IMPSA

The new APE includes the exchange of existing debt for new Negotiable Obligations with Public and Private Offering, a new International Bond and new Loans. The agreement includes a debt re profiling without a capital reduction and a three-stage plan.

(Buenos Aires – Mendoza, October 2020)

As described in the following paragraphs, the proposal for the reorganization of the capital structure presented by IMPSA in its APE Offer comprises 3 stages that will allow the Company to have the necessary working capital to grow again and with a sustainable debt that will significantly improve its balance sheet, allowing it to re-conquer the local and foreign markets, as it has done throughout its history. In turn, it will make possible the payment of the sums owed to all its creditors, without capital deductions and on reasonable terms, and offering them the possibility of obtaining an additional recovery through the timely sale in the market of the shares deposited in the Stocks Trust.

The worsening of the macroeconomic situation as of May 2018 (including the signing of a stand-by credit agreement between Argentina and the International Monetary Fund that imposed severe restrictions on public spending, with the consequent postponement and / or cancellation of various public works projects that IMPSA had reasonable expectations of obtaining), the total absence of financing and, finally, the advent of the COVID-19 pandemic and its impact on the world economy, affected the development of the sale process foreseen in the Trusts of Company Shares. It finally had to be suspended by the financial advisor hired for this purpose in the absence of interested buyers (despite the many potential investors contacted and the non-binding offers received at the time, which ultimately did not lead to the presentation of binding offers that would allow the sale process to advance), and in the face of the emergence and expansion of the pandemic.

Faced with this context, and attentive to the fact that various financial entities dependent on the National State (such as the Banco de la Nación Argentina and the Banco de Inversión y Comercio Exterior, among others) already participate in IMPSA in their capacity as Beneficiaries of the Stock Trust, and taking into consideration the strategic nature that the Company has for the country, IMPSA resorted to requesting assistance from the National Government, through the Ministry of Productive Development, which decided to carry out an analysis of the financial, patrimonial and legal situation of IMPSA. Having completed it, and attentive to the characteristics of the Company and the equity and financial situation it faces, IMPSA would be in a position to be a beneficiary of the “Assistance Program for Strategic Companies in the Liability Restructuring Process” (PAEERP) created by Resolution N ° 551/2020 of the Ministry of Productive Development (the “Program”), through which the granting of assistance to companies considered strategic for the country that require restructuring their liabilities to achieve economic and financial viability, is possible. The effective granting of the assistance provided for in the Program is subject to the approval by the creditors of the refinancing of the debt presented in the APE Offer, and to certain additional conditions that the APE Offer adequately meets.

Therefore, attentive to the substantial relevance that the assistance provided for in the Program has for the continuity of its operations, IMPSA has prepared the comprehensive proposal for the reorganization of its capital structure that is detailed in the APE Offer, which complies with the parameters and requirements established for the granting of the assistance within the framework of the Program, and whose main terms and different stages are summarized in the Annex hereto.

We understand that this proposal to rebuild IMPSA’s capital structure will provide a definitive solution to the problems that have affected its operations in recent years, while ensuring the cancellation of all its debts, under reasonable conditions and with achievable objectives. What is offered through the APE Offer is, in short, a re-profiling of the maturities of the debt, at par value and in dollars, without capital deductions.

Engineer Juan Carlos Fernández, CEO of IMPSA, stated: “We are convinced that the successful implementation of the proposal presented here, will allow IMPSA to return to the place that it occupied for decades at the forefront of global technological development in the field of hydroelectric, nuclear energy and other renewable energies, to continue producing Argentine technology exportable to the whole world”.

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