Klabin’s royalty agreement is cancelled after investors engagement

Sogemar has a license agreement to use the Klabin brand and pays royalties on profits to the Klabin family – in 2017, such payments totaled approximately $50 million reais. This related party transaction was always mentioned in the interactions between the company and its investors and the objective was to eliminate it. Sogemar would be merged into Klabin, eliminating the agreements in exchange for a financial compensation.

In March, Amec published a notice to the market mentioning the need of additional information about the proposal and recommending that investors actively exercised their voting powers in the shareholders’ meeting called by the company to analyze Sogemar’s merger, scheduled to be held on March 14. Controlling shareholders would not vote in the meeting.

On March 6, however, the company decided to cancel the meeting claiming that shareholders have not agreed with the operation.

Amec’s notice to the market is available here.