UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN ISSUER
PURSUANT
TO RULE 13a-16 OR 15b-16 OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the month of January 2017
Commission
File Number 001-35591
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GRAÑA Y MONTERO S.A.A.
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(Exact name of registrant as specified in its charter)
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GRAÑA Y MONTERO GROUP
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(Translation of registrant’s name into English)
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Republic of Peru
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(Jurisdiction of incorporation or organization)
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Avenida Paseo de la República 4667, Lima 34,
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Surquillo, Lima
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Peru
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(Address of principal executive offices)
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Indicate by
check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F:
Form 20-F
__X__ Form 40-F ______
Indicate by
check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by
check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by
check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934.
Yes
______ No __X__
If "Yes" is
marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): Not applicable.
Messrs.,
Superintendencia del Mercado de Valores – SMV
Present.
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Reference: Relevant Information Communication
We hereby comply by providing an answer to the requirements of Official
Letter No. 564-2017-SMV / 11.1, in the same order in which they were
requested:
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1.
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In relation to the relevant information communication reported
by Graña and Montero S.A.A. on January 24, 2017, in which they
inform, among others, that the Ministry of Energy and Mines - MEM
terminated the Concession Agreement with Gasoducto Sur Peruano
S.A., and that:
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"(...) According to the analysis made by the Graña y Montero Group
with the information available to date, and under the agreements entered
into with the other shareholders of GSP, in the event that the payment
reaches 72.25% of the VCN we would recover more than 95% of the total
commitments which include the equity invested in GSP amounting to US $
220 million, the amount honored by the corporate guarantee granted to
the bridge loan conferred to GSP by a syndicate of five banks amounting
to US$ 129 million, as well as the percentage honored in relation to the
Guarantee of Fulfillment of the Concession Agreement that amounts to US
$ 52.5 million. In the case where the payment reaches 100% of the VCN,
these amounts would be fully recovered. Assuming a conservative
position, the Consolidated Financial Statements of Graña y Montero
S.A.A. corresponding to fiscal year 2016 will be prepared registering a
provision for impairment of the investment of US$ 35 million after
taxes, which is a result that considers receiving the minimum payment of
72.25% of the aforementioned VCN”.
Based on what was disclosed to the market and for transparency
purposes, Graña y Montero S.A.A. is required to, on the date, report as
relevant information communication, the following information:
The documentation and information containing and supporting the
analysis referred to in the preceding paragraph - contained in said
relevant information communication - clearly explaining the amounts and
percentages indicated.
Likewise, the legal and/ or financial documentation and reports that
support the recovery scenarios referred to, specifying, as appropriate,
if the assumptions, numbers or calculations reported are accurately
contemplated in the agreements and/ or contracts related to the
Gasoducto Sur Peruano S.A. or if they are interpretations of Graña y
Montero S.A.A., in which case such interpretation must be supported
indicating the contingencies that could be faced, including the possible
misinterpretation of the different parties involved in the concession.
In addition, the documentation detailing the calculation or estimate
of the provision for recovery.
Likewise, all sufficient additional information or documentation that
contributes to the transparency of the disclosed information.
In this regard, as informed in the relevant information communication
dated January 24, 2017, Graña y Montero S.A.A. made the following
investments and acquired the following obligations for a total amount of
US $ 423 MM in relation to the concession (the "Concession") owned by
Gasoducto Sur Peruano S.A. ("GSP"), according to the following detail:
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a.
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Capital investments were made in GSP for US 241 MM, through our
subsidiary Negocios de Gas S.A.
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b.
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Graña y Montero S.A.A's credit lines assumed a Guarantee of
Fulfillment with the Peruvian State for US 52.5 MM.
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c.
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A corporate guarantee amounting to US 129 MM was granted in favor of
the syndicate of banks that granted the bridge loan to GSP.
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The recovery of these investments and the honoring of the indicated
obligations must be made in line with flows that Graña y Montero SAA
will receive by GSP, who, in turn, has as source of income the payment
of the Net Book Value of the Concession Assets ("VCN") by the
Government, for which the following premises have been considered:
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d.
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As indicated in our relevant information communications dated
November 25, 2016, January 20 and 24, 2017, according to the
Concession Agreement, GSP is entitled to receive as a consequence of
the termination of the Concession a payment for the Concession
Assets of not less than 72.25% of the VCN and not more than 100% of
the VCN. For the purpose of calculating the 95% of the investment
recovery and honoring of obligations of Graña y Montero S.A.A., a
payment has been made to GSP by the Peruvian Government equal to
72.25% of the VCN (the most conservative amount).
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e.
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According to the Concession Agreement, the VCN must be calculated
annually by an audit firm. In this sense, the VCN used for our
analysis has been calculated by GSP based on (i) the provisions of
the Concession Agreement; and, (ii) the methodology used by said
audit firm for the calculation of the VCN presented to the
Government for the year 2015.
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f.
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Graña y Montero S.A.A., having honored guarantees for the payment of
GSP obligations (referred to in subparagraphs b. and c. above, would
be GSP’s creditor.
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g.
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Likewise, Graña y Montero S.A.A., through its subsidiary Negocios de
Gas S.A., has as a shareholder of GSP, a credit claim against the
balance of the remaining GSP asset once the creditors of GSP are
paid.
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h.
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Graña y Montero S.A.A. has signed and adopted agreements with the
other shareholders of GSP in which a certain priority of payments is
established with respect to certain credits of the shareholders of
the company, which benefit, among others, Graña y Montero S.A.A.
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As a consequence of the above:
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i.
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Graña y Montero S.A.A. recovers as a creditor of GSP all the amounts
honored by the concepts indicated in subparagraphs b) and c) above.
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j.
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Once all GSP obligations have been met against third parties, the
remainder is applied in accordance with the agreements indicated in
clause h) above, meaning Graña y Montero S.A.A. would recover a
total of US 220 MM. That is, Graña y Montero S.A.A. would have a
loss of US 21 MM in capital investments.
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k.
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In this sense, when Graña y Montero S.A.A. recovers US 402 MM of the
US 423 MM invested in GSP, it will have a recovery equal to 95% of
the invested.
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The above is based on the Concession Agreement, the agreements signed
and entered into with the other shareholders of GSP, the calculation
methodology of the VCN applied in the year 2015 and taking into account
the current financial situation of GSP. It should be reiterated that the
analysis has been carried out with the information available to date
therefore it may vary based on future events that we are not aware of,
or on the indication that the definitive calculation of the VCN must be
made by an audit firm of international prestige designated in accordance
with the Concession Agreement.
On the other hand, as indicated, according to our estimates, of capital
investments made to the GSP project for US 241 MM we estimate to recover
US 220 MM generating a loss of US 21 MM that has been registered in the
financial statements as investment impairment, additionally, the equity
value of GSP, which had been recorded in the financial statements in
accordance with the accounting standards for a total of US 20MM, has
been written off and the discount of the future recovery receivable
(from the VCN and described in the previous paragraphs) has been
recorded for US 4 MM, as established by the accounting standards.
Finally, the deferred income tax has been considered for the loss
generated, for a total of US 7MM. The sum of all these effects reaches
the total of US 38MM as shown in the financial statements that were
approved yesterday by the Board of Directors of Graña and Montero S.A.A.
and reported as relevant information communications.
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2.
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The causes, circumstances or liquidity needs that have
motivated the divestment plan disclosed to the market in the
relevant information communication on January 26, 2017, informing
the situation of Graña y Montero S.A.A. in the national and/ or
international financial system, and whether or not they have
undergone any change or modification.
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Regarding the causes, circumstances or liquidity needs that have
motivated the divestment plan communicated in the relevant information
communication on January 26, 2017, we inform that, as a result of the
termination of the GSP Concession, Graña y Montero S.A.A. must meet 3
specific commitments:
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i.
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US $ 150 MM structured to 5 years with a syndicate of banks led by
Credit Suisse with which Graña y Montero S.A.A. Has had discussions
so that the terms and conditions of such credit are maintained as
originally agreed.
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ii.
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US $ 129 MM corresponding to the corporate guarantee issued by Graña
y Montero S.A.A. In relation to the Bridge Credit in favor of GSP to
which will be applied a first payment of US $ 30 MM already agreed
as part of the structuring of the balance.
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iii.
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US $ 52.5 million owed to Chubb Insurance Company, the issuer of the
Guarantee of Fulfillment of the Concession Agreement with which it
has taken the necessary actions in order to agree the terms for the
payment of said debt.
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Considering that conservatively we have estimated that the recovery of
the VCN could occur in a maximum of three years, Graña y Montero S.A.A.
has decided to implement a divestment plan with the main objective of
strengthening liquidity and that the companies that make up the Graña y
Montero Group maintain the existing credit lines to continue their
operations normally.
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3.
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The list of assets or other contents in the referred divestment
plan.
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Regarding the list of assets or others, contained in the referred
divestment plan approved by the Board of Directors of Graña y Montero
S.A.A. and informed as a relevant information communication on January
26, 2017, the aforementioned plan establishes divesting the
non-strategic assets of the Group up to the amount of US 300 MM, having
identified a total of non-strategic assets with a value of up to US
550MM.
In this sense, of the total assets identified, Graña y Montero S.A.A.
will carry out a process to define which assets will be subject of sale
up to the sum of US 300MM. As the assets of the sale are defined,
relevant information communications will be disclosed to the market. The
Group's objective is to obtain US 51MM in cash in the first two quarters
of 2017, US 170MM in the third quarter of 2017 and US 99MM in the fourth
quarter of 2017.
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4.
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The current situation of the Chavimochic Project - III Stage,
stating whether this project is being implemented or paralyzed,
and the possible effect of this on the financial situation of its
representative
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With regard to the current situation of the Chavimochic Project - III
Stage, we have complied with specifying that the Concession Agreement is
still in force. In terms of project work, Phase I of the project, Palo
Redondo Dam, has an approximate 75% progress, and as a requirement for
the continuation of the works, it is necessary to sign an operative
addendum to the Concession Agreement, which allows, among other issues,
the execution of what remains of the project. To date Graña y Montero
S.A.A. has a participation of 26.5% in Concesionaria Chavimochic S.A.
The Group's exposure to the project comprises (i) capital contributions
of approximately S/. 29.0MM and (ii) a guarantee of fulfillment for US
8.3MM.
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5.
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Detailed and updated list of the national and international
projects in which its representative directly or through companies
of its economic group or through associations or consortia or
similar, is participating with Odebrecht or companies of its
economic group. For each case, indicate the participation
percentage and the amount of the project, as appropriate.
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In relation to the detailed and updated list of projects in which,
directly or through a Group company, we have been participating with
Odebrecht, we hereby announce the following:
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Name of the Project
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Company of the Group
participating in the Project
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Participation percentage
in the Project
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Approximate investment
in the Project
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Concession of Major Hydraulic Works of the Chavimochic Project –
Stage III
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Graña y Montero S.A.A.
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26.5%
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US 700 MM
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Improvements to Energy Security and Development of the Southern
Gas Pipeline (GSP)
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Negocios de Gas S.A.
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21.49%
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US 4,200 MM.
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We should also point out that, through our subsidiary GyM S.A, we hold a
minority stake in the consortiums responsible for the construction of
each of these projects, specifically we have a 26.5% stake in the
consortium constructing Major Hydraulic Works of the Chavimochic project
- III Stage, and 29.0% in the construction consortium of the
Improvements to Energy Security and Development of the Peruvian Southern
Gas Pipeline project.
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6.
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The start of any administrative sanctioning or judicial
proceeding involving Graña y Montero S.A.A. or its directors, in
accordance with what is established in the applicable regulations.
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In relation to the punishing administrative procedures or judicial
processes that involve the company or its managers, related to the
termination of the Concession Agreement of the Gasoducto Sur Peruano S.A
project, we inform you that to date and to the best of our knowledge, we
have not been notified with any.
Sincerely,
____________________
/s/ Claudia Drago Morante
Stock Market Representative
Graña y Montero S.A.A.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GRAÑA Y MONTERO S.A.A.
By: /s/ CLAUDIA DRAGO MORANTE
Name: Claudia Drago Morante
Title: Stock Market Representative
Date: January 27, 2017
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