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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

(Rule 13d-101)

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED

PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED

PURSUANT TO RULE 13d-2(a)

 

Under the Securities Exchange Act of 1934

 

Afya Limited

(Name of Issuer)

 

Class A Common Shares, par value US$0.00005 per share

(Title of Class of Securities)

 

G01125106

(CUSIP Number)

 

May 3, 2021

(Date of Event Which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

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CUSIP No. G01125106

1	NAMES OF REPORTING PERSONS
	SoftBank Group Corp.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Japan
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			8,351,211(1)
		8	SHARED VOTING POWER
			0
		9	SOLE DISPOSITIVE POWER
			8,351,211(1)
		10	SHARED DISPOSITIVE POWER
			0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	8,351,211(1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	16.4%(2)
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	HC, CO

 

This Schedule 13D is being filed on behalf of SoftBank Group Corp., a Japanese kabushiki kaisha (referred to herein as “SoftBank” or the “Reporting Person”), with respect to Afya Limited, an exempted liability company incorporated under the laws of the Cayman Islands (referred to herein as the “Issuer”). This Schedule 13D relates to the beneficial ownership by SoftBank of (i) Class A Common Shares and (ii) Series A Preferred Shares (collectively, the “Securities”). The principal executive offices of the Issuer are located at Alameda Oscar Niemeyer, No. 119, Salas 502, 504, 1,501 and 1,503, Vila da Serra, Nova Lima, Minas Gerais Brazil.

 

 

In accordance with the provisions of General Instruction C to Schedule 13D, information concerning the name, business address, principal occupation and citizenship of SoftBank’s general partners, executive officers and board of directors and each person controlling SoftBank, required by Item 2 of Schedule 13D, is provided on Appendix A-1 and is incorporated by reference herein.

Neither the present filing nor anything contained herein shall be construed as an admission that SoftBank constitutes a “person” for any purposes other than Section 13(d) of the Act.

Pursuant to the terms of that certain Securities Purchase Agreement, dated April 26, 2021 (the “SPA”), by and between the Issuer and SBLA, SBLA agreed to purchase and the Issuer agreed to sell an aggregate amount of 150,000 Series A Preferred Shares (the “Primary Transaction”).

The terms of the Series A Preferred are as follows, as detailed in the Issuer’s Certificate of Designations:

Liquidation Rights. In the event of any voluntary or involuntary liquidation or winding up of the affairs of the Issuer, holders of the Series A Preferred are entitled, before any distribution to the holders of capital stock of the Issuer that rank junior to the Series A Preferred Shares and subject to the right of any holders of capital stock of the Issuer that rank senior to the Series A Preferred Shares or on parity with the Series A Preferred Shares or the rights of any existing and future creditors of the Issuer to the greater of (i) the sum of (A) the Liquidation Preference (as defined in the Certificate of Designations) plus (B) the accumulated dividends and (ii) the amount the holder would have been entitled to receive had such holder converted such Series A Preferred Shares into Class A Common Shares at the Conversion Rate  (as defined in the Certificate of Designations) in effect immediately prior to such liquidation or winding up of the affairs of the Issuer.

Dividends and Voting. Holders of Series A Preferred Shares are entitled to receive dividends (i) in respect of the Series A Preferred Shares, at a rate of 6.5% per annum in cash, in additional Series A Preferred Shares, or a combination thereof, at the Issuer’s discretion, subject to certain conditions, and (ii) in respect of any dividends declared on the Class A Common Shares, any dividends holders of Class A Common Shares are entitled to receive. Holders of Series A Preferred Shares generally have no voting rights other than with respect to changes that affect the rights of the Series A Preferred Shares and the issuance of shares of capital stock that rank senior to the Series A Preferred Shares.

Optional Conversion by the Holders. At any time, the holders of the Series A Preferred Shares are entitled, subject to certain conditions, to convert the Series A Preferred Shares into Class A Common Shares at an initial conversion rate of 39.452587 Class A Common shares per Series A Preferred Share (subject to certain adjustments) (the “Conversion Rate”), plus accrued but unpaid dividends, in addition to cash in lieu of fractional shares.

Mandatory Conversion by the Issuer. At any time after the three-year anniversary of the original issuance date of the Series A Preferred Shares (the “Original Issuance Date”), if the closing price of the Class A Common Shares is greater than or equal to the Mandatory Conversion Price (as defined in the Certificate of Designations) then in effect for at least 20 trading days during any 30-trading day period, the Issuer may elect to convert any portion of the outstanding Series A Preferred Shares into Class A Common Shares at the Conversion Rate plus accrued but unpaid dividends, in addition to cash in lieu of fractional shares.

Anti-dilution. The Conversion Rate is subject to adjustment for, among other things, share dividends, splits, combinations or reclassifications and certain future issuances of rights, options or warrants to holders of Class A Common Shares.

Redemption at Option of Holders. At any time after the five-year anniversary of the Original Issuance Date, or May 3, 2026, the holders of the Series A Preferred Shares are entitled to cause the Issuer to redeem all or any of such holder’s shares at a redemption price equal to (A) the sum of (x) the Liquidation Preference plus (y) the accumulated dividends, multiplied by (B) 105% (the “Redemption Price”). The Issuer may satisfy the redemption either in cash or Class A Common Shares, subject to certain conditions.

Redemption at Option of the Issuer. At any time after the seven-year anniversary of the Original Issuance Date, or May 3, 2028, the Issuer is entitled to redeem, in whole or in part, any outstanding Series A Preferred Shares at the Redemption Price, payable, at the Company’s option, in cash or Class A Common Shares, subject to certain conditions.

Redemption Upon Change of Control. If a Change of Control (as defined in the Certificate of Designations) occurs at any time, the holders of the Series A Preferred Shares are entitled to require the Issuer to repurchase all or a portion of such holder’s Series A Preferred Shares for cash at price equal to (i) the Liquidation Preference per share plus accumulated dividends multiplied by (ii) (x) if the Change of Control repurchase date is prior to the six (6)-year anniversary of the Original Issuance Date, or May 3, 2027, 140%, or (y) otherwise, 105%, plus (b) if the Change of Control repurchase date is prior to the five-year anniversary of the Original Issuance Date, or May 3, 2026, the sum of the present value of each scheduled quarterly dividend that would have been paid on such Series A Preferred Share pursuant to each dividend payment date occurring on or prior to such five-year anniversary.

Lock-up. The Series A Preferred Shares are subject to a one-year lock-up, subject to certain exceptions, which expires one year from the Original Issuance Date, or May 3, 2022.

Board Rights. In connection with the purchase of the Series A Preferred Shares, SBLA is entitled to designate an employee of SBLA or its affiliates as an observer to the Board, with approval from the Board, so long as SoftBank holds at least 5% of the outstanding Class A Common Shares (on an as-converted basis); provided that such right will be suspended if SBLA has a representative on the Board pursuant to the Letter Agreement (as described below).

Pro Rata Right. For three years following the Original Issuance Date, or until May 3, 2024, SBLA is entitled to a pro rata right, based on its, together with its affiliates’, percentage ownership in the Issuer, to participate in any subsequent issuances of equity securities of the Issuer, subject to certain exceptions, on all of the same terms provided for in such issuance.

Pursuant to the terms of that certain Secondary Share Purchase Agreement, dated April 26, 2021 (the “Crescera SPA”), by and between SBLA and Crescera Educacional II Fundo de Investimento em Participações (“Crescera”) and that certain Secondary Share Purchase Agreement, dated April 26, 2021 (the “Esteves SPA” and together with the Crescera SPA, the “Secondary SPAs”), by and between SBLA and certain members of the Esteves family (the “Esteves Family”) named as parties named thereto, each of Crescera and the Esteves Family agreed to sell and SBLA agreed to purchase an aggregate amount of 2,270,208 Class A Common Shares (collectively, the “Secondary Transaction” and together with the Primary Transaction, the “Transactions”).

Concurrently with the closing of the Transactions, and as a condition and inducement to SBLA’s willingness to enter into the SPA and Secondary SPAs, SBLA entered into an agreement (the “Letter Agreement”) with each of Crescera and certain members of the Esteves Family, dated as of May 3, 2021, pursuant to which Crescera and certain members of the Esteves Family agreed to appoint a representative, designated by SBLA, to the Issuer’s board of directors so long as SoftBank holds at least 5% of the outstanding Class A Common Shares (on an as-converted basis).

The Transactions were consummated on May 3, 2021.  The purchase of the Securities was made for investment purposes with available funds of the SoftBank Entities, as applicable, in the ordinary course of business.

The foregoing descriptions of the SPA, the Letter Agreement and the Certificate of Designations do not purport to be complete and are qualified in their entirety by reference to the copies of the SPA, the Letter Agreement and the Certificate of Designations included as Exhibits 99.1, 99.2 and 99.3 to this Schedule 13D.

The information set forth in Item 3 of this Schedule 13D is incorporated herein by reference.

The SoftBank Entities acquired the securities reported herein for investment purposes, subject to the following:

The SoftBank entities intend to review from time to time the investment in the Issuer and the Issuer’s business affairs, financial position and capital requirements. Based upon such review, as well as general economic, market and industry conditions and prospects existing at the time, the Reporting Person may consider from time to time alternative courses of action. Such actions may include sales of Securities or other securities of the Issuer through sales plans, in open-market transactions, privately negotiated transactions, through a public offering or otherwise, or the acquisition of additional Securities or other securities of the Issuer directly from the Issuer, through open-market purchases, in privately negotiated transactions or otherwise, including the disposition or acquisition of Securities or other securities of the Issuer in connection with the SoftBank Entities’ businesses. The SoftBank Entities may also propose or take one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D and may discuss such actions with the Issuer and Issuer’s management and the board of directors (the “Board”), other stockholders of the Issuer and other interested parties.

As described in Item 3 above, SBLA entered into the Letter Agreement with each of Crescera and certain members of the Esteves Family, dated as of May 3, 2021, pursuant to which Crescera and certain members of the Esteves Family agreed to appoint a representative, designated by SBLA, to the Board.

Except as otherwise set forth herein, the Reporting Persons do not have any current plans or proposals which would relate to or would result in any of the events or matters described in (a) – (j) of Item 4 of Schedule 13D.

As a result of the relationships described in this Schedule 13D, SoftBank may be deemed to have voting and/or dispositive power with respect to the shares of Common Stock of the Issuer held of record by SBLA and SBLA L.P., respectively.  SoftBank expressly disclaims beneficial ownership of such shares, and this Schedule 13D shall not be deemed an admission that SoftBank is the beneficial owner of such shares for purposes of the Act or for any other purpose.

 

 

The information set forth in Item 3 of this Schedule 13D is incorporated herein by reference.

99.1	Securities Purchase Agreement, dated April 26, 2021, by and between the Afya Limited and SBLA
99.2	Letter Agreement, dated May 3, 2021, by and between SBLA, Crescera Educacional II Fundo de Investimento em Participações and certain members of the Esteves family named as parties thereto
99.3	Certificate of Designations (incorporated by reference to Exhibit 99.2 on Afya Limited’s Form 6-K furnished to the Commission on May 4, 2021)

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Appendix A-1

 

EXECUTIVE OFFICERS AND DIRECTORS

OF

SOFTBANK GROUP CORP.

 

Set forth below is a list of each executive officer and director of SoftBank Group Corp. setting forth the business address and present principal occupation or employment (and the name and address of any corporation or organization in which such employment is conducted) of each person.

 

Name and Business Address		Present Principal Occupation (principal business of employer)		Name and Address of Corporation or Other Organization (if different from address provided in Column 1)
Masayoshi Son*, a citizen of Japan SoftBank Group Corp. 1-7-1 Kaigan, Minato-ku Tokyo 105-7537Japan		Representative Director, Corporate Officer, Chairman & CEO of SoftBank Group Corp.
Ronald D. Fisher*, a citizen of the United States of America SoftBank Group Corp. 1-7-1 Kaigan, Minato-ku Tokyo 105-7537 Japan		Director, Corporate Officer, and Vice Chairman of SoftBank Group Corp.; Director and Chairman of SB Investment Advisers (US) Inc.; and Director and President of Star Bright Holdings Inc. (f/k/a SoftBank Holdings Inc.)		SoftBank Holdings Inc. 38 Glen Avenue Newton, Massachusetts 02459
Yoshimitsu Goto*, a citizen of Japan SoftBank Group Corp. 1-7-1 Kaigan, Minato-ku Tokyo 105-7537, Japan		Director, Corporate Officer, Senior Vice President, CFO, CISO & CSusO of SoftBank Group Corp. and President & CEO of Fukuoka SoftBank HAWKS Corp.
Ken Miyauchi*, a citizen of Japan SoftBank Group Corp. 1-7-1 Kaigan, Minato-ku Tokyo 105-7537 Japan		Director of SoftBank Group Corp.; Representative Director and Chairman of SoftBank Corp.		SoftBank Corp. 1-7-1 Kaigan, Minato-ku, Tokyo 105-7537
Simon Segars*, a citizen of the United Kingdom SoftBank Group Corp. 1-7-1 Kaigan, Minato-ku Tokyo 105-7537 Japan		Director of SoftBank Group Corp.; CEO of Arm Limited; Vice Chairman and Director of Global Semiconductor Alliance; Director of TechWorks, Inc.; and Non-Executive Director of Dolby Laboratories, Inc.		Arm Limited 150 Rose Orchard Way San Jose, CA 95134
Masami Iijima*, a citizen of Japan SoftBank Group Corp. 1-7-1 Kaigan, Minato-ku Tokyo 105-7537 Japan		External Director, Independent Officer of SoftBank Group Corp.; Director of Isetan Mitsukoshi Holdings Ltd.; Counsellor to Bank of Japan; Director of Ricoh Company, Ltd.; and Representative Director, Chairman of the Board of Directors of MITSUI & CO., LTD.		MITSUI & CO., LTD. 1-3, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8631 Japan
Yutaka Matsuo*, a citizen of Japan SoftBank Group Corp. 1-7-1 Kaigan, Minato-ku Tokyo 105-7537 Japan		External Director, Independent Officer of SoftBank Group Corp. and Associate Professor, Graduate School of Engineering at the University of Tokyo

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