Paranapanema (PMAM3), which is under court-supervised reorganization, approved on Tuesday, July 28, 2026, the 11th private issuance of convertible debentures, in a maximum amount of R$ 110 million and a minimum of R$ 100 million, with a 12-month term, to raise funds intended mainly to meet a R$ 100 million payment condition set out in a debt settlement agreement of approximately R$ 4.3 billion with 11 financial institutions.
Up to 11 unsecured debentures (with no collateral) will be issued, in a single series, with a unit par value of R$ 10 million, mandatorily convertible into the company’s common shares. The conversion price will correspond to 10% of the volume-weighted average price (VWAP) of Paranapanema’s common shares on B3 over the 30 days prior to the issue date, which represents a 90% discount to this average price, defined in light of a report indicating a negative book value of R$ 60.98 per share as of December 31, 2025.
The debentures will pay CDI (the benchmark interbank market rate) +5% per year during their term, with no scheduled amortization, and must be converted into shares at any time at the debentureholders’ discretion, or mandatorily on the maturity date of July 27, 2027, except in the cases of early maturity provided for in the indenture. Conversion is the sole form of settlement of the debentures, except in the event of early maturity.
Current shareholders will have preemptive rights to subscribe, with those holding shares on August 2, 2026 being entitled to subscribe 0.000000037012 debenture per share, with a 30-calendar-day subscription period from August 3 to September 1, 2026. There will also be additional periods for subscription of remaining and additional remaining debentures through September 8, 2026, with payment always due by 12:00 p.m. on the business day following each deadline.
Debentures not subscribed or not paid in by shareholders may be allocated, as of September 10, 2026, to previously identified investors in a private placement, with payment by September 11, 2026. The issuance allows for partial placement, provided the minimum amount of R$ 100 million is reached, and may result in potential dilution of 92.73% of the current shareholder base if the maximum amount is converted, or 92.07% if only the minimum amount is subscribed and converted.
