January 14, 2003 – Santiago, Chile.
Quiñenco S.A. (LQ:NYSE) reported today to the Chilean Superintendency of Securities and Insurance (SVS) the following significant information with respect to its investment in CCU:
On January 13, 2003, Quiñenco and its joint venture partner in Inversiones y Rentas (IRSA), the Schorghuber Group, agreed to put an end to the arbitration proceedings which have been underway since 2001. IRSA is the controlling entity of CCU with a 61.58% interest.
As part of the agreement reached between Quiñenco and the Schorghuber Group, the Schorghuber Group will pay a US$50 million definitive settlement to Quiñenco, on or before January 31, 2003.
The existing shareholders´agreement between the parties was modified on January 13, 2003 to allow the Schorghuber Group to sell its interest in IRSA to Heineken International B.V. (Heineken) within a three-year period provided that the following conditions are met: :
1) Heineken will not compete with CCU in its defined territory (Chile and Argentina);
2) Heineken will grant an exclusive license to CCU to produce, sell and distribute the Heineken brand in Chile and Argentina;
3) Heineken will adhere to the terms and conditions of the existing shareholders´agreement dated April 14, 1994 and modified on January 13, 2003.
IRSA, in an extraordinary board meeting held on January 13, 2003, agreed to propose to the Board of Directors of CCU that it submit for consideration to its shareholders a dividend distribution equivalent to 100% of its 2002 earnings and an additional dividend distribution against CCU´s retained earnings amounting to Ch$168,700 million (equivalent to US$237.4 million), to be paid within 180 days (in single or multiple distributions).
Finally, as part of the agreement reached to put an end to the conflict, Southern Breweries Establishment (SBE), a 50% subsidiary of CCU, has agreed, in principle, to sell the interest it holds in the Croatian brewery, Karlovacka pivovara d.d. (Karlovacka), to Heineken at a sales price equivalent to ten times EBITDA. The sale of Karlovacka will be subject to regulatory approval and approval by the Boards of Directors of Heineken, SBE, and its controlling entities, namely Lanzville Investments Establishment and CCU.