Mrs,
ESSENTIAL FACT
COMPANIES LA POLAR S.A.
REGISTRATION IN THE SECURITIES REGISTRY NO. 806
Santiago, December 22, 2022
Solange Berstein Jáuregui
Financial Market Commission
Av. Libertador Bernardo O’Higgins N° 1449
Santiago
From our consideration:
On behalf of Empresas La Polar S.A. (hereinafter, the “Company”), by virtue of the provisions of Article 9 and the second paragraph of Article 10 of Law No. 18,045 on the Securities Market, and numeral 2.2 of Section II of General Standard No. 30 of the Financial Market Commission, Being duly empowered, I hereby inform the following as an essential fact:
On September 5, 2021, it was reported as an essential fact that H.E. On September 3, 2021, the Supreme Court had accepted the appeal on the merits filed by the Administradora de Fondos de Pensiones Capital S.A. (hereinafter, “AFP Capital”) against the resolutions of the 13th Civil Court of Santiago (the “Court”) and the Illustrious Court of Appeals of Santiago in the case Rol C-15102-2011 (the “Case”), it was decided that the Company and other defendants should indemnify AFP Capital. The final amounts to be compensated to AFP Capital were reserved for the stage of compliance with the Court’s ruling.
On this date, the Company and AFP Capital signed a document called “Agreement on Partial Settlement, Withdrawal and Payment” by which they agreed, among other terms and conditions, the following (the “Agreement”):
” With respect to the Company, both parties agreed that the amount to be compensated to AFP Capital will be the single and total amount to be determined judicially by the Court, without considering the costs (the “Liquidation of the Compensable Amount”).
= With respect to the judicial implications in the Case, the Company and AFP Capital agreed to submit to the Tribunal a brief giving an account of the Agreement, and, in turn, the Company will desist from the exceptions to incidental performance of the Cause, as well as from the appeals deducted, related to (1) its exceptions to incidental performance, (11) the decision rejecting the objection of lack of timeliness in performance raised by the Company to such incidental performance, (iii) the resolution of the Court that decreed the seizure of the offices, warehouses, parking lots, and movable property of the Santa Clara Building 207, Huechuraba, trademarks and certain checking accounts, all owned by the Company (the “Embargo”), and (iv) the resolution that rejected the incident of nullity of the Embargo.
The payment of the Liquidation of the Indemnifiable Amount will be made by the Company as follows: (1) a first payment of $500 million, to be paid no later than December 30, 2022, (ii) the balance of the amount of the Liquidation of the Indemnifiable Amount will be paid in a single installment on the fifteenth anniversary counted from this date (the “Original Maturity Date”), accruing a fixed annual interest rate of UF + 0.3%, (iii) however, with the annual Audited Financial Statements, the Company must calculate its free cash flow and, in the event that as of December 31 of the years 2023, 2024 and 2025, the free cash flow is positive by more than $ 4,000,000,000, in accordance with the formula included in the Agreement, the Company shall make a mandatory advance payment equivalent to 25% of the free cash flow in excess of such $4,000,000,000, with an annual limit of up to $1,000,000,000, and as of December 31, 2026, the Company shall make a mandatory advance payment equivalent to 25% of the positive free cash flow, whatever it may be, with a limit of $1,000,000,000 per year, (iv) in the event that on the eighth anniversary counted from this date, the amount of the Liquidation of the Compensable Amount has been paid at least 30%, the obligation to pay the principal owed will be extended to the twentieth anniversary counted from this date, and the balance of the principal owed of the Liquidation of the Compensable Amount will accrue a fixed annual interest rate of UF + 1.0%; (v) accrued interest shall be paid semi-annually; and (vi) the Company may at any time make voluntary payments or advance payments of the amount owed to AFP Capital.
Once the $500 million referred to in paragraph (1) of the previous point has been paid, AFP Capital must request and obtain from the Court the lifting of the Embargo, and may not request new precautionary measures or embargoes.
To the extent permitted by law and applicable regulatory regulations, the amount owed by the Company to AFP Capital will be restructured into bonds issued by the Company and registered with the CMF for the specific purpose of such restructuring, which shall be delivered in lieu of AFP Capital’s claims under the Agreement.
= In order to guarantee the Agreement, the Company will constitute a second degree mortgage in favor of AFP Capital on the property of its property located at Santa Clara Street No. 207, commune of Huechuraba, which must be raised once the bonds of the Company have been issued or the promissory note has been subscribed for the equivalent of the Liquidation of the Compensable Amount.
The definitive financial effects that the Agreement may have on the assets, liabilities or results of the Company will be determinable once the value of the Liquidation of the Compensable Amount has been resolved by the competent court.
Yours faithfully yours faithfully,
Manuel Claro
Vice Chairman of the Board
Empresas La Polar S.A.
Link to file in CMFChile: https://www.cmfchile.cl/sitio/aplic/serdoc/ver_sgd.php?s567=0a317e0bc8f4db13b69f7f6d9f3da538VFdwQmVVMXFSWGxOUkZFMFRucFZlVTlCUFQwPQ==&secuencia=-1&t=1682376108
