OREANDA-NEWS. March 29, 2011. Banco Indusval S.A. announces the closing of a strategic partnership to increase its capital, with the intake of a renowned team of partners and the reinforcement of its strategy in corporate credit, capital market and foreign trade.

The current institution controlling shareholders Manoel Felix Cintra Neto (former BM&F), Luiz Masagao (former BM&F) and Carlos Ciampolini will be joined by entrepreneur and former banker Jair Ribeiro (former Banco Patrimonio, Chase Manhattan and CPM Braxis), who will from now on be co-president of the institution.

These partners can also count on another strategic entrance: the Warburg Pincus, a leading global private equity firm, which has USD  36 billion in assets under management in companies around the world. This is the first investment of the global manager in a Brazilian bank, offering new frontiers for the long-term resources in the domestic financial sector.

Banco Indusval will hold a strategic investment of BRL  25 million on Sertrading's capital increase, taking a minority stake of 17.7in the leading foreign trade company. Banco Indusval will also hold an option of acquiring the remaining shares of the company over the next two years.

With the investment agreement and the arrival of new shareholders, Banco Indusval reinforces its strategy of pursuing excellence in corporate credit with a deep knowledge of their clients' activities, as well aims to become one of leaders of the growing fix income securities market.

The institution will change its commercial name to Banco Indusval & Partners, enhancing their character to work with partners and developing a culture of partnership with executives participating in the management and capital.

The agreement provides an increase of the bank's capital in the minimum amount of BRL  200 million (a value that could reach BRL  280 million, depending on the exercise of preemptive rights by the bank's existing minority shareholders).Of the total amount, have already been agreed to and will be fully paid up BRL  150 million by Warburg Pincus, BRL 21 million by current Banco Indusval controllers and BRL  30 million by Sertrading shareholders (Jair Ribeiro, Alfredo de Goeye, entre outros)

In parallel, the bank will sign an operating agreement with the company, with a term of five years, by which it is preferred for the purchase of receivables generated by Sertrading foreign trade operations, as well as for the development of certain markets together, expanding the product base of both organizations. Last year, the flow of foreign trade from Sertrading was BRL 1.6 bi, an increase of 45% over the previous year.

Sertrading also entered into a separate transaction to purchase the Brazilian and Argentine activities of J.P. Morgan foreign trade logistics services (JPMorgan Chase Vastera do Brasil and J.P. Morgan Vastera Argentina).

In addition, J.P. Morgan will extend a 2-year term loan with principal amount of USD 25 million to Banco Indusval and acquire 5-year term warrants that will allow it to secure a minority stake in Banco Indusval, corresponding to approximately 2.5% of the Banco Indusval's corporate capital after the capital increase. J.P. Morgan will not be part of the control group and will have no involvement in the management of Banco Indusval & Partners.

"The operation is a further outspread of the process of strengthening Brazilian companies in the domestic and global market. Our aim is to transform Banco Indusval into a great financial institution of the country: strong, agile and innovative," stated Manoel Felix Cintra Neto, chief executive of the bank's Administrative Council. "Besides benefiting from synergies and new products, this is the union of entrepreneurs of the

financial sector and foreign trade that have known each other and done business for over 25 years," he adds.

UNPRECEDENTED ALLIANCE

"The combined strengths of the companies and their partners, together with the global expertise of Warburg Pincus, give us a privileged position to exploit a booming market," said Jair Ribeiro, who returns to the financial sector after five years dedicated to leading the consolidation of the largest information technology services company in the country, CPM Braxis. Ribeiro will be co-CEO and, after the Central Bank's approval, become a part of the controlling group. Luiz Masagao shares the presidency with him. Alfredo de Goeye remains as chairman of Sertrading.

Led by a unique team of entrepreneurs, the institution will have a loan portfolio of BRL  2 billion and over 700 corporate clients. The Sertrading partnership enables Banco Indusval & Partners to have closer operational relationship to its clients, offering an even wider range of services and products in addition to expanding activities in the foreign trade platform.

"We want to offer innovative solutions for the market, developing differentials for the entire institution. Our proposal in corporate lending is to become more and more closer to our clients' operational activities, deeply knowing their structure and the market they serve. Moreover, we aim to position ourselves as one of the leaders in the fixed income corporate bond market," says Jair Ribeiro. "We believe that Brazil will enter into a new phase of capital market, with the expansion of the local bond market that has a grand potential growth. The United States corporate bond market has a volume five times larger than that of equity," he adds. The recently launched government package that encourages long-term private credit reinforces the bank's new strategy.

According to Luiz Masagao, at first, the bank will seize the natural synergy among its clients. "The bank's capitalization and the partnership to Sertrading will allow us to expand the assets portfolio with less credit risk, maintaining our characteristics of solidity and safety in terms of leverage, besides generating corporate credits with quality, because we can monitor our clients' operational aspects. We will offer an even greater range of financial products, including access to capital markets", he explains.

"Foreign trade will show exponential growth considering the whole economy, and that should expand Sertrading's field of activity. We intend to grow our market share and offer a wider range of services and products to our clients," stated Alfredo de Goeye.

"Investing in financial institutions has been a specialty of Warburg Pincus over the last 25 years. We have successfully invested and added value to more than 65 financial institutions around the world. We strongly believe in the Brazilian market, in the potential of the domestic credit and the corporate bond market, and above all, in the competence and integrity of the team that will lead Banco Indusval & Partners", says Alain Belda, managing partner of Warburg Pincus and CEO in Brazil. Upon the completion of this transaction, Alain Belda, who is former chief of the Administrative Council and CEO of Alcoa, will become a part of the company's Administrative Council.