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General Meeting Vasco de Mello Corporate Reorganization Framework - - PowerPoint PPT Presentation
General Meeting Vasco de Mello Corporate Reorganization Framework - - PowerPoint PPT Presentation
General Meeting Vasco de Mello Corporate Reorganization Framework Advantages Corporate Reorganization Largely discussed with shareholders Projected structure already presented to shareholders in the 2009 General Meeting 3 Corporate
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Corporate Reorganization
Largely discussed with shareholders
Projected structure already presented to shareholders in the 2009 General Meeting
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Corporate Reorganization
Largely discussed with shareholders
Reorganization details presented to shareholders during the 2010 General Meeting
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Corporate Reorganization
Largely discussed with investors
Investors’ Day 2008 Investors’ Day 2009 Investors’ Day 2010
All information available at CMVM and Brisa site
Details of the reorganization project Presentation of the Reorganization project following agreement with the State and new concession contract Corporate strategy and need to implement new corporate organization
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Corporate Reorganization
Roadshows Research reports Press releases
Transparent project, well accepted by the market
Largely discussed with investors
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Corporate Reorganization
Largely discussed with different stakeholders
> Interaction with multiple stakeholders
> Portuguese Government > Financial and Sector regulatory authorities (IGF and InIR) > Capital Market regulatory authority (CMVM) > European Investment Bank (EIB) > Bondholders and other financial backers > Rating agencies > Trade unions and employees
Simple but demanding process
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Framework Advantages Corporate Reorganization
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Corporate Reorganization
Advantages
> The corporate reorganization provides stable and strong rating
> With Brisa close to a further downgrade (credit watch negative) and the deterioration of the country’s rating, > Brisa concession will be separate and independent from the rest of the Group, and thus will not be liable for other assets > And it will allows access to the debt market creating refinancing capacity
Rating stability Crucial for any top company
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Corporate Reorganization
Advantages
> Renegotiation with the EIB
> Immunization of Brisa concession assets and liabilities (ring-fencing) enabled the renegotiation of ongoing EIB loans amounting to 850 million euros > Conversion of current credit lines into one loan > Extended debt maturity up to 2030 > Decrease by 260 million in debt repayment in the next few years
Unique opportunity as debt markets are practically closed
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Corporate Reorganization
Advantages
> Stable dividend policy
> Immunization of Brisa concession assets and liabilities (ring-fencing) enables a regular dividend flow at parent company level, sustaining the Group’s dividend policy > The announced dividend policy – at least 31 cents per share in the next 5 years – was based on the new corporate structure > The new structure minimizes dividend risk, since it no longer requires the allocation of funds to reduce debt > The estimated regular dividend amount – 31 cents – represents dividend yield of nearly 6% at current prices
Financial stability at dividend level
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Corporate Reorganization
Advantages
> Enables growth
> Reorganization and ensuing rating stability enable to allocate funds to investment in new business opportunities > In the light of the current economic situation, corporate growth will only be possible with investment in new businesses > As the need to reduce debt no longer arises, it will be possible to fuel funds into the development of the business base
Financial stability enabling growth
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Corporate Reorganization
Advantages boosted by current situation
> Instability in international financial markets > Probable increased deterioration of Portugal’s risk > Uncertainty as to the performance of the Portuguese economy in the next few years > Uncertainty as to access to capital markets by the Portuguese State and Portuguese companies
Advantages were already considerable, but they became critical in the present environment
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Corporate Reorganization Unique financial structure – strong and stable against an adverse background
Brisa BCR
Brisal Douro Atlântico Litoral Oeste Baixo Tejo Outros Activos …
BCR
>Strong financial profile >Solid platform for access to financing
Other concessions
>Project finance with gradual repayment and low
refinancing risk
>Long term financing
Financed assets and cash reserves
Financial reserve
>Support to potential needs
> Support to the dividend policy > (re)capitalization needs > Specific growth opportunities
- Simplified chart for
Illustrative purposes
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Corporate Reorganization
Without the reorganization
> Brisa would be forced to drastically reduce debt to maintain a strong and stable rating, which is required to have access to markets
> It would be subject to the current situation, in which rating is given to the Group as a whole, and it would be negatively affected by ongoing project finance projects, which are in a highly leveraged phase > Required refinancing would also be at stake
> The EIB debt restructuring would not have taken place > It would jeopardize the stable dividend policy, the purchase of treasury shares and the growth strategy
No financial stability, no stable dividend policy, no growth
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The Board of Directors developed a solution which will allow, in a very unfavorable scenario, to :
- achieve financial solidity
- ensure a stable shareholder return
- promote sustainable growth