15. EBITDA Adjustments
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16. Capex - 2003
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Enlargement of the Distribution Grid 1998 2003 Growth %
Transformers of the distribution grid 160.549 214947 54.398 33,9%
Poles 1.003.554 1.091.742 88.188 8,8%
Overhead circuits of the distribution grid (15kV) 1.269 1.459 190 15,0%
Installed power in the distribution grid (MVA) 9.030 11274 2.244 24,9%
Eletropaulo invested R$ 1,654 million between 1998 and 2003.
During 2003 R$ 217million, were invested representing a 20.5% increase when compared
to the previous year.
Investments in 2003 were made for:
Maintenance of the grid
New Clients’ Connections
Improvement in consumers’ services
20. Indebtedness – Short Term x Long Term
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The total amount recorded in the Short Term does not mirror the actual
schedule of maturities, as it includes the reclassification of some debts that incurred
in non-compliance of contractual obligations such as financial covenants, cross-
defaults and payment defaults
21. Purposes and Strategies
of the Proposal to Readjust the Debt
On September 30, 2003 a proposal for the readjustment of the
profile of the indebtedness of Eletropaulo was presented to the
creditor banks, which aims at:
– Recovering its investment grade position
– Readjusting its cash generation to the schedule for the amortization of
the debts
– Mitigating the exchange risks, continuing with the strategy of of
converting the debt to Reais and making possible its return to having
access to the hedge market
The proposal allows for a significant unleveraging in the next 3-5
years
– No refinancing risk in the next 36 months
– Significant improvement in the credit indicators reducing thus the risk
insight
22. Creditors Involved in the
Debt Readjustment Proposal
The proposal for readjusting the debt with private creditors without guarantee
includes operations with individual creditor banks, bank syndicates and
working capital operations
– The amount to be renegotiated is approximately R$ 2,3 billion
Furthermore, exchange offers were made to holders of Commercial Papers in
the amount of US$ 49 million. And US$ 13 million, on the papers of November
6, 2003 and January 27, 2004 respectively.
The payment of interest will be maintained during negotiations, however
suspending the payment of the principal
The guaranteed debts or those with favorable term and rate conditions for the
company will not be included in this process and will be amortized according
to their original contracts. These are mainly as follows*:
– Rationing loan with BNDES – R$ 762 million
– Debentures – R$ 143 million
– Debts with the Cesp Foundation – R$ 1.4 billion
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23. The Proposal to Banks
The proposal to creditor banks seeks to unify the debts to be
restructured under one sole lot of documents
– Isonomic treatment for creditor banks, with uniform rates, terms and
covenants
The Debt will be restructured in four tranches
– The proportioning of the tranches was based on the projections of
company’s liquidity
– The tranches allow flexibility to creditors in regard to the desired
exposure
– At the most, 30% of each tranche will be denominated in US$
Schedule:
– September 30, 2003: Proposal made to creditor banks
– October 21, 2003: Indications of adhesion (non-binding)
– December 22, 2003: Obtained 91% adhesion
– February 16, 2004: Date anticipated for signing the contract
26. Concession
Concession: 30 years. The concession contract provides the right to
operate assets but does not grant the property of same
Assets:
10 hydroelectric plants
Location: Rivers Tietê, Grande, Pardo and Mogi Guaçu, located in
the State of Sao Paulo
2,651 MW
Installed Capacity:
Operating Background: Plants started operations between 1958 and 1997
Capacity sold under Initial 100% of the productive capacity of Tietê (“assured
Contracts (PPAs): energy”)
15% - 400MW – until 2008 according to a demand of the
Increase in capacity: Privatization Notice
27. Initial and Bilateral Contracts
The tariffs of the initial contracts are adjusted annually following the calculation
formulae as pre-established in the Concession Contract
Tariff Adjustment Rate = VPA + VPB x IGPM
Revenue
1200
The bilateral contracts (new Eletropaulo contract) are adjusted on the basis of
1000
the IGPM
800
600
MW
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400
200
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32. Agreement with the MAE Creditors
December/03 – closing of the deal with the MAE creditors
Agreement for the payment of debts related to the purchase and sale
of electric energy operations recorded in the Energy Wholesale Market
– MAE, for the period between September 2000 and December 2002
(Period of Energy Rationing)
Payment of debts in 49 installments
Cash payment for debts lower than R$500 thousand.
Debts amounted to R$120 million
33. Eletrobrás
Value: R$ 1,488 bilion
Correction and Interest:IGPM + 10% a year
Maturity: 2013
Amortization: Monthly of interest and principal (168 monthly
installments) calcullated on the basis “Price Table”
Guarantee : receivables
Debt originally assumed by CESP
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400
350
300
R$ milhões
250
200
150
100
50
-
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
35. Conclusion
Critical issues were positively resolved at the end of 2003
– Signing of the agreement between AES and BNDES
– Eletropaulo debt re-profiling process
– Closing of the agreement with Tietê creditors at the MAE
In 2004 Eletropaulo starts a new promising fase, in which it acquires a
solid shareholding structure and a sustainable level of indebtedness
that is compatible with its cash generation
Current times are more stable, allowing one to to forecast a
prosperous scenario for the future of the companies
