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.
| HOLDCO PARTICIPAÇÕES LTDA. Shareholders' Equity Appraisal Report – Book Value Base Date: November 30, 2009 Issue Date: December 10, 2009 |
| HOLDCO PARTICIPAÇÕES LTDA. |
| Shareholders’ Equity Appraisal Report – Book Value |
| Base Date: November 30, 2009 |
| 2 |
SHAREHOLDERS' EQUITY APPRAISAL REPORT - BOOK VALUE
ACAL CONSULTORIA E AUDITORIA S/S, a company specialized in assessments, headquartered at Avenida Rio Branco, 181- 18º andar, Centro, in the city and state of Rio de Janeiro, CEP 20.040 -007, registered in the Regional Council of Accountancy of the State of Rio de Janeiro (CRC/RJ) under number 1,144, and in the Brazilian Register of Legal Entities of the Ministry of Finances (CNPJ/MF) under number 28.005.734/0001 -82, having as technical representative Mr. Gelson José Amaro, Accountant, registered in the CRC/RJ under no. 049.669/O -4 and in the Brazilian Register of Natural Persons of the Ministry of Finances (CPF/MF) under no. 339.408.607/78, after all the studies and researches required, presents hereby the Appraisal Report on the value of the shareholders' equity of HOLDCO PARTICIPAÇÕES LTDA, a limited liability company, headquartered at Praia de Botafogo nº 370, 9º andar (parte), in the city and state of Rio de Janeiro, registered in the CNPJ/MF under no. 02.698.266/0001 -85, for reorganization purposes.
This appraisal report is summarized in sections, as follows:
| I. OBJECTIVES |
This Appraisal Report has the purpose of recording the assessment, by book value, of the shareholders' equity of HOLDCO PARTICIPAÇÕES LTDA., for reorganization purposes.
| HOLDCO PARTICIPAÇÕES LTDA. |
| Shareholders’ Equity Appraisal Report – Book Value |
| Base Date: November 30, 2009 |
| 3 |
| II. BASES AND APPROCAHES FOR THE VALUTATION |
Determining the value of shares of a company is subject to several variables, as well as to several factors out of control, so it will always consider subjective aspects. Some of the main aspects impacting on such determination are:
(a) The owners’ perspectives vs. the perspectives of a prospective buyer;
(b) The economic conditions allowing prior results may be better or worse in the future;
(c) The politic and economic context that may vary completely out of control;
(d) The strategic interests of business groups or of specific programs, such as the privatization one;
(e) The very existence of several assessment methods delivering very different results.
Therefore, determining the value of shares representing the capital stock is not a accurate, but a subjective process, depending on the expectations of the owner and how the shares are used.
However, there are several methods used to estimate the value of capital shares. Although the application of such methods may vary depending on facts and specific circumstances, they may, at least, indicate a reasonable amount range for the prior determination of such value.
2.1. EXAMPLES OF METHODS BASED ON THE VALUE OF THE NET ASSETS
Equity Assessment
This valuation focus is used to determine the market value of specific assets, to provide the base to certain adjustments to the net book value (as abovementioned) and as the start point to estimate the liquidation value. Moreover, the equity assessment provides a proper basis to the business value and is often used in companies’ negotiation operations, as the value adjusted by the applicable depreciations and obsolescence.
Liquidation Value
The liquidation value has been used as basis to price negotiations and, therefore, represents a start level of interest for both buyers and sellers.
The liquidation value is determined by the estimate of the company’s assets value, undertaking its conversion to currency in a short period, discounted of all the company’s obligations, as well as the business liquidation cost, including assessment fees, brokerage commissions, taxes and legal fees.
| HOLDCO PARTICIPAÇÕES LTDA. |
| Shareholders’ Equity Appraisal Report – Book Value |
| Base Date: November 30, 2009 |
| 4 |
The liquidation value may be determined considering both an ordered and a faster and forced business liquidation. This last focus will result in a lower value.
Such criterion, however, would not be that most adequate for companies’ shares assessment with operated activities ongoing.
2.2 EXAMPLES OF METHODS BASED ON INVESTMENT RETURN
Price/Profit Index
The price/profit ratio for open companies is known and may be easily used to achieve the estimated value of the shares of such companies by multiplying the P/P by the aggregate results expected. The average P/P ratio to the industry or to several open companies comparable can be used to reach an indication of the value. A premium for the controlling interest is often added to such value estimative.
An assessment by the P/P method can also be used to estimate the value of a given company. Assuming a profit increase rate estimated by the current shareholders and a return on the investment required by the purchaser, this rate can determine the profit multiple allowing it to reach its return purpose. This method allows buyer to determine the price it is willing to pay, and to compare it to that the seller wants to receive.
Net Cash Flow Discounted
The analysis of the net cash flow discounted may be used to estimate the value of a company, and, hence, of its shares, based on the current value of its cash flows estimates. In theory, this method should result in the same value as determined, by using the price/profit ratio, as it reflects the current perception of how much a company will worth in the future.
In practice, this analysis is increasingly used to determine the value of a company, as it is based on effective estimate of cash flows, incorporating aspects such as cost reduction by synergies, products development etc., and not only on the market perception of the company's future profits. Other aspects affecting the share market and, thus, the P/P index, are also eliminated upon the use of the analysis of the net cash flow discounted.
| HOLDCO PARTICIPAÇÕES LTDA. |
| Shareholders’ Equity Appraisal Report – Book Value |
| Base Date: November 30, 2009 |
| 5 |
| III. METHODOLOGY ADOPTED AND SUMMARY OF WORK PERFORMED |
There are several methods to set the value of a company, as already mentioned.
To determine the value of the shareholders' equity at book value of HOLDCO PARTICIPAÇÕES LTDA., on the base date of November 30, 2009, we used, for the purposes of this Report, the equity assessment method – net accounting value.
Within the parameters set to the preparation of this assessment, determining the equity value – net book value – of the shareholders' equity of HOLDCO PARTICIPAÇÕES LTDA., to the base date of November 30, 2009, is based also on a limited revision made to the financial statements of this company, surveyed at that date and audited by the company BDO Trevisan Auditores Independentes. This procedure was carried out according to certain regular standards of audit and, hence, includes proofs in the accounting records required to the specific purpose of determining the equity value – at net accounting value of the said equity. Those examinations evidenced that such records and elements were completely under the legal requirements, including the compliance with the general accounting principles usually accepted and evenly applied by the company, and the equity value - net accounting equity - did not exceed the market value.
In view of the foregoing, taking into account the provisions of Article 8 of Law nº 6404, dated December 15, 1976, as amended, the accounting books and records sourcing the Balance Sheet were checked, as well as the respective documents originating them, but in selective tests and in samples.
| IV. CONCLUSION |
After the due examinations and technical checks performed by us with the company, and based on the data mentioned in this Appraisal Report, we consider that the equity value – book value of HOLDCO PARTICIPAÇÕES LTDA.’s shareholders' equity, for the base date of November 30, 2009, is of R$ 516,724,000 (six hundred and sixteen million, seven hundred and twenty-four thousand reais), as per the table below.
| Descricption | R$1,000.00 | Quantity of Shares |
Shareholders' Equity Book Value per Share | |||
| CAPITAL STOCK | 3,029,659 | |||||
| Acumulated Losses | (2,512,935) | |||||
| Total Shareholdres' Equity | 516,724 | |||||
| Shareholders' Equity - Book Value | 516,724 | 3,029,659,161 | 0.170555159 | |||
| HOLDCO PARTICIPAÇÕES LTDA. |
| Shareholders’ Equity Appraisal Report – Book Value |
| Base Date: November 30, 2009 |
| 6 |
For all the legal purposes, namely the CVM Instruction 319, we declare that we have no interest, direct or indirect, in any of the companies involved in this work or in their operations, and there is no circumstance relevant that may characterize conflict of interest to the issuance of this Report. We had full access to all data, elements, information and files related to the companies involved, and there was no directing, restriction or hindrance by the managers and/or controllers limiting or restricting our conclusion.
And as an expression of our best technical understanding, we hereby sign this Appraisal Report.
Rio de Janeiro, December 10, 2009.
ACAL CONSULTORIA E AUDITORIA S/S
CRC- RJ 1.144
Gelson José Amaro
Partner in Charge
CRC - RJ – 049.669/O -4 – Accountant
SIGNATURE
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.
| TIM PARTICIPAÇÕES S.A. | |||
| Date: December 15, 2009 | By: | /s/ Claudio Zezza | |
| Name: Claudio Zezza | |||
| Title: CFO and Investor Relations Officer | |||
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will a ctually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.