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Graña y Montero Will Fulfill All Its Financial Obligations

Wednesday, January 25, 2017 12:57 am EST

Dateline:

LIMA, Peru

Public Company Information:

NYSE:
GRAM
PE:
GRAMONC1
"While we have seen that in all scenarios the return of the amount invested in GSP will provide us with the necessary liquidity to meet 100% of our commitments, the Group is prepared to take care of them before the repayment is made"

LIMA, Peru--(BUSINESS WIRE)--Graña y Montero S.A.A. (NYSE:GRAM) (BVL:GRAMONC1) (“the Company,” “the Group” or “Graña y Montero”) a leading Engineering and Construction company, announced today that after the Ministry of Energy and Mines terminated the Peruvian Southern Gas Pipeline concession contract, the Company which is a shareholder of 20% of the concessionaire, ensures that it will fully comply with all its financial obligations and that it has the liquidity to do so, even before they receive from the Government the repayment of the amount invested.

"While we have seen that in all scenarios the return of the amount invested in GSP will provide us with the necessary liquidity to meet 100% of our commitments, the Group is prepared to take care of them before the repayment is made," said Mario Alvarado Pflucker, Chief Executive Officer of the Group.

For a few months, Graña y Montero has been working on a divestiture plan that will be presented for approval in its next Board of Directors. The total amount of assets that the Group expects to sell amounts to US$ 300 million, which together with an EBITDA that in the last 12 months has exceeded US$ 200 million, would give the Group the liquidity to fulfill all its obligations.

It should be emphasized that - according to the analysis made by Graña y Montero under the agreements signed between the shareholders of the concessionaire - in the event that the amount returned by the government after the auction corresponds to the minimum amount guaranteed by the contract, which is equivalent to 72.25% of the net book value of the Concession’s assets, the Group would recover more than 95% of the total amount invested.

Despite the reduction in Grupo Graña y Montero's backlog, at the end of 2016 this should amount to US$ 3,828 million, which is equivalent to approximately twice the revenues of 2016. Finally, it should be noted that the other subsidiaries of the Group will operate normally attending their needs of capital and financing with their own cash flows as they have been doing until today.

About Graña y Montero S.A.A.

Founded in 1933, Graña y Montero is the only Peruvian engineering and construction company listed on the Lima Stock Exchange since 1997 and in the NYSE since 2013. The Company has participated in the development of major engineering and construction projects in Peru, including large-scale, complex projects in the energy, mining, construction and real estate sectors.

It currently has subsidiaries in Chile and Colombia, and has been executing major projects in Panama, Bolivia, Jamaica and Ecuador. By the end of 2015, the Group’s international revenues amounted to approximately US$ 600 million.

With 83 years of operations, the Company has leveraged its engineering and construction expertise into complementary lines of business, such as the development, ownership, operation and maintenance of infrastructure assets, real estate developments, and the provision of technical services. The Company has significant investments in infrastructure concessions, such as three toll roads and Line 1 of the Lima Metro.

Contact:

Graña y Montero S.A.A.
Samantha Ratcliffe, 511-213-6573
Head of Investor Relations
samantha.ratcliffe@gym.com.pe
relacion.inversionistas@gym.com.pe
http://investorrelations.granaymontero.com.pe/
or
Belén Masson, 511-213-6565, ext. 6453
Investor Relations Assistant
belen.masson@gym.com.pe

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