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 Reorganization Largely discussed with shareholders Reorganization details presented to shareholders during the 2010 General Meeting 4

Corporate Reorganization Largely discussed with investors Investors ’ Day Corporate strategy and need to implement new 2008 corporate organization Presentation of the Reorganization project Investors ’ Day following agreement with the State and new 2009 concession contract Investors ’ Day Details of the reorganization project 2010 All information available at CMVM and Brisa site 5

Corporate Reorganization Largely discussed with investors Roadshows Research reports Press releases Transparent project, well accepted by the market 6

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 7

Corporate Reorganization Framework Advantages

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 9

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 10

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 11

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 12

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 13

Corporate Reorganization Financed assets and Financial reserve cash reserves > Support to potential needs > Support to the dividend policy Brisa > (re)capitalization needs > Specific growth opportunities Outros Baixo Litoral Atlântico BCR Brisal Activos Douro Oeste Tejo … • Simplified chart for Illustrative purposes BCR Other concessions > Strong financial profile > Project finance with gradual repayment and low refinancing risk > Solid platform for access to financing > Long term financing Unique financial structure – strong and stable against an adverse background 14

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 15

Corporate Reorganization 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 16