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Use of Proceeds We estimate that our net proceeds from the global offering, after deducting underwriting discounts and commissions and estimated offering expenses, will be approximately US$[ ] million, or approximately US$[ ] million if the international underwriters exercise their over-allotment option in full. This estimate assumes an initial public offering price of US$[ ] per ADS, which is the mid-point of the offering price range indicated on the cover of this prospectus. The global offering is an important component of our capital expenditure program, through which we plan to invest approximately US$533.4 million (R$1.24 billion at the commercial selling rate published by the Central Bank of Brazil for March 31, 2002) in the expansion of our operations over the next five years. We intend to use the proceeds in the following manner: - US$[ ] million (R$[ ] million at the commercial selling rate published by the Central Bank of Brazil for March 31, 2002), or [ ]% of the net proceeds, on capital expenditures, principally to expand our wastewater system. - US$79.3 million (R$184.2 million at the commercial selling rate published by the Central Bank of Brazil for March 31, 2002), or [ ]% of the net proceeds, to repay amounts due to the state of Parana as advances from shareholders, assuming interest accrued through an anticipated repayment date of June , 2002. The applicable interest rate is based on the average interest rate of borrowings obtained by us during the periods the advances have been outstanding (i.e. the variation of the Taxa Referential (Reference Rate), the Central Bank of Brazil's short term floating reference rate, plus approximately 8% per annum). Since these amounts were contributed to us by the state as advances, they have no contractual due date, except for our obligation to pay back such advances no later than 30 days after we receive the proceeds from this offering. For a more detailed description of these amounts, see "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and capital resources -- Advances from shareholders". - US$[ ] million (R$[ ] million at the commercial selling rate published by the Central Bank of Brazil for March 31, 2002), or [ ]% of the net proceeds, to repay our outstanding commercial paper with a fixed annual interest rate of [ ]% scheduled to mature on June 28, 2002, as further described the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and capital resources -- Past and anticipated capital expenditures -- Short-term debt". We may use a portion of the amount dedicated to capital expenditures for acquisitions of new concessions, related lines of business or other aspects of our capital expenditure plan, depending on the timing and desirability of new opportunities that arise. We do not, however, have any specific business acquisitions planned or contemplated at this time. If the international underwriters exercise their over-allotment option, we intend to use the proceeds from that sale of additional ADSs and preferred shares for capital expenditures. We intend to invest a portion of the net proceeds in high-grade, Brazilian short-term investments pending their use as described above.