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MPX Corporate Presentation - June

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  • 1. MPX CORPORATE PRESENTATIONJune 2012

2. DISCLAIMERThe material that follows is a presentation of general background information about MPX Energia S.A. and its subsidiaries (collectively, MPXor the Company ) as of the date of the presentation. It is information in summary form and does not purport to be complete. Norepresentation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, orcompleteness of this information.This presentation may contain certain forward-looking statements and information relating to MPX that reflect the current views and/orexpectations of the Company and its management with respect to its performance, business and future events. Forward looking statementsinclude, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, andmay contain words like may, plan, believe, anticipate, expect, envisages, will likely result, or any other words or phrases of similarmeaning. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of importantfactors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in thispresentation. In no event, neither the Company, any of its affiliates, directors, officers, agents or employees nor any of the placementagents shall be liable before any third party (including investors) for any investment or business decision made or action taken in reliance onthe information and statements contained in this presentation or for any consequential, special or similar damages.This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities.Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients shouldconsult their own advisors in this regard.The market and competitive position data, including market forecasts, used throughout this presentation were obtained from internalsurveys, market research, publicly available information and industry publications. Although we have no reason to believe that any of thisinformation or these reports are inaccurate in any material respect, we have not independently verified the competitive position, marketshare, market size, market growth or other data provided by third parties or by industry or other publications. MPX, the placement agentsand the underwriters do not make any representation as to the accuracy of such information.This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in partwithout MPXs prior written consent. 2 3. 1MPX AT A GLANCE 4. A PROVEN RECORD OF ACHIEVEMENT20122011 MPX/E.ON partnership TPP Parnaba licensedThe First Five Years capacity increased to Drawdown of bridge- 3,722 MWloans totaling R$ 1.6 Power supply billion for natural contracts secured for gas production and 20101,193 MW andpower generation in construction works at the Parnaba Basin MPX Colombia 1st TPP Parnaba begin Spin-off ofTechnical Report:2009coal resources of D&M estimates forColombian coal risked resources in assets to a new144 MM tons2008 Construction works the Parnaba basincompany listed at at TPPs Itaqui and License granted for amount to over 11Tcf First acquisition of the BM&FBOVESPA Pecm II begin TPP Parnaiba2007 mining rights in(1,863 MW) Declaration of E.ONs acquisition of Colombia Acquisition of commerciality for 2 minority interest at IPO: US$ 1.1 interest in 7 onshore Initiation of drillinggas fields withbillion raised 365 MW contracted in MPX through a R$ exploratory blocks incampaign in theestimated production the A-5 Auction 1.0 billion capital 1,080 MW the Parnaba basin Parnaba basin of 6 MM m3/day increasecontracted in the Construction works atA-5 AuctionTPP Pecm I begin 4 5. A DIVERSIFIED ENERGY COMPANYLargest Portfolio Of Integrated Projects In South America Amapari Energia Power Generation 23 MWItaqui TPP360 MW Power agreements secured for 3.0 GW Exploratory blocksEnergia Pecm11.3 Tcf GN720 MW Environmental license for an additionalParnaba TPP1,531 MW Pecm II TPP 365 MW 11 GWParnaba TPP Solar Tau2,191 MW 1 MW Joint-Venture with leading global player E.ON AG Natural ResourcesAu TPP2,100 MW CoalCastilla TPP3,300 MW Natural Gas Natural Gas: >11 Tcf of risked resources2,100 MW in the Parnaiba BasinDesalinationSeival mine PlantSul TPP740 l/s 727 MWSeival TPP600 MWMPXJV5 6. MPX OWNERSHIP STRUCTURE(after conclusion of capital increase, assuming no subscription by minority shareholders) EIKEFree FloatBATISTA 53.9%34.3%11.7%50% 50% MPX- E.ON JV50/50100%50% 50%50% 100% Contracted Greenfield NaturalSupply & Power ThermalRenewablesResourcesTrading Generation GenerationEnergia PecmSeival TPP Parnaba(365 MW)(1,534 MW)Pecm II OGX Maranho Au Natural New(365 MW)Gas (3,300 MW) ProjectsItaquiAu Coal(365 MW)(2,100 MW)TPP ParnabaCastilla - Coal(1,087 MW)(2,100 MW)Amapari Sul and Seival -(12 MW) Coal (1,327 MW)6 7. EXPERIENCED MANAGEMENT TEAM TO EXECUTE ONSTRATEGIC VISION Over 22 years of experience in a wide range of M&A and corporate finance transactions related to the naturalEduardo Karrer resources, electricity, sanitation and logistics sectorsCEO & IRO CEO at El Paso Brasil Ltda.and Rio Polmeros S.A.. Executive manager for the Gas&Energy and International Markets divisions at Petrobrs Over 25 years of experience in the financial area at multinational corporationsRudolph Ihns CFO at MMX Minerao e Metlicos S.A.CFO CFO at Unisys in Brazil and Germany Former National Secretary for EnergyXisto Vieira Filho Coordinator of the Subcommittees for Electricity Studies of the Interconnected System and Secretary of NationalOfficer for Regulatory Energy Policy Committee of BrazilAffairs & Chairman of the Board of Directors of CHESF and Eletrosul and Board member of Eletrobrs, Furnas, Cepel andCommercializationGrupo Rede Former president of the National Committee of Cigr (Conference Internationale des Grand Rseaux lectriques) Over 20 years of experience in operations at multinational corporationsMarcus BerndTemke COO at Rio Polmeros S.A.COO Holds an MBA from COPPEAD-UFRJ Partner at Villemor Amaral Advogados (2002-2004) and Tozzini, Freire & Silva Advogados (2001-2002)Bruno Chevalier General Counsel at MMX Minerao e Metlicos S.A.General Counsel Legal Director at General Motors Corp. in Lisbon and Delphi Automotive Systems 7 8. 2INVESTMENT CONSIDERATIONS 9. INVESTMENT CONSIDERATIONS Exposure to Brazils growing energy demand Tax-advantaged thermal power plants coming on-line in 2012 Attractive monetization of natural gas resources Robust pipeline of thermal projects to meet Brazils need for a more reliable electric system Joint-venture with E.ON to develop strong portfolio of energy assets while unlocking value of Colombian coal assets Experienced management team to execute on strategic vision 9 10. 3EXPOSURE TO BRAZILS GROWINGENERGY DEMAND 11. BRAZIL WILL NEED ADDITIONAL 10 AVG GW FROM 2015-2019 Power Supply/Demand Energy Deficit starting in 2015 = Investment Opportunities Energy Load (forecast) Firm Energy2015-on: new generation required10 GW avg required from 2015 to 2019Source: ANEEL11 12. BRAZIL NEEDS NEW THERMAL CAPACITY TOINCREASE SUPPLY RELIABILITY Water storage capacity has stagnated, leading to decreased system autonomyStorage Capacity (Southeast)Autonomy = [Storage Capacity / (Load Thermal Generation)]ActualReservoirAutonomy:~ 5 monthsStoragecapacity stagnation2001: EnergyDeficit(load reduction)1Storage Capacity (SIN):Southeast = 69%Northeast = 19% New thermal plants are necessary to guaranteeSouth = 7% North = 5%a reliable power supply.Source: ONS 12 13. TRANSMISSION DELAYS REINFORCE THEIMPORTANCE OF THERMAL PLANTS Transmission expansion delays will affect reliability of energy supply: greater need for thermal plantes located close to power consumption centers Average delay = 1.2 year 103 delays of up to 1 year 100 delays greater than 1 yearSource: ANEEL13 14. 4TAX-ADVANTAGED THERMAL POWER PLANTSCOMING ON-LINE STARTING IN 2012 15. POWER AGREEMENTS SECURED FOR 3.0 GWMinimum guaranteed revenues will reach R$ 1.4 billion in 2015 TOTALADJUSTEDENERGY SOLD ANNUAL CAPACITYPPACAPACITYCAPACITYFUEL SOURCE (AVG MW)PAYMENT3PERIOD(MW)(MW) Energia Pecm TPP1720 360615R$ 272 millionCoal 2012-2027 Itaqui TPP360 360315R$ 287 millionCoal 2012-2027 Pecm II TPP365 365276R$ 258 millionCoal 2013-2028 Parnaba TPP2 - Phase I 676 473450R$ 282 million Natural Gas 2013-2028 Parnaba TPP2 - Phase II517 362450R$ 237 million Natural Gas 2014-2034 Parnaba TPP2 - Free 338 237200R$ 186 million Natural Gas 2019-2029 Market Total 2,976 2,157 2,306 R$ 1,538 millionTotal Capacity: Does not include Amapari TPP and Taua Solar Plant.Adjusted Capacity/Annual Capacity Payment: Figures adjusted for MPXs ownership in each projectNotes: 1. Energia Pecm is a partnership between MPX (50%) and EDP Brasil (50%); 2. Parnaba is a partnership between MPX (70%) and Petra (30%); 3. Capacity Payments areescalated annually by the IPCA inflation index (Figures as of March, 2012).15 16. STEADY AND PREDICTABLE CASH FLOWS3 Installed Capacity (MW)Minimum Guaranteed Gross Revenues (MM) 1,920 1,3521,2911,558 1,113720 18220122013 2014 2012 20132014 2015 Energia Pecm TPP1Parnaba TPP2 Phase I Itaqui TPP Parnaba TPP2 Phase II Pecm II TPPFigures adjusted considering MPXs interest in each projectNotes: 1. TPP Energia Pecm is a partnership between MPX (50%) and EDP (50%); 2. TPP Parnaba Phases I and II are partnerships between MPX (70%) and Petra (30%); 3. CapacityPayments are escalated annually by the IPCA inflation index (Figures as March, 2012)

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