in ranking,

preferences or privileges than the rights

arising from the subordinated debt of other

present or future creditors of the Issuer.

Credit Rating of the Issue On 18 June 2019, the agency Axesor Risk

Management, S.L.U. (“Axesor”) assigned the

Issuer a credit rating of BBB-.

Guarantors EFACEC Energia – Máquinas e Equipamentos

Eléctricos, S.A., EFACEC – Engenharia e

Sistemas, S.A. and EFACEC Electric Mobility,

S.A.

Obligations of the Issuer Negative Pledge, pari passu, ownership

clause/change of control, cross-default.

Limitations on indebtedness (Net Debt /

EBITDA < 2.75x).

Annual testing based on the consolidated

financial statements of EFACEC Power

Solutions, SGPS, S.A.

Limitation on asset disposals > 10% of Total

Assets.

See “Description of the Notes” in section VIII.

Paying Agent Banco Comercial Português, S.A.

Common Representative Bondholders, S.L.

15

Applicable law Portuguese Law.

Risk Factors Investing in the Notes involves risks and

investors should thus read the “Risk Factors”

section of this document for a detailed

description of the risks associated with this

operation that should be considered before

investing. See “Risk Factors” in section III.

Use of the proceeds General corporate purposes and refinancing

of existing corporate debt, including as a

result of the partial repayment of such

corporate debt, the full discharge and release

of any security interests granted to secure

such corporate debt.

5. FINANCIAL INFORMATION

A summary of the information contained in the audited individual and consolidated income

statement and statement of financial position of the Issuer and in the audited annual income

statement and statement of financial position of the Guarantors for the financial years ended

one 31 December 2017 and 31 December 2018 is included in this section.

The Issuer’s consolidated financial statements for the financial years ended on 31 December

2017 and 31 December 2018 are attached as Annex to this Information Memorandum.

16

Issuer audited consolidated income statement for the years ended December 31, 2018 and

2017

Monetary values are expressed in euros

Sales and Services Rendered 426.551.800 431.886.771

Production Variation 6.873.030 -3.149.216

433.424.830 428.737.554

Cost of Sales and Materials Used -204.295.983 -198.635.735

Supplies and External Services -109.439.556 -121.332.255

Personnel Expenses -92.662.925 -85.730.375

Contract Termination Expenses -1.508.254 -925.635

Amortisations and depreciations -10.093.945 -8.178.990

Provisions and asset impairments -9.704.262 -6.907.171

Other operating expenses -5.327.925 -5.496.667

Other operating income 17.076.720 16.059.081

Operating Profit 17.468.700 17.589.807

Financial Losses and Expenses -7.361.446 -7.367.475

Financial Profits and Income 3.329.214 433.011

Pre-tax Profit 13.436.468 10.655.343

Income Tax - Deferred 3.869.461 -439.051

Income Tax - Current -3.140.948 -2.670.355

Consolidated Net Profit 14.164.981 7.545.937

Attributable to:

Efacec Power Solutions Shareholders 14.099.926 7.524.955

Non-controlling interests 65.055 20.982

Net profit per share

Basic 0,22 0,13

Diluted 0,22 0,13

EFACEC Power Solutions, SGPS, S.A. and Subsidiaries

Consolidated Income Statement by Nature

for the years ended 31 December 2018 and 2017

2018 2017

17

Issuer audited income statement for the years ended December 31, 2018 and 2017


Sales and Services Rendered 5.800.008 5.812.454

Supplies and External Services -3.833.691 -7.381.124

Personnel Expenses -2.413.201 -2.747.060

Contract Termination Expenses -92.276 0

Amortisations and depreciations -757.367 -188.413

Other operating expenses -295.019 -70.221

Other operating income 1.836.343 1.873.592

Operating Profit 244.797 -2.700.773

Financial Expenses -4.051.209 -3.684.356

Financial Income 1.297.561 948.917

Losses/Profit in related entities 16.359.149 7.374.629

Result before taxes 13.850.298 1.938.416

Income Tax - Deferred 109.228 0

Income Tax - Current 397.719 1.101.796

Net Result 14.357.244 3.040.212

Net profit per share

Basic 0,23 0,05

Diluted 0,23 0,05

EFACEC Power Solutions, SGPS, SA

Income Statement by Nature

for the periods ended 31 December 2018 and 2017

2018 2017

18

Guarantors audited income statement for the years ended December 31, 2018 and 2017

Monetary amounts are expressed in Euros

Sales and services rendered 209 453 869 228 594 824

Production inventory variation 3 097 482 18 216

212 551 351 228 613 039

Cost of goods solds and material consumed -108 637 379 -118 173 893

External suppliers and services -56 911 728 -61 349 624

Staff costs -39 839 770 -37 727 364

Expenses with contractual terminations -815 646 -883 319

Amortizations and depreciations -4 906 507 -4 177 070

Provisions and assets impairment -5 035 085 62 178

Other operating costs -2 767 653 -2 322 237

Other operating income 9 594 201 5 805 165

Operating Income 3 231 785 9 846 875

Financial losses and costs -3 107 693 -3 502 733

Financial gains and income 1 187 925 407 556

Losses and gains on related parties 0 740 107

Income Before Tax 1 312 016 7 491 805

Income tax - deferred 3 039 045 -1 924 784

Income tax - current -903 322 -879 923

Consolidated Net Income 3 447 739 4 687 098

Net Earnings per Share

Basic 1,03 1,39

Diluted 1,03 1,39

EFACEC Energia, Máquinas e Equipamentos Eléctricos, SA

Income statement by nature

for the periods ended on December 31, 2018 and 2017

2018 2017

19



Production inventory variation -1 092 765 -2 050 311

142 947 613 155 699 679



Staff costs -22 220 511 -20 778 155

Expenses with contractual terminations -105 366 0

Amortizations and depreciations -844 521 -756 310

Provisions and assets impairment -3 631 330 -5 195 449

Other operating costs -801 454 -1 265 678



Financial losses and costs -3 383 736 -2 785 447

Financial gains and income 3 054 687 3 224 167

Losses and gains on related parties 0 82 234


Income tax - deferred -17 275 963 881

Income tax - current -1 009 558 -1 960 179



Basic 1,15 4,86

Diluted 1,15 4,86




2018 2017

20



Production inventory variation 72 882 -2 211 749

34 470 298 14 676 536



Staff costs -3 459 439 -2 210 217

Expenses with contractual terminations -82 715 0

Amortizations and depreciations -370 024 -74 364

Provisions and assets impairment -50 818 0

Other operating costs -138 852 -177 275



Financial losses and costs -395 328 -128 922

Financial gains and income 734 16


Income tax - deferred 432 556 35 995

Income tax - current -984 288 -54 093



Basic 14,82 5,58

Diluted 14,82 5,58

EFACEC Electric Mobility, SA



2018 2017

21

Issuer audited consolidated statement of financial position for the years ended December 31,

2018 and 2017

22


Assets

Non-Current Assets

Tangible Assets 73.035.743 72.150.155

Intangible Assets 95.699.466 86.459.121

Goodwill 120.039.977 120.242.439

Financial assets available for sale 703.632 316.132

Debtors and Expenses to be recognised 1.261.794 1.000.000

Deferred Tax Assets 59.723.993 56.016.276

Derivative Financial Instruments 87.026 0

Total Non-Current 350.551.631 336.184.123

Current Assets

Stocks 36.883.082 29.106.894

Customers 167.557.223 159.484.155

Accrued Income 105.313.342 85.076.762

Loans to Related Entities 724.605 724.605


Income tax 0 365.309

Derivative Financial Instruments 608.923 995.006

Cash and Cash Equivalents 38.184.891 31.148.216

Total Current 380.069.262 337.160.694

Total Assets 730.620.893 673.344.817

Equity and Liabilities

Equity

Capital 308.949.250 314.235.160

Share issuance premiums 1.947.730 1.947.730

Other equity capital instruments 11.490.052 35.900.000

Reserves and accumulated income 11.412.501 -2.672.500

Accumulated other comprehensive income -17.365.120 -3.611.455

Non-controlling interests -194.278 -78.244

Total Equity 316.240.135 345.720.692

Non-Current Liabilities

Provisions 9.547.308 11.892.451

Amounts owed to credit institutions 69.946.853 57.306.624

Suppliers 43.446 7.121

Deferred Tax Liabilities 21.401.471 22.009.762

Derivative Financial Instruments 109.289 0

Total Non-Current Liabilities 101.048.368 91.215.958

Current Liabilities

Amounts owed to credit institutions 24.802.889 13.367.561

Loans from Related Entities 5.000.000 0

Suppliers 112.723.474 75.778.258

Invoices received and pending approval 48.458.293 34.016.509

Creditors and Accrued Expenses 65.970.962 42.411.242

Income tax 1.009.014 0

Income to be recognised 53.628.989 70.692.095

Derivative Financial Instruments 1.738.769 142.502

Total Current liabilities 313.332.390 236.408.167

Total Equity Capital and Liabilities 730.620.893 673.344.817

2018 2017

EFACEC Power Solutions, SGPS, S.A. and Subsidiaries

Consolidated Statement of Financial Position

at 31 December 2018 and 2017

23

Issuer audited statement of financial position for the years ended December 31, 2018 and 2017


Asset

Non-Current Assets

Tangible Assets 31.651.199 31.682.700

Financial Investments 375.327.833 375.327.833

Financial assets available for sale 688.632 301.132

Loans to Related Entities 31.246.655 21.470.846

Deferred Tax Assets: 454.327 345.100

Total Non-Current 439.368.647 429.127.611

Current Assets

Customers 201.007 21.127

Accrued Income 307.223 165.771

Loans to Related Entities 16.761.762 8.760.843


Income Taxes 399.491 1.118.062

Cash and Cash Equivalents 453.362 185.006

Total Current 32.985.024 23.024.033

Total Assets 472.353.671 452.151.644


Equity

Share capital 308.949.250 314.235.160

Share Issuance Premiums 1.947.730 1.947.730

Additional Paid-In Capital 11.490.052 35.900.000

Reserves and accumulated income 17.397.456 3.040.212

Accumulated other comprehensive income 0 0

Total Equity 339.784.489 355.123.102


Amounts owed to credit institutions 670.000 0

Loans from Related Entities 50.000.000 74.167.109

Total Non-Current Liabilities 50.670.000 74.167.109

Current Liabilities

Amounts owed to credit institutions 330.000 0

Loans from Related Entities 56.840.748 12.598.748

Suppliers 4.769.865 1.174.399

Creditors and Accrued Expenses 19.958.569 9.088.286

Total Current liabilities 81.899.183 22.861.433

Total Equity Capital and Liabilities 472.353.671 452.151.644

EFACEC Power Solutions, SGPS, SA

Statement of financial position

at 31 December 2018 and 2017

2018 2017

24

Guarantors audited statement of financial position for the years ended December 31, 2018

and 2017


Assets

Non-Current Assets

Tangible assets 9 571 576 9 315 390

Intangible assets 12 491 561 5 545 390

Financial Investments 506 912 506 912

Loans to related parties 3 756 708 5 062 965

Debtors and deferred costs 8 550 0

Deferred tax assets 51 551 063 48 110 078

Financial derivative instruments 87 026 0

Total Non-Current Assets 77 973 396 68 540 735

Current Assets

Inventories 19 390 481 16 425 894

Customers 73 699 768 74 311 434

Accrued income 49 219 725 42 546 974


Debtors and deferred costs 10 645 009 10 679 189

Income tax 230 277 0

Financial derivative instruments 608 923 995 006

Cash and cash equivalents 10 999 077 3 628 498

Total Current Assets 186 884 861 161 436 037

Total Assets 264 858 257 229 976 772


Equity

Capital 16 800 000 16 800 000

Other equity instruments 58 811 255 58 811 255

Legal Reserve 3 716 210 3 716 210

Reserves and retained earnings 8 868 001 9 937 598

Other accumulated comprehensive income 1 160 632 2 991 614

Total Equity 89 356 097 92 256 677

Total Non-Current Liabilities

Provisions 1 851 261 3 401 244

Bank loans 34 149 187 33 875 982

Deferred tax liabilities 0 129 636

Derivative financial instruments 109 289 0

Total Non-Current Liabilities 36 109 737 37 406 862

Current Liabilities

Bank loans 15 222 121 8 043 665

Loans from related parties 234 339 0

Suppliers 57 899 782 35 274 509

Invoices received and pending from approval 10 344 275 10 188 529

Creditors and acccrued costs 25 323 211 21 597 794

Income tax 0 294 749

Deferred income 28 629 927 24 771 483

Derivative financial instruments 1 738 769 142 502

Total Current Liabilities 139 392 423 100 313 232

Total Equity and Liabilities 264 858 257 229 976 772

EFACEC Energia, Máquinas e Equipamentos Eléctricos, SA


on December 31, 2018 and 2017

2018 2017

25


Assets

Non-Current Assets

Tangible assets 11 430 212 10 525 093

Intangible assets 1 297 411 597 941





Current Assets

Inventories 3 381 902 4 019 942

Customers 84 036 227 81 122 369

Accrued income 32 078 737 34 707 921

Loans to related parties 30 086 412 201 736


Cash and cash equivalents 11 526 467 8 104 813


Total Assets 243 858 678 230 535 926


Equity

Capital 11 250 000 11 250 000

Other equity instruments 32 500 000 32 500 000

Legal Reserve 3 590 670 3 590 670


Other accumulated comprehensive income 1 926 505 2 127 505

Total Equity 68 290 326 76 840 527

Total Non-Current Liabilities

Provisions 7 080 173 8 050 516

Bank loans 35 121 941 23 415 703

Deferred tax liabilities 348 975 348 975

Total Non-Current Liabilities 42 551 088 31 815 193

Current Liabilities

Bank loans 7 542 604 4 411 601

Loans from related parties 201 372 103 307

Suppliers 38 895 696 38 432 805

Invoices received and pending from approval 41 323 788 24 947 595


Income tax 458 302 1 045 357

Deferred income 20 521 491 38 544 008






2018 2017

26


Assets

Non-Current Assets

Tangible assets 824 014 755 138

Intangible assets 2 225 354 1 082 598

Financial assets held for sale 15 000 15 000



Current Assets

Inventories 4 223 257 1 924 386

Customers 17 560 089 7 227 345

Accrued income 7 968 666 3 824 412

Loans to related parties 0 123


Cash and cash equivalents 4 286 640 145 976


Total Assets 39 981 254 18 222 075


Equity

Capital 1 200 000 1 200 000

Share premiums 1 500 000 1 500 000

Legal Reserve 6 168 6 168


Other accumulated comprehensive income 0 0

Total Equity 7 494 725 4 838 284


Total Non-Current Liabilities 0 0

Current Liabilities

Loans from related parties 13 789 526 3 700 000

Suppliers 12 409 808 6 541 671


Income tax 972 854 68 250

Deferred income 3 066 402 1 976 237



EFACEC Electric Mobility, SA



2018 2017

27

SECTION III

RISK FACTORS

Before making a decision in relation to the subscription of the Notes, investors should carefully

consider all the information contained in this Information Memorandum, as well as the following risk

factors. Additional risks and uncertainties currently unknown or that the Issuer currently considers not

significant may have an adverse effect on the Notes, the Issuer’s activities, the development of its

business, its operating results, financial position, income, assets and liquidity, and on the Issuer’s

future prospects or capacity to achieve its goals.

The order in which the risk factors are presented below does not indicate the likelihood of these risks

occurring or the scope of any potential impairment these risks might cause to the business of the

Issuer. The risks could be realised individually or cumulatively.

A - RISK FACTORS RELATING TO THE ISSUER

Financial risks

The Issuer’s activities are exposed to a variety of financial risks including market risks, interest rate risk

and liquidity risk. The Issuer’s risk management programme focuses on the unpredictability of financial

markets, seeking to minimise potential adverse effects on the Issuer’s financial performance, and may

use various financial instruments to minimise the risks arising from its activity.

Financial risk management is carried out by the Corporate Finance Board within the framework of the

policies and guidelines approved by the Board of Directors. This board is responsible for the

identification, evaluation and coverage of financial risks, in close collaboration with the EPS Group’s

operating units. The Board of Directors establishes principles for overall risk management as well as

policies designed to cover specific areas, such as interest rate risk and liquidity risk, the use of

derivative and non-derivative financial instruments, and the investment of liquidity surpluses. These

transactions are closely monitored by the Board of Directors.

Despite its cautious and conservative risk management policies, the Issuer cannot exclude the

possibility of being impacted by some or a combination of the different financial risks listed below, or

others currently not considered material or unknown, and of this adversely affecting its business

and/or the results of its activities.

28

Market risks

Interest rate risk

Interest rate risk for the Issuer arises mainly from loans, since it does not have interest rate derivatives

or long-term remunerated assets. Loans with variable interest rates, exclusively denominated in euros,

expose the Issuer to the risk of changes in cash flows.

Exposure to interest rate risk is subject to a dynamic analysis. In addition to assessing future changes

based on forward rates, sensitivity tests are carried out on fluctuations in interest rate levels. The

Issuer is fundamentally exposed to the Euro interest rate curve. The sensitivity analysis is based on the

following assumptions:

• Changes in market interest rates affect interest income and costs in relation to financial

instruments with variable interest rates;

• Changes in market interest rates affect interest income and costs in relation to financial

instruments with fixed interest rates, if they are only recognised at fair value;

• Changes in market interest rates affect derivative financial instruments and other financial

assets and liabilities at fair value; and

• Changes in other financial assets and liabilities at fair value are estimated by discounting future

cash flows using year-end market rates.

For each analysis, regardless of the currency, the same changes are used in the interest rate curves.

These analyses are carried out for net financial debt, that is, loans are deducted from interest-bearing

deposits and treasury applications. Simulations are carried out based on the net debt values and the

fair value of derivative financial instruments at the relevant dates, and the respective change in the

interest rate curves.

At 31 December 2018, the EPS Group had no interest rate derivatives contracted. The Group’s

exposure on the same date was € 95,6 million on bank debt1, essentially denominated in euros minus

€ 1,2 million in treasury applications and term deposits. Based on the assets and liabilities at the end

of the year, if interest rates on loans and deposits were 0.25% higher/lower, and all other variables

1 “Bank debt” means current and non-current "Amount owed to credit institutions" excluding current and non-current “amortised cost”, as disclosed in statement of financial position at 31 December 2018 and 2017 and in Note 17 of 2018 Annual Report, respectively.

29

remained constant, the pre-tax result for the year would be 236 k € lower/higher, accordingly. These

effects are essentially due to a higher or lower cost of interest on variable rate loans.

31.12.2018

Non-current

Current account 25 000 000

Bank loans 39 626 813

Commercial paper 5 750 000

70 376 813

Current

Bank overdrafts 2 838 045

Current account 390 362

Bank loans 13 797 868

Commercial paper 7 250 000

Trade discount 967 449

25 243 724

Total 95 620 537

(Group’s total bank debt exposure as of 31.12.2018)

Despite the implementation of an interest rate risk management policy which aims to optimise the

cost of debt, reduce volatility in financial costs, and control and mitigate the risk of incurring losses as

a result of interest rate changes, the Issuer cannot predict the evolution in interest rates or its impacts.

Therefore, if interest rates increase more than expected or if obtaining new financing becomes more

expensive than anticipated, this may adversely affect the Issuer’s results or its activities.

Liquidity risk

In order to ensure the maintenance of an adequate level of cash and cash equivalents to meet

operational needs, and considering the contribution of possible financing facilities, the Issuer carries

out cash flow forecasts. These forecasts take into account the Issuer’s debt financing plans, the

fulfilment of internal objectives given as financial ratios and, if applicable, compliance with external

regulatory or legal requirements – for example, foreign currency restrictions and compliance with debt

covenants, namely: cross default, pari passu, negative pledges, debt ratios, shareholder changes and

others related to the operational activities and to the legal, fiscal and operational obligations of the

Issuer.

Cash surpluses necessary to maintain a balanced working capital management take into account EPS

Group’s instructions regarding maturity, liquidity and counterparty. The Issuer invests cash surpluses

30

by choosing instruments with adequate maturities or sufficient liquidity, which provide enough of a

margin, as determined by the aforementioned forecasts.

At 31 December 2018, the EPS Group held € 37 million in cash and demand deposits , € 0,5 million in

term deposits and € 0,7 million in treasury applications.

31.12.2018

Cash 122 337

Demand Deposits 36 909 939

Term deposits 463 719

Treasury applications 688 895

38 184 890

These were expected to promptly generate capital inflows capable of facilitating liquidity risk

management. The Group had, at that date, unused credit facilities amounting to approximately €7,8

Million.

The Issuer has implemented liquidity risk management policies with the objective of ensuring a stable

debt maturity profile, reducing short-term debt, and extending its average debt maturity. To fulfil

these objectives, the Issuer closely monitors the financial markets and carefully selects the most

efficient alternative at any given point in time.

However, the Issuer is not able to predict future credit or funding conditions available on the market,

particularly concerning liquidity. Limitations in accessing financing, due to lower loan capacity, from

financing institutions or higher costs of funding may adversely impact on the Issuer’s business or on

the results of its activities.

Capital risk

The Issuer seeks to maintain an adequate level of equity that enables it to ensure its continuity and

development, providing adequate return for its shareholders, and to optimise the cost of capital.

The Issuer may adjust the amount of dividends payable and shareholders’ capital return, or issue new

shares or debt, in order to maintain or adjust its capital structure.

According to industry market practices, the capital structure balance is monitored based on the gearing

ratio, calculated using the formula “Net Debt / Total Equity”. Net debt comprises the value of loans

(including current and non-current bank and related company loans, as presented in the statement of

financial position) minus cash and cash equivalents, other financial investments and current loans

conceded. The total capital is composed of equity, as presented in the financial statements, plus net

debt.

31

However, the Issuer is not able to ensure that the aforementioned “Net Debt / Total Equity” gearing

ratio and, for the purposes of the Notes, the Net Debt / EBITDA ratio as provided for in the Terms and

Conditions of the Notes, will be maintained in the future and that the Issuer will comply with such

ratios until the Notes are redeemed. The Issuer’s failure to comply with the Net Debt / EBITDA ratio

will lead to its breach of the financial covenants with respect to the Notes and will cause an event of

default thereunder if not remedied within the applicable remedy period.

Price risk

The Issuer (and the EPS Group in general) is exposed to short and long-term changes in the prices of

the raw materials used in its production processes whenever it purchases raw materials with prices

quoted on the stock exchange. This exposure mainly concerns copper. The EPS Group has implemented

policies aimed at mitigating the impact of changes in the price of these raw materials on consolidated

net income and has established hedging strategies that allow the use of derivative financial

instruments.

Together with the Purchasing Department and the Business Units that use these raw materials, the

Corporate Finance Board is the entity responsible for ensuring the EPS Group’s risk management.

Any variation in the prices of the raw materials used in its production processes may have an adverse

impact on the Issuer’s business, financial condition and operational results.

Credit risk

Credit risk is the risk of a counterparty not meeting its contractual obligations as and when the same

are due, which could lead to the recognition of a loss in the Issuer’s accounts. Credit risk results

primarily from the Issuer’s (and the EPS Group’s) activities, specifically credit risks to customers,

including receivables and commitments, and its investment and hedging activities, including derivative

financial instruments and deposits with financial institutions.

Nevertheless, without prejudice of any mitigating actions and measures that the Issuer may implement

from time to time, the Issuer’s exposure to credit risk may adversely affect its business and/or the

results of its activities.

B - RISK FACTORS RELATING TO THE ISSUER’S ACTIVITIES

The Issuer’s activity is subject to uncertainty in the economic context

The global economy and the global financial system have been experiencing a period of uncertainty

and turbulence. In the Eurozone, the key focus is on the ability of peripheral countries to repay their

32

debt, including Portugal. The persistent pressure on the sustainability of government finances in

advanced economies has led to strong tensions in credit markets. A new or further escalation of the

crises in the Eurozone could impair the Issuer’s ability to refinance its maturing debt. In addition, there

could be sudden fiscal reforms or changes in the European regulatory framework.

In addition, the ongoing instability and somewhat uncertain economic-financial situation may have a

negative impact on third parties with whom the Issuer does or could do business with. In particular,

the Iberian economies may continue to be restrained in the coming years, thus potentially adversely

impacting the business environment.

Any of the factors described above, whether in isolation or in combination with each other, could have

an adverse effect on the Issuer’s business, financial condition or operational results.

The Issuer’s activity presence in emerging markets

EPS Group has a presence in emerging markets. These emerging markets are exposed to political and

legal risks which are present to a greater degree than in established markets in Europe.

These risks include the risk of nationalisation and expropriation of private assets, political and social

instability, frequent changes in the general legal conditions and government policy as well as changes

in tax policy and price control. These markets also face a higher risk of macro-economic instability and

volatility than the markets in the industrialised nations, which may lead to restrictions in foreign

currency transactions, in repatriating profits and importing of investment goods.

These risks could have a material adverse effect on the business, the financial condition and the results

of operations of EPS Group.

The Issuer does not directly develop operational activities

The Issuer, as a holding company (SGPS), develops direct and indirect management activities over its

subsidiaries, whereby the fulfilment of its assumed obligations depends on the cash flows generated

by its subsidiaries. The Issuer thus depends on the distribution of dividends by its subsidiary companies,

interest payments, repayment of loans and other cash flows generated by those companies. The ability

of the Issuer’s subsidiaries to provide/repay funds to the Issuer depends, partly, on its ability to

generate positive cash flows within operational activities. The ability of these companies to, on the

one hand, distribute dividends and, on the other, pay interest and repay loans granted by the Issuer,

is subject to statutory and tax restrictions, its revenues, available reserves and its financial structure,

which may have an adverse impact on the Issuer’s business, financial condition and operational results.

Legal and regulatory tax changes or changes in the interpretation by the tax authorities

33

The Issuer may be adversely affected by tax changes in Portugal, in the European Union and in other

countries where it develops its activities. The Issuer does not control these tax changes or any changes

in the interpretation of tax laws by any tax authority. Significant legislative changes in Portugal, the

European Union or in countries where the Issuer develops its activities, or difficulties in implementing

or complying with new tax laws and regulations, can have an adverse impact on the Issuer’s business,

financial condition or operational results.

Customer’s credit risk

The Issuer (and the EPS Group in general, including the Guarantors) is exposed to customers’ credit

risk in terms of trade receivables, which may result in a counterparty failing to meet its contractual

obligations as and when the same fall due, with a potential negative impact on the Issuer’s financial

statements.

The Issuer (and the EPS Group in general, including the Guarantors) mitigates its exposure to this risk

by seeking to ensure that its customers have a solid credit profile or adequate financing to meet their

obligations and by negotiating contractual advances for some of the contracts. The credit risk quality

assessment is performed by the Corporate Finance Board in accordance with the following

methodology: if customers hold an independent external credit rating, this rating is used; otherwise,

their credit risk quality is evaluated taking into account their financial situation and past experience,

among other factors. The individual risk limits are determined according to the guidelines defined by

the Board of Directors of the Issuer, which is also responsible for the approval of projects considered

to be of high or significant risk.

Notwithstanding the measures mentioned above and the regular monitoring of the use of credit limits,

the Issuer (and the EPS Group in general, including the Guarantors) cannot ensure, at all times, that its

customers will fulfil their obligations as and when these fall due and any breach of such obligations

may have an adverse impact on the Issuer’s business, financial condition or operational results.

Risk of interruptions in the supply chain

The development by the EPS Group (notably the Guarantors) of their relevant activities and the

successful supply of their product depends on the supply of materials and critical components by third

parties. The timely supply of all those items the Guarantors require to develop their operational

activities and the supply of such items in the number and quality requested by the Guarantors is

essential to ensure that the Guarantors are able to provide their customers with the requested

products.

34

To mitigate the EPS Group’s risks in this respect, a policy of diversifying the relevant supplier base and

respective geographies has been implemented, alongside the EPS Group’s implementation of approval

processes for materials and critical components to the supplier group. On the other hand, the EPS

Group extends the scope of projects to the optimisation of inventory and logistics management.

However, any inefficient inventory management or relevant failure in the supply of materials and

critical components by third parties may lead to delays in the delivery of the relevant supply orders by

the Guarantors, which may in turn expose the Guarantors, and the EPS Group in general, to contractual

penalties and indemnities, as well as the reputational risk that may arise if the EPS Group fails to

comply with agreed delivery deadlines. Any of the factors described above, whether in isolation or in

combination with each other, could have an adverse effect on the Issuer’s business, financial condition

or operational results.

Risk of increased competition

The EPS Group operates in a highly competitive environment. Structural changes in competition in the

markets where the EPS Group operates, such as new market entrants, decline in demand, excess

capacity or the launch of new marketing campaigns, products or services, could have an impact on its

business activity.

The pressure and uncertainty generated by competitors already operating in the market and by those

that may potentially emerge in the future with their own market strategies, could have a negative

impact on the EPS Group’s performance. To mitigate its exposure to this risk, the EPS Group develops

R&D projects that allow for increased efficiency in terms of production and seeks to adapt the product

to customers’ needs in order to enhance its position in the industry and in the markets where the EPS

Group operates.

If the number of competitors were to increase significantly, or if such competitors are able to provide

services that the EPS Group, notably the Guarantors, are unable to provide its customers, this may

have an impact on its volume of customers, prices, market shares or on the EPS Group’s profit margins

and, consequently, may have an adverse impact on the Issuer’s business or on the results of its

activities.

Risk of corruption

The EPS Group is concerned with maintaining its reputation and ethical standards, irrespective of the

markets in which it operates and the relevant contractual counterparties. In this context, the EPS

Group regularly audits its business practices which reveal a higher identified risk and defines

35

contractual procedures and standards for its relationship with partners with a higher identified risk.

Additionally, the EPS Group seeks an effective implementation of its Code of Conduct and carries out

internal and external training courses aimed at complying with the ethical standards set.

However, due to the strong impact that any reputational risk may have, the occurrence of such a risk

may have an adverse effect on the Issuer’s business, financial condition or operational results.

Risks associated with health, safety and environment

Given the range and complexity of the EPS Group’s operations, the potential risks in terms of health,

safety and the environment are considerable. This includes major incidents involving safe processes

and installations, failure to meet approved policies, natural disasters and civil unrest, civil war and

terrorism. The EPS Group, notably the Guarantors, is further exposed to generic operational, health

and personal safety risks and potential criminal activities.

Such incidents may cause injury or loss of life, environmental damages and claims, destruction of

premises or similar events, and, depending on their cause, severity and extent, they may negatively

affect the EPS Group’s reputation and adversely affect the Issuer’s business, financial condition or

operational results.

Risks associated with business continuity and effective crisis management

The EPS Group is subject to business continuity risk, both its own and that of its partners, and may

suffer financial losses resulting from any kind of interruption to its business, namely due to natural

disasters, industrial accidents, power outages, and loss of information technology (IT) systems.

The EPS Group is also subject to the risk of labour disputes and adverse employee relations, which may

lead to strikes or work interruptions. Any such disputes or adverse relations could disrupt its business

operations and adversely affect the Issuer’s business, financial condition and results of operations.

Crisis management plans and the ability to deal with a crisis scenario are essential to deal with

emergencies at every level of the operations of the EPS Group. Additionally, an inability to restore or

replace critical capacity to an agreed level within an agreed time frame could prolong the impact of

any disruption. If the relevant EPS Group company does not respond or if it is perceived not to respond

in an appropriate manner to either an external or internal crisis, the EPS Group’s businesses and

operations could be severely disrupted, with a potential negative effect on the EPS Group’s reputation,

results of operations and financial condition.

36

Risks associated with the difficulty in hiring and retaining qualified personnel

In order to maintain and expand its business, the EPS Group needs to recruit, promote and maintain

its executive management and qualified technical personnel.

The inability to attract or retain sufficient technical and managerial personnel in the future could limit

or delay the EPS Group's development efforts or negatively affect its operations.

Risks associated with certain litigation proceedings

The Issuer and the Guarantors are, have been, and may be from time to time in the future, subject to

a number of judicial, arbitral or administrative claims and disputes in connection with their business

activities. The Issuer cannot ensure that it or that the Guarantors will prevail in any of these disputes

or that they are adequately reserved or insured against any potential losses.

The EPS Group cannot ensure the outcome such disputes or control the effect that they may have on

the EPS Group and its activities. An adverse outcome may negatively impact on the EPS Group’s

reputation and on the Issuer’s results of operations and financial condition.

The most relevant disputes are disclosed in the management report of the financial year ending 31

December 2018, which can be consulted on the Issuer’s website at www.efacec.pt.

Risks associated with technological developments

Innovation can dictate an organisation’s success. The EPS Group operates in a highly innovative

environment, where breakthrough products and services play a key role in measuring success. In order

for the EPS Group to maintain its competitiveness and to expand its business, it must effectively adjust

to technological changes. If the EPS Group is unable to modernise its technologies quickly and

regularly, and to take full advantage of industry trends, it could face increased pressure from

competitors and lose customers in the markets in which it operates. The inability to keep up with the

rapid pace of innovation may have negative impacts on the EPS Group, notably the Guarantors.

If the EPS Group does not proceed, on an ongoing basis, with the supply of cutting-edge products and

services, or if such products and services are not perceived by the relevant customers as innovative

and value-adding, this may have an adverse impact on the Issuer’s business or on the results of its

activities.

http://www.efacec.pt/

37

C - RISKS RELATING TO THE NOTES

Credit ratings may not reflect all risks, are not recommendations to buy or to hold securities and may

be subject to revision, suspension or withdrawal at any time

The agency Axesor assigned the Notes a credit rating of BBB-. The rating of the rating agency is a way

to measure risk. In the market, investors demand higher returns on higher risk and should assess the

likelihood of a downward variation in the credit quality of the Issuer or the Notes (if any is assigned),

which could lead to a loss of liquidity in the Notes purchased in the market and a loss in value. The

rating reflects only the view of the rating agency at the time of the evaluation and takes into

consideration the credit rating of the Issuer, as well as the structural characteristics and other aspects

of the Issue. However, the rating may not reflect the potential impact of risks related to structure,

market and other factors in the valuation of the Notes.

The credit rating can be revised upward or downward, suspended or even withdrawn by the rating

agency. The downward revision, suspension or withdrawal of the credit rating by the rating agencies

could alter the price of the Notes for the perception of the markets and hinder the Issuer’s access to

debt markets and impact on its ability to achieve financing.

Therefore, any change in creditworthiness, or the perception of it, could also adversely affect the

market value of the Notes. Credit ratings of the Notes are not a recommendation.

Notes may not be a suitable investment for all investors

Each potential investor in any Notes must determine the suitability of that investment in light of its

own circumstances. In particular, each potential investor should:

(i) have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the

merits and risks of investing in the Notes and the information contained or incorporated by

reference in this Information Memorandum or in any applicable supplement;

(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its

specific financial situation, an investment in the Notes and the impact such investment will have

on its overall investment portfolio;

(iii) have sufficient financial resources and liquidity to bear all the risks of an investment in the Notes,

including where principal or interest is payable in one or more currencies, or where the currency

for principal or interest payments is different from the potential investor's currency; and

38

(iv) thoroughly understand the terms of the Notes and be familiar with the behaviour of any relevant

indices and financial markets; and

(v) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for

economic, interest rate and other factors that may affect its investment and its ability to bear

the applicable risks.

Some Notes are complex financial instruments and such instruments may be purchased as a way of

reducing risk or enhancing yield with an understood, measured, appropriate addition of risk to their

overall portfolios. A potential investor should not invest in Notes which are complex financial

instruments unless it has the expertise (either alone or with the help of a financial adviser) to evaluate

how the Notes will perform under changing conditions, the resulting effects on the value of such Notes

and the impact this investment will have on the potential investor's overall investment portfolio.

There is no active trading market for the Notes, in which case the ability to sell the Notes may be

limited

The Issuer cannot assure the Noteholders as to the liquidity of any market in the Notes, their ability to

sell the Notes or the prices at which they will be able to sell their Notes. Future trading prices for the

Notes will depend on many factors, including, among other things, prevailing interest rates, the Issuer’s

operating results and the market for similar securities.

Although the Issuer has requested admission (incorporación) to trading of the Notes on MARF, the

Issuer cannot guarantee that the Notes will be or will remain listed. Although no assurance is made as

to the liquidity of the Notes as a result of their admission on MARF, the failure to be approved for

admission or the exclusion (whether or not for an alternative admission to listing on another stock

exchange) of the Notes from the MARF market may have a material effect on a Noteholder’s ability to

resell the Notes, as applicable, in the secondary market.

Payment procedures in respect of the Notes

Payment in respect of the Notes will be (i) credited, according to the procedures and regulations of

Interbolsa, as operator of the Portuguese central securities clearing system (Central de Valores

Mobiliários), to TARGET2 payment current accounts held in the payment system of TARGET2 by

financial intermediaries for the purposes of the Portuguese Securities Code, and which are entitled to

hold control accounts with Interbolsa on behalf of the Noteholders (each, an “Affiliate Member of

Interbolsa”) whose accounts with Interbolsa are credited with such Notes, thereafter (ii) credited by

such Affiliate Members of Interbolsa from the respective above mentioned payment current accounts

39

to the accounts of the Noteholders or of Euroclear or Clearstream, Luxembourg with said Affiliate

Members of Interbolsa, as the case may be.

The Noteholders must rely on the procedures of Interbolsa and of Euroclear or Clearstream,

Luxembourg to receive payment under the Notes and the Issuer, the Paying Agent, the Coordinators,

the Dealer and the Co-Dealer will have no responsibility or liability for Interbolsa’s or of Euroclear’s or

Clearstream, Luxembourg’s records relating to payments made in respect of beneficial interests in the

Notes.

Applicable law and legal changes

Investors’ rights in their capacity as Noteholders shall be governed by Portuguese law, and thus some

aspects may differ from the rights usually recognised to Noteholders in companies governed by legal

systems other than the Portuguese.

It cannot be ensured that legal (including tax) or regulatory changes will not occur, or that any changes

in the interpretation or application of legal standards will not have an adverse effect on the rights and

obligations of the Issuer and/or of the investors in the Notes.

Modification and waiver

The conditions of the Notes contain provisions for the calling of meetings of Noteholders to consider

matters affecting their interests generally. These provisions permit defined majorities to bind all

Noteholders, including Noteholders who did not attend and vote at the relevant meeting and

Noteholders who voted in a manner contrary to the majority.

Compliance with offer and distribution restrictions

Investors are referred to, and are required to inform themselves about and to observe, the offer and

distribution restrictions and the agreements, acknowledgements, representations, warranties and

undertakings detailed in the applicable Terms and Conditions, which investors will be deemed to

accept and make upon submission of a subscription order.

Costs

Investors must inform themselves about any commissions, charges, taxes, expenses or other amounts

that they may have to pay or bear as a result of submitting, or having had submitted on their behalf, a

subscription order and/or as a result of such subscription order being accepted by the Issuer, including

any commissions charged by custodians or intermediaries. Accordingly, investors shall consult in

advance the price lists or other cost agreements in force with any such parties.

40

Investors shall have no rights against the Issuer, the Coordinators, the Dealer or the Co-Dealer in

respect of any costs related to the offer for subscription.

No recommendations

Investors in doubt as to the behaviour to be adopted should seek financial advice, including in relation

to possible tax consequences, from their respective broker, bank, manager, solicitor, accountant or

other independent financial, tax or legal adviser prior to their participation in the offer for subscription.

Neither the Issuer, the Coordinators, the Dealer nor the Co-Dealer, and their respective directors,

employees, affiliates or representatives, is acting for any investors, or will be responsible to any

investors for providing any protections which would be afforded to its clients or for providing advice

in relation to the offer for subscription. Accordingly, neither the Issuer, the Coordinators, the Dealer

nor the Co-Dealer, and their respective directors, employees, affiliates or representatives, makes any

recommendation whatsoever as to whether investors should subscribe for the Notes pursuant to the

offer for subscription.

Interest rate risk and foreign exchange controls

The Issuer will pay the principal and interest on the Notes in Euro (the “Selected Currency”), which

poses certain risks relating to currency conversions if the financial investments of an investor are

primarily denominated in a currency (the “Investor’s Currency”) different from the Selected Currency.

Such risks include the risk that exchange rates may change significantly (including due to the

depreciation of the Selected Currency or revaluation of the Investor’s Currency) and the risk that

authorities with jurisdiction over the Investor’s Currency or the Selected Currency may impose or

modify foreign exchange controls. An appreciation of the Investor’s Currency relative to the Selected

Currency will decrease (i) the equivalent yield of the Notes in the Selected Currency, (ii) the equivalent

principal of the Notes in the Selected Currency, and (iii) the equivalent market value of the Notes in

the Selected Currency.

Governments and monetary authorities of the relevant jurisdictions may impose (as has happened in

the past) rates likely to adversely affect the applicable foreign exchange rate. Accordingly, investors

may receive less interest or principal than expected, or not even receive principal or interest.

The interest attributable to the Notes is calculated with reference to a fixed rate. Accordingly,

investment in the Notes involves the risk that subsequent changes in market interest rates may

adversely affect the value of the Notes.

41

Considerations about the lawfulness of the investment

The activities of certain investors are subject to investment laws and regulations and/or to review or

regulation by certain authorities. Each potential investor should use its own legal advisors to determine

whether and to what extent (i) the Notes are legally permitted investments to them, (ii) the Notes may

be used as collateral for various types of loans, and (iii) other restrictions apply to the

subscription/acquisition of the Notes.

42

SECTION IV

DECLARATION OF LIABILITY

1. Person responsible for the information contained in the Information Memorandum

(a) Mr. Francisco José Meira Silva Nunes, on behalf of the Issuer, as member of the Issuer’s

Board of Directors, is responsible for the entire content of this Information Memorandum;

and

(b) Mr. Francisco José Meira Silva Nunes is expressly authorised to provide any public or

private documents as may be necessary for the proper processing of the Notes issued by

virtue of the resolutions adopted at the meeting of 19 July 2019.

2. Statement of the person responsible for the content of the Information Memorandum

On behalf of the Issuer, Mr. Francisco Nunes hereby declares that the information contained in

this Information Memorandum is, to his knowledge and after acting with reasonable care to

ensure its completeness, in full accordance with the facts and contains no omissions likely to

affect its content.

43

SECTION V

FUNCTIONS OF THE REGISTERED ADVISOR OF MARF

(a) VGM Advisory Partners, S.L.U. is a limited liability company incorporated on 24 July 2013, before

the notary public of Madrid, duly registered in the Commercial Register of Madrid, Volume

31259, Page 114, Sheet M-562699, and in the Registered Advisors Market Register pursuant to

market Operative Instruction 4/2014, 17 February 2014 (Instrucción Operativa 4/2014 de 17 de

febrero de 2014) (“VGM” or the “Registered Advisor”).

VGM is designated as the Registered Advisor of the Issuer and has therefore assumed the

compromise to cooperate with the Issuer on (i) the admission (incorporación) of the Notes

issued; (ii) compliance with any obligations and responsibilities that apply to the Issuer with

respect to its participation in MARF; (iii) the preparation and presentation of financial and

business information required thereunder and (iv) review of the information to ensure that it

complies with the applicable standards. Thus, VGM will collaborate with the Issuer helping it

comply with the obligations and responsibilities to be assumed by it when incorporating the

issue on MARF, acting as specialised interlocutor between MARF and the company and

facilitating its insertion and development in the new trading regime of the securities trading.

VGM shall provide the MARF with the periodic reports required by it and MARF may, in turn,

seek any information deemed necessary in connection with the Registered Advisor’s role (and

obligations as Registered Advisor) and take any measures to check the information provided.

The Issuer must have, at all times, a designated Registered Advisor listed in the “Registered

Advisors Market Register”.

(b) As Registered Advisor, VGM has, with respect to the admission (incorporación) of the Notes to

trading on MARF:

(i) confirmed that the Issuer complies with the requirements set out under the MARF

regulations for admission (incorporación) of the Notes to trading; and

(ii) assisted the Issuer in the preparation of the Information Memorandum, reviewed all

information furnished to the market in connection with the application for admission

(incorporación) of the Notes on MARF, and confirmed that the information contributed

by the Issuer complies, to the best of its knowledge, with the requirements of the

applicable laws and contains no omission likely to confuse potential investors.

(iii) Once the Notes are admitted, VGM will:

44

(1) review the information prepared and sent by the Issuer to MARF periodically or on

an ad hoc basis, and verify that the content meets the requirements and time limits

provided for in the rules;

(2) advise the Issuer on the events that might affect the performance of the obligations

it has assumed to admit the Notes to trading on MARF and on the best way to treat

such events to avoid breaching those obligations;

(3) inform the MARF of any facts that would constitute a breach by the Issuer of its

obligations in the event of a potential material breach by the Issuer which had not

been cured by its advice, and

(4) manage, attend to and answer any queries and requests for information from

MARF in relation to the Issuer’s situation, the evolution of its activity, the

performance of its obligations and such other market data deemed relevant.

(c) To this effect, the Registered Advisor shall perform the following actions:

(i) maintain regular and necessary contact with the Issuer and analyse any exceptional

situations that may occur in the evolution of the market price, trading volume and other

relevant trading indicators of the Notes of the Issuer;

(ii) sign such statements, in general, as may be required under the regulations, as a result of

the admission (incorporación) of the Notes on the MARF and in relation to the information

required from companies listed on said market; and

(iii) forward to the MARF, as soon as possible, information received in response to inquiries

and requests for information that the latter may issue.

(d) Any breach, by the Registered Advisor, of the requirements demanded of it, or of the tasks to

be carried out by it, may lead to the adoption, by the applicable organs of MARF, of any of the

following actions:

(i) The issue of a written warning, leading to the adoption by the Registered Advisor of

corrective measures for non-compliant actions. This action may be taken by the Managing

Director or the Market Supervision Committee;

(ii) suspension of the Registered Advisor, which would result in the Registered Advisor being

banned from being appointed for this role by new issuers. This action does not, however,

affect previous appointments and, therefore, the Registered Advisor in question may

continue to act as such for other issuers; and/or

(iii) exclusion of the entity from the Registered Advisors Registry.

45

Actions (b) and (c) must be agreed upon by the Board of Directors following a report issued by the

Securities Incorporation Commission and after hearing the person concerned. Such actions shall be

notified to the CNMV on the day of their adoption and published on MARF’s website.

46

SECTION VI

INFORMATION ON THE ISSUER, THE GUARANTORS AND THE GROUP

A. Identification data of the Issuer and of the Guarantors

A.1. The Issuer

Legal and commercial name of the Issuer

The legal name of the Issuer is EFACEC Power Solutions, SGPS S.A. and the most frequent commercial

name is EFACEC.

Registration and legal person number of the Issuer

EFACEC is a limited liability company (sociedade aberta de responsabilidade limitada) with head office

at Lugar da Arroteia, 4465-587 – Leça do Balio, Matosinhos, district of Oporto, Portugal, registered

with the Commercial Registry Office under the registration and tax number 513 180 966, and with a

fully subscribed and paid-up share capital in the amount of €308,949,250.00.

Incorporation of the Issuer

EFACEC was incorporated on 14 August 2014 for an unlimited period of time.

Head office, legal form and legislation that governs the Issuer’s activity

EFACEC has its head office at Lugar da Arroteia, 4465-587 – Leça do Balio, located in the parish of

Custóias, Leça do Balio e Guifões, municipality of Matosinhos, district of Oporto, Portugal, and its

telephone number is (+351) 22 956 23 00.

EFACEC is a holding company under the legal form of a limited company, incorporated and operating

under the laws of the Portuguese Republic and, under article 2 of its by-laws, its corporate purpose is

the “management of holdings in other companies as an indirect way of carrying out economic

activities, also being able to provide technical and management services pursuant to law”.

Article 4 of its by-laws further provide that EFACEC may “acquire and dispose of holdings in national

or foreign law companies, with the same or a different corporate purpose to that referred to in the

second article, in companies governed by special laws and in unlimited liability companies” and

“associate with other legal entities, in particular to form new companies, including European limited

liability companies, complementary company groupings, European economic interest groupings,

consortia and joint ventures”.

47

EFACEC is governed by the Portuguese laws applicable to holding companies, particularly by the

Portuguese Commercial Companies Code, the Portuguese Securities Code and Decree-Law no. 495/88,

dated 30 December 1988, and by its by-laws.

As of 31 December 2018, EFACEC’s capital is €308,949,250.00 represented by 61,789,850 ordinary

shares with a nominal value of five euros each, and is fully subscribed and paid-up.

A.2. The Guarantors

EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A.

EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A., a limited liability company incorporated

and validly existing under Portuguese law, with head office at Lugar da Arroteia, 4465-587 – Leça do

Balio, Matosinhos, district of Oporto, Portugal, is registered with the Commercial Registry Office of

Oporto under registration and tax number 504 040 847.

EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A. is a wholly owned subsidiary of the Issuer.


EFACEC Engenharia e Sistemas, S.A., a limited liability company incorporated and validly existing under


district of Oporto Portugal, is registered with the Commercial Registry Office of Maia under registration

and tax number 502 533 447.

EFACEC Engenharia e Sistemas, S.A. is a wholly owned subsidiary of the Issuer.


EFACEC Electric Mobility, S.A., a limited liability company incorporated and validly existing under


district of Oporto Portugal, is registered with the Commercial Registry Office under registration and

tax number 510 893 376.

EFACEC Electric Mobility, S.A. is a wholly owned subsidiary of the Issuer.

B. History and performance of the Group

EFACEC is a Portuguese company with a strong export profile and international presence in over 65

countries. A brand with 70 years of history, made by great people. Its origins go back to 1905, with the

establishment of a new company “A Moderna”, Sociedade de Serração Mecânica. In 1921, “A

Moderna” gives rise to the Electro-Moderna, Lda., a company with operations in the field of electrics

48

(motors, generators, transformers and electric accessories). Electro-Moderna had, at that time, the

necessary skills to support the major future development of what would come to be “EFACEC”.

On 12 August 1948, EFME – Empresa Fabril de Máquinas Eléctricas, SARL was founded. That was the

starting point of the Efacec project and the birth of the Efacec brand. The company’s equity capital

was, at that time, shared by Electro-Moderna (20%), ACEC – Ateliers de Constructions Électriques de

Charleroi (20%) and CUF – Companhia União Fabril (45%). The remaining 15% were distributed among

other shareholders. After several equity capital changes, namely due to the exit of CUF, ACEC became

the majority shareholder. As a result, the name EFACEC – Empresa Fabril de Máquinas Eléctricas, SARL

emerged in 1962, and a period of remarkable growth began that same year.

About 25 years later, in the context of Portugal’s integration in the EEC and the sale, by ACEC, of its

65% stake in EFACEC – Empresa Fabril de Máquinas Eléctricas, SARL, there was another period of strong

growth, namely in the international markets, along with important technological developments in

various fields, which endured until the global financial crisis of the first decade of twenty-first century.

In response to the global economic and financial crisis, Efacec launched a restructuring process, namely

in the international markets structures, as well as a simplification of the company’s portfolio.

Alongside, the company sold some assets and business considered non-core. In 2014, EFACEC Power

Solutions, SGPS S.A. was incorporated to be the new holding company of the Group with a new

business perimeter, reinforcing its core businesses. The constitution of EFACEC in 2014 and the

replacement of EFACEC Capital, SGPS, S.A.’s (currently named MGI Capital, SGPS, S.A.) as the holding

company of the EPS Group was part of this restructuring process aimed at aligning the corporate

structure of the EPS Group with the market segments and target geographies addressed.

In October 2015, Winterfell 2 Limited acquired a majority stake in EFACEC Power Solutions SGPS, S.A.

and such of the EPS Group. EFACEC’s previous shareholders (José de Mello Group and Textil Manuel

Gonçalves) became minority shareholders (organized under MGI Capital, SGPS, S.A.) and a new

management was appointed to the Group.

Currently, facing the future head-on and prepared for new and important challenges, Efacec is

recognised as a prestigious brand and one of the largest industries in the country, based on its

resilience and flexibility but, above all, based on its continuous ability to innovate.

49

C. Main shareholders of the Issuer

As of 31 December 2018, the capital of the Issuer is €308,949,250.00 fully subscribed and paid-up,

represented by 61,789,850 ordinary shares with the nominal value of 5 (five) euros each. These shares

are not admitted to trading.

As of 31 December 2018, the structure of the Issuer’s holdings know to it is the following:

% Capital

Shareholder No. of shares % Voting rights

Winterfell 2 Limited 41,525,275 67.20% 67.20%

MGI Capital, SGPS, S.A. 20,264,575 32.80% 32.80%

Total 61,789,850 100.00% 100.00%

D. Legal structure of the Group

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E. Organizational structure of the Group

F. Industry and activity of the Group

EFACEC activities are focused on energy sectors by developing its activity within three segments,

organized in eight Business Units

a. Products Segment (4 business units legally organized under EFACEC Energia, Máquinas e

Equipamentos, S.A.)

i. Transformers

EFACEC is a worldwide recognized manufacturer of Power Transformers, either of

Shell and Core type, as well as Mobile Substations and Distribution Transformers.

ii. Automation

EFACEC develops and sell energy management systems, distribution dispatch

systems, command & controls systems (SCADA), PV Stations and Storage Solutions

for Utilities, Electrical Power Grids, Transportation, Cities and Industries.

iii. Switchgear

EFACEC is a manufacturer of switchgear, namely of primary and secondary

distribution, compact substations and high and medium voltage switchgear for

Eletrical Power Grids, Electric Distribution Systems and Industry and Infrastructure

Systems.

iv. Service

EFACEC provides vertically integrated services of maintenance, refurbishment and

revamping of its own and third-parties equipment for industrial facilities,

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hydroelectric and thermoelectric power plants, cogeneration, wind farms,

substations and transformer stations.

b. Systems Segment (3 Business Units legally organized under EFACEC Engenharia e Sistemas,

S.A.)

i. Energy

Within this Business Unit EFACEC design and develops complete turnkey solutions

for solar photovoltaic plants (or hybrid), substations, hydro & thermal power

generation plants (either of combined cycle or conventional plants) including the

supply of its own distributed control systems and an integrated offer of

maintenance and technical assistance.

ii. Environment

EFACEC offers integrated solutions from design and planning to implementation,

service and operation of systems for water and wastewater treatment, water

supply, irrigation and solid waste treatment.

iii. Transportation

EFACEC is an EPC turnkey provider for railway, light rails and roadways with

integrated electrical and automation solutions, providing mainly energy, signaling,

fleet management, passengers information, cross-level, tunnel and central

management solutions. The core capabilities of this business unit are also able to

be used and provided for telecom.

c. Electric Mobility (one business unit legally organized under EFACEC Electric Mobility, S.A.)

EFACEC is a very relevant player in the electric mobility market, where it positions

itself as one of the world leaders in rapid and ultra-rapid segment for charging

stations for electric vehicles. It has a full range of charging solutions to Electric

Vehicles (private chargers / public chargers / quick charging / buses charging). It

also provides integration solutions of cars, motorcycles and buses in management

systems for an efficient use of the electric grid infrastructure.

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G. Declaration on the absence of significant changes in the Information Memorandum

(Documento Informativo de Incorporación) of the Issuer

Since publication of the last audited consolidated financial statements as of and for the year ended 31

December 2018, until the date of this Information Memorandum, there has been no material adverse

changes in the prospects of EPS Group.

H. Reasons for the Issue and use of proceeds

The Issuer will use the net proceeds from the issue of the Notes for general corporate purposes and

refinancing part of existing corporate debt, and as a result of the partial repayment of such corporate

debt, the security interests granted to secure such corporate debt will be fully discharged and released.

I. Consolidated Financial information of the Issuer

During 2018, the volume of orders2 achieved by the EPS Group was worth 533.1 million of euros, 7%

higher than the previous year, essentially with the contribution of the Energy Business, Electric

Mobility, Transformers and Service Units. The Management revenues3 of € 433 million remained in

line with the previous year, which resulted from the mixed performance of the eight business units

that make up the EPS Group. The Automation, Equipment and Electric Mobility Units made a positive

contribution, and the latter unit doubled its volume of receipts in comparison with the previous year.

As was set out in the Group’s Strategic Plan, the international market continues to be of fundamental

importance for the business and represents 77% of the orders and 75% of the revenue for 2018. The

European and North American markets are gaining a growing importance, which has had a particular

impact on the Business Units that undertake their activity in these regions. The Middle East is also

beginning to establish itself as a particularly important market.

(€ million) 2017 2018 ∆ ∆%

Orders 496.5 533.1 36.6 7%

Management revenues 431.7 433.2 1.5 0%

Direct costs -348.9 -336.4 12.5 -4%

Gross Margin 82.7 96.8 14.0 17%

Indirect Costs -48.7 -55.6 -6.8 14%

Other income 1.9 0.0 -1.9 n.a.

Management EBITDA4 35.9 41.2 5.3 15%

2 “Orders” refers to the contracts signed with Customers in a specific period, with a clear indication that the projects are to be executed by Efacec. 3 “Revenues” means “Sales and services rendered” and “Production variation”, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017, and “Management revenues” means “Revenues” minus “Non-core activity sales”. 4 “Management EBITDA” means the consolidated net profit of the Issuer before Financial Profits and Income, Financial Losses and Expenses, Income Tax – Deferred, Income Tax- Current, Amortisations and depreciations, Provisions and asset impairments as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017,

53

The Management EBITDA, used to assess the group’s performance and that of each of its Business

Units, is obtained by deducting the direct and indirect costs from the revenue:

• Direct costs include all the cost items allocated to projects or manufactured products (materials,

direct labour, sub-contracted services, general charges and expenses directly related to sales),

operational exchange differences and other necessary costs for the Business Units activity

(quality, logistics, and product development). The gross margin is calculated by the deduction of

direct costs from management revenues, and its average value for 2018 is set at 22.3% in

contrast to the 19.2% records for 2017.

• Indirect costs essentially include structural costs, and encompass the commercial,

administrative and management functions.

The management EBITDA, in contrast to statuary EBITDA, does not include the non-recurring rubrics

(see the section on the comparison of the main indicators are the end of this chapter).

In 2018, the Group’s management EBITDA grew by 14.8%, to € 41.2 million, whereby the Management

EBITDA represented 9.5% of the management revenues, in contrast to 8.3% the previous year. The

major contribution to this growth was provided by the Electric Mobility, Automation and Transport

Units. Despite the maintenance of the revenue level, an increased margin was achieved through the

better execution of projects, which was a common feature across the Business Units, and a change in

performance, which was reflected in the accounts for 2018 with a positive impact of around € 5 million

euros in Statutory EBITDA5.

(€ million) 2017 2018 ∆ ∆%

Management EBITDA 35.9 41.2 5.3 15%

Contract Rescission Expenses -0.8 -2.9 -2.1

Extra-operational Revenues -2.5 -1.0 1.5

Statutory EBITDA 32.7 37.3 4.6 14%

Management Amortisations and Depreciation6s -6.0 -8.8 -2.7

Provisions and asset impairments -6.9 -9.7 -2.8

Net Financial Expenses7 -7.0 -4.0 3.0

excluding “Contract Rescission Expenses” and “Extra-operational revenues”. “Contract Rescission Expenses” includes restructuring costs, namely contract termination expenses and “Extra-operational revenues” includes revenues from MGI Capital SGPS, S.A. group entities and strategic consulting expenses. 5“Statutory EBITDA” means, in respect of any Relevant Period, the Consolidated EBIT before provisions and asset impairments, amortisations and depreciations, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017. 6 “Management Amortisations and Depreciations” means “Amortisations and depreciations”, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017, excluding “PPA Amortisation”. 7“Net Financial Expenses” means “Financial Losses and Expenses” and “Financial Profits and Income”, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017.

54

Management EBT8 12.7 14.8 2.0 16%

PPA Amortisation9 -2.1 -1.3 0.8

Pre-tax Profit 10.7 13.4 2.8 26%

Taxes10 -3.1 0.7 3.8

Consolidated Net Profit 7.5 14.2 6.6 88%

The €2.8 million increase in the value of provisions and asset impairments recorded in 2018 compared

to 2017 arose mainly from required impairments, namely the €1.8 million impairment for the debt of

Corpolec, provisions for guarantee costs for the transformers business unit, and provisions for various

systems unit projects.

The significant improvement of financial results in 2018 resulted primarily from exchange gains

achieved through financial investment in Angolan treasury bonds indexed to the American dollar,

which were undertaken by the subsidiary Efacec Angola, Lda. as a means of protecting against the high

currency devaluation reported in this country. The Net Financial Expenses section also includes an

amount of €0.6 million for the amortisation expenses recorded in the financial year.

The group’s Management EBT increased from €12.7 million in 2017 to €14.8 million in 2018, above all

due to the EBITDA increase (14% for the Statutory EBITDA), and the Pre-tax Profit in 2018 was €13.4

million. The taxes had a positive contribution of €0.7 million on the net Consolidated Net Profit by

reporting €3.9 million in income tax deferred, compared to a cost of €0.4 million in 2017, which

included adjustments of previous years to deferred tax related to the tax benefits of investing €2.3

million. Together, these results allowed us to reach a positive Consolidated Net Profit of €14.2 million,

88% higher than the amount reached in 2017.

At the end of 2018, the group’s consolidated total assets amounted to €730.6 million, the company

total equity was €316.2 million, and the financial autonomy ratio11 was 43%.

(€ million) 2017 2018 ∆ ∆%

TOTAL ASSETS 673.3 730.6 57.3 9%

key items and changes:

Tangible and Intangible Assets 158.6 168.7 10.1 6%

Deferred tax assets 56.0 59.7 3.7 7%

Stocks 29.1 36.9 7.8 27%

Accrued income 85.1 105.3 20.2 24%

8 “Management EBT” means “Pre-tax Profit”, as disclosed in consolidated income statement by nature, excluding “PPA Amortisation”. 9 “PPA Amortisation” means the difference in the “Amortisations and depreciations” relates to the tangible and intangible assets which were revalued when subsidiaries of Efacec Power Solutions, SGPS, S.A. were acquired. 10 “Taxes” means “Income Tax – Deferred” and “Income Tax – Current”, as disclosed in consolidated income statement by nature for the years ended 31 December 2018 and 2017. 11 “Financial autonomy ratio” means the ratio between “Total Equity” and “Total Assets”, as disclosed in consolidated statement of financial position at 31 December 2018 and 2017.

55

Customers 159.5 167.6 8.1 5%

Cash and Cash Equivalents 31.1 38.2 7.0 23%

NON CURRENT AND CURRENT LIABILITIES 327.6 414.4 86.8 26%

key items and changes:

Amounts owed to credit institutions 70.7 94.7 24.1 34%

Suppliers 75.8 112.8 37.0 49%

Creditors and Accrued expenses 42.4 66.0 23.6 56%

Income to be recognised 70.7 53.6 -17.1 -24%

TOTAL EQUITY 345.7 316.2 -29.5 -9%

The table above highlights the most relevant balance sheet items. Tangible and intangible assets

increased by 6%, mainly through investments in development projects. Customers increased slightly

in 2018, by 5%, in contrast to the downward trend reported in recent years, due to the fact that a

significant volume of invoices were produced in the final quarter of the year; overdue customer debt

has continued its downward trend over the course of the year.

The increase from €85.1 million to €105.3 million shown in the Accrued income section arose primarily

from a level of execution of projects which was higher than the invoices produced, particularly in the

Electric Mobility, Switchgear, Automation and Energy Systems business units. The increase of stocks

from €29.1 million to €36.9 million was due to the significant growth of some business units,

particularly Electric Mobility, which required investment in working capital.

The amount reported in the deferred tax assets section includes the tax effect of €44 million reported

by EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A. in 2014, resulting from the sale of assets

held by the subsidiary EFACEC Power Transformers Inc. in the United States. EFACEC Power

Transformers Inc. was liquidated in 2016. This allowed the effective loss recognised in previous years

to be materialised in previous years and the respective tax credit could then be used.

On the liabilities side, the largest fluctuation was reported in the suppliers section which underwent

an increase of 49%, primarily due to the high level of invoicing seen in the final quarter. At the end of

2018, the Creditors and Accrued Expenses section was affected by the decision of the Board of

Directors to refund part of the Additional Paid-in Capital to the shareholders. €11.6 million (out of a

total €24.4 million) was repaid, with the remaining amount (€12.8 million) staying in this section. It is

also worth noting the increase in credits from the state, in both VAT and Corporate Income Tax, and

the increases in expenses with commitments undertaken as multi-annual contracts.

56

In addition, there was an increase in gross financial debt12, due to (i) the partial refund of additional

paid-in capital, (ii) investment in fixed assets and in development projects, and (iii) in the opposite

direction, due to the contribution of €5 million in loans from related entities (shareholder Winterfell

2 Limited).

(€ million) 2017 2018 ∆%

Total Equity at the start of the financial year 309.1 345.7 36.6

Capital increases/ Capital reduction 28.4 -5.3 -33.6

Other equity capital instruments 0.0 -24.4 -24.4 Consolidated Net Profit attributable to Efacec Power Solutions Shareholders 7.5 14.1 6.6

Other changes13 0.7 -13.9 -14.6

Total Equity at the end of the financial year 345.7 316.2 -29.5

There was a capital reduction of €29.5 million, mainly resulting from the following:

a) the repayment of additional paid-in capital to the value of €24.4 million;

b) a €5.3 million reduction of capital, following the acquisition of company shares from the

shareholder MGI Capital, SGPS, S.A.;

c) the positive impact of net income, with the sharp increase in 2018 already analysed above; and

d) the adverse effects of €11.9 million exchange conversion reported in “Other changes”, arising

from the transposition of foreign subsidiary balances, which in 2018 were affected by strong

depreciation of the kwanza and Argentinian peso.

In terms of financing, the net debt balance reported in the Financial Statement on the 31st of

December 2018 and the 31st of December 2017 was as follows:

(€ million) 2017 2018 ∆ ∆%

Bank debt 72.1 95.6 23.5 33%

Cash and Cash Equivalents -31.1 -38.2 -7.0 23%

Net financial debt14 40.9 57.4 16.5 40%

Amortised cost (current and non-current) -1.4 -0.9 0.5 -38%

12 “Gross Financial debt” means current and non-current “Amounts owed to credit institutions”, as disclosed in consolidated statement of financial position at 31 December 2018 and 2017. 13 “Other changes” means "Others" disclosed in Consolidated statement of changes in equity for the years ended 31 December 2018 ad 2017 and Comprehensive Income for the period excluding "Reserves and Accumulated Profit" disclosed in Consolidated statement of changes in equity for the years ended 31 December 2018 ad 2017. 14 “Net financial debt” means bank debt minus “cash and cash equivalents”, as disclosed in consolidated statement of financial position at 31 December 2018 and 2017.

57

Net debt balance15 39.5 56.6 17.0 43%

During 2018, the group increased its bank debt from €72.1 million in 2017 to €95.6 million in 2018. At

the end of the year 2018, the group’s Statement of Financial Position reported a net financial debt of

€57.4 million, representing an increase of €16.5 million compared to 2017. This increase did not exceed

the contractual ratio the group is required to meet.

2017 2018 ∆ ∆%

Starting net financial debt 46.4 40.9 -5.4 -12%

Management EBITDA 35.9 41.2 5.3 15%

Capex16 -15.8 -21.3 -5.5

Changes to Working Capital (1) 10.1 -7.8 -18.0

Other items (2) -11.2 -9.5 1.7

Cash-Flow from operations 19.0 2.6 -16.5 -86%

Financial Charges17 (3) -6.4 -3.5 2.9

Other movements (4) -7.2 -15.6 -8.4

Net financial debt reduction 5.4 -16.5 -21.9

Final net financial debt 40.9 57.4 16.5 40%

Notes: 2018

(1) Working Capital (*) 22.6 Changes to Working Capital, see Balance Sheet

1.0 Extra-operational

-12.8 Additional paid-in capital to be repaid to the Shareholders

-5.3 Receipt of MGI Capital, SGPS, S.A. shares

-2.6 Customer impairment established in 2018

-3.1 Current tax accounting

-7.6 Currency Translation Differences

-7.8

(2) Other items 9.5 Cash-out related to use of provisions

(3) Interest -3.6 Interest and similar expenses paid, see

Statement of Cash Flow

0.5

Interest and similar income received, see

Statement of Cash Flow

-0.3 Other financial losses

-3.5

(4) Other movements -11.6 Additional paid-in capital paid to the Shareholders

5.0 Loans from related entities

-4.2 Restructuring costs

15 “Net debt balance” means current and non-current “Amounts owed to credit institutions” minus “Cash and cash equivalents”, as disclosed in consolidated statement of financial position at 31 December 2018 and 2017. 16 “Capex” means “Tangible Assets – Increases” and “Intangible Assets – Increases”, as disclosed in Note 5 and 6 of 2018 Annual Report, respectively. However, Capex 2017 excludes € 28,4 million, which corresponds a capital increase in kind recorded on 31 July 2017. For more details, see note 5.1. in 2017 Annual report. 17 “Financial charges” means “Interest and similar expenses paid” and “Interest and similar income received”, as disclosed in Consolidated Cash Flow Statements for the financial years ended on 31 December 2018 and 2017, plus other financial losses.

58

-4.7 Primarily exchange differences of net debt

-15.6

(*) The working capital mainly includes the following items: i) customers excluding impairment constitution and reversion of

the year and its advances; ii) accrued income; iii) stock including a stock adjustment; iv) suppliers, excluding non-core balances

and foreign currency translation effect; and v) deferred profits. Non-operational items are not included in the management

report. From a management viewpoint, the group’s consolidated working capital had a negative performance in 2018, with

an operational fluctuation of -€7.8 million. Overall, there was an increase in the main components of the working capital,

including €20.2 million in the area of accrued income and €11.4 million for customers. For the liability components, there was

an increase in the supplier area to the value of €28.2 million.

Maturity of medium and long term bank debt was prolonged until 2022 and the group’s average debt

cost, at the end of 2018, was 3.5% compared to 3.7% in the previous year. The ratio of net

debt/EBITDA, calculated based on the statutory consolidated accounts, was 1.5.

Conciliation of management indicators with statutory financial statements

EPS analyses its performance on a monthly basis, based on the management accounts, from the

perspectives of: i) organisation by business unit and ii) operational result generation. The economic

and financial analysis of consolidated accounts provided here is also based on this dual perspective

and should therefore be analysed in conjunction with the consolidated income statement and

statement of financial position.

With regards to conciliation of these management values with the statutory values, it is important to

note that the group is also involved in various non-core activities, whose development is not

represented in EPS’s regular operational management. These activities refer to specific projects which

are in the process of being closed or discontinued companies which, for formal and legal reasons, could

not be separated from the businesses which constituted them, thus continuing to be part of EPS

consolidation. Despite having a reduced manifestation, they represent part of the difference between

the statutory financial statements and the management statements, thus influencing the group’s

annual accounts. However, the impact of these noncore activities tend to cancel themselves out in the

following years.

Below we present comments, justifications, and respective values for 31 December 2018 which

reconcile the management accounts with the statutory accounts.

59

Indicator Management Accounts

Statutory Accounts

Difference Justification

Revenues 433.2 426.62 -6.7

In its management accounts, the EPS Group uses production undertaken for the record of business volume, given that all of its activity is based on firm contracts and orders with customers, while increases and decreases in ongoing production are merely temporary deviations. The EPS Group also includes some non-core activities, which make a marginal contribution and will be fully discontinued. These sales are not included for management purposes.

-6.9 Production variation.

0.2 Non-core activity sales.

EBITDA 41.2 37.3 -3.9

The management EBITDA shows profits and expenses related to operating activities in the various business areas. Profits and expenses which are extra-operational or related to other activities are shown after the EBITDA. In the statutory accounts, EBITDA = Operating profit + Amortisations and depreciations + Provisions and asset impairments.

-2.9 Contract Recession Expenses (Restructuring costs, namely contract termination expenses).

-0.9

Extra-operational revenues (Revenues from MGI Capital, SGPS, S.A. group entities: € 0.4 million; Strategic Consulting: €1.3 million).

Amortisations and depreciations

-8.8 -10.1 -1.3

The difference in the Amortisations and Depreciations section relates to the tangible and intangible assets which were revalued when subsidiaries of EFACEC Power Solutions, SGPS, S.A. were acquired (PPA Amortisation).

Management EBT vs. Pre-tax Profit

14.8 13.4 -1.3 The difference corresponds to the amortisations reported above (PPA Amortisation).

60

SECTION VII

INDEPENDENT AUDITOR

A. Name and address of the Issuer’s auditors for the period covered by the historical financial information (together with their membership in a professional body)

The Issuer’s statutory auditor and independent auditor is PricewaterhouseCoopers & Associados –

Sociedade de Revisores Oficiais de Contas, Lda., with registered office at Palácio Sottomayor, Rua

Sousa Martins, 1 – 3º, 1069-316 Lisbon, registered with the professional body Ordem dos Revisores

Oficiais de Contas as SROC no. 183 and registered at the CMVM under the no. 20161485, represented

by Joaquim Miguel de Azevedo Barroso, ROC no. 1426.

B. If auditors have resigned, been removed from their duties or have not been re-appointed during the period covered by the historical financial information, indicate the details if material

The Issuer´s auditor has not resigned nor been removed from its duties during the financial years 2018

and 2017. PricewaterhouseCoopers & Associados – Sociedade de Revisores Oficiais de Contas, Lda. has

been designated as the Issuer’s auditor in the year of 2017, for a 3 (three) years period, up until the

end of the year of 2019.

61

SECTION VIII

TERMS AND CONDITIONS OF THE NOTES

PROHIBITION OF SALES TO EEA RETAIL INVESTORS

The Notes are not intended to be offered, sold or otherwise made available to (and should not be

offered, sold or otherwise made available to) any retail investor in the European Economic Area (the

“EEA”). For these purposes, a retail investor means a person who is one (or more) of the following: (a)

a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU of the European

Parliament and of the Council, of 15 May 2014, on markets in financial instruments, and amending

Directive 2002/92/EC and Directive 2011/61/EU (“MiFID II”); (b) a customer within the meaning of

Directive 2002/92/EC, where that customer would not qualify as a professional client as defined in

point (10) of Article 4(1) of MiFID II; or (c) not an eligible counterparties as defined in Directive

2003/71/EC of the European Parliament and of the Council, of 4 November 2003, on the prospectus

to be published when securities are offered to the public or admitted to trading, and amending

Directive 2001/34/EC (as amended, the “Prospectus Directive”).

NO PRIIPS REGULATION KID

No key information document (“KID”), under Regulation (EU) No. 1286/2014 of the European

Parliament and of the Council, of 26 November 2014, on key information documents for packaged

retail and insurance-based investment products (the “PRIIPs Regulation”), has been prepared by the

Issuer and by the Sole Lead Manager.

MIFID II PRODUCT GOVERNANCE / PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET

Solely for the purposes of each manufacturer’s product approval process, the target market

assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes

is eligible counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels

for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any

person subsequently offering, selling or recommending the Notes (a “distributor”) should take into

consideration each manufacturers’ target market assessment; however, a distributor subject to MiFID

II is responsible for undertaking its own target market assessment in respect of the Notes (by either

adopting or refining the manufacturers’ target market assessments) and for determining appropriate

distribution channels.

62

DESCRIPTION OF THE NOTES

The following are the terms and conditions of the Notes.

The notes issued have a nominal value of €58,000,000, with a face value of €100,000, each grouped in

a single class and series, and pay a fixed interest rate of 4.5%, as is regulated in Condition 6 (Interest)

below. The issue of the Notes due 23 July 2024 (the “Notes”, which expression shall, unless otherwise

indicated, include any further notes issued pursuant to Condition 16 (Further issues) and consolidated

and forming a single series with the Notes) of EFACEC Power Solutions, SGPS S.A. (the “Issuer”) was

(save in respect of any such further notes to be issued pursuant to Condition 16 (Further issues))

authorised by a decision of the Issuer’s Board of Directors passed on 19 July 2019. The Notes will be

fully guaranteed by irrevocable guarantee issued by EFACEC Energia – Máquinas e Equipamentos

Eléctricos, S.A., EFACEC Engenharia e Sistemas, S.A. and EFACEC Electric Mobility, S.A. pursuant to the

guarantee described in Condition 10 (Guarantors: personal guarantee).

The Notes have the benefit of a paying agency agreement dated 19 July 2019, as amended or

supplemented from time to time (the “Paying Agency Agreement”), between the Issuer and Banco

Comercial Português, S.A. as paying agent (the “Paying Agent”, which expression includes any paying

agent appointed from time to time in connection with the Notes). Bondholders, S.L. is appointed as

the common representative of the Noteholders (the “Common Representative”, which expression

shall include any successor as common representative).

Any reference to “Noteholders” shall mean the persons in whose name the Notes are registered in the

individual securities account held with an Affiliate Member of Interbolsa (as defined below) in

accordance with Portuguese law and the relevant Interbolsa procedures and, for the purposes of

Condition 11 (Taxation), the effective beneficiary of the income attributable thereto.

1. FORM, DENOMINATION, PRICE AND STATUS

1.1. Form and Denomination

The Notes are issued in dematerialised book-entry form (“forma escritural”) and in the nominal

value of €58,000,000 in denomination of €100,000 each.

The Notes are “nominativas” which means that Interbolsa may, at the Issuer’s request, ask the

Affiliate Members of Interbolsa for information regarding the identity of the holders of the Notes

and transmit such information to the Issuer.

The Notes will be registered by, and held through, Interbolsa as management entity of the CVM

(Central de Valores Mobiliários).

63

1.2. Status of the Notes

The Notes are direct, senior, unconditional, unsecured (subject to the provisions of Condition

4.4 (Negative Pledge)) and unsubordinated obligations of the Issuer, guaranteed by the

Guarantors. The Noteholders’ rights against the Issuer, arising from the Issue, will have at least

the same priority in terms of ranking, preferences or privileges, without any preference among

themselves (and save for certain obligations required to be preferred by law), as the rights

arising from the senior debt of other present or future creditors of the Issuer, and a higher

priority in ranking, preferences or privileges than the rights arising from the subordinated debt

of other present or future creditors of the Issuer.

1.3. Price of the Notes: 100%

1.4. ISIN Code: Interbolsa – Sociedade Gestora de Sistemas de Liquidação e de Sistemas

Centralizados de Valores Mobiliários, S.A. has, as management entity of the CVM, assigned the

following ISIN to identify the Notes: PTEFWAOM0001.

1.5. Name of the Issue: EFACEC Fixed Rate Notes 2019-2024

2. REGISTER, TITLE AND TRANSFERS

2.1. Registration

The Notes will be registered with Interbolsa, as management entity of the CVM. Each

Noteholder's (as defined below) title to the corresponding principal amount of the Notes will be

evidenced by book-entry in individual securities accounts held with the relevant Affiliate

Member of Interbolsa, in accordance with the Portuguese Securities Code and the regulations

issued by, or otherwise applicable to, Interbolsa. Noteholders who do not have, directly or

indirectly through their custodians, a participating account with Interbolsa may participate in

the Notes through bridge accounts maintained by each of Euroclear Bank S.A./N.V. and

Clearstream Banking, société anonyme, Luxembourg.

2.2. Title

Title to the Notes will be evidenced by book-entries in individual securities accounts held with

the relevant Affiliate Member of Interbolsa, in accordance with the Portuguese Securities Code

and the regulations issued by, or otherwise applicable to, Interbolsa. Title to the Notes held

through Interbolsa is subject to compliance with all applicable rules, restrictions and

requirements of Interbolsa and under Portuguese law.

64

No physical document of title will be issued in respect of the Notes held through Interbolsa.

Each person shown in the individual securities accounts of an Affiliate Member of Interbolsa as

having an interest in the Notes (each, a “Holder”) shall (except as otherwise required by law) be

deemed, for all legal purposes, as the holder of the principal amount of the Notes recorded

therein (each, a “Noteholder”).

One or more certificates in relation to the Notes (each, a “Certificate”) attesting to the relevant

Holder's holding of the Notes in the relevant registry will be delivered by the relevant Affiliate

Member of Interbolsa, or, where the Holder is itself an Affiliate Member of Interbolsa, by

Interbolsa (in each case, pursuant to article 78 of the Portuguese Securities Code and in

accordance with the procedures of the relevant Affiliate Member of Interbolsa or, as the case

may be, of Interbolsa), to such Holder upon such Holder’s request.

The Issuer and the Paying Agent may (to the fullest extent permitted by the applicable laws)

deem and treat the person or entity registered in each individual securities account of an

Affiliate Member of Interbolsa as the holder of any Note and its absolute owner for all purposes.

Proof of such registration is made by means of a Certificate.

2.3. Transfer of Notes

The Notes are issued without any restrictions on their transferability.

Consequently, the Notes may be transferred and title to the Notes may pass (subject to

Portuguese law and to compliance with all applicable rules, restrictions and requirements of

Interbolsa or, as the case may be, of the relevant Affiliate Member of Interbolsa) upon

registration in the relevant individual securities accounts held with an Affiliate Member of

Interbolsa and/or Interbolsa itself, as applicable. Each Holder will be treated (except as

otherwise required by Portuguese law) as the legitimate owner of the relevant Notes for all

purposes (whether or not it is overdue and regardless of any notice of ownership, trust, or any

interest or annotation of, or the theft or loss of the Certificate issued in respect of it) and no

person will be liable for so treating the Holder.

3. DEFINITIONS

In these Conditions the following expressions have the following meanings:

“Affiliate Member of Interbolsa” means any authorised financial intermediary for the purposes

of the Portuguese Securities Code, and which are entitled to hold control accounts with

Interbolsa on behalf of Noteholders and includes any depository banks appointed by Euroclear

65

and Clearstream, Luxembourg, for the purposes of holding accounts on behalf of Euroclear and

Clearstream, Luxembourg;

“Business Day” means a day which is both (i) a day on which commercial banks and foreign

exchange markets settle payments and are open for general business (including dealing in

foreign exchange and foreign currency deposits) in Lisbon and in Madrid; and (ii) a Target

Settlement Day;

“Change of Control” means the event by which any person or group of persons acting in concert

gains control over the Issuer by means of acquiring shares that represent more than 50% of the

voting rights and/or being attributed with more than 50% of the voting rights and/or having the

power to appoint the majority of the members of its board of directors;

“Clearstream, Luxembourg” means Clearstream Banking société anonyme, Luxembourg;

“CMVM” means the Comissão do Mercado de Valores Mobiliários, the Portuguese Securities

Market Commission;

“Common Representative” means Bondholders, S.L. or any successor thereof;

“Consolidated Cash and Equivalents” means, in respect of the Issuer and its Subsidiaries, at any

time, the aggregate of the following:

(a) cash at bank and at hand;

(b) time deposits;

(c) securities, which are not convertible into any other form of security, issued, or

unconditionally guaranteed, by the government of any Specified Sovereign or issued by

any agency thereof and guaranteed or backed by the full faith and credit of the

government of any Specified Sovereign, in each case maturing within one (1) year of the

date of acquisition;

(d) commercial paper issued by any corporation organised under the laws of a Specified

Sovereign maturing no more than one (1) year from the date of acquisition thereof and,

at the time of acquisition which is not convertible into any other form of security and is

not issued or guaranteed by the Issuer and its Subsidiaries; and

(e) certificates of deposit or bankers’ acceptances issued by any commercial bank, other than

those referred to in paragraph (c) above, organised under the laws of a Specified

Sovereign and maturing within one (1) year from the date of acquisition thereof;

66

“Consolidated EBIT” means, in respect of the Relevant Period, the consolidated operating profit

in respect of the Group;

“Consolidated EBITDA” means, in respect of any Relevant Period, the Consolidated EBIT before

provisions, depreciation and amortisation;

“Consolidated Net Debt” means, at any time, the Consolidated Total Debt less Consolidated

Cash and Equivalents;

“Consolidated Total Debt” means, in respect of the Group but excluding any intercompany

loans, shareholders loans, or any other form of indebtedness between companies within the

Group, at any time, without double counting, the aggregate of the following:

(a) moneys borrowed;

(b) any amount raised pursuant to any note sale facility or the issue of bonds, notes,

debentures or any similar instrument;

(c) receivables sold or discounted (other than any receivables sold on a non-recourse basis);

(d) any amount arising from any deferred payment agreement or any forward sale or

purchase agreement, when arranged primarily as a method for raising finance or financing

the acquisition of an asset; and

(e) the amount of any liability in respect of any guarantee or indemnity for any of the items

referred to in paragraphs (a) to (d) above,

excluding the lease of right-of-use assets in accordance with IFRS16;

“Coordinators” means Beka Finance, Sociedad de Valores, S.A. and Optimal Investments, S.A.;

“Co-Dealer” means Banco Finantia, S.A.;

“CVM” means the Central de Valores Mobiliários, the Portuguese central securities clearing

system managed by Interbolsa;

“Dealer” means Beka Finance, Sociedad de Valores, S.A.;

“EBITDA” means the consolidated profit of the Issuer before interest, taxes, depreciations,

provisions and other non-operating expenses and incomes for any 12 (twelve) month period

ending on the last day of the audited financial statements for each financial year;

“Euroclear” means Euroclear Bank SA/NV;

67

“Event of Default” means any of the events listed in Condition 12 (Events of Default);

“Extraordinary Resolution” means a resolution passed at a meeting of Noteholders in respect

of any of the following matters: (i) change in any date fixed for payment of principal or interest

in respect of the Notes, reduction of the amount of principal or interest due on any date in

respect of the Notes, or variation in the method of calculating the amount of any payment in

respect of the Notes on redemption or maturity; (ii) change in the currency in which amounts

due in respect of the Notes are payable; (iii) approval of the modification or abrogation of any

of the provisions of these Conditions; (iv) approval of any amendment to this definition; (v)

approval of any modification or abrogation of any provisions of any Guarantee or the

substitution of any Guarantor; and (vi) approval of any other matter in respect of which these

Conditions require an Extraordinary Resolution to be passed;

“First Interest Payment Date” means 23 July 2020, provided that if it falls on a date which is not

a Business Day then the relevant payment will be made on the following Business Day;

“Group” means the Issuer and its Subsidiaries;

“Guarantee” means the irrevocable guarantee granted by each of the Guarantors in relation to

the Notes, as foreseen in Condition 10 (Guarantors: Personal Guarantee);

“Guarantors” means each of EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A.,

EFACEC Engenharia e Sistemas, S.A. and EFACEC Electric Mobility, S.A.

“Indebtedness for Borrowed Money” means (i) any indebtedness (whether being principal,

premium interest or any other amounts) for or in respect of notes, bonds, debentures,

debenture stock, loan stock or other securities; or (ii) any borrowed money, in each case other

than Intra-Group Indebtedness and shareholder’s loans;

“Interbolsa” means Interbolsa - Sociedade Gestora de Sistemas de Liquidação e de Sistemas

Centralizados de Valores Mobiliários, S.A., as management entity of the CVM;

“Interest Payment Date” means the First Interest Payment Date and the date that falls every 12

(twelve) months after the First Interest Payment Date (up to and including the Maturity Date),

provided that if an Interest Payment Date falls on a date which is not a Business Day then the

relevant payment will be made on the following Business Day;

“Interest Period” means each period beginning on (and including) the Issue Date or any Interest

Payment Date and ending on (but excluding) the First Interest Payment Date or the next Interest

Payment Date, as the case may be;

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“Interest Rate” means the rate of interest applicable to the Notes for each Interest Period, as

determined pursuant to Condition 6 (Interest);

“Intra-Group Indebtedness” means money borrowed by one entity within the Group from

another entity within the Group;

“Issue Date” means 23 July 2019;

“MARF” means the Spanish Alternative Fixed-Income Market (Mercado Alternativo de Renta

Fija);

“Material Assets” means, with respect to any date, the real estate assets of the Issuer and its

Material Subsidiaries;

“Material Subsidiary” means any Subsidiary whose EBITDA, according to the latest audited

annual accounts approved by the general meeting, represents at least 10 per cent. of the

consolidated EBITDA of the Issuer (according to the latest audited consolidated annual accounts

approved by the general meeting);

“Material Subsidiary Sale” means the sale of more than 50 per cent. of the shares of any

Material Subsidiary;

“Maturity Date” means the Interest Payment Date falling on 23 July 2024;

“Net Debt To EBITDA Ratio” means, on any date, the ratio of (i) Consolidated Net Debt to (ii)

Consolidated EBITDA;

“Noteholder” means each person shown in the individual securities accounts of an Affiliate

Member of Interbolsa as having an interest in the Notes;

“Paying Agency Agreement” means the agreement entered into by the Issuer and the Paying

Agent, and dated on or about the Issue Date;

“Portuguese Commercial Companies Code” means Decree-Law no. 262/86, of 2 September, as

amended from time to time;

“Paying Agent” means Banco Comercial Português, S.A.;

“Portuguese Securities Code” means Decree-Law no. 486/99, of 13 November, as amended

from time to time;

“Principal Amount Outstanding” means, on any day, (i) in relation to a Note, the principal

amount of that Note upon issue; and (ii) in relation to the Notes outstanding at any time, the

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aggregate amount of (i) with respect to all Notes outstanding;

“Relevant Period” means a period of 12 (twelve) months ending on the last day of a financial

year, as relevant;

“Security Interest” means any mortgage, charge, pledge, lien or other security interest

(“garantia real”), including, without limitation, anything analogous to any of the foregoing under

the laws of any jurisdiction, created upon the entirety or any part of the Issuer’s undertakings

or assets, present or future, which represent more than 25 (twenty-five) per cent. of its

consolidated net assets, except:

(i) security existing as at the date hereof and any that is or will be created to secure

obligations of the Issuer arising in connection with the Notes;

(ii) security created with the prior consent of the Noteholders, granted through an

Extraordinary Resolution of Noteholders;

(iii) security created upon assets to be acquired by the Issuer or for its benefit, to the extent

that (i) the relevant acquisition does not correspond to a mere substitution of assets, it

being understood that the investment in assets forming part of the real estate of the

Issuer, but which are obsolete or deteriorated, will not be deemed a mere substitution of

assets, and (ii) the security is created to secure the payment of the relevant price or is

otherwise associated with any credit extended for such purpose; and

(iv) Security Interest securing any indebtedness incurred in relation to any asset for the

purpose of financing the whole or any part of the acquisition, creation, construction,

improvement or development of such asset, where the financial institutions to whom

such indebtedness is owed have recourse solely to the applicable project borrower and/or

such asset and/or the shares held in such project borrower and any similar transaction in

nature.

To this effect, consolidated net assets (“ativo líquido consolidado”) means the total assets as

evidenced by the consolidated financial position statement (“demonstração da posição

financeira consolidada”);

“Specified Denomination” has the meaning given to that term in Condition 1 (Form,

Denomination, Price and Status) above;

“Subsidiary” means any entity that, from time to time, the Issuer (i) owns, directly or indirectly,

more than 50 (fifty) per cent. of its share capital or similar rights of ownership; or (ii) owns or is

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able to exercise, directly or indirectly, more than 50 (fifty) per cent. of the voting rights; or (iii)

has the right to appoint the majority of the members of its Board of Directors; and, in each case,

when such entity is within the accounting consolidation perimeter of the Issuer in accordance

with the accounting principles and rules approved by the European Union;

“Dealer Agreement” means the agreement entered into by the Issuer, the Coordinators, the

Dealer and the Co-Dealer, dated on or about the Issue Date;

“TARGET Settlement Day” means any day on which the Trans-European Automated Real-Time

Gross Settlement Express Transfer (TARGET2) System is open; and

“Total Assets” means the sum of the current and non-current assets as described under Section

VI (Consolidated Financial information of the Issuer).

4. COVENANTS AND UNDERTAKINGS

4.1. Issuer General Obligation

So long as any Note remains outstanding, the Issuer shall comply, at all times, with the legal

regulations and contractual obligations that apply to it in every jurisdiction, and with all payment

obligations regarding the payment of principal and interest on the Notes.

4.2. Authorisations

The Issuer has obtained and shall comply with the terms of, and do all that is necessary to

maintain in full force and effect, any authorisations, approvals, licenses, resolutions,

exemptions, notarizations, registrations and consents required pursuant to Portuguese law to

enable it to lawfully enter into and perform its obligations under the Terms and Conditions, the

Notes and the Paying Agency Agreement, and to ensure the legality, validity, enforceability or

admissibility in evidence in the Republic of Portugal of the Terms and Conditions, and/or the

Notes.

4.3. Trading of the Notes on the multilateral trading facility of MARF

So long as the Notes remain outstanding, the Issuer shall perform each and every action

available to it to ensure the continued trading of the Notes on MARF or on any other multilateral

trading facility as the Issuer and the Noteholders may agree from time to time.

4.4. Negative pledge

So long as the Notes remain outstanding, the Issuer shall not create or permit to subsist any

Security Interest upon their Material Assets to secure any Indebtedness without at the same

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time, or prior thereto, (a) securing the Notes through the creation of equivalent Security Interest

in favour of the Noteholders or (b) providing such other security for the Notes as may be

approved by an Extraordinary Resolution of the Noteholders.

4.5. Pari Passu Ranking

Without prejudice to the guarantee provided by the Guarantors with respect to the Notes, the

Issuer shall ensure that the Notes constitute direct, unconditional, unsecured and

unsubordinated obligations of the Issuer and will rank pari passu among themselves and at least

pari passu in right of payment with all other present and future unsecured obligations of the

Issuer subject to any laws affecting the rights of creditors generally.

4.6. Financial Covenants

So long as any Note remains outstanding, the Issuer must ensure that, in respect to each

Relevant Period, its Net Debt To EBITDA Ratio is equal to, or below, 2,75x.

4.7. Disposal of assets

So long as any Note remains outstanding, the Issuer will not, and will not cause or permit any of

its Material Subsidiaries to, sell or otherwise transfer all or a substantial part of its assets if such

transaction would result in a disposal exceeding 10 (ten) per cent. of the Total Assets.

Notwithstanding the above, any sale or transfer of assets by the Issuer or by its Material

Subsidiaries shall be carried out (i) in the ordinary course of business or (ii) on an arm’s length

basis.

4.8. Sale of Material Subsidiaries

So long as any Note remains outstanding, the Issuer undertakes not to carry out a Material

Subsidiary Sale.

5. CHANGE OF CONTROL

If a Change of Control occurs, then the Issuer shall, without undue delay and after becoming

aware thereof, give notice of the Change of Control (a “Put Event Notice”) to the Noteholders

in accordance with Condition 17 (Notices), specifying the nature of the Change of Control.

If a Change of Control (which is not considered an Event of Default) occurs, each Noteholder

may, having given not less than 15 (fifteen) nor more than 30 (thirty) days’ notice as from the

date on which the Change of Control has been notified by the Issuer to the Noteholders in

accordance with Condition 17 or, in the absence of such notice, as from the date on which the

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relevant Noteholder becomes aware of the Change of Control, shall have the option to require

the Issuer to redeem or, at the Issuer’s option, purchase (or procure the purchase of), in whole

or in part, all of the Notes then outstanding held by such Noteholder at 100 per cent. of their

nominal amount on the 15th (fifteenth) day as from the date of delivery of the relevant notice,

with interest accrued to (but excluding) the relevant redemption date. (the “Put Option”).

To exercise the right to require redemption of the Notes under this Condition 5, the relevant

Noteholder must deliver, at the specified office of the Portuguese Paying Agent at any time

during normal business hours, a duly completed and signed notice of exercise in the form

obtainable from any specified office of the Portuguese Paying Agent and attached as a schedule

to the Paying Agency Agreement (a “Put Notice”). The relevant Noteholder shall

specify/complete/provide such information as required in the form of put notice as attached to

the Paying Agency Agreement, including a certificate of ownership and blocking issued by the

relevant Affiliate Member of Interbolsa through which the Notes are held. Any Put Notice given

by a Noteholder pursuant to this paragraph shall be irrevocable.

To exercise the Put Option, a Noteholder must, within the Put Period, block the relevant Note(s),

or instruct CVM or its Affiliate Member of Interbolsa to block such Note(s), and deposit a duly

signed and completed notice of exercise, in the then current form, obtainable from the specified

office of the Paying Agent and attached as a schedule to the Paying Agency Agreement (a “Put

Notice”) and in which the Noteholder must specify a bank account to which payment is to be

made under this Condition 5 (Change of Control), at the specified office of the Paying Agent,

during normal business hours (on any business day) in the city of the specified office of the

Paying Agent.

The Issuer shall redeem or, at its option, purchase (or procure the purchase of) the relevant

Note(s) on the date (the “Put Date”) falling seven days after the expiration of the Put Period,

unless such Notes are previously redeemed or purchased and cancelled. A Put Notice, once

given, shall be irrevocable.

6. INTEREST

6.1. Interest Payment Dates. Interest period

The Notes bear interest from and including 23 July 2019 (the “Issue Date”) at the rate

established in Condition 6.2 (Interest Rate) below, payable annually in arrears on 23 July of each

year (each, an “Interest Payment Date”), commencing with the Interest Payment Date falling

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on 23 July 2020 and ending on 23 July 2024 (the “Maturity Date”), subject as provided in

Condition 9 (Payments). For the sake of clarity, the First Interest Payment Date will be 23 July

2020 and the last Interest Payment Date will be 23 July 2024.

For the purposes of calculating the applicable interest, the time between the Issue Date and the

Maturity Date of the issue will be deemed to be divided into successive interest periods (each

an “Interest Period”), with a duration adjusted as follows:

(a) Interest Periods will have a term of twelve months;

(b) The first Interest Period will start on 23 July 2019;

(c) At the end of each Interest Period a new Interest Period shall begin;

(d) The computation of each Interest Period takes into account the preceding Interest

Payment Date (or, if none, the Issue Date) included, but excluding the next Interest

Payment Date;

(e) For computation of the Interest Period, if the last day thereof is not a Business Day, the

end of the relevant Interest Period shall be deemed to fall on the very next Business Day;

(f) Each Note will cease to bear interest, where such Note is being redeemed or repaid

pursuant to Condition 8 (Redemption and Purchase) or Condition 12 (Events of Default),

from the due date for redemption thereof unless, upon due presentation thereof,

payment of the principal amount of the Notes is improperly withheld or refused, in which

event interest will continue to accrue at such rate (both before and after judgment) until

whichever is the earlier of (i) the day on which all sums due in respect of such Note up to

that day are received by or on behalf of the relevant Holder, and (ii) the day falling seven

(7) days after the Paying Agent has notified Noteholders of the receipt of all sums due in

respect of all the Notes up to that seventh day (except to the extent that there is any

failure in the subsequent payment to the relevant Holders under these Conditions).

If interest is to be calculated in respect of a period which is equal to or shorter than an Interest

Period, it shall be calculated by applying the corresponding interest rate established in Condition

6.2 (Interest Rate) below to the Specified Denomination, multiplying the product by the relevant

Day Count Fraction and rounding the resulting figure to the nearest cent (half a cent being

rounded upwards), where:

“Day Count Fraction” means, in respect of any period, the number of days in the relevant period,

from and including the date from which interest begins to accrue to but excluding the date on

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which it falls due, divided by the number of days in the Regular Period in which the relevant

period falls; and

“Regular Period” means each period from (and including) the Issue Date or any Interest Payment

Date to (but excluding) the next Interest Payment Date.

In accordance with the above, interest on the Notes will accrue daily on an Actual/Actual ICMA

basis.

6.2. Interest rate

The interest rate applicable to the Notes shall be a fixed rate equal to 4.5% per annum (the

“Fixed Interest Rate”).

6.3. Default Interest

Interest on overdue principal and interest on the Notes, if any, will accrue from the due date up

to the date of actual payment at a rate of 1 (one) per cent. higher than the interest rate then

applicable to the Notes.

7. PLACEMENT OF THE NOTES

The Issue of the Notes was subject to private placement among professional clients and eligible

counterparties by the Dealer, which signed a placement contract with the Issuer.

Immediately after the close of the placement period, the Dealer notified the Issuer of the

amount of the Notes placed by them, so that the Issuer could request the registration of the

Notes in the register of Interbolsa.

Neither the Dealer nor any other entity assumed underwriting commitments with the Issue.

8. REDEMPTION AND PURCHASE

8.1. Final redemption

Unless previously purchased and cancelled or redeemed as provided herein, the Notes will be

redeemed at their principal amount on the Maturity Date. The Notes may not be redeemed at

the option of the Issuer other than in accordance with this Condition 8 (Redemption and

Purchase).

8.2. No other redemption

The Issuer shall not be entitled to redeem the Notes other than as provided in Condition 8.1

(Final redemption), except in accordance with Condition 8.3 (Purchase) below.

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8.3. Purchase

Subject to the applicable laws and regulations in force from time to time, the Issuer may, at any

time, purchase Notes in the secondary market or otherwise at any price.

Subject to the applicable laws and regulations in force from time to time, such Notes may be

held, re-sold or, at the option of the relevant purchaser, cancelled and, while held by or on behalf

of the Issuer, the Notes shall not entitle the holder to vote at any meetings of Noteholders, and

shall not be deemed to be outstanding for the purposes of calculating quorums at meetings of

the Noteholders or for the purposes of Condition 15 (Meetings of Noteholders).

8.4 Cancellation

All Notes redeemed will forthwith be cancelled in accordance with Interbolsa’s regulations. All

Notes so cancelled and any Notes purchased and cancelled pursuant to Condition 8.3 (Purchase)

above shall be cancelled by Interbolsa and cannot be held, reissued or resold.

8.5 Notice of redemption

All Notes in respect of which any notice of redemption is given under this Condition shall be

redeemed on the date specified in such notice, in accordance with this Condition.

9. PAYMENTS

9.1 Principal and interest

Payment in respect of the Notes will be (i) credited, according to the procedures and regulations

of Interbolsa, as operator of the Portuguese central securities clearing system (Central de

Valores Mobiliários), to TARGET2 payment current accounts held in the payment system of

TARGET2 by financial intermediaries for the purposes of the Portuguese Securities Code, and

which are entitled to hold control accounts with Interbolsa on behalf of holders of the Notes

(each, an “Affiliate Member of Interbolsa”) whose accounts with Interbolsa are credited with

such Notes, thereafter (ii) credited by such Affiliate Members of Interbolsa from the respective

above mentioned payment current accounts to the accounts of the Noteholders or of Euroclear

or Clearstream, Luxembourg with said Affiliate Members of Interbolsa, as the case may be .

All payments to be made by the Issuer in connection with the Notes will be net and will therefore

be made free of any deductions, set offs or counterclaims.

9.2 Notification of non-payment

If the Issuer determines that it will not be able to pay the full amount of principal and/or interest

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in respect of the Notes on the relevant due date, the Issuer will, in accordance with Condition

17 (Notices), promptly give notice to the Noteholders of its inability to make such payment.

9.3 Notification of late payment

If the Issuer expects to pay the full amount in respect of the Notes on a date later than the date

on which such payments are due, the Issuer will, in accordance with Condition 17 (Notices), give

notice of such late payment to the Noteholders and MARF.

9.4 Payments subject to Applicable Laws

Payments in respect of principal and interest on the Notes are subject, in all cases, to any fiscal

or other laws and regulations applicable in the place of payment, but without prejudice to the

provisions of these Conditions.

9.5 Payments on Business Days

Where payment is to be made by transfer to a euro account (or other account to which euros

may be credited or transferred), payment instructions (for value the due date, or, if the due date

is not a Business Day, for value the next succeeding Business Day) will be initiated on the due

date for payment. A Holder of a Note shall not be entitled to any interest or other payment in

respect of any delay in payment resulting from the due date for a payment not being a Business

Day.

10. GUARANTORS: PERSONAL GUARANTEE

Without prejudice to the universal liability of the Issuer, the payment of principal and interest

in respect of the Notes outstanding from time to time is and will be unconditionally and

irrevocably guaranteed by a personal guarantee (the “Guarantee”) granted by the Guarantors.

The obligations guaranteed by the Guarantee shall be all current and future obligations due,

payable or incurred at any time by the Issuer against the Noteholders, either jointly or

separately, and as principal or guarantee or in any other capacity.

The intent and purpose of the Guarantee is to ensure that the holders of the Notes, under all

circumstances and regardless of the factual or legal circumstances, motives or considerations by

reason of which the Issuer may fail to effect payment, shall receive the amounts payable on the

due dates provided for in these Terms and Conditions.

The obligations of the Guarantors under the Guarantee constitute direct, unconditional,

irrevocable and unsecured obligations of the relevant Guarantor and rank, and will rank, at least

77

pari passu among themselves and with all other outstanding unsecured and unsubordinated

obligations of the Guarantor, present and future.

The main features of each of the Guarantors are described below:

EFACEC Energia – Máquinas e Equipamentos Eléctricos, S.A.

(a) Corporate domicile: Lugar da Arroteia, 4465-587 – Leça do Balio, parish of Custóias, Leça

do Balio e Guifões, municipality of Matosinhos, district of Oporto, Portugal;

(b) Corporate purpose: 1. Exercise of industry, trade, installation, repair and maintenance of

electrical and mechanical material, namely those destined to energy production and

distribution; 2. Study, development, design, project, production, trade, installation and

maintenance of systems, eletronic, electric and electromechanical equipment and

installations, telecommunications and software, for various industrial areas and services;

3. Provision of management, command and control systems of electric networks and

industrial premisses; 4. Development, production and trade of eletronic circuits and

boards; 5. The company is also dedicated to the provision of vocational training services;

(c) Registration details: a limited liability company incorporated and validly existing under

Portuguese law, with head office at Lugar da Arroteia, 4465-587 – Leça do Balio,

Matosinhos, district of Oporto, Portugal, is registered with the Commercial Registry Office

of Oporto under registration and tax number 504 040 847.


(a) Corporate domicile: Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-605 – Maia,

parish of Moreira, municipality of Maia, district of Oporto, Portugal;

(b) Corporate purpose: The company's object consists: a) in the study, development, design,

project, production, trade, installation and maintenance of equipment and electronic,

electrical and electromechanical systems, of telecommunications and software, for

several industrial sectors and of services, in execution of public and private works; b) in

activity on engineering and civil construction, c) in supply of management systems,

command and control of electrical power grids and industrial premisses; d) in the

production and trade of automatisation systems, robotisation and automatic storage; e)

carrying out installations of air-conditioning, gas distribution networks, communication

networks, dust removal, networks and water treatment facilities and sewage and

industrial waste waters and other anti-pollution systems, including the production of

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equipments needed for the purpose; f) in provision of services of exploitation of sewerage

service systems;


Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-

605 – Maia, district of Oporto Portugal, is registered with the Commercial Registry Office

of Maia under registration and tax number 502 533 447.


(a) Corporate domicile: Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-605 – Maia,

parish of Moreira, municipality of Maia, district of Oporto, Portugal;

(b) Corporate purpose: Development, project, production, trade, installation and

maintenance of equipment and power electronics systems for various industrial sectors

and services;


Portuguese law, with head office at Rua Engenheiro Fernando Ulrich, Guardeiras, 4470-

605 – Maia, district of Oporto Portugal, is registered with the Commercial Registry Office,

entity with all documents deposit in electronic format, under registration and tax number

502 533 447.

11. TAXATION

11.1. Payments of Interest without Withholding or Deduction

All payments in respect of the Notes made by or on behalf of the Issuer will be made without

any withholding or deduction for, or on account of, any present or future taxes, duties,

assessments or governmental charges of whatever nature (“Taxes”) imposed or levied by or on

behalf of a Relevant Jurisdiction, unless the withholding or deduction of such Taxes is required

by law.

In such event, the Issuer will pay such additional amounts to ensure the receipt, by the relevant

Beneficiaries, of the amounts they would have been received had no such withholding or

deduction been required, except that no additional amounts shall be payable in relation to any

payment in respect of any Note:

(a) to, or to a third party on behalf of, a Beneficiary who is liable for Taxes in respect of the

Note by reason of having some connection with the Relevant Jurisdiction other than the

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mere holding of the Note; or

(b) to, or to a third party on behalf of, a Beneficiary in respect of whom the information

required in order to comply with Decree-Law no. 193/2005, of 7 November 2005, as

amended (“Debt Securities Taxation Act”), and any implementing legislation, is not

received by the Affiliate Member of Interbolsa with which securities are registered in the

name of the Beneficiary, no later than the second Business Day prior to the Relevant Date

(as defined in Condition 11.2(a)), or which does not comply with the formalities to benefit

from tax treaty benefits, when applicable; or

(c) to, or to a third party on behalf of, a Beneficiary (i) resident for tax purposes in the

Relevant Jurisdiction, or when the investment income is imputable to a permanent

establishment of the Beneficiary located in Portuguese territory, or (ii) resident in a tax

haven jurisdiction, as defined in Ministerial Order (“Portaria”) 150/2004, of 13 February

2004, as amended by Ministerial Order No. 292/2011, of 8 November 2011, and by

Ministerial Order No. 345-A/2016, of 30 December 2016, with the exception of (a) central

banks and governmental agencies, as well as international institutions recognised by the

Relevant Jurisdiction, of those tax haven jurisdictions; and (b) tax haven jurisdictions

which have a double taxation treaty or a tax information exchange agreement in force

with the Relevant Jurisdiction; and/or

(d) to, or to a third party on behalf of, (i) a Portuguese resident legal entity subject to

Portuguese corporate income tax, with the exception of entities that benefit from a

waiver of Portuguese withholding tax or from Portuguese income tax exemptions, or (ii)

a legal entity not resident in Portuguese territory acting with respect to the holding of the

Notes through a permanent establishment in Portuguese territory, with the exception of

entities that benefit from a waiver of Portuguese withholding tax (for the avoidance of

doubt, an Affiliate of Interbolsa holding Notes on behalf of a Noteholder should not be

considered as having a permanent establishment in Portuguese territory).

11.2. Interpretation

In these Conditions:

(a) “Relevant Date” means the date on which the payment first becomes due but, if the full

amount of the money payable has not been received by the Paying Agents on or before

the due date, it means the date on which, the full amount of the money having been

80

received, notice to that effect has been duly given to the Noteholders by the Issuer in

accordance with Condition 9 (Payments);

(b) “Relevant Jurisdiction” means the Republic of Portugal or any political subdivision or any

authority thereof or therein having power to tax, or any other jurisdiction or any political

subdivision or any authority thereof or therein having power to tax, to which the Issuer,

as the case may be, becomes subject in respect of payments made by it of principal and

interest on the Notes; and

(c) “Beneficiary” means the holder of the Notes who is the effective beneficiary of the

income arising thereto.

11.3. Additional Amounts

Any reference in these Conditions to any amounts in respect of the Notes shall be deemed to

also refer to any additional amounts which may be payable under this Condition 11 (Taxation)

or under any undertakings given in addition to, or in substitution for, this Condition 11

(Taxation).

12. EVENTS OF DEFAULT

12.1. Events of Default

If any of the following events (each an “Event of Default”) occurs and is continuing:

(a) Non-payment: The Issuer fails to pay, on the relevant due date, any amount of principal

or interest in respect of any of the Notes or any of the Guarantors fails to pay any amount

of principal or interest under the Guarantee and such failure continues for a period of 7

(seven) days after the Maturity Date, in the case of principal, and 14 (fourteen) days after

the relevant Interest Payment Date, in the case of interest; or

(b) Breach of other obligations or undertakings: The Issuer defaults on the performance or

observance of any of its other obligations or undertakings under or in respect of the Notes

and such default (if capable of remedy) remains unremedied for a period of 30 (thirty)

calendar days (or a longer period allowed by the common representative of the

Noteholders (if any) or by the Noteholders) after written notice thereof, addressed to the

Issuer by any Noteholder, has been delivered to the Issuer; or

(c) Breach of financial covenant: Any requirement of Condition 4.6 (Financial Covenants), if

applicable, is not satisfied, provided that no Event of Default under this paragraph will

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occur as a result of failure to comply with the financial covenants specified in Condition

4.6 (Financial Covenants) if such failure is cured, as evidenced by a certificate signed by

two (2) of its directors, attorneys or senior officers on its behalf, delivered after a period

of 180 (one hundred and eighty) days from the date on which the Net Debt To EBITDA

Ratio has been breached; or

(d) Guarantee: The Guarantees is or becomes inexistent, invalid, ineffective or

unenforceable, or is or becomes not (or is claimed by the relevant Guarantor not to be) in

full force and effect; or

(e) Cross-default of Issuer or Material Subsidiary: The occurrence of an event of default in

respect of any Indebtedness for Borrowed Money of the Issuer or a Material Subsidiary,

provided that the amount in question exceeds €5,000,000.00 (or its equivalent in another

currency), considered individually or in aggregate; or

(f) Insolvency, etc.: Any corporate action, legal proceedings or other procedure or step is

taken in relation to:

(i) the suspension of payments, a moratorium of any indebtedness, winding-up,

dissolution, administration or reorganisation (by way of voluntary arrangement,

scheme of arrangement or otherwise) of the Issuer or any Material Subsidiary;

(ii) a composition, compromise, assignment or arrangement with any creditor of the

Issuer or any Material Subsidiary;

(iii) the appointment of a liquidator, receiver, administrative receiver, administrator,

compulsory manager or other similar officer in respect of the Issuer or any Material

Subsidiary;

(iv) enforcement of any Security over the generality of the assets of the Issuer or any

Material Subsidiary; or

(v) any analogous procedure or step is taken in any jurisdiction;

(g) Cessation of business: The Issuer or any Material Subsidiary ceases, or threatens to cease,

to carry on all or substantially all of its business or operations, except for the purposes of

and followed by a reconstruction, amalgamation, reorganisation, merger or consolidation

(i) on terms approved by a resolution of the Noteholders; or (ii) in the case of a Material

Subsidiary, whereby the undertaking and assets of the Material Subsidiary are transferred

to or otherwise vested in the Issuer or another of its Material Subsidiaries; or

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(h) Failure to take action: Any action, condition or thing (including the obtaining or effecting

of any necessary consent, approval, authorisation, exemption, filing, licence, order,

recording or registration) at any time required to be taken, fulfilled or done in order (i) to

enable the Issuer to lawfully enter into, exercise its rights and perform and comply with

its obligations under the Notes; (ii) to ensure that those obligations are legal, valid, binding

and enforceable; and (iii) to make the Notes admissible in evidence in the courts of

Portugal, is not taken, fulfilled or done; or

(i) Analogous events: The occurrence of any event which the Issuer has, directly or indirectly,

caused and which, under the laws of any relevant jurisdiction, has an analogous effect to

any of the events referred to in any of the foregoing paragraphs; or

(j) Unlawfulness: It is or becomes unlawful for the Issuer to perform or comply with any of

its obligations under or in respect of the Notes;

then any Note may, by notice in writing given to the Issuer by (i) the Common Representative

acting upon a resolution of the Noteholders, in respect of all Notes, or (ii) unless there has been

a resolution to the contrary by the Noteholders, any Noteholder in respect of such Note, be

declared immediately due and payable, whereupon it shall become immediately due and

payable at its principal amount, together with accrued interest, without further action or

formality.

12.2. Issuer to inform

Immediately upon becoming aware of the occurrence of an Event of Default, or of any event

likely to cause an Event of Default, the Issuer shall forthwith notify the Noteholders and the

Common Representative, with copy to the Paying Agent and MARF.

13. PRESCRIPTION

Claims against the Issuer for principal and interest in respect of the Notes shall become void

unless made within a period of 20 (twenty) years, in the case of principal, and 5 (five) years, in

the case of interest, from the Relevant Date (as defined in Condition 11.2(a)) in respect of the

Notes.

14. PAYING AGENT

When acting under the Paying Agency Agreement and in connection with the Notes, the Paying

Agent acts solely as agent of the Issuer and does not assume any obligations towards, or

relationship of agency or trust for or with, any of the Noteholders.

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The Paying Agent and its initial specified office is Banco Comercial Português, S.A..

The Issuer reserves the right to, at any time, vary or terminate the appointment of any Paying

Agent and to appoint a successor agent, and additional or successor agents, provided, however,

that:

(i) the Issuer shall at all times maintain a paying agent;

(ii) so long as the Notes are held through Interbolsa, there will at all times be a paying agent

with a specified office in such place of registration and complying with any requirements

that may be imposed by the rules and regulations of Interbolsa; and

(iii) so long as the Notes are listed on any stock exchange, or listed or admitted to trading by

any competent authority, multilateral trading facility and/or quotation system which

requires the appointment of a paying agent in any particular place, there will at all times

be a paying agent with a specified office in such place, as may be required by the rules

and regulations of the relevant competent authority, multilateral trading facility and/or

quotation system.

Notice of any change in the Paying Agent or in its specified offices shall promptly be given to the

Noteholders and MARF.

15. MEETING OF NOTEHOLDERS; MODIFICATION AND WAIVER

15.1. Meetings of Noteholders

Meetings of the Noteholders to consider any matter affecting their interests, including the

modification or abrogation of any of these Conditions by Extraordinary Resolution and the

appointment or dismissal of a common representative, are governed by the Portuguese

Commercial Companies Code.

15.2. Request for Meetings

Meetings may be convened by a common representative (if any), or by the chairman of the

general meeting of shareholders of the Issuer before the appointment of, or in case of refusal

to convene the meeting by, a common representative, and when the common representative

and the chairman of the general meeting of shareholders refuse to convene a meeting,

Noteholders holding not less than five (5) per cent. in principal amount of the Notes for the time

being outstanding may petition the court to order the convening of a meeting.

15.3. Quorum

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The quorum required for a convened meeting to pass a resolution other than an Extraordinary

Resolution will be any person or persons holding or representing the Notes then outstanding,

regardless of the principal amount thereof; and an Extraordinary Resolution will require the

attendance of a person or persons holding or representing at least fifty (50) per cent. of the

principal amount of the Notes then outstanding or, at any adjourned meeting, the attendance

of a person or persons holding or representing the Notes then outstanding, regardless of the

principal amount thereof.

15.4. Majorities

The majority required to pass a resolution other than an Extraordinary Resolution is the majority

of the votes cast at the relevant meeting; the majority required to pass an Extraordinary

Resolution, including, without limitation, a resolution relating to the modification or abrogation

of certain provisions of these Conditions, is of at least fifty (50) per cent. of the principal amount

of the Notes then outstanding or, at any adjourned meeting, two thirds (2/3) of the votes cast

at the relevant meeting.

Resolutions passed at any meeting of the Noteholders will be binding on all Noteholders,

whether or not they were present at the meeting or voted against the approved resolutions.

Resolutions involving the increase of charges for Noteholders require unanimity to be approved.

15.5. Appointment, dismissal and substitution of common representative

Pursuant to, and in accordance with, the relevant provisions of the Portuguese Commercial

Companies Code, Bondholders, S.L. has been appointed as Common Representative on or about

the Issue Date.

The dismissal and substitution of the common representative, pursuant to the relevant

provisions of the Portuguese Commercial Companies Code, shall be made by way of a resolution

passed by the Noteholders for such purpose, pursuant to these Conditions and the relevant

provisions of the Portuguese Commercial Companies Code. Each of the Noteholders may also

request a court to dismiss (for cause) the Common Representative.

All fees, commissions and expenses related to the functions of the Common Representative shall

be borne by the Issuer.

15.6. Notification to the Noteholders

Any modification, abrogation, waiver or authorisation, in accordance with this Condition 15

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(Meetings of Noteholders), shall be binding on all Noteholders and shall be notified by the Issuer

to the Noteholders as soon as practicable thereafter, in accordance with Condition 17.1. (Notices

to Noteholders).

15.7. Resolutions bind all Noteholders

A Resolution approved at any meeting of Noteholders shall be binding on all holders of Notes,

whether or not they were present at the meeting.

16. FURTHER ISSUES

The Issuer may, from time to time, subject to the Conditions and without the Noteholders’

consent, create and issue further notes having the same terms and conditions as the Notes in

all respects (or in all respects except for the first payment of interest) and also the same

Common Representative (if one has been appointed), so as to form a single series with the

Notes.

17. NOTICES

17.1. Notices to Noteholders

So long as the Notes are admitted (incorporadas) to trading on MARF, notices to the Noteholders

will be published in the official website of MARF. Any such notice will be deemed to have been

given on the date of the first publication.

In addition, notices to the Noteholders shall be valid if made by registered mail, by publication

in a leading newspaper having general circulation in Portugal, or by any other means which

complies with the Portuguese Securities Code and Interbolsa’s rules on notices to investors,

including the disclosure of information through the official website of the CMVM. Any such

notice shall be deemed to have been given on the date of first publication (or, if required to be

published in more than one newspaper, on the first date on which it was published in all the

required newspapers) or, if applicable, on the day after being mailed.

17.2. Notices to the Common Representative

Copies of any notice given to any Noteholder will also be given to the Common Representative.

18. GOVERNING LAW AND SUBMISSION TO JURISDICTION

18.1. Governing law

The Notes, and any non-contractual obligations arising out of or in connection with them, are

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governed by, and will be construed in accordance with, Portuguese law.

18.2. Jurisdiction

The courts of Lisbon, Portugal, shall have jurisdiction to settle any disputes arising out of or in

connection with the Notes.

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SECTION IX

ADMISSION (INCORPORACIÓN) OF THE SECURITIES

1. Request for admission (incorporación) of the Notes on the Alternative Fixed Income Market

(MARF). Deadline for admission to trading

Admission to trading has been requested for the Notes described in this Information

Memorandum on the multilateral trading facility (MTF) known as the Alternative Fixed Income

Market (Mercado Alternativo de Renta Fija or “MARF”). Said listing will take place within thirty

(30) days of the Closing Date.

MARF adopts the legal structure of a multilateral trading facility (MTF), under the terms

provided for in Articles 26 et seq. of the RLD 21/2017, constituting an alternative, unofficial,

market for the trading of fixed-income securities.

EFACEC has requested the admission of the Notes on MARF with the aim of: (i) diversifying its

sources of external financing through access to capital markets; (ii) raising funds to strengthen

its financial ability to obtain financing at longer maturities; (iii) benefitting from the flexibility of

requirements concerning securities markets, with lower costs; and (iv) providing the issue with

liquidity through a multilateral trading facility.

This Information Memorandum follows the applicable proceedings on admission to trading and

removal of MARF set out in its own Regulations and other

applicable regulations.

Neither MARF, the National Securities Market Commission (Comisión Nacional del Mercado de

Valores or CNMV), CMVM, the Coordinators, the Dealer, nor the Co-Dealer have approved or

made any verification or test in relation to the contents of the Information Memorandum, the

financial statements of the Issuer, the rating report or the risk of the issuance required under

Circular 2/2018. The intervention of MARF does not constitute a statement, acknowledgement

or confirmation of the completeness, comprehensibility and consistency of the information

included in the documentation provided by the Issuer.

It is recommended that the investor fully and carefully read this Information Memorandum prior

to any investment decision.

The Issuer declares that it is aware of and knows the requirements and conditions necessary for

admission (incorporación) and exclusion of securities on MARF, under the current legislation and

the requirements of its governing bodies, and expressly agrees to comply therewith.

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The Issuer further declares that it has met all the requirements for the registration and

settlement of a transaction in Interbolsa. Operations settlement will be made through

Interbolsa.

2. Costs of all legal, financial, and audit services and other costs for the Issuer, placement costs

and, if necessary, underwriting costs, originated by the Issue and by the placement and

admission (incorporación) of the Notes

The cost of the issuance and admission (incorporación) to trading on MARF of the Notes amounts

to a total of €1,325,459.75.

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SECTION X

TAXATION

Prospective purchasers of the Notes are advised to consult their tax advisers as to the tax consequences,

under the tax laws of the country in which they are resident, of a purchase of Notes, including, but not

limited to, the consequences of receipts deriving from interest, as well as from the sale or redemption

of the Notes.

The following descriptions are general summaries of certain taxation matters based on applicable law

and practice currently in effect in the relevant jurisdictions. Nothing in this section constitutes tax, legal

or financial advice, and the summaries contained herein are of a general nature and do not cover all

aspects of taxation in the jurisdictions that may be relevant to any particular holder of Notes.

Prospective investors in the Notes should consult their professional advisers on the tax implications for

them of an investment in the Notes.

Portuguese Taxation

The economic advantages derived from interest, amortisation, reimbursement premiums and other

types of remuneration arising from Notes issued by private entities are qualified as investment income

for Portuguese tax purposes and are considered to be Portuguese sourced income, generally subject

to taxation in Portugal.

General Tax Regime applicable to Debt and Equity securities

Resident individuals

Investment income (including dividends and interest) obtained from the Notes by a Portuguese

resident individual are subject to individual income tax. If payment of investment income is made

available to Portuguese resident individuals, withholding tax applies at a rate of 28 per cent., which is

the final tax on that income, unless the individual elects to aggregate his taxable income, subject to

tax at the current progressive income tax rates of up to 48 per cent. In the latter case, additional

income tax will be due on the part of the taxable income exceeding €80,000, as follows: (i) 2.5 per cent.

on the part of the taxable income exceeding €80,000 up to €250,000 and (ii) 5 per cent. on the

remaining part (if any) of the taxable income exceeding €250,000. Investment is deemed a payment

on account of the final tax due. Income paid or made available to accounts opened in the name of one

or more accountholders acting on behalf of one or more unidentified third parties is subject to a final

withholding tax rate of 35 per cent., unless the relevant beneficial owner(s) of the income is/are

identified and, as a result, the tax rates applicable to such beneficial owner(s) will apply.

Capital gains obtained by Portuguese resident individuals on the repayment or transfer of Notes are

taxed at a special rate of 28 per cent. levied on the excess of such gains (and gains on other securities)

over the losses on securities, unless the individual elects to aggregate that same balance to his taxable

income, subject to tax at the current progressive rates of up to 48 per cent. In the latter case, additional

90

income tax will be due on the part of the taxable income exceeding €80,000, as follows: (i) 2.5 per cent.

on the part of the taxable income exceeding €80,000 up to €50,000 and (ii) 5 per cent. on the remaining

part (if any) of the taxable income exceeding €250,000. The amount of accrued interest on the date of

the transfer qualifies as interest, rather than capital gains, for tax purposes.

Legal persons resident in Portugal and those non-resident but with a permanent establishment to which

the income derived from the Notes is attributable

Investment income derived from the Notes and capital gains derived from the transfer of the Notes by

legal persons resident for tax purposes in Portugal and by non-resident legal persons with a permanent

establishment in Portugal, to which the income or gains are attributable, are included in their taxable

income and are subject to corporate income tax at a 21 per cent. rate, or at a 17 per cent. rate on the

first €15,000 in the case of small and medium-sized enterprises, to which a municipal surcharge

(“derrama municipal”) may be added of up to 1.5 per cent. of the taxable income. A state surcharge

(“derrama estadual”) also applies, at 3 per cent. on taxable profits in excess of €1,500,000 up to

€7,500,000, 5 per cent. on taxable profits in excess of €7,500,000 up to €35,000,000 and 9 per cent.

on taxable profits in excess of €35,000,000.

As a general rule, withholding tax at a rate of 25 per cent. applies on interest and other investment

income, which is deemed a payment on account of the final tax due.

Interest payments made to financial institutions, pension funds, retirement and/or education savings

funds, share savings funds, venture capital funds and collective investment undertakings incorporated

and operating under the laws of Portugal, and some other exempt entities, are not subject to

withholding tax.

Investment income paid or made available to accounts opened in the name of one or more

accountholders acting on behalf of one or more unidentified third parties is subject to a final



Non-resident individuals and legal persons without a permanent establishment to which the income

derived from the Notes is attributable

Without prejudice to the Debt Securities Taxation Act further described below, the general tax regime

on debt and equity securities applicable to non-resident entities is the following:

Investment income obtained by non-resident individuals without a permanent establishment in

Portugal to which the income is attributable is subject to withholding tax at a rate of 28 per cent.,

which is the final tax on that income. Investment income obtained by non-resident legal persons

without a permanent establishment in Portugal to which the income is attributable is subject to

withholding tax at a rate of 25 per cent., which is the final tax on that income.

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A withholding tax rate of 35 per cent. applies in the case of investment income payments made to non-

resident individuals or non-resident legal persons without a permanent establishment in Portugal to

which the income is attributable and which are resident in a country, territory or jurisdiction subject

to a clearly more favourable tax regime included in the “low tax jurisdictions” list approved by

Ministerial Order (Portaria) No. 150/2004, of 13 February 2004, as amended from time to time.

Under the tax treaties entered into by Portugal, which are in full force and effect on the date of this

Information Memorandum, the applicable withholding tax rate may be reduced to 15, 12, 10 or 5 per

cent., depending on the applicable treaty and provided that the relevant formalities (including

certification of residence, by the tax authorities, of the beneficial owners of the interest and other

investment income) are met. The reduction may apply at source or through the refund of the excess

tax paid. The forms currently applicable for these purposes are available for viewing and downloading

at www.portaldasfinancas.gov.pt.

Capital gains derived from the transfer of the Notes by non-resident individuals without a permanent

establishment in Portugal to which the gains are attributable are exempt from Portuguese capital gains

taxation, unless the non-resident individual is resident in a country, territory or jurisdiction subject to

a clearly more favourable tax regime included in the “low tax jurisdictions” list approved by Ministerial

Order (Portaria) no. 150/2004, of 13 February, as amended from time to time, are exempt from

personal income tax. Capital gains derived by non-resident individuals that are not entitled to said

exemption will be subject to taxation at a 28 per cent. flat rate. Under the tax treaties entered into by

Portugal, such capital gains are usually not subject to Portuguese personal income tax, but the

applicable rules should be confirmed on a case-by-case basis. The amount of accrued interest on the

date of the transfer qualifies as interest, rather than capital gains, for tax purposes.

Capital gains derived from the transfer of Notes by a legal person non-resident in Portugal for tax

purposes and without a permanent establishment in Portugal to which the gains are attributable are

exempt from Portuguese capital gains taxation, unless the share capital of the non-resident entity is

more than 25 per cent. directly or indirectly held by Portuguese resident entities or the beneficial

owner is resident in a country, territory or jurisdiction subject to a clearly more favourable tax regime

included in the “low tax jurisdictions” list approved by Ministerial Order (Portaria) No. 150/2004, of 13

February 2004, as amended from time to time. The 25 per cent. threshold referred above will not be

applicable when the following cumulative requirements are met by the seller: (i) the seller is an entity

resident in the European Union, or in a European Economic Area State which is bound to cooperate

with Portugal under an administrative cooperation agreement in tax matters similar to the exchange

of information schemes for tax matters existing within the EU Member States, or in any country with

http://www.portaldasfinancas.gov.pt/

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which Portugal has a double tax treaty in force that foresees the exchange of information; (ii) such

entity is subject to and not exempt from a tax referred to in article 2 of Council Directive 2011/96/EU,

of 30 November 2011, or a tax of a similar nature with a rate not lower than 60 per cent. of the

Portuguese corporate income tax rate; (iii) it holds at least 10 per cent. of the share capital or voting

rights of the entity subject to disposal, for at least one uninterrupted year; and (iv) it does not

participate in an artificial arrangement or a series of artificial arrangements put into place with the

main purpose, or one of the main purposes, of obtaining a tax advantage. Although the

abovementioned cumulative requirements are in full force and effect since 31 March 2016 and apply

to securities in general, the law is not clear on the application thereof for holders of debt

representative securities, as some of the alluded requirements appear not to apply to debt

representative securities.

If the exemption does not apply, the gains will be subject to corporate income tax at a rate of 25 per

cent. Under the tax treaties entered into by Portugal, such capital gains are usually not subject to

Portuguese corporate income tax, but the applicable rules should be confirmed on a case-by-case

basis.

Debt Securities Taxation Act

Resident Individuals

Investment income obtained from Notes by a Portuguese resident individual is subject to individual

income tax. If payment of investment income is made available to Portuguese resident individuals,

withholding tax applies at a rate of 28 per cent., which is the final tax on that income unless the

individual elects to include this income in his taxable income, subject to tax at progressive rates of up

to 48 per cent. In the latter case, additional income tax will be due on the part of the taxable income

exceeding €80,000, as follows: (i) 2.5 per cent. on the part of the taxable income exceeding €80,000

up to €250,000; and (ii) 5 per cent. on the remaining part (if any) of the taxable income exceeding

€250,000. In this case, the tax withheld will be creditable against the recipient's final tax liability. The

relevant tax shall be withheld by the relevant direct registering entity.





Capital gains obtained by Portuguese resident individuals on the transfer of Notes are taxed at a special

rate of 28 per cent. levied on the positive difference between such gains and gains on other securities,

and losses on securities, unless the individual chooses to aggregate his taxable income, subject to tax

at the current progressive rates of up to 48 per cent. In the latter case, additional income tax will be

due on the part of the taxable income exceeding €80,000, as follows: (i) 2.5 per cent. on the part of

the taxable income exceeding €80,000 up to €250,000 and (ii) 5 per cent. on the remaining part (if any)

93

of the taxable income exceeding €250,000. Interest accrued on the date of the transfer qualifies as

interest, rather than capital gains, for tax purposes.

Legal persons resident in Portugal and those non-resident but with a permanent establishment to which

the income derived from the Notes is attributable

Investment income derived from Notes and capital gains obtained from the transfer of Notes by legal

persons resident for tax purposes in Portugal and by non-resident legal persons with a permanent

establishment in Portugal to which the income or gains are attributable are included in their taxable

income and are subject to Corporate Income Tax at a rate of 21 per cent., or at a 17 per cent. tax rate

on the first €15,000 in the case of small and medium-sized enterprises, to which a municipal surcharge

(derrama municipal) may be added of up to 1.5 per cent. of the taxable income. A state surcharge

(derrama estadual) also applies, at 3 per cent. on taxable profits in excess of €1,500,000 up to

€7,500,000, 5 per cent. on taxable profits in excess of €7,500,000 up to €35,000,000 and 9 per cent.

on taxable profits in excess of €35,000,000.

As a general rule, withholding tax at a rate of 25 per cent. applies on investment income, which is

deemed a payment on account of the final tax due. The relevant tax shall be withheld by the relevant

direct registering entity. Payments to financial institutions subject to tax in Portugal, pension funds,

retirement and/or education savings funds, share savings funds, venture capital funds and collective

investment undertakings incorporated under the laws of Portugal, as well as some other exempt

entities, are not subject to Portuguese withholding tax.





Non-resident individuals

Pursuant to the Debt Securities Taxation Act, investment income paid on, as well as capital gains

derived from, a repayment, sale or other disposition of the Notes to non-resident beneficial owners

will be exempt from Portuguese income tax, provided that the debt securities are integrated in (i) a

centralised system for securities managed by an entity resident for tax purposes in Portugal (such as

the CVM, managed by Interbolsa), or (ii) an international clearing system operated by a managing

entity established in an EU Member State other than Portugal or in a European Economic Area Member

State, provided, in this case, that such State is bound to cooperate with Portugal under an

administrative cooperation arrangement in tax matters similar to the exchange of information

schemes for tax matters existing within the EU Member States, or (iii) integrated in other centralised

systems not covered above, provided that, in this last case, the Portuguese Government authorises

the application of the Debt Securities Taxation Act, and the beneficiaries are:

(i) central banks or governmental agencies; or

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(ii) international bodies recognised by the Portuguese State; or

(iii) entities resident in countries or jurisdictions with whom Portugal has a double tax treaty or a

tax information exchange agreement in force; or

(iv) other entities without headquarters, effective management or permanent establishment in

Portuguese territory to which the relevant income is attributable and which are not resident in

a country, territory or jurisdiction subject to a clearly more favourable tax regime included in

the “low tax jurisdictions” list approved by Ministerial Order (“Portaria”) No. 150/2004, of 13

February 2004, as amended from time to time.

For the purposes of application at the source of this tax exemption regime, the Debt Securities Taxation

Act requires the completion of certain procedures and the provision of certain information. Under

these procedures (which are aimed at verifying the non-resident status of the Noteholder), the

Noteholder is required to hold the Notes through an account held with one of the following entities:

(i) a direct registering entity, with which the debt securities accounts integrated in the centralised

system are opened;

(ii) an indirect registering entity, which, although not assuming the role of the “direct registering

entity”, is its client; or

(iii) an international clearing system, which proceeds, in the international market, to clear, settle or

transfer securities integrated in centralised systems or in their own registration systems.

The special regime approved by the Debt Securities Taxation Act sets out the detailed rules and

procedures to be followed to provide proof of non-residence by the beneficial owners of the

instruments to which it applies.

Under these rules, the direct registering entity is required to obtain and retain proof, in the form

described below, that the beneficial owner is a non-resident entity entitled to the exemption. As a

general rule, proof of non-residence should be provided to, and received by, the direct registering

entities prior to the relevant date for payment of any interest and, in the case of domestically cleared

Notes, prior to the transfer of any Notes, as the case may be.

The following is a general description of the rules and procedures pertaining to the proof required for

the exemption to apply at source, as they stand at the date of this Information Memorandum.

(a) Domestically Cleared Notes

The beneficial owner of the Notes must provide proof of non-residence in Portuguese territory,

substantially in the terms set forth below:

(i) if the beneficial owner of the Notes is a central bank, a public law entity or agency, or an

international organisation recognised by the Portuguese State, it must provide (a) a

declaration of tax residence issued by the beneficial owner of the Notes, duly signed and

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authenticated; or (b) proof of non-residence pursuant to the terms of paragraph (iv)

below;

(ii) if the beneficial owner of the Notes is a credit institution, a financial company, a pension

fund or an insurance company domiciled in any of the Organisation for Economic Co-

operation and Development (“OECD”) countries or in a country with which Portugal has

entered into a double taxation treaty and which is subject to a special supervision regime

or administrative registration, it must provide: (a) its official tax identification document;

or (b) a declaration issued by the entity responsible for its supervision or registration, or

by the relevant tax authorities, confirming the legal existence of the beneficial owner of

the Notes and its domicile; or (c) proof of non-residence pursuant to (iv) below. The

respective proof of non-residence in Portugal is provided only once, its periodic renewal

not being necessary, and the beneficial owner should immediately inform the direct

registering entity of any change in the required conditions that may prevent the tax

exemption from applying, pursuant to the terms of paragraph (iv) below;

(iii) if the beneficial owner of the Notes is either an investment fund or other type of collective

investment scheme domiciled in any OECD country, or in a any country or jurisdiction with

which Portugal has entered into a double tax treaty or tax information exchange

agreement in force, it shall make proof of its non-resident status by providing the

following documents: (a) a declaration issued by the entity responsible for its supervision

or registration, or by the relevant tax authorities, confirming its legal existence, domicile

and law of incorporation; or (b) proof of non-residence pursuant to the terms of

paragraph (iv) below. The respective proof of non-residence in Portugal is provided only

once, its periodic renewal not being necessary, and the beneficial owner should inform

the direct registering entity immediately of any change in the required conditions that

may prevent the tax exemption from applying;

(iv) Other investors will be required to make proof of their non-resident status by way of: (a)

a certificate of residence or equivalent document issued by the relevant tax authorities;

or (b) a document issued by the relevant Portuguese consulate certifying residence

abroad; or (c) a document, specifically issued by an official entity which forms part of the

public administration (either central, regional or peripheral, indirect or autonomous) of

the relevant country, certifying residence. For these purposes, an identification document

(such as a passport or an identity card) or a document by means of which it is only

indirectly possible to determine the respective tax residence (such as a work or

permanent residency permit) is not acceptable. The rules on the authenticity and validity

of the required documents specifically state that the Noteholder must provide an original

or a certified copy of such documents and, as a rule, if these documents do not refer to a

specific year and do not expire, they must have been issued within the 3 (three) years

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prior to the relevant payment or maturity dates or, if issued after the relevant payment

or maturity dates, within the following 3 (three) months. The Noteholder must inform the

registering entity immediately of any change in the required conditions that may annul

the tax exemption, the relevant residence certificate or equivalent document. This

document must be issued up to 3 (three) months after the date on which the withholding

tax would have been applied and will be valid for a 3 (three) year period, starting on the

date the document in question is issued.

In the cases referred to in paragraphs (i), (ii) and (iii) above, proof of non-residence is required

to be provided only once; however, the beneficial owner of the Notes is required to immediately

inform the registering entity of any changes that may have an impact on its entitlement to the

tax exemption.

(b) Internationally Cleared Notes

If the Notes are registered in an account held with an international clearing system, the entity

managing such system is required to provide to the direct registering entity, or its

representative, prior to the relevant date for payment of any interest, the number and

identification of the relevant securities, as well as the respective income, and, when applicable,

the tax withheld, itemised by type of beneficial owner, as follows:

(i) Portuguese resident entities or permanent establishments of non-resident entities to

which the income is attributable which are not exempt from tax and are subject to

withholding tax;

(ii) entities resident in a country, territory or jurisdiction subject to a clearly more

favourable tax regime included in the “low tax jurisdictions” list approved by Ministerial

Order (Portaria) No. 150/2004, of 13 February 2004, as amended by Ministerial Order

(Portaria) No. 292/2011, of 8 November 2011, and by Ministerial Order (Portaria) No.

345-A/2016, of 30 December 2016, which are not exempt from tax and are subject to

withholding tax;

(iii) other non-Portuguese resident entities.

In addition, the managing entity of the international clearing system must provide the direct

registering entity, in relation to each income payment, with at least the following information

concerning each of the beneficiaries identified in (i), (ii) and (iii) above: name and address, tax

identification number, if applicable, identification of the securities held and amount thereof, and

amount of income.

No Portuguese exemption shall apply at source under the special regime approved by the Debt

Securities Taxation Act if the above rules and procedures are not followed. Accordingly, the general

Portuguese tax provisions shall apply as described above.

97

If the conditions for an exemption to apply are met, but, due to inaccurate or insufficient information,

tax is withheld, a special refund procedure is available under the regime approved by the Debt

Securities Taxation Act. The refund claim is to be submitted to the direct registering entity of the Notes

within 6 (six) months of the date on which the withholding took place. A special form is yet to be

approved for this purpose.

After the abovementioned 6 (six) month period, any refund of withholding tax must be claimed from

the Portuguese tax authorities through the submission of an official form available at

http://www.portaldasfinancas.gov.pt, within 2 (two) years from the end of the year in which the

relevant tax was withheld. The refund is to be made within 3 (three) months, after which interest is

due.

Administrative cooperation in the field of taxation

Council Directive 2014/107/EU of 9 December 2014, which amended Council Directive 2011/16/EU of

15 February 2011, implemented a new automatic exchange of information system under the

administrative cooperation framework in the field of taxation, which is based on the format

established by the OECD known as the Common Reporting Standard (“CRS”).

Council Directive 2014/107/EU, of 9 December 2014, on the mandatory automatic exchange of

information in the field of taxation was transposed into Portuguese law through Decree-Law no.

64/2016, of 11 October. Under such law, as amended from time to time, the Issuer will be required to

collect information regarding certain accountholders and to report this information to the Portuguese

tax authorities – under forms which, in turn, will report such information to the tax authorities of the

relevant EU Member States or States which have signed the Multilateral Competent Authority

Agreement on Automatic Exchange of Financial Account Information for the Common Reporting

Standard.

In view of the regime enacted through Decree-Law no. 64/2016, of 11 October, which was amended

by Law no. 98/2017, of 24 August, and by Law no. 17/2019, of 14 February, all information regarding

the registration of the financial institution, the procedures to comply with the reporting obligations

arising therefrom, and the forms to be used for such purposes was provided by the Ministry of Finance,

through Order (Portaria) no. 302-B/2016, of 2 December 2016, Order (Portaria) no. 302-C/2016, of 2

December 2016, Order (Portaria) no. 302-D/2016, of 2 December 2016, and Order (Portaria) no. 302-

E/2016, of 2 December 2016, all as amended from time to time.

Foreign Account Tax Compliance Act

Pursuant to certain provisions of the U.S. Internal Revenue Code of 1986, commonly known as FATCA,

a “foreign financial institution” (as defined by FATCA) may be required to withhold on certain payments

it makes (“foreign passthru payments”) to persons that fail to meet certain certification, reporting or

related requirements. The Issuer is a foreign financial institution for these purposes.

98

A number of jurisdictions (including Portugal) have entered into, or have agreed in substance to,

intergovernmental agreements with the United States to implement FATCA (“IGAs”), which modify the

way in which FATCA applies in their jurisdictions. Under the provisions of IGAs, as currently in effect, a

foreign financial institution operating in an IGA jurisdiction would generally not be required to

withhold, under FATCA or an IGA, from payments that it makes. Certain aspects of the application of

FATCA and IGA provisions to instruments such as the Notes, including whether withholding would ever

be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Notes,

are uncertain and may be subject to change. Even if withholding would be required pursuant to FATCA

or an IGA with respect to payments on instruments such as the Notes, such withholding would not

apply prior to 1 January 2019 and Notes issued on or prior to the date falling six months after the date

on which final regulations defining foreign passthru payments are filed with the U.S. Federal Register

would generally be grandfathered for purposes of FATCA withholding, unless materially modified after

such date.

However, if additional Notes not distinguishable from previously issued Notes are issued after the

grandfathering period has expired and are subject to withholding under FATCA, then withholding

agents may treat all Notes, including the Notes offered prior to the expiration of the grandfathering

period, as subject to withholding under FATCA.

Portugal signed its IGA with the United States on 6 August 2015 and has implemented, through Law

no. 82-B/2014, of 31 December 2014, the legal framework for the reciprocal exchange of information

with the United States on financial accounts subject to disclosure. The IGA entered into force on 10

August 2016 and, through Decree-Law no. 64/2016, of 11 October 2016, amended by Law no. 98/2017,

of 24 August, and by Law no. 17/2019, of 14 February, and Ministerial Order (Portaria) no. 302-A/2016,

of 2 December, as amended by Ministerial Order (Portaria) no. 169/2017, of 25 May, the Portuguese

Government approved the complementary regulation required to comply with FATCA. Under this

legislation, the Issuer is required to obtain information regarding certain accountholders and to report

such information to the Portuguese tax authorities, which, in turn, will report the information to the

IRS.

Noteholders should consult their own tax advisers regarding how these rules may apply to their

investment in the Notes.

The proposed financial transaction tax (“FTT”)

On 14 February 2013, the European Commission published a proposal (the “Commission’s Proposal”)

for a Directive on a common financial transaction tax (“FTT”) in Belgium, Germany, Estonia, Greece,

Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the “participating Member States”).

However, Estonia has since stated that it will not participate.

The Commission’s Proposal has a very broad scope and could, if introduced, apply to certain dealings

in financial instruments (including secondary market transactions) under certain circumstances.

99

Under the Commission’s Proposal, the FTT could apply in certain circumstances to persons both within

and outside the participating Member States. Generally, it would apply to certain dealings in Notes

where at least one party is a financial institution, and at least one party is established in a participating

Member State. A financial institution may be, or be deemed to be, “established” in a participating

Member State in a broad range of circumstances, including (a) by transacting with a person established

in a participating Member State, or (b) where the financial instrument subject to the dealings is issued

in a participating Member State.

However, the FTT proposal remains subject to negotiation between participating Member States. It

may therefore be altered prior to any implementation, the timing of which remains unclear. Additional

European Union Member States may also decide to participate.

Prospective holders of the Notes are advised to seek their own professional advice in relation to the

FTT.

100

SECTION XI

THIRD PARTY INFORMATION, STATEMENT BY EXPERTS AND DECLARATIONS OF INTEREST

No statement or report attributed to an expert is included in the Information Memorandum. No

statement or report attributed to a third party is included in the Information Memorandum.

101

SECTION XII

DOCUMENTS INCORPORATED BY REFERENCE

The following documents shall be deemed to be incorporated by reference in, and to form part of, this

Information Memorandum:

• The by-laws of the Issuer are available at the Commercial Registry Office of Oporto (Portugal); and

• The audited consolidated financial statements (including the auditor’s report thereon and notes

thereto) of the Issuer in respect of the years ended 31 December 2017 and 31 December 2018,

which are included in the Annex of this Information Memorandum.

For the life of this Information Memorandum, copies of the documents incorporated in it by reference

and the Information Memorandum itself will be available for inspection during normal business hours

at the registered office of the Issuer (without charge) and may also be obtained from the websites of

the Issuer (www.efacec.pt) and of the Alternative Fixed Income Market (www.bmerf.es).

For the avoidance of doubt, the content of the Issuer’s website or of any other website referred to in

this Information Memorandum does not form a part of the Information Memorandum, except the

content of the list of documents incorporated by reference.

In Lisbon, on 19 of July, 2019

For and on behalf of:

EFACEC POWER SOLUTIONS, SGPS S.A.

____________________________________

Name: Francisco José Meira Silva Nunes

Capacity: Director

http://www.efacec.pt/

102

ANNEX

AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE ISSUER FOR THE FINANCIAL YEARS ENDED ON 31 DECEMBER 2017 AND 31 DECEMBER 2018

Collective Person Identification Number: 513180966 Submission of Consolidated AccountsYear: 2017 1st SubmissionFirm: EFACEC POWER SOLUTIONS, SGPS S.A. Date of Receipt: 2018-07-13

tl3Særaårio da Sæicdadeefacec

Power Solutions SGPS SA

EXTRACTO DE ACTA DA ASSEMBLEIA GERAL

ÂDEODATO ALEX,{NDRE FREiRE VALENTE LOPES PINTO, que também usa o

nome profissional de ADEODATO FREIRE PINTO, na qualidade de Secretário da

Sociedade da EFACEC POWER SOLUTIONS, SGPS, S.4., sociedade com sede no Lugar

da Arroteia, 4465-587 Leça do Balio, freguesia de Custóias,Leça do Balio e Guifões, concelho

de Matosinhos, Pessoa Colectiva número 513 180 966, matticulada na Conservatória do

Registo Comercial sob o mesmo número, entidade com os documentos integralmente

depositados em suporte eletrónico, com o capital social de EUR 374.235.160,00

("Sociedade"), CERTIFICA, nos teffnos e ao abrþo do disposto no artigo 446."-B ðo

Código das Sociedades Comerciais, que exffaiu, de forma parcial, da acta relativa à reunião da

Assembleia Geral da Sociedade realtzadano dia vinte e quafto de Abril de dois mil e dezoito,

exarada no livro de actas de Assembleia Geral da Sociedade o seguinte:

"(...) PONTO PRIMEIRO:Deliberar sobre o relatódo de gestãô, balanço e contas,

individuais e consolidadas, relativos ao exercício findo em 31 de Dezemb rc de 2017; -PONTO SEGLINDO:Deliberar sobre a proposta de aplicação de resultados relativos

ao exetcício findo em 31 de Dezemb to de 2017.

Declarada aberta a sessão, entrou-se, de imediato, na análise e discussão do Ponto Pdmeiro

da ordem de trabalhos, tendo o Presidente da Mesa referido aos presentes ter sido informado

pelo Conselho de ,{dministração que o relatório de gestão, balanço e contas, individuais e

consolidadas, a certific ação legal de contas e o parecer do conselho fiscal referentes ao

exercício findo em 37 de Dezembro de 2017 ,bemcomo os demais documentos previstos no

Page I of 3SEDE / HEAD OFFICE: Lugar da Arroteia - Leça do Batio, 44ó5-587 À"latosinhos - Portugat

Tet: +351 229 562 300 - Fax: +351 229 518 933 - www.efacec.ptCapitat Sociat /Share Capitat: € 314.235.1ó0,00 NIPC / VAT: 513 180 96ó

,80çiod.4

efacecPower Solutions SGPS SA

arttgo 289." do Código das Sociedades Comerciais, estiveram à disposição dos acionistas, nos

telrnos e prazos legais, pelo que se dispensou a sua leitura

O Presidente da Mesa questionou os presentes se pÍetendiam que o Conselho de

Administração prestasse esclarecimentos sobre o Relatório de Gestâo e as Contas do

Exercício.

Não tendo sido solicitados quaisquer esclarecimentos, !m^ vez que os documentos eram já,

do conhecimento de todos, o Presidente da Mesa colocou à votação o relatório de gestão, o

balanço e contas, individuais e consolidadas referentes ao exercício de2017, dos quais resulta

um resultado individual fquido no montante de € 3.040.21,2,73 (três milhões quarenta mil

duzentos e doze euros e treze cêntimos) e um resultado consolidado no montante de€7 .545.937

(sete milhões quinhentos e quarenta e cinco mil novecentos e trinta e sete euros). Tendo os

presentes prescindido da votação nominal dos documentos de prestação de contas, foi

deliberado, por unanimidade, aprovar o relatório de gestão, balanço e contas refetentes ao

exercício findo em 31 de Dezembrc de 2077 .

Seguidamente, entrou-se no âmbito do Ponto Segundo da ordem de trabalhos, tendo sido

deliberado, por unanimidade, aprovar a proposta de apücação dos resultados do exercício

findo em 31 de Dezembro de 2077 apresentada pelo Conselho de,A.dministação pelo que o

resultado líquido do exercício de 2077, apurado nas demonstrações financeiras individuais, no

valor de € 3.040.21,2,13 (três milhões quârenta mil duzentos e doze euros e treze cêntimos)

terá a seguinte aplicação

-ParaReservaLegal:€152.011,00(centoecinquentaedoismi]eonzeeufoS);e-

Page 2 of 3

SEDE / HEAD OFFICE: Lugar da Arroteiã - Leça do Batio, 44ó5-587 Matosinhos - PortugalTet: +351 729 562 300 - Fax: +351 229 518 933 - www.efacec.pt

Capital Social /Share Capital: € 314.235.1ó0,00 NIPC / VAT: 513 180 966

zl3Socicdadc

&8ørc(*

+efacecPower Solutions SGPS SA

-Para Reservas Livres: €2.888.201,13 (dois milhões oitocentos e oitenta e oito mil duzentos

e um euros e treze cêntimos). (...)"

Certifico que o presente extracto de acta relativo aos Pontos Primeiro e Segundo da ordem de

trabalhos da reunião de Assembleia Geral da Sociedade rcabzada no dia vinte e quatro de Abril

de dois mil e dezoito, está em conformidade com a respectiva acta da qual foi extraído.-

O restante conteúdo da acta rela¡,va à referida reunião da Assembleia Geral da Sociedade não

limita, altera ou prejudica a deliberação relativa à parte dos Pontos Primeiro e Segundo da

ordem de trabalhos ora reoroduzida e obiecto do oresente extrato.

Matosinhos,T2 deJulho de 2018.

O Secretário da Sociedade da EFACEC Power Solutions, SGPS, S.A.

(,{.deodato Freire Pinto)

Sæntário da Socida&

3t)Ø

Page 3 of 3SEDE / HEAD OFFICE: Lugar da Arroteia - Leça do Batio, 44ó5-587 Matosinhos - Portugat

Tet: +351 ZZ9 562 300 - Fax: +351 229 518 933 - www.efacec.otCapital Social /Share Capitat: € 314.235.1ó0,00 NIPC / VAT: 513 180 966

Collective Person Identification Number: 513180966 Submission of Consolidated AccountsYear: 2018 1st SubmissionFirm: EFACEC POWER SOLUTIONS, SGPS S.A. Date of Receipt: 2019-06-28

103

ISSUER

EFACEC Power Solutions, SGPS, S.A.

Lugar da Arroteia

4465-587 Leça do Balio

Portugal

GUARANTORS

EFACEC Energia – Máquinas e Equipamentos

Eléctricos, S.A.

Lugar da Arroteia

4465-587-Leça do Balio

Portugal


Rua Engenheiro Frederico Ulrich, Guardeiras

4470-605 Maia

Portugal


Rua Engenheiro Frederico Ulrich, Guardeiras

4470-605 Maia

Portugal

COORDINATORS

Beka Finance, Sociedad de Valores, S.A.

Calle Marqués de Villamagna, 3

4ª planta

28001 Madrid

Spain

Optimal Investments, S.A.

Av. Eng. Duarte Pacheco, Torre 2, 17º Piso

1070-102 Lisboa

Portugal

CO-DEALER

Banco Finantia, S.A.

Rua General Firmino Miguel, n.º 5

1600-100 Lisboa

Portugal

REGISTERED ADVISOR

VGM Advisory Partners, S.L.U.

Calle Serrano 68, 2º Derecha

28001 Madrid

Spain

COMMON REPRESENTATIVE

Bondholders, S.L.

Avda. de Francia, 17, A

46023 Valencia

Spain

PAYING AGENT

Banco Comercial Português, S.A.

Praça D. João I, no. 28

4000-295 Porto

Portugal

104

LEGAL ADVISOR

Vieira de Almeida & Associados, Sociedade de Advogados, S.P., R.L.

Rua D. Luís I, n.º 28

1200-151 Lisboa

Portugal

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