Biosev : Material Fact - Response to Craft 26/2017-SAE/GAE 2

January 09th, 2017

26/2017-SAE/GAE 2

Biosev S.A.

At. Sr. Paulo Prignolato Investor Relations Officer

Ref.: Request of clarifications in respect to news publicized in the press

Dear Sirs,

According to the news published by Valor Econômico online version, on January 8th,2017, among other information, Biosev:

1. Is evaluating options in the financial market, including a subsequent public offering of shares, seeking to raise R$ 2 billion to reduce its indebtedness;

2. Would be adjusting its corporate structure to apply for a subsequent public offering of shares, sell a stake of the company or issue bonds.

We do not identify this information in the documents sent by this company, through the Empresas.NET System. In case of contradictory, please inform the document and the pages which contain the information and the date and time in which they were sent.

It should be noted that the company must disclose periodic and eventual information and other information of interest of the market, through the Empresas.NET System, assuring its wide and immediate dissemination and fair treatment of its investors and other market participants.

That being so, we request clarifications on the items above indicated, until January 10th, 2017, without prejudice to the provisions of the sole paragraph of art. 6 of CVM Instruction 358/02, with its confirmation or otherwise, as well as other information considered important.

Such clarifications shall be sent by the IPE module, selecting the category: Material Fact or the category: Notice to the Market, the type: Clarifications regarding inquiry of CVM/Bovespa, and then, the subject: News disclosed by the media, which shall result on the transmission of the document to BM&FBOVESPA and CVM simultaneously. The option of replying by a Material Fact does not exclude potential verification by CVM of accountability for the late disclosing of information, as set forth by CVM Instruction 358/02

We hereby reinforce the obligation, as provided for by article 4, sole paragraph, of CVM Instruction 358/02, of questioning the officers, board of directors' members and controlling shareholders of the company, with the purpose of verifying if they have knowledge of information which should be disclosed to the market.

The document to be sent shall fully transcribe the content of the above inquiry before the reply of this company.

Such requirement is placed in light of the Cooperation Agreement, entered into by CVM and BM&FBOVESPA on December 13th, 2011, and non-compliance shall result in the application of possible punitive fine by CVM, as provided by CVM Instruction 452/07."

Sincerely,

Nelson Barroso Ortega

Superintendência de Acompanhamento de Empresas BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros

c.c.: CVM - Comissão de Valores Mobiliários

Sr. Fernando Soares Vieira - Superintendente de Relações com Empresas

Sr. Francisco José Bastos Santos - Superintendente de Relações com o Mercado e Intermediários

BIOSEV S.A.

CORPORATE TAXPAYER ID (CNPJ/MF): 15.527.906/0001-36 COMPANY REGISTRY (NIRE): 35.3.0034518.5

CVM REGISTRY: 22845

MATERIAL FACT

Biosev S.A., a corporation (sociedade anônima) with its headquarters in the city of São Paulo, State of São Paulo, Avenida Brigadeiro Faria Lima, No. 1355, 11th floor, Pinheiros, enrolled under corporate taxpayer's identification (CNPJ/MF) No. 15.527.906/0001-36 (the "Company") (BM&FBovespa: BSEV3), in compliance with the provisions of Instruction No. 358, dated January 3, 2002, as amended, of the Brazilian Securities Commission, in response to the Notice 26/2017-SAE / GAE 2, hereby informs its shareholders and the market in general that, the Company is continually evaluating funding options to strengthen its capital and financial structure, such as raising funds through the capital markets, including through a public offering of the Company's shares and/or an issuance of bonds in the international market. Any potential fundraising, if carried out, would be conducted in conformity with the Company's required corporate approvals and the applicable laws and regulations.

São Paulo, January 10th, 2017.

Paulo Prignolato

Chief Financial and Investor Relations Officer

Biosev is the world's second largest sugarcane processor, with 11 agroindustrial units in Brazil. The Company is controlled by the Louis Dreyfus Group and began operating in the sugar and ethanol industry in 2000, when it acquired its first unit in Brazil. Since then it has built a track record of growth through both acquisitions and expansion projects that have led its crushing capacity to increase from 0.9 million metric tons/year in 2000 to 36.4 million metric tons/year today. Biosev manages 346,000 hectares of land and has surplus biomass power generation capacity of 1,346 GWh. The Company adopts the highest standards of corporate governance and its stock is traded on the Novo Mercado segment of the São Paulo Stock Exchange (BM&FBovespa).

Disclaimer: This material fact does not constitute an offer to sell the securities or the solicitation of an offer to buy securities. The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws, and they may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. There shall not be any sale of the securities to be sold in the offering in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.