n 2005, the Gerdau Group issued a stock dividend to shareholders of its two listed companies in Brazil, Metalúrgica Gerdau S.A. and Gerdau S.A. The operation consisted of the incorporation of capital stock reserves and the issue of new shares. For each lot of 100 shares, 50 bonus shares of the respective company were credited.

The basis for the operation, discussed at the two companies’ Board meetings, was the capitalization of investment resources and working capital over previous fiscal years, resulting in capital stock increase for both companies – from R$ 1.7 billion to R$ 2.5 billion in the case of Metalúrgica Gerdau S.A., and from R$ 3.5 billion to R$ 5.2 billion for Gerdau S.A.

The operation allowed greater access to the companies’ shares by small investors, as the cost of a standard lot was reduced in the same proportion as the stock offering.