Moving to a more efficient financial i structure

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Betty Mascarenhas
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1 Moving to a more efficient financial i structure Investors Day 2009 João Azevedo Coutinho (CFO) 1

2 Moving to a more efficient financial structure Reinforcing the liquidity position Capitalizing on historically low interest rate levelsl Actively managing the project finance concessions portfolio Implementing the new corporate structure Trailing the path to reorganization 2

3 Debt structure Corporate Debt/Main concession Other concessions Consolidated Overview Corp. Reorganization Wrap-up

4 Corporate Debt / Main Concession Debt structure millions 2008 i 9M09 i Brisa % % Bonds Securitization EIB Other Cash Net debt E i 3.58% Adequate and diversified funding mix Weighted Average Cost of Debt (WACD) decreased significantly During 4Q09, net debt will decrease to levels below YE08 Very low cost of debt (3.5%) with a 70% fixed rate component! 4

5 Corporate Debt / Main Concession Interest rate debt structure Inflation linked w/ cap 4% Euribor w/ cap 3% YE08 Floating 47% Inflation linked w/ cap 1% 9M09 Floating 29% Fixed Fixed 46% 70% During 2009, Brisa entered into floating-to-fixed to fixed Interest Rate Swaps, with a total notional of 440M, seizing the opportunity to hedge interest rate risk at historically low interest rate levels Significant decrease of floating rate component in

6 Corporate Debt / Main Concession Liquidity 9M09 Total Used Available Cash and cash equivalents 112 Treasury stock 158 Committed EIB loan Committed CPs relationship banks Uncommitted CPs Other ST bank lines relationship banks 6 relationship banks EMTN Programme More than 500M in cash, treasury stock and available committed bank lines Conservative approach to liquidity recognized by rating agencies Strong increase in liquidity position during

7 Debt structure Corporate Debt/Main concession Other concessions Consolidated d Overview Corp. Reorganization Wrap-up

8 Other Concessions Portfolio overview Concessions % ownership Consolidation Method NWP 100% Full To be reduced to 45% Brisal 70% Full Douro 55% Full Atlântico 50% Proportional Baixo Tejo 30% Equity Litoral Oeste 15% Equity (Equity Method) To be reduced to 45% in 2009 (Equity Method) NWP and Douro s reduction processes are both underway New projects reflect previously stated policy towards new tenders in line with 2008 stated policy 8

9 Other Concessions Debt structure 9M09 Consolidated Concessions Debt WAC Cash Brisal % 17M Atlântico (50%) % 36M NWP % 13M Douro % - Project Finance (without Douro) % 66M Project Finance (with Douro) % 66M Debt is non-recourse to Brisa Consolidated project finance debt will decrease with the reduction of the stake in Douro Floating 33% Fixed 67% Fully funded concessions 9

10 Debt structure Corporate Debt/Main concession Other concessions Consolidated d Overview Corp. Reorganization Wrap-up

11 Consolidated Overview Improvement in consolidated key ratios 2008 YEE09* Change Consolidated Net Debt % Main Concession cesso % Other Concessions % Gearing 268% 251% -17 p.p. Debt Average Maturity yrs 08 Net Debt / EBITDA 7.6x 6.8x -0.8x *YE09 estimate reflects the deconsolidation of Douro concession Net debt will decrease by 10% Net debt / EBITDA ratio will return to pre YE07 levelsl Deconsolidation of Douro will positively impact key credit ratios 11

12 Debt structure Corporate Debt/Main concession Other concessions Consolidated d Overview Corp. Reorganization Wrap-up

13 Corporate reorganisation Current structure Current group structure has become sub-optimal Main Concession is held within the group s top company and financed on a corporate basis, while other concessions are held in separate subsidiaries and funded on a project finance basis Inconsistent management and financing approach within similar businesses Brisa Parent Co Main Concession O&M Co Brisal Douro Atlantico Baixo Tejo Litoral Oeste International Concession Concession Concession Concession Concession Concessions Current group structure has become sub-optimal 13

14 Corporate reorganisation Target structure Brisa SA will become a pure holding company Main Concession will be transferred to a new concession company, the Brisa Concession O&M activities of the group will be carried out by a new company, Brisa O&M Transfer of existing corporate debt to the Brisa Concession Brisa Holding Brisa Concession Brisal Concession Douro Concession Atlantico Concession Baixo Tejo Concession Litoral Oeste Concession International Concessions Brisa O&M Agreement O&M O&M Agreement Consistent approach across all the Group s businesses 14

15 Corporate reorganisation Advantages of the new corporate structure Higher visibility bl of assets Clearer portfolio management approach, giving visibility over the value of each business Higher business units efficiency Greater management focus due to segmented approach Improved concession agreement management Maximization of economic and financial potential Separation of assets and servicing companies, which do not revert to the Grantor at concession expiry Clearer relationships with the Grantor Brisa will become a holder of a portfolio of concession businesses 15

16 Corporate reorganisation Financing objectives of reorganisation Separate holding and developing activities from current business Achieving greater ratings stability Solid investment grade credit ratings will be sought for Brisa Concession on stand-alone basis through the ring fencing from the rest of the group Provides increased flexibility to raise additional debt to support future investments by Brisa in new projects Provides alternative sources of funding through active portfolio management Rating stability and financing structure optimisation through ring fencing of Brisa Concession 16

17 Corporate reorganisation Establishment of O&M Company A key aspect of the corporate reorganization is the transfer of the operation and maintenance activities, currently undertaken within Brisa, to a new wholly owned subsidiary, Brisa O&M Brisa O&M will be created from the existing wholly owned subsidiary, Brisa Assistência Rodoviária S.A. ( BAR ) BAR is currently the entity which provides roadside assistance to services (including security patrols, emergency assistance, break-down or towing services) Created in 2002 with an experienced team from Brisa Currently sub-contractor to Brisa on various O&M Agreements for Portuguese concessions/sub-concessions BAR will be re-named Brisa O&M at the time of transfer into the company of other specialist staff, equipment and facilities 17

18 Corporate reorganisation Efficient management of group s concessions There are currently O&M Agreements in place between Brisa and the other Portuguese concessionaires for the duration of the concession period Upon the creation of Brisa O&M, Bi Brisa s rights and obligations under O&M Agreements will be effectively transferred to Brisa O&M Brisa O&M will also enter into new O&M Agreement on arm s length terms with the Brisa Concession Bi Brisa Holding Bi Brisa Brisal Douro Atlanticoti Baixo Tejo Litoral Oeste Concession Concession Concession Concession Concession Concession O&M Agreement Brisa O&M O&M Agreement 18

19 Corporate reorganisation Key milestones achieved Due dl diligence process is concluded d A thorough due diligence process was executed with the support of external legal, tax and accounting advisers Tax neutrality A confirmation of tax neutrality was obtained from the Portuguese Tax Authorities Transfer of the O&M contracts from Brisa to the new O&M Company Consent was obtained from all the project finance companies and their respective bank syndicates Grantor's authorization process is expected soon Transfer of the debt to the Brisa Concession Very advanced negotiation process with the EIB Ratings assessment Reorganisation plans have already been discussed with the rating agencies 19

20 Corporate reorganisation Key milestones overview Consent from the Grantor Due diligence Ongoing EIB Negotiation Creation of Brisa O&M Ratings assessment Achieved Implementation Consent from of new other Funders structure Brisa is targeting implementation by Q

21 Debt structure Corporate Debt/Main concession Other concessions Consolidated d Overview Corp. Reorganization Wrap-up

22 Wrap up current business Current portfolio streamlined New concessions reflect stated policies Douro will be deconsolidated d by YE09 Main concession generating cash Generating positive free cash flow Low capex requirements Very comfortable liquidity headroom Lower interest rate risk and lower debt cost A very positive year 22

23 Wrap up things to come Reorganization well underway More efficient financial structure Higher visibility bl of assets Clearer portfolio management approach Higher business units efficiency New projects will remain selective Low equity needs and fully financed through non-recourse project finance Continued selectiveness and an even better outlook! 23

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