Business Context and Reporting Period
This Form 6-K filing by Nu Holdings Ltd. (NYSE: NU, B3: NUBR33) is dated July 10, 2023. The document serves as a formal notice to holders of Level III Brazilian Depositary Receipts (BDRs) regarding the voluntary discontinuance of the Level III BDR Program. The filing details the regulatory approval received from the Brazilian Securities Commission (CVM) on June 27, 2023, and outlines the procedures for converting or selling these securities.
Key Financial Metrics
The filing does not contain current period revenue, profit, cash flow, or debt metrics. It provides historical market data and book value estimates for informational purposes regarding the BDR discontinuance:
- Weighted Average BDR Level III Price (12 months): R$ 4.33
- Weighted Average Class A Ordinary Share Price (12 months, USD): $5.00
- Weighted Average Class A Ordinary Share Price (12 months, BRL): R$ 25.65
- Equity Value per BDR (as of March 31, 2023): R$ 278.99
- Equity Value per Class A Ordinary Share (as of March 31, 2023): $1.44
Material Changes
The primary material change is the approved discontinuance of the Level III BDR Program, which will result in the cancellation of the Company's registration with the CVM as a foreign publicly traded company issuer of "Category A" securities. Following the discontinuance, the Company will no longer have outstanding securities traded in Brazil under the Level III program.
Outlook, Management Commentary, and Risks
Discontinuance Options: Holders of Level III BDRs have a 30-day "Choice Period" (July 13, 2023, to August 11, 2023) to select one of three outcomes:
- Receipt of Class A Ordinary Shares: Convert 6 Level III BDRs into 1 Class A Ordinary Share tradable on the NYSE. Investors must open a custody account with a NYSE-authorized broker.
- Receipt of Unsponsored Level I BDRs: Convert 1 Level III BDR into 1 Unsponsored Level I BDR tradable on B3 (Brazilian exchange).
- Sales Procedure (Default): If no choice is made, the underlying Class A Ordinary Shares will be sold on the NYSE. Proceeds will be converted to Brazilian Reais and distributed to holders, net of taxes.
Risks and Contingencies:
- Sale Price Risk: The Company explicitly states it assumes no obligation to sell shares at a specific price. Sales may occur via block trades at a discount to market quotation prices.
- Exchange Rate Risk: Proceeds from the Sales Procedure will be converted at the current USD/BRL rate on the day of conversion.
- Costs: While the Company bears the costs of the disassembly and sales procedure, investors are responsible for taxes and costs related to opening/maintaining NYSE custody accounts.
Important Facts for Investors to Verify
- Choice Period Deadline: Investors must act by August 11, 2023, to avoid automatic liquidation of their holdings.
- Custody Requirements: Investors opting for Class A Ordinary Shares must have an active custody account with a NYSE-authorized broker before the transfer date.
- Trading Suspension: Level III BDR trading on B3 ends August 11, 2023; Unsponsored Level I BDR trading begins August 14, 2023.
- Tax Implications: Investors are solely responsible for verifying tax and exchange effects of the transaction in their jurisdiction.
- Registration Cancellation: The Company will cease to be registered as a foreign issuer with the CVM upon completion of the program discontinuance.