Summary
Visa Inc. (V) filed an 8-K report on July 1, 2009, detailing the sale of a significant stake in its Brazilian subsidiary, VisaNet do Brasil. The company announced the sale of 136,478,372 shares following VisaNet do Brasil's Initial Public Offering (IPO). This transaction generated approximately $1 billion in gross proceeds for Visa International, Visa's wholly-owned subsidiary, with Visa Inc. retaining about half of this amount after taxes. Visa will recognize a GAAP gain of approximately $235 million in the quarter ended June 30, 2009, stemming from the sale. This gain reflects the subsidiary's book value, which includes an initial cash investment and accounting adjustments from Visa's 2007 reorganization. Additionally, the report mentions Visa's program to allow certain Class C stockholders to terminate transfer restrictions on up to 30% of their shares, a move that will not impact the outstanding share count.
Key Highlights
- 1Visa Inc. sold 136,478,372 shares of its Brazilian subsidiary, VisaNet do Brasil, in connection with its IPO.
- 2The sale generated approximately US$1 billion in gross proceeds for Visa International.
- 3Visa Inc. will retain approximately $500 million after applicable taxes from the proceeds.
- 4A GAAP gain of approximately $235 million (net of tax) will be recorded for the quarter ended June 30, 2009.
- 5The gain is based on Visa International's recorded book value of $535 million, including an $18 million cash investment and purchase accounting adjustments.
- 6Visa is offering Class C stockholders the ability to terminate transfer restrictions on up to 30% of their shares.
- 7The early termination of transfer restrictions for Class C shares will not dilute the outstanding share count.