1 - Where are Helbor shares traded?

The Company’s shares are listed for trading in BM&FBOVESPA under the symbol HBOR3. Helbor has entered into an agreement with the BM&FBOVESPA to list its shares in the “Novo Mercado” the highest level of the differentiated corporate governance practices.

2 - How individuals not resident in Brazil can invest in Helbor shares?

The investors residing outside Brazil, including institutional investors, are authorized to acquire securities, including Helbor shares, at the Brazilian stock exchanges, as long as they comply with the register requirements under Resolution nº 2,689 and CVM Instruction nº 325, of January 27, 2000, and amendments.

The investors registered under Resolution nº 2,689, except for certain circumstances, may carry out any type of transaction in the Brazilian capital market involving a security traded in the stock exchange, futures market or organized over-the-counter market. The investments in and remittances of, outside Brazil, earnings, dividends, profits or other payments related to Helbor shares are carried out through the foreign exchange market.

To become an investor registered under the provisions of Resolution nº 2,689, an investor residing outside Brazil shall:

  • appoint representative in Brazil, with powers to perform actions relating to its investment;
  • appoint an authorized custodian in Brazil for its investment under Resolution nº 2,689, whic hmust be a financial institution duly authorized by the BACEN and CVM; and – through its representative, register as a non-Brazilian investor with the CVM and register the investment with the BACEN.

Securities and other financial assets held by non-Brazilian investors pursuant to CMN Resolution no 2,689 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the BACEN or the CVM. In addition, securities trading is restricted to transactions carried out in the stock exchange or through organized over-the-counter markets licensed by the CVM.

3 - What are Helbor common shares rights?

Helbor’s capital stock consists of nominal common shares without par value only. Pursuant to its bylaws, the holder of each common share has the right to one vote in each shareholders’ meeting. Except as provided for in the Brazilian Corporation Law, holders of the Company’s common shares have preemptive rights in connection with capital increases, proportionally to their holdings.

Holders of Helbor’s common shares are entitled to dividends and other distributions. Under the rules and regulations of the Novo Mercado, the Company’s common shares have the right to be included in a public tender offer of shares in case of sale of its control, at the same terms and conditions offered to the shares of its controlling shareholders.

Under the Brazilian Corporation Law, neither Helbor’s bylaws nor actions taken at a shareholders‘ meeting may deprive any of its shareholders of certain rights, including:

  • the right to participate in the distribution of profits;
  • the right to participate in any remaining residual assets in the event of Helbor’s liquidation, in proportion to their respective interests in its share capital;
  • the right to supervise the management of its business, as specified in the Brazilian Corporation Law;
  • preemptive rights in the subscription of its common shares, debentures convertible into its common shares or warrants, except under circumstances specified in the Brazilian Corporation Law; and
  • right of withdrawal in the cases set forth under Brazilian Corporation Law.
4 - What is the depositary institution for Helbor’s shares?

The depositary institution contracted by Helbor is Banco Bradesco, which is responsible for maintaining records of shares and shareholder information, dividend payments, receipt of amounts issued by Helbor and the exercise of rights.

5 - What are the differences between launches, contracted sales, revenues and receipts?

A launch is an event in which a new real estate development is offered to the market, and its value is equal to the number of units launched multiplied by the sales price.

Contracted sales correspond to all purchase and sale agreements signed between Helbor and its clients in the period, which can refer to both newly launched units or units already in the Company’s inventory.

Revenues are recognized according to the current accounting practices in Brazil – the Percentage of Completion Method. In other words, revenues are recognized according to the financial evolution of our projects, measured by calculating the costs incurred for the project in relation to the budgeted cost.

Receipts are amounts relative to payments made by our clients and recorded in the Company’s cash position.

6 - How can I contact the Investor Relations Area?

Click here to access the contact information.

7 - Why does Helbor calculate EBITDA?

From time to time, Helbor discloses so-called non-GAAP financial measures, primarily EBITDA. EBITDA means income before net financial expenses, income and social contribution taxes, depreciation and amortization. EBITDA is not Brazilian or the U.S. GAAP measurement, does not represent cash flows for the periods presented and should not be considered alternatives to net income as an indicator of Helbor’s operating performance or as an alternative to cash flows as an indicator of liquidity. EBITDA does not have a standardized meaning and Helbor’s definition of EBITDA may not be comparable to EBITDA as used by other companies.

Although the EBITDA does not provide, according to the Brazilian Accounting Principles (BR GAAP) or the U.S. Accounting Principles (US GAAP), measures of the operational cash flows, Helbor management uses EBITDA to measure its operating performance. Additionally, the Company management believes that disclosure of EBITDA can provide useful information to investors, financial analysts and the public in their review of the Company’s operating performance and its comparison to the operating performance of other companies in the same industry and other industries.

8 - What is Helbor’s dividend distribution policy?

Click here for more information on Company’s dividend policy.

9 - Where can I find information on the projects launched by Helbor?

Click here to access Helbor’s launch history.

10 - What is Tag Along?

Tag Along is an instrument of defense of the minority shareholder when a company is sold by the controlling group. It is the guarantee that the buyer should not only negotiate with the controlling group, but also realize a public offer of acquisition of all ordinary shares of the company.

The Brazilian Corporate Law (Law 6,404) stipulates that this public offer should be of at least 80% of the value offered to the controlling group. Helbor, however, is part of the Special Tag Along Stock Index (ITAG), which assembles the companies with better guarantees than the ones stipulated by law. Helbor´s shareholders are entitled to a 100% Tag Along.

11 - How is the revenue recognized?

In the market of real estate development there is a time division between the acquisition of a product and its effective construction and delivery. Thus, while certain businesses obtain their revenue at the moment of sell, it is possible for a real estate developer to sell its products on the launching date, even before its construction. The accounting methodology used to recognize these revenues is the percentage of completion (PoC), which follows the pace of construction.

As an example, we have the scheme of a sell of R$100,00:

Value of Revenues Received R$ 35 R$ 50 R$ 60 R$ 80 R$ 90 R$ 100 R$ 100
Percentage of the Budget Already Used 0% 30% 50% 80% 100% 100%
Recognized Revenue R$ 18 R$ 40 R$ 72 R$ 100 R$ 100
Launching Construction Period End of Instalments
12 - How do the land purchases by swap agreements work?

In the acquisition of land by swap agreement, in opposition to cash disbursement, the real estate developer offers the seller a percentage of the sale value (financial swap agreement) or a defined number of units delivered (physical swap agreement) at the end of the construction. This process helps the company to avoid compromising its cash flow, leaving space for investments in other projects. Furthermore, the swap agreement diminishes the risks associated with the acquisition of land, making it easier for the company to return the asset in case of a change of scenario.

On the other hand, offering the seller this kind of participation in the project leaves space to the possibility that the rise of prices of the constructed units increases the expenditure, in comparison to the cash disbursement option. Nevertheless, this possibility may also be seen as another incentive for the seller to accept the acquisition offer. Helbor´s land bank has 72.55% of its inventory acquired by swap agreement.

13 - What are the criteria used for the income classification of the projects?

The criterion for the segmentation is based on the average value of the units of the project:

  • Lower Middle Income – Units priced between R$150,000 and R$250,000
  • Middle Income – Units priced between R$250,000 and R$600,000
  • Upper Middle Income – Units priced between R$600,000 and R$1,000,000
  • High Income – Units priced above R$1,000,000.
14 - Why doesn´t Helbor offer preference shares (PN)?

Helbor is part of BM&FBOVESPA´s New Market (“Novo Mercado”), the highest standard in corporate governance. One of the demands for the company to be listed under the New Market (“Novo Mercado”) standards is the emission of ordinary shares (ON) exclusively.

Preference shares (PN) have priority in the distribution of dividends, as well as by capital reimbursement. Nevertheless, these shares do not have voting rights in shareholder’s meetings, in opposition to the ordinary shares. Thus, the New Market (“Novo Mercado”) standards secure the voting rights and equal dividends to all shareholders.

15 - What does it mean to be part of BM&FBOVESPA´s New Market (Novo Mercado)?

In the year 2000 BM&FBOVESPA created three new special listing segments of corporate governance: Level 1, Level 2 and the New Market (“Novo Mercado”). The objective of these changes was to open space for the development of the Brazilian capital market, encouraging companies to voluntarily incorporate the more rigid criteria of corporate governance and information disclosure, extremely important factors for the investor to be better protected and informed.Among these segments, the New Market (“Novo Mercado”) is the one with the highest level of corporate governance practices, demanding, for instance:

  • The emission of ordinary shares (ON) exclusively.
  • A minimum free float of at least 25% of all shares.
  • Efforts in favor of the dispersion of shareholder base.
  • The prohibition of bylaw resolutions that limit the number of votes of a shareholder or a group of shareholders in percentages smaller than 5%. Except in cases where demanded by law, the company should also not establish a qualified quorum for the deliberation of subjects that should be submitted to the shareholder’s meeting.
  • A minimum number of 5 members for the Board of Directors, 20% of them as independent members, with a maximum mandate of 2 years
  • The forbiddance of accumulation of the positions of President of the Board of Directors and Chief Executive Officer (CEO) by the same person (implementation expected by 2014).
  • The public offer of reacquisition of all shares, at least by the economic value, in case of an exit of the New Market (“Novo Mercado”) segment or the stock market.

Click here for a complete list of New Market (“Novo Mercado”) regulations (Portuguese only):

16 - What is Free Float?

Free Float is the amount of shares effectively in negotiation. The accountability of the Free Float does not consider the shares of the controlling group, of the company directors, of the owners of more than 5% of the company´s total capital, the shares with restrictions and the treasury shares.

The importance of the Free Float comes from the necessity of liquidity. A wider quantity of free shares in the market may tend to make it easier to commercialize them. Companies listed under the New Market (“Novo Mercado”), as Helbor, are obliged to present a free float of at least 25% of the total of shares emitted by the company.

17 - Does Helbor disclose Guidances?

Guidance, according to CODIM (Brazilian Committee for the Orientation and Disclosure of Market Information), is any prospective information of quantitative or qualitative nature, provided by the company, about its future performance. Helbor does not publicize any declarations in this sense.

18 - What are Dividends and Interests on Own Capital? How are they different from one another?

Dividend is the portion of the company profit that is distributed to the shareholders at the end of the fiscal year. The Law 6.404/706 (Brazilian Corporation Law) demands the creation of a mandatory minimum dividend, which should be stipulated by the bylaw of the company. The information about Helbor´s dividends policy can be found in the Dividends section.

Interests on Own Capital (JCP) are another way of distributing profits to the shareholders. Opposed to the dividends, which are exempted from taxation, the JCPs are taxed at 15% by the Income Tax Deducted at Source. Nevertheless, they can be registered as an expense by the company. Furthermore, the JCP are also accounted as part of the minimum mandatory dividend which should be paid by the company, but only after its tax deduction.

19 - What is a Special Purpose Company?

A Special Purpose Company is an entrepreneurial entity restricted to a determined objective, possibly having a specific period of existence, aligned with the conclusion of the project for which it was destined. There is no specific type of business entity designed for the Special Purpose Companies, which should use the normal business entities already available, such as a limited company or a public listed company.

Helbor utilizes Special Purpose Companies in its process of real estate development, so that each different project corresponds to a specific company. This strategy permits the partnerships to be better structured in each enterprise, and has the benefit of isolating the accountability and the financial risk of the different projects.